With the beginning of a new year, most of us are thinking about what we plan to do in 2023 – we consider our aims, objectives, goals and targets.
I am reminded of a conversation, some years ago, between Françoise Szigeti, who was then Vice President, International Centre for Facilities, Ottawa, Canada and Helen Tippett, then Emeritus Professor, Faculty of Science, Victoria University, New Zealand.
Françoise observed that the same words tended to be used to convey totally different meanings, and Helen came up with the following that she uses to help her students keep the meanings straight.
- “You AIM for the stars.
- Your OBJECTIVE is to land on the moon.
- Your GOAL is to build a rocket with enough fuel to get you there at an affordable cost.
- Your TARGET is be ready to launch in two years.”
We have to be more efﬁcient, do more with less! Why?
It has been of increasing concern to me that we seem to be focussing on efﬁciency without having the right steps in place for effectiveness. Why, I asked myself was this happening? The answer I came up with – which you may not agree with – is that it is relatively easy if you are the Commonwealth or State Government or a Head Ofﬁce, to focus on policies that impose efﬁciency on others. Effectiveness, however, requires each of us to make changes of our own – much harder!
Thinking along these lines I issued a challenge to the asset managers taking part in the History Forum at the time, I asked “ Is Asset Management still fun? Or has our concern for efﬁciency (doing the same with fewer resources) driven out our interest in effectiveness (doing better by doing differently)?
I was thinking of effectiveness as getting the right assets in place, in other words, capital optimisation (which I still think we do rather badly) rather than maintenance optimisation (which I think we do rather well). But John Hardwick saw another aspect to effectiveness. He saw the necessity to get the right culture and information infrastructure in place. Both logically pre-date a focus on efficiency. Here is John’s comment, which is worth thinking about.
“Well, I can’t miss the opportunity to comment on this one. I don’t know how you pick your topics but this one is great. I think the doing more with less can only really become successful if you have already put the building blocks in place, set up the right culture and created the IT systems to gather the information for decision making. This creates the effective part of the story but how do you then deal with efficiency? Well, for me there are two options. One you can take on more risk. At least if your Asset Management is working you can articulate the change in risk. The other option is to look at your people and process to understand if this is optimum. What interested me the most with this topic Penny is you must be in sync with our company. I have just been moved from the strategic area of our company to managing about 700 people delivering outcomes. Interestingly i am still the business process owner for Asset Management. I am sure there are going to be some real challenges in this move. The funny part is this means I am more excited then ever. New challenges, new people to influence, more people to become part of the Asset Management community if i get it right. If it does not excite you then get out of the field and do something else.”
Do you know where are good examples that illustrate improvements in AM effectiveness (either capital optimisation or organisational culture)?
Today the pressure is on to measure and track our performance with KPIs, but it is important that we measure the right things. The following story is from 30 years ago but the message still applies.
I had only just joined the water agency in South Australia as a policy analyst, when a complete stranger turned up, not at my ofﬁce but at my home, and presented me with a dirty scrap of t-shirt material. “There!”, he said angrily, “that’s what happens when I put that under my tap. What are you going to do about it?” I was mystiﬁed how he knew where I worked, and even more mystiﬁed about what I was expected to do.
A month later there he was again, with another piece of muddy t-shirt. This time I decided to ﬁnd out from our water quality section just what was going on. It turned out that as most of our water comes from the River Murray and we are at the tail end of the river, there was a great deal of sediment that was carried along with the water. The practice at that time was to thoroughly ﬂush out the pipes once a month to keep the water at a good quality. After ﬂushing, the water was relatively clear and free of sediment, but for those few hours the water ﬂowed like gravy!
Now, the authority’s water statistics told the engineers that they provided relatively clear water 99.5% of the time, which was held to be a pretty good service. But anyone who put through a load of white washing at the time of the ﬂushing probably thought it an exceedingly poor service. Who was right?
After speaking with the water quality team about my visits from the t-shirt man, they decided that it would be a good thing to at least let people know about the ﬂushing program and when it was going to take place so that they could avoid using the taps at that time.
Later, they were able to ﬁnd ways of avoiding the ﬂushing problems and still provide a reasonably good quality of water.
But neither of these two actions were taken until the water quality team started thinking about the problem from the perspective of the user! The KPI’s told them they were doing a good job.
Your thoughts and experience? Are your KPIs giving you the right information?
“We donʼt get the recognition we deserve” the council’s maintenance guy told me. “Nobody ever says, ‘Thanks!’”
But why would they when you have just told them your organisation has an insurmountable renewal gap in its road assets?”
We have to wonder if presenting problems without solutions is really what asset management is about. What if a brain surgeon told you that you have a brain tumour but nothing could be done about it, would you say ʻthanksʼ? Or would you be inclined to downgrade his expertise, seek a second opinion and/or wallow in the misery of the diagnosis? If so, why should councils be any different?
If, however, your brain surgeon said: ʻYou have a brain tumour, it is tricky, but we can operate and there is an excellent chance that, if you follow the regime that I will give you, you will recover well.ʼ Would you now say a heartfelt ʻThanks!!’ Indeed you would. Again, why should councils be any different?
We now have models that enable easy prediction of future asset renewal. It really is ʻplug and playʼ, we put in the raw data and, hey presto, out come the answers. These projected asset renewal costs will generally be far above the capacity of the organisation to ﬁnance, so we cannot stop there. Providing this ʻraw dataʼ is NOT the end of the Asset Management task, merely a preliminary data input.
Suppose now that you say to your council. “This is the current state of the asset renewal gap. The ﬁgures represent the cost of continuing to do things the way we have always done them in the past. This problem has built up over many years and it will take a number of years to correct, but with your support and using the asset management tools and knowledge we now have, we can reduce this gap to manageable levels.
As a bonus, what if, at the end of the year, you are able to recalculate the gap and demonstrate that you have made, say, a 10% or 20% reduction, and that, with actions already in hand, you are on track to reduce the gap even further in the following year, do you think that they will now say: “THANKS!”? Of course. You have now done something worth thanking.
Asset Management is not about presenting problems – it is about addressing them.
This was ten years ago. Where are we today?
Yes, it may be frantic now as we try to finish up all those things we promised we would have done ‘by the end of the year’, but soon it will be Christmas and, hopefully, we can relax and catch up on reading more, as we also promised ourselves, but didn’t get done.
If this sounds like you, may I recommend a book that will have you laughing as well as learning? In “Corporate Punishment”, James Adonis, takes apart 38 of the most common – and most annoying – business clichés, such as ’employees are our greatest asset’, ‘think outside the box’, ‘pick the low hanging fruit’, and the ever-present but abysmally misleading ‘what gets measured, gets done’. At the very least, you will avoid the embarrassment of using them yourself.
The cleverness of the cover illustration encouraged me to pick this up and start reading and after that, the author kept me going until the very last page. I don’t know about you, but it is the rare book I read right through to the end nowadays, so this is a rare recommendation.
Reading these general business clichés reminded me that we have our own in asset management – perhaps the leading one being ‘there are no votes in maintenance’. If there were a book of AM Clichés, what clichés would you suggest should be included?
By 1989, state finances were getting tight across the entire country. But none was in a worse condition than Tasmania which had always been a mendicant state, even in the best of times.
I had been invited to speak to the Tasmanian Municipal Government in May on the subject of priority setting on which I had spoken to the Infrastructure Forum the previous year. But that earlier paper was aimed at giving a message to the AFCC, my arch nemesis at the time for their interest – and more especially, their ability – to be funded for infrastructure without any obvious concern for community benefit. I could see that local government required a different story.
In Hobart that morning, the session had been completely concerned with road funding, which they decided could be solved only if the Commonwealth Government would give them more money. I said that while we could fix some problems with more money, we didn’t have enough to fix all problems that way. In those days, I was younger and braver and I told them that they needed to reckon with the fact that there was no more money money coming, that indeed, whatever money the Commonwealth had to give would be reached by those ‘with longer arms than theirs’. Their experience meant they did not doubt me. But, I said, there was an answer: they could spend what they had more wisely. I then explained what they could achieve with asset management.
Happily the paper was well received. I was even asked to give the same paper to the engineers’ conference the following day. And then, about a month or so later, I had an invitation from the Minister of Construction, Resources and Energy, who had been sent a copy of my paper. He could see the value of AM and asked me if I would ‘come down to Tasmania and help him run the show’ . Chapter 12 “Moving on – my story” tells of this incredible opportunity and part 4 of our continuing story will look at how it worked in Tasmania.
Is this the AM curse? Every election year we are presented with some impossibly expensive infrastructure project which generates great excitement – and acceptance. Invariably these projects are unaccompanied by any detailed analysis, for it is the idea itself that is so compelling, and so analysis just spoils it.
Is this the problem with AM? Are we trying to sell the detail, when all that is wanted – indeed all that can be absorbed by the general public – is the vision? This is not to say that detail is not needed but without an exciting vision, why will people listen?
I am looking for examples of good AM ‘visions’. Do you have, or know of, one?
After the Construction Minister’s Conference in 1987 where the PAC work had been presented, I was greeted by my CEO. He was well pleased with our contribution.
Not that the PAC’s work on renewing infrastructure was necessarily understood! “I’m the envy of all”, he said, “because at last we have someone who can tell us how much we should be spending on maintenance”. Intrigued, I asked who this was. “Why, you!” he replied happily. I tried to explain that my expertise was in capital component renewal, not in maintenance, but my protestations were considered modesty and did not diminish his happiness, or belief!
It was generally assumed by maintenance personnel (although not by anyone else) that maintenance should be 2%. (Of what was never well speciﬁed). Now it so happened that the PAC calculations of component renewal had averaged out, across all portfolios, to be approximately 2% of the replacement capital value. This was taken as validation of this popular maintenance ﬁgure. It was a misinterpretation, but I could see how it arose.
Chapter 11, “Reactions” of The Asset Management Quest (volume 1 of The Asset Management Story) which I have posted today looks at the many and varied ideas that people had about asset management at the beginning.
What are the mistaken ideas that you have to deal with now?
I have known – and quite probably, so have you – many who have fought their way to the end of their studies, perhaps in medicine, law or teaching, only to find that their chosen field is something for which they are quite temperamentally unsuited and they need to start all over again. Fortunately, for those who wish to make their career in the management of physical assets, this fate can be avoided.
In Leadership Assets, Dr Monique Beedles takes you through four stages of an asset management career – from an Apprenticeship role where your task is to learn and you are leading yourself, through the next stage as Advisor where you lead others and your task is to establish credibility, and on to being an Advocate where you are now ‘leading people who lead people’ and your role is as an influencer, and finally, if you wish, a role as Ambassador where you represent an industry and lead a community.
You don’t need to be at the beginning of your career to benefit greatly from this book, although if you are, you are lucky indeed. Even those considerably advanced along a particular pathway will be encouraged by seeing how much further they may still progress.
Whatever spot on this spectrum you choose for yourself, you will not only find here a clear outline of the key ‘smarts’ you require: ‘tech’ smarts, ‘biz’ smarts and ‘people’ smarts, but also, and importantly, how to develop your strength in the ones you need. This is the main core of the book. It is brightly written, brief, to the point and immensely useful.
This is one of those books that when you find it at the end of your career, as I have done, you are left with a great desire to start all over again – and do it properly!
The late 1980s saw a reduction of grant monies to the States from the Commonwealth with promises of further cuts to come. Peak construction funding was over. This concerned the large private sector firms that had arisen with Commonwealth patronage and they now cast their eye over public works. It is no coincidence that the ‘outsourcing’ movement that had started overseas, should now arrive in Australia. Private Sector think tanks began to speak adversely about government construction performance, whilst at the same time boosting their own chances by promoting the country’s need for more. This was when the word ‘infrastructure’ started to be heard. The Australian Federation of Construction Contractors (AFCC) funded annual ‘Infrastructure Forums’ held in Canberra (near the source of power) and claimed that there was an infrastructure gap.
I challenged this in my first presentation to the Infrastructure Forum in 1988 and said that, since we didn’t know what we had, and we didn’t know what we needed (both of which were indisputably true) we couldn’t know whether we had a gap or not. This annoyed the AFCC and they asked the CSIRO, who organised the forums for them and who had arranged my first presentation, not to invite me again. So they didn’t. But they did arrange for the NCRB (the National Committee on Rational Building) – and a group that the CSIRO was heavily involved in – to be invited and the NCRB asked me to speak on their behalf. So my next address focused on the expensive consequences for the recurrent budget in future years of increasing capital spend this year. They didn’t like this either.
I didn’t have the power that the AFCC had – and, unfortunately, neither did the public works departments around the country. Gradually work was ‘outsourced’ to the private sector and it became obvious that if Asset Management were to grow, it needed to reach out beyond the engineering and corporate planning base that had guided it in its early stages.
That is what I look at in Chapter 10 of our ongoing Asset Management Story, “Architecture, Audit and the Rise of Accounting”, posted today.
Which disciplines, groups, organisations and institutions do we NOW need to reach?