“Renewal is so Yesterday” (December 5) argued that, in a changing world, we cannot afford to think of renewal as replacing what we currently have, perhaps with ‘better’or ‘higher’ quality which, when you think about it, is what we are currently doing. We need to focus instead on ensuring that any infrastructure we build now is ‘future friendly’, meaning it can be adapted as needs and opportunities change.
However, new infrastructure – while it often occupies most of our thoughts and media column inches – is at any time really only a very tiny percent of our total infrastructure stock.
How do we defer the need to renew – and thus avoid committing ourselves to another 20, 40 or more years of 20th century assets? The answer is obvious: we need to put more effort into maintenance. Well-maintained assets last!
So, if we are to maximise our chances to benefit from the changes that are coming – and avoid adding to the mounds of redundant, or stranded, assets that change has already brought about – then we need to focus on extending the lives of our existing assets by better maintenance.
It may not be as glamorous as renewal, but better maintenance is key to succeeding in a changing world. It does what nothing else can – it gives us the chance to learn more about the future before we build for it.
Agree/Disagree? Counter arguments welcome!
Special Note: The Asset Management Council is running a special webinar on Tuesday 19 December – “Life extension of a gas powered generator” the award winning presentation by Mark McKenzie and Giuliano Cangelosi, Find out more and sign up here
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The strength of concrete – but with adaptability! Interblocs are large scale concrete lego blocks, and just like lego you can construct – and then reconstruct. I was fascinated with the ability of interblocs to adjust as needs change over time, but when I spoke with Jack Bright at the IPWEA Conference in Perth last August, he was more interested to tell me about their environmental and cost aspects, and – not for the first time – I noted how good ideas tend to address not one, but multiple issues.
1. Avoiding Waste
NZ and international evidence indicates that 2.5-3% of all ready mix concrete will end up as surplus to requirements. This is perfectly good concrete, however because of the perishable nature of concrete it ends up wasted. Traditional approaches to dealing with this waste is to dry it, crush it, and use as recycled concrete aggregate (which has a high embedded energy content), or is sent to landfill. Jack explained that the Interbloc system was part of a larger sustainability iniative called Envirocon, a product stewardship scheme for the ready mix concrete batching waste streams. Envirocon have developed technology to analyse each unique mix of concrete and put it to sleep for up to 72hrs, which allows the aggregation of wet surplus concrete for transport back to a central processing plant where it is upcycled into precast concrete products.
The major benefit here is the reuse of a substantial waste stream with minimal extra processing. There are also a number of indirect benefits; an estimated 1.3 million km of truck movements are eliminated by enabling trucks to return direct to the plant; new jobs, compounding economic growth etc.
2. Re-Use and the Circular System
The design principles behind the precast concrete products also lends itself to this idea of a truly circular system. Both Interbloc and Stonebloc are modular wall systems which deliver greater efficiencies in the building process. While acting as a permanent structure when assembled, the blocks can be easily disassembled, reconfigured to suit changing requirements, and reused at the end of the structures life. In New Zealand, where Interbloc Systems have been in use for over ten years, there is even a buy-back guarantee.
3. Security and Reliability
Each block has a unique serial number so you can track the construction process including the original test data. Intrigued? Want to know more? Here is a short company video. Or go to Interbloc.com.au or Stonebloc.com.au
Question this week: What other commercial products do you know that allow adaptability?
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“Lasting” is not enough
It seems strange to us today, but 30 years ago little thought was given to infrastructure renewal. Infrastructures looked so solid, and lasted so long, that little attention was paid to ‘how’ they lasted so long. This was the mid 1980s, and for the past 25 years, the focus had been on construction. As the world had recovered from WW2 and refugees and immigrants flooded into Australia, we had expanded and we had built. In fact, we expanded so rapidly, that not only did we build but the focus of our building was speed, on how quickly we could establish the new housing, the new developments that were needed by our burgeoning population. That was the background for the eight Public Accounts Committee’s Reports on asset renewal. The purpose was to convince the Parliamentarians that they needed to pay attention to renewal. It worked. We started to forecast our renewal requirements and we started to manage our assets so as to contain our future costs. Maintenance improved. Decision making improved. We rethought our existing renewal practices and, in many cases, realised that our assets could last far longer than we had previously thought.
For the last 30 years we have focussed on trying to make our assets last as long as we could so as to reduce our life cycle costs. It was a worthy ambition and it fuelled an entire discipline. Asset management was born and it has flourished.
But now, as we look ahead, it is clear that the world is changing. Climate change and rising sea levels are producing problems since many of cities around the world have been built near the sea to allow for rapid sea transport. Demographic change is impacting service demand. Technological change is impacting not only consumption but production. With an internet connection, we can work most anywhere and this is changing our ideas about cities.
That is why I say that renewal is yesterday’s problem. Renewal underlies the concept of longevity. But tomorrow’s problems are around our ability to adapt to constant and rapid change. They are about Adaptability. This is where we now need to focus. And this is why our theme for December is “Adaptability”
Your ideas on this topic welcome!
Community membership is open to everyone who has an interest in making the changes in infrastructure necessary for the 21st century, there is no fee – and we welcome you all!
However, for those community members who would like to go further and actively contribute to the goals of Talking Infrastructure, invitations are offered to become full (i.e. voting, direction-setting) members.
Please welcome our most recent Full Members:
Dr Neville Binning
Neville’s company, EDAB, has a speciality in transport infrastructure. He has a PhD in Asset Management and is the International Vice President of the Chartered Institute of Logistics & Transport (CILT). Neville has taken on the role of Chair of the Talking Infrastructure’s Perth City Chapter.
Hein Aucamp,
Hein is Infrastructure Asset Management Consultant at WA Integrated Asset Management. Hein is a member of the Perth City Chapter and a contributer to the Blog. Multi-talented, Hein also has broadcasting experience in South Africa.
Sophie Wallis,
Sophie is an experienced facilitator and Strategy and Sustainability Consultant at Upthink, a member of the Perth City Chapter and contributor to the Blog. When we realised that we both had an interest in Nudge Theory and Behavioural Economics and its relationship to infrastructure, Sophie and I collaborated on a series of blogs on Nudge Theory.
Chris Adam,
Chris is Director of Strategic AM Pty Ltd, is a management consultant specialising in the water industry. Chris was a regular contributor to Strategic Asset Management and is one of the first to have made the essential transition now to Infrastructure Decision Making. He is a contributor to the Blog and a specialist advisor to Talking Infrastructure.
ACTION If you would like to be invited to become a full, voting, direction-setting, member of Talking Infrastructure, there are TWO simple steps you need to take:
Step One: Join the Talking Infrastructure Community as a Community Member
Step Two: Text me your mobile number so that we may organise a chat to find out what you are interested in and would like to see us do.
Penny Burns, Chair, Talking Infrastructure, 0434 406 751
Sophie Wallis, Upthink, and member of the Perth City Chapter, writes that we know from behavioural science that our brain responds to the complexities of daily life by seeking out simple rules of thumb – shortcuts called ‘heuristics’. And that these impact many of our decisions, in both our personal and our professional lives.
React? Or Think?
Daniel Kahneman (also a Nobel Prize winner) first described three of them in the 1970s:
- The ‘anchoring’ effect which can influence our ability to accurately estimate, as we will naturally tend towards a suggested figure or starting point. Ed: Over 5 years I conducted hundred of market simulation experiments in which we varied the market rules, available information and incentives. Every time the market conditions changed, the participants were informed – yet they still initially tended towards the equilibrium prices that had been determined in earlier experiments even though they knew this was a different market. It was an ‘anchor’.
- ‘Availability’ This is where we easily recall readily available stories, even if they don’t represent the bulk of evidence. Following a high profile but rare disaster, we are more likely to focus on the risk of this occurring again than on more probable, less visible risks. Conversely, the more we hear about successful innovations in infrastructure, the more achievable they will seem. Knowing about ‘availability’ helps us understand just why it is so hard to change the status quo towards something unfamiliar for which we have no examples yet.
- ‘representativeness’ – ‘a man hears what he wants to hear and disregards the rest’ (Paul Simon, not a Nobel Prize winner) which might blind us to the validity of other’s points of view, to stereotype people. Have you ever been at a community consultation session, and been surprised by the insight of a local resident? Perhaps you had made a judgement based on the person’s appearance, assumed a level of education and not expected they’d be capable of such understanding. They are. And you’re deciding on their infrastructure.
Question: Being aware of our natural human cognitive biases is the first step in being able to counter them. How have these biases impacted your decisions, or the decisions of others affecting you in the past?
Sophie Wallis, Upthink, and member of the Perth City Chapter, believes that nudge theory (or behavioural insights) can help to address some of the natural cognitive biases (as introduced in the last two posts) and thus to improve infrastructure decision making. In this post she looks at a study of project delivery in the UK’s Department for Transport (DfT), carried out by the Behavioural Insights Team (which Nobel Prize winner, Richard Thaler and others helped to set up).
Cognitive biases are hard for us to notice, even if we’re aware of them. It’s taken painstaking research to uncover the ones we have, and we’ve only just started to realise some of their implications.
The BIT chose to focus on 3 key cognitive biases that could impact DfT’s major projects. Interviews with key personnel indicated where these biases were impacting decisions, whether biases were built into their systems and processes – and what could be done to correct them.
The three biases BIT studied were:
Planning Fallacy – We’re wired to assume things will turn out well, that we are more than capable of reaching our goals, and less likely to fail than others are. For major projects, BIT found this led to consistent overestimation of success and under-estimation of cost and time requirements, particularly during the project planning phase.
Groupthink. Strong group dynamics are great for project teams, but we must be wary of the tendency to be influenced by others in our group and the impact this can have on decisions. Have you every been in a group where an ‘outsider’s’ view was shut down and discounted? That might be groupthink at play, and it can tend towards non-contentious ‘middle ground’ decisions rather than the ‘best’ decision. Have you been in a team where it felt safe to raise alternative ideas, and leaders encouraged this? What was different?
Sunk cost fallacy. Stopping a project mid-delivery is a fairly unpalatable option – a ‘courageous decision, Minister’. But when we make decisions based on the money and time already spent, rather than on the suite of potential outcomes, we fall into the sunk cost fallacy trap. BIT suggests a simple tool like a decision-tree can help to break the ‘escalation of commitment’ in large projects.
Question: Are these cognitive biases affecting decisions in your organisation? One elegantly simply tool suggested by BIT is the ‘pre-mortum’. Imagine the project has been completed, but went really badly – what went wrong?
Have you tried this? Did it provide insight? What other solutions might also prove effective?
Aim for the Fly A.Currell/ Flickr
Nudge theory was originally used to make small but consistent changes in user behaviour over a period of time to create better personal and community outcomes. In the last post we mentioned the case of organ donation but perhaps the most famous example is the ‘urinal fly’ introduced at the Amsterdam airport – a fly painted on the men’s urinal, encouraging better aim (or more attention!) which had the effect of reducing spillage by 80% and cleaning costs by 8%. It was results like these that led to governments around the world setting up ‘nudge units’ to see what other applications were possible. But the focus was on consumer behaviour. They looked to see how others could be nudged, but what about nudging ourselves – the decision makers?
Can we be nudged to make better decisions? Joe Arvai, Professor of Sustainable Enterprise at the University of Michigan, says “ governments have made important strides when it comes to using behavioral science to nudge their constituents into better choices. Yet, the same governments have done little to improve their own decision-making processes. Consider big missteps like the Flint water crisis. How could officials in Michigan decide to place an essential service – safe water – and almost 100,000 people at risk in order to save US$100 per day for three months? No defensible decision-making process should have allowed this call to be made”. (my emphasis) His article in The Conversation is worth reading.
User decisions, such as choosing a default option, or aiming at a fly, are pretty simple. Infrastructure decisions, by contrast, are not. Joe Arvai refers to nudges as as ‘passive decision support’ because they don’t require a lot of effort on the part of the decision maker. “They are about exploiting – not correcting – the judgmental biases that people bring with them to all manner of decisions, large and small”.
Which lead us to ask: What cognitive biases affect our ability to make sound infrastructure decisions? And how can we use behavioural economics (of which nudge theory is but a part) to improve our choices? This is what we will look at in the next few posts.
Nudge theory is currently in the news and the next few posts examine aspects of it that are relevant to infrastructure decision making. Have you had any experience with ‘nudging’? What are your thoughts on the subject?
Back in the day!
In 2010 Richard Thaler (the 2017 Nobel Economics Prize winner) and his co-author, Cass Sunstein, wrote “Nudge Theory”. The idea behind nudge theory is that the brain is lazy, or rather that we have so many decisions to make every day, that where there is an easy way out, we are likely to take it. Governments around the world have established ‘nudge’ units to figure out how to encourage (yet not force) people to take decisions that are in their, or the community, interest. The most popular of the approaches is to make the beneficial decision the ‘default’ option. For example, making organ donation the default standard but allowing people to opt out, generates significantly highly numbers of organ donors than where the default is out, but people are allowed to ‘opt in’. This relies on us defaulting to the ‘easy option’, the one that requires the least effort, the least thought.
When it comes to infrastructure decision making, this means that we are more likely to choose options with which we are familiar, rather than ones that require effort, exploration, thought, and time. In other words, although we know that the world is rapidly and radically changing with technology providing far more options than we have had in the past, we will (being human) have a tendency to default to the infrastructure that we have built in the past. This means that we have an inbuilt tendency to construct infrastructure better suited to the 20th, rather than the 21st, century.
Question: How can we use nudge theory to work in our favour, rather than against?
Hein Aucamp, Perth City Chapter, submitted this as a comment to the last post but I think it contains ideas that are important enough to warrant a post of its own. Hope you all agree. Penny
Silo! We use this word to indicate a situation in which efficiency and conclusions are impaired because cloistering prevents us from including all the required factors.
If you stand at the top of a silo and look down inside, you see a tiny horizon, much smaller than the surrounding landscape.
Our manner of talking – our language and choice of vocabulary – can be revealing about our perspective. It can show how much we can see and how many relevant factors we are taking into account.
I remember being at an AIFMG training course in 2012. There was a discussion about whether a road is really an asset. From a Local Government’s point of view, why isn’t a road considered a liability? After all, it requires effort and expenditure, it must be maintained, and it must be replaced. Should it really be called an asset?
But from a wider perspective a useful road is definitely an asset. We can easily see this, because when it is consumed, the community wants another one. Of course an asset has associated costs; that in itself does not make it a liability. What makes it an asset is that its benefits outweigh the costs.
Now look at the dangers of the silo effect in the discussion about the road. From the limited perspective of the asset custodian it would be much easier to entertain the notion that a road is a liability. The custodian bears the burden of the effort and records the expenditure. But when we extend our horizon to include all the relevant factors and actors, we see that it is an asset.
The comparison between road and rail in the last post is an interesting case study. May I venture to say that it is always possible, by drawing a small enough perimeter, to decide that any piece of infrastructure is a liability? The perspective just needs to be small enough to exclude the funding mechanism and the benefits to the end users.
In the road vs rail example mentioned, the economist unconsciously placed a circle of reasoning around both road and rail. In the road circle, he discovered a satisfactory funding mechanism; in the rail circle, he did not. So he reached his conclusion because he was looking for local net benefits. If on the other hand he had used a horizon instead of a silo, he would have been looking for system-wide benefits.
(Admittedly, it is much harder to comprehend funding mechanisms and benefits that are outside your silo even if inside your horizon.)
Hein Aucamp hein.aucamp@waiam.com.au
A senior economist in a State Treasury once claimed that Rail was a net cost since costs exceeded revenues. Roads, on the other hand, he said, were profit producing. I smiled and thought he was joking, but he wasn’t.
The motor vehicle licensing board was embedded within the highways department and the sum total of licence revenues, he said, exceeded road costs. Ergo, roads were profit producing. (I suspect that capital costs didn’t figure in his equation)
On this reasoning, he resisted extending the capacity of rail, despite the fact that the city roadways were excessively congested with little scope to increase road capacity and that road users benefitted when traffic was diverted to rail.
I was reminded of this when I read Milos’ comment on my earlier post “Infrastructure – damned by the language we use”. He referred to language supporting silos. And indeed it does. However, if our infrastructure decisions are to be used to support community wellbeing do we not need to move beyond silos, to take a wider, more holistic, viewpoint?
Thoughts?
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