From script by Lou Cripps
Bad news for techies, but infrastructure is mostly money, business and politics.
Yes, Asset Management is about making better decisions on our physical assets. But not just any decisions: the wider, longer-term, strategy and co-ordination that organisations struggle with.
Operations already take care of immediate responses. Engineers are more than happy to focus on the technical details. Finance counts the money – but struggles to do more because it doesn’t get the honest information about the assets that it needs.
The gap that Penny Burns identified in 1984 was, first of all, planning for capital renewals to maintain the infrastructure base we already have, beyond the next year. A need most people didn’t even notice, let alone take on to fill.
In the forty years since, Penny has talked extensively about decisions for new infrastructure as well. About how the overall system needs to change to meet changing demands for service. And the impact of physical assets on the economy, the environment, our communities.
In other words, Strategic Asset Management.
In the past few years I have been asked to develop webinars and other support for better asset strategy and planning. My fundamental message is A. Strategy and planning are not the same, and B. they are complementary, and we need them both.
Over the next few weeks, we’d like to explore them both further. Starting with understanding why organisations are so bad at them.
- Asset Management planning is about the allocation of budget and resources. It therefore has plenty of opponents who only care that their own projects and assets get the money.
- Asset Management strategy requires standing back to think strategically, which many people (including CEOs) are not good at doing.
- There isn’t a formula, or a template. There are good questions, but some of them are hard, and many of them require saying no to some things, and some people. Not going along with the political clamour for simplistic solutions.
- There are vested interests – some of it bordering on corruption (who will make money from this decision?) and many of them challenging teams on how they have done things in the past. Even on what they were trained to do.
What are your experiences of asset planning? What works – and what gets in the way?
Is any of it really a technical problem we can solve at our desks?
At least the pet duck enjoyed it
When we moved into our house, we first realised the problem when the mortgage company said we needed flood insurance, and discovered that would cost ten times the normal building and contents policy.
Until a smarter insurance company here sold us a cheaper policy based on postcode (in other words, by group of two or three houses), not Environment Agency flood areas: they spotted a market opportunity for a more precise risk assessment. Smug us!
Until six years later, and the house actually did flood.
And four years on, in late 2024, the water came to our front door twice, and overtopped the sand bags the second time.
And the risk of flooding in England is predicted to increase five-fold in the next decades under current projections for global warming.
However, Newport Pagnell is not Miami.
To be clear, our flooding is due to rain, and living next to where two rivers meet. Unfortunate timing of river surges – or someone getting the timing off on floodgates. We are nowhere near the sea and don’t get hurricanes, and so far the extent of our flooding is a few inches of water at the front of the house.
A few houses flooding a bit: you start thinking about resale values, and whether getting wet every year or so will do the brick walls and wood floorboards any good.
In South Florida, they face losing whole towns to the sea and the swamps. Many people live only a few feet above current sea levels, and the infrastructure is similarly low and at risk. They have to worry about overwhelmed sewerage systems and nuclear power plants.
Florida has such a tax-averse politics that it will come down to money for school education versus money for flood action soon for some towns. They continue to build right up to the sea and in areas only just above sea level, even as they watch the hurricanes track towards them. And of course the ruling Republicans also mostly deny climate change.
It would seem a perfect storm of human inability to face the facts.
But it is striking just how much of an issue it is for infrastructure. And that involves use of tax dollars, national insurance schemes, building codes, politics and Politics: so much more than simply technical questions.
Do we speak the right language/s to manage this?
Just a reflection on our own institutions.
I have been involved with the IAM on and off for almost 25 years. I attended Asset Management Council meetings and conferences (under different names) when I lived and worked in Australia in the 2000s. I have been impressed by the IPWEA since someone brought back a copy of the IIMM to the UK around 2001. My boss was instrumental in setting up the GFMAM.
These are just the most obvious AM institutions. (But shout out to Canadian AM networking here, too.)
They have not always been particularly friendly to each other, but at roughly 30 years old at their oldest, we seem to have developed some institutional maturity.
I was heartened to realise that, for all its limits – well delineated by Richard Edwards and others at the recent IAM UK conference – the revisions and new ISO 55000 documents involved hugely more people this time around.
The IAM itself has grown and now functions in more European and Asian countries, as well as succeeding in the USA; it has a truly excellent CEO in Ursula Bryan. I love the IPWEA ‘Ask Your Mates’, the kind of practical support we need from out networking.
But perhaps the best sign of all was a workshop last month on ‘Peak Infrastructure?’. A room full of Asset Managers asking what infrastructure we really need. And how there is work still to be done to make a lasting difference. Changing national government policies not to incentivise (or give in to developers and construction companies) building new when we can maintain what we have.
All physical assets come at a cost, often a very steep one in impact on the environment and communities. We have to take the lead to make sure we understand costs versus benefits.
That’s the real question when we get together as Asset Managers.
*IAM: Institute of Asset Management, HQ in UK. IPWEA: Institute of Public Works Engineering Australasia. GFMAM: Global Forum on Maintenance and Asset Management, established by the IAM, Asset Management Council and others. Asset Management Council in Australia. Canadian Network of Asset Managers, plus Provincial AM networks such as AMBC and AMOntario.
At this end of 2024, I am more convinced than ever that the whole point of Asset Management is Planning.
Planning, as opposed to delivery – which we have been doing for decades, if not centuries. Asset Management is about thinking through what we need to deliver across our asset base, Plan before Do. (Don’t just do something, sit there.)
That is what Penny created Asset Management for.
And the central concept was lifecycle modelling, supported by cost-risk-optimisation, matched to understanding demand. When is the right time to replace, renew, maintain? What don’t we need to do?
The AMP has been the centre of Asset Management since the very beginning. As captured in state and federal requirements, as documented in the International Infrastructure Management Manual from the IPWEA.
We need Planning – and it is not going to happen without us.
But it is too often still – after 40 years! – fragmentary, driven by vested interests (even the understandable wish by people on the ground to get money for their own assets).
It doesn’t look at what happens next: ‘And then what?’
And I can count the organisations I work with that actually do lifecycle cost modelling or cost-risk optimisation on the fingers of two hands.
To do the maths on all the major costs, risks and benefits of different options across the lifecycle, and demonstrate that (for example) building back rural roads like for like after they have been washed away for the fourth time in five years simply doesn’t add up.
Time for a Campaign for Honest Asset Management Planning?
Among my personal highs and lows of 2024, the standout experience was going to Japan.
I am sorry to say I have never encountered a Japanese Asset Manager, but thanks to GFMAM I got to hear a rep from the Japanese maintenance societies at the IAM UK conference in London last month.
Despite what we hear about its economy, the country is still doing very well on total maintenance and quality in manufacturing. Some days it seems every other car on our roads is a Toyota.
And my overriding sense of Japan? That along with the incredible food and gardens and manufacturing, it’s simply the most sensible society I have ever seen.
Starting with the toilets at Tokyo airport when we arrived.
I have long suspected the most important thing about Asset Management is that it is sensible. Don’t spend where you don’t need to, but do what you must to sustain what we need to thrive. Don’t preach growth for its own sake, and be wary of ‘innovation’ (think of ‘the Maintainers’ and their 2020 book The Innovation Delusion*). What does the evidence tell us? What risks are we really running with our assets? Cut through the lobbying and classical economics – and make sensible decisions.
Sensible is not necessarily glamorous; AM is not glamorous. It doesn’t pander to fantasies, of engineering or entrepreneurs.
As several Western countries seem to lose the plot, even caught up in what can only be described as fascist dreams, it was wonderful to experience somewhere that has a much stronger sense of its limits. A lot of people in a limited space, and some of that physical space quite dodgy: how can we organise food, rub along with millions of strangers without pulling guns on each other, love nature (trees!), create beautiful things? Value education, and don’t take our gods too seriously.
Take what we need, and reject what we don’t.
Yes, I am hopelessly romantic about Japan, ever since my father worked there when I was a child. But I didn’t expect to come away with sensible.
PS not sure I will ever be happy with cold toilet seats again.
* The Innovation Delusion: How Our Obsession with the New Has Disrupted the Work That Matters Most
Note: Japan, like many countries including the UK, USA, China and France, not to mention Germany and Russia, has some dismal history. Unlike some of those countries, it appears to be able to learn from its past, but this is not to excuse its treatment of Korea and China and prisoners of war in the past.
I have just been to the 30 year celebration of the Institute of Asset Management (IAM) in London, where we also marked ten years of ISO 55000. This was held jointly with the Global Forum on Maintenance and Asset Management (GFMAM) – representing AM and AM-minded maintenance societies worldwide – with representatives from IPWEA and the Asset Management Council. A time to reflect as well as celebrate!
Russ Seiler of Grant Public Utility District (one of the Columbia River hydro utilities in the Pacific North West) reflected on his journey since 2016. Starting from scratch as an Asset Management lead, under Russ the team at Grant has looked at asset inventory, Wave 1, and the absence of basic asset data. It then focused on the AM ‘system’, as in ISO 55000, and the idea of building AM artefacts. (Wave one-and-a-half?) But, encouraged by Penny’s 2023 book on the beginnings of AM, he realised that neither were really the point.
His conclusion after seven years? “If your asset management program never affects the money being spent on assets, your program should and will be terminated.” AM creates the machine that produces the plan, a better plan for the assets. Everything else is just a means to that end.
It’s the AMP process, ok.
I have trained many 1000s in the last 14 years, in the USA and elsewhere. And that’s what I have found, too. Too many get caught up in asset data – which is important, sure – and documents such as the AM Policy and SAMP, which are also important. But that is never what Penny meant by Asset Management.
And ‘plan’ doesn’t just mean what proactive maintenance you should do, or what you need to spend capital on to sustain your existing asset base. It’s also what if any new infrastructure we require. It’s whole of life and system-wide. It’s big.
Have we been tinkering at the edges while the world changes around us?
What makes an effective asset management practitioner? Ruth Wallsgrove ,who founded IAM’s Asset Magazine in 2004, recently contributed this opinion piece to the magazine in which she shared some of her experience in working around the globe. Our thanks to IAM for permitting reproduction here.
On the steering group to review the IAM Competences Framework, we discussed the distinction between the things we needed to know about and things we actually have to be able to do for ourselves. That is between what we need to appreciate other people doing, and what we have to take main responsibility for.
A useful way I have found to think about asset management capabilities generally is: what won’t get done if we don’t do it? What key competences should we expect not to be there, if we don’t have them?
This means areas such as IT, Engineering and Finance are fields we should understand, but we don’t necessarily need to have hands-on skills or previous experience in them. There are plenty of other people, other professionals, looking after them.
On the other hand, we have to be the ones to understand good asset management practice, and to communicate this and its benefit across our organisations. Who else could do this? Communication, facilitation and change management of attitudes are often called ‘soft’ skills, but that doesn’t reflect how hard many of us find them in practice.
Information and risk
I have become increasingly interested in in two other areas vital for effective asset management that we cannot depend on anyone else to know how to do. They probably are not there anywhere else in our organisations, especially as applied to physical assets. And they are not in any sense ‘soft’.
First of all, we need to ensure we have the skills to understand what information about our assets can and cannot tell us. This isn’t about IT, data collection or even quality assurance, but about interpreting data. The realm of data science, including statistics, is crucial here. Some of the best asset managers I’ve worked with have exceptional data-analysis skills – some even teach data science at college or have backgrounds in military intelligence. Once you’ve seen a true expert in action, it’s clear that asset management is incomplete without these skills. (It’s a shame that many of us didn’t enjoy statistics in college!)
A second, related area of concern is risk management. The whole realm of managing physical assets has up to now been – well, how can I put this delicately – naive about risk. We still struggle to quantify risk, as if actuaries didn’t exist. The basic issue may not just be that we have been ignorant (and I am talking about myself here), but that we’ve been positively resistant to handling uncertainty.
Embracing uncertainty
Twenty years ago, Ype Wijnia from ProGas in the Netherlands alerted our community to the problem of relying on people who don’t like to work with uncertainty On those whose previous education, and maybe natural preference, leans towards knowing for sure, or relying on rules to give the right answer.
But that just isn’t asset management, it’s all about making decisions and planning for the future. The one thing you can be sure about is that you don’t know everything. You can’t know everything.
We have to ‘embrace uncertainty’, as Chris Lloyd, who previously chaired the IAM work on competences, put it – and use the tools and concepts for managing risk that have been there for years in other professions.
Looking across these key competences, i suspect we’ve relied too much on the skills that individuals bring across from engineering or finance. We’ve lingered too log in our old comfort zones. We should not expect that what we have learnt from previous education and experience is adequate on its own.
We should expect any asset manager to go on learning and exploring areas that may be quite different to what we’ve done before. New tools, new concepts, jumping happily into the unknown.
Curiosity may well be the most important asset management competence of all.
Penny and Ruth at AM Peak gala dinner, April 16 2024
Since I last posted I have spent a month celebrating 40 years of Asset Management in Australia with Penny, Jeff and Gregory; gone to one of my favourite conferences in Minneapolis; taught an advanced AM course to some sophisticated AM practitioners in Calgary, as well delivering to as a post ISO 55000 certification client in California.
I have been thinking about where AM needs to go next, at the same time as worrying that things have not moved far enough.
And it just keeps coming back to: We Need to Raise our Game. And not because what Penny kicked off four decades ago hasn’t made a huge difference already.
But I want us to do more.
First, to effect what Penny set out to do through Talking Infrastructure: to look up and out, to make a difference to key decisions on what infrastructure we really need.
Secondly, as I start to unwind from delivering basic AM training – something I have loved doing for nearly 14 years now – I reflect on our competencies.
This kicks off a series of questions and reflections on what we want to change, and how to do it.
How to interest existing AM practitioners in upskilling on risk, data analysis, culture/ system change, persuasion, strategic thinking?
How to find people who want to challenge the status quo on infrastructure projects?
What can we best offer from our collective experiences to support better decision-making?
I am looking forward to this!
Come and meet Penny and Talking Infrastructure in person! Watch this space for additional details, but here’s the programme so far:
April 15 & 16 AMPeak, Adelaide. Penny and Ruth will be at AMPeak.
April 18, Stantec, Brisbane
April 19, PACoG, Brisbane. Asset Institute, QUT, 11am- 12.30, followed by lunch. Join Joe Mathew and Kerry McGivern along with Penny and Ruth to discuss what we’ve learnt in 40 years – and look forward to the next 40. Includes a look of what is happening with asset management internationally, in this big year for AM.
April 23, Blue Mountains City Council, Katoomba, 10am to noon. Seminar with Jeff Roorda on Blue Mountains City Council planetary health and disaster recovery experience, plus update on the new advocacy project underway by IPWEA Roads and Transport Directorate (IPWEA RTD – NSW/ACT), on Lessons Learned from Disaster Recovery, to assist NSW Councils work with Local, Strate and Federal Government Agencies.
April 24, Sydney event, Dawes Point. 6-10pm Harbour View Hotel, 18 Lower Fort Street, Dawes Point, NSW 2000. Using the recent experiences of the Blue Mountains City Council, Talking Infrastructure is holding an event in central Sydney to call for urgent changes in all of our asset mindsets and tools to ensure planetary health, biodiversity and climate change resilience. Meet with Penny, Jeff, Gregory and Ruth, plus local IPWEA. Food provided thanks to AMCL.
April 30, IPWE, Melbourne. Presentation by Penny. Penny and Ruth will be at IPWE until May 3. There will also be a dinner out in Melbourne for TI friends and colleagues – please let us know if you would like to join us. And bring along your copy of Penny’s book to get signed!
If you are planning to attend our Sydney celebration, please RSVP to: amis40@talkinginfrastructure.com so we can keep an eye on numbers – limited to the first 60! Event is free, includes food and discussion with Penny Burns and Jeff Roorda and a whole heap of old friends and colleagues.
Full update of the 40th year celebration events shortly!
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