One of my great pleasures in life is to sit in a café and talk infrastructure. A popular topic, even before Lou Cripps came up with the idea Asset Managers are platypuses, is what makes an effective one? Or even what attracts us in the first place.
Who are ‘our people’?
To defend us from accusations of exclusivity, I need to point out that it’s not about what you studied at university, or which country you grew up in. Good Asset Managers are ‘anywheres’, as Ark Wingrove put it.
This is, of course, a Serious Subject, as we desperately seek to switch to a future-friendly mindset; seeing the bigger, longer picture around physical assets. But it’s also kinda fun to think about the difference that makes a difference.
Like the AM team who came on one of my courses and took me literally. We teach whole life costs, cost-risk optimisation, thinking in risk, and how information is all about decision-making. But I don’t think most attendees go away and start actually doing any of that. This team did.
One reason people don’t try whole life cost modelling, or risks in $, is because they think it’s too hard before they even start.
But my best students – well, if that was how you do Asset Management, they would figure out how to do it. When I later asked Todd Sheperd how they quantified asset risk, he said he looked it up on the internet. After reading a recommended book and going on a recommended course. (As I said, he took me literally.)
Yes, he must have had the confidence to believe he and his team could figure it out. But I think it’s more than that. It’s about curiosity and openness to learning.
It also involves a belief that if I don’t know something, someone else may have worked it out, maybe in a completely different context. We can learn from others – like 17th century gambling mathematicians, or stock markets traders.
Or actuaries. It’s as if 99% of attendees on AM courses have never heard there is a whole profession who have worked out how to put $ on risks.
Sitting in a café recently with Todd and Julie DeYoung talking about infrastructure, we also recognised another quality: interest in what we can learn from people doing something that’s not exactly the same as what we’re trying to do. Like wondering what we can learn from assets that aren’t exactly what we have – instead of deciding ‘our’ assets are so special there is nothing we can learn from others (and the processes of AM planning and modelling don’t apply to us).
In other cafés years ago with another old AM friend, Christine Ashton, we thought it’s about pattern matching. About looking at a problem we had, and the kind of technology approach it needed, as opposed to a fixation on a particular software tool, for example. What kind of problem is it? What sort of tool could help?
To me that’s linked to 80:20 thinking, but I suspect that some of my best AM buddies are better at details than me. It’s happily straying into the unknown, instead of trying to force everything to fit into what you already know.
I love (nearly) all of my students, of course. But not all of them turn out to be my sort of café people.
Shout out to yet another recent café and Janel Ulrich – her of the ‘can we develop our SAMP in the next 12 hours?’ (yes, of course we can). I love the way she loves ‘our kind of people’, in all our quirks and heartaches and irrepressible openness.
Others who will recognise their café contributions include John Lavan and Manjit Bains. And Penny, with whom too many of these café conversations have to be virtual.
My colleague Todd Shepherd and I had a brainwave* last year to restructure how we teach Asset Management – not as a line that starts with investigating capital needs, the conventional beginning of the asset life cycle, but from where we are now. That is, right in the middle of maintenance. We are always deep in maintenance needs.
It makes more sense of the history of AM, straight off. It was not people writing business cases, or design engineers, who realised the urgent need for something different. It was maintenance, post World War 2, and then Penny Burns and the problem of unfunded replacements and renewals in the 1980s.
If Asset Management has waves, we might suggest what Wave Minus 1 was. Wave Minus 1 was hero engineers, from the Industrial Revolution on, building heroic infrastructure – Bazalgette and London sewers, Brooklyn Bridge. Sewers and bridges are both good things. But they are not quite such good things if they leak or fall down because they are not maintained or renewed.
With infrastructure, it is not enough to start; you have to see it through.
Penny used life cycle models to understand the extent of renewals, and increasingly I don’t feel anyone is really doing Asset Management if they do not use such models. Of course it is called life cycle for a reason. There isn’t an end, only another cycle.
But now I fear that starting at the beginning of one lifecycle in our teaching still makes it sound as though it is the creation of infrastructure that’s the important thing. We have not really got the cycle bit across enough, at least to the average engineer we teach. What comes after construction is still a vague future state, that is someone else’s problem.
And, not at all coincidentally, that’s also the point of the circular economy concept. There is no meaningful product end, and we are right in the middle of the mess we already built.
It is not a straight line into the future, where we set assets in motion and let them go. Longer term thinking, long-termism, has to think in cycles.
*Almost certainly it was Todd’s brainwave, which I managed to catch up with.
One key question for me this year as an Asset Management practitioner is time itself, and how we act with the future in mind.
The innovation of Asset Management is very largely about time. Penny Burns created AM to look forward in time and consciously choose whether we needed to renew like-for-like, or should manage our assets differently in future.
Forty years ago, we were not thinking about climate catastrophe, and we were only just at the start of the IT revolution. (I had only just seen my first PC, and the world wide web, smart phones and terabytes of data storage for $50 were barely pipedreams.)
But the question of longer-term thinking has in some ways gone backwards in our societies since then, not forwards.
The vast majority of infrastructure organisations still only have very short term asset plans, and almost no asset strategy. More have, must have, 3- or 5-year plans now, thanks to AM as much as anything. But the 15 to 20 years plus strategic view that Penny proposed is still a challenge.
And shockingly few agencies even use life cycle modelling to project the very basic realities about the timings for replacements, let alone a mindset of always asking ‘And then what?’ of our day to day and year to year asset decisions.
I fear as a community we are still underskilled, underprepared for the future: for embracing uncertainty and identifying with the future.
And so, as we celebrate, look back and learn from the last 40 years, Talking Infrastructure plans to act like the future matters.
Starting with a time series of blogs to ring in the New Year. Your contributions most welcome!
In April 2024, it will be 40 years since Penny Burns started the whole thing. Talking Infrastructure plans to party like it’s 2024, all year.
2024 also marks milestones for the Global Forum for Maintenance and Asset Management (update of the AM Landscape), ISO (10 years since ISO 55000), and the Institute of Asset Management (30 years since it was founded): there will be a lot happening.
The need for more considered decision making for our future infrastructure has only grown and become more urgent. Asset Managers everywhere know this. Our 40 year celebration will be an opportunity to take this message not only to managers of infrastructure but also to those who decide, design, construct, fund and vote for our infrastructure.
Like infrastructure itself, our purpose is to support the wider community. There is a lot of satisfaction to be had in this and we invite you to join us, and enjoy it too. What area of Asset Management and decision making particularly interests you?
We are looking to develop a circle of advisors, who, through their interests and work, can have the fun of keeping Talking infrastructure up to date with current issues, and setting its future directions.
Your ideas for celebrating our 40th are also needed and much welcomed. This will include events across Australia in April, and presence at AM conferences and articles wherever and whenever we can.
What did we learn in the last forty years? Where do we need to go in the next 40 years?
It may be hard now to imagine a time when we didn’t have asset management so let’s go back almost 40 years ago to when it started, a time when our spending on assets was hand written on file cards, before AIS existed, before fax machines (remember them?), and before computers were everywhere. How did we go from practically nothing to where we are today? Well, it has taken 40 years. This is the story of the first ten: how it all started – and why.
Here we go behind-the-scenes to see how the idea arose and grew and how it was influenced by the economic, political and administrative changes taking place at the time in the Australian government and, indeed, around the world. We look at the challenges, successes and setbacks – and many of the funny things that happened along the way. So join this journey into the past and gain a deeper understanding of the foundation on which contemporary asset management principles are built.
Available both in print and ebook versions from Amazon (kindle) and other on line booksellers (epub). All proceeds support the work of Talking Infrastructure.
What does perfect Asset Management look like? What’s at the top of the mountain we’re climbing?
And what’s a metaphor between friends?
But to some of us it’s more a windy, winding road, over yet more hills, where we sometimes see part of the road up ahead, but never glimpse the end.
Why does this matter? Having recently faced a virtual room full of people saying they would know what to do next, if only someone could describe the end state for them: as though Asset Management is an accomplishment, something you can complete. Done, checklist all checked, and move on?
In contrast, is there a destination for, say, engineering? Although many engineers may not examine what they believe, they surely think of engineering more as a state of mind, a way of thinking, rather than something that gets finished. (And who even has a vision of HR?)
We could describe the top of our mountain as the point where everyone takes it for granted that we think longer term, whole system and lifecycle, use information wisely, and truly embrace uncertainty.
But I don’t think that’s what the metaphor betrays. I think it’s more ‘when we have a complete asset inventory and a strategy for every class’ and can stop thinking about them and move onto something more fun. The way some, at least, appear to think a check the box approach to ISO 55000 is what we need, or even the point.
But, you know, it’s also whether fun to us means continual discovery, the thrill of not knowing and then learning – or getting back to my desk to fill something in.
In the late 1990s two of us, now very senior IT director Christine Ashton and me, put forward the need for such active translation between IT and business users. IT has always struggled to understand what’s really needed by users, as the users themselves are poor at describing their information and information processing requirements.
Christine and I set up a special interest group in the British Computer Society – an organisation which could do with some translation in the first place – for people who work between IT and business. We had a great time discovering some very good people, who, I am happy to say, generally earned pretty good remuneration for their ability to understand what the users need and turn it into something IT techies could understand (and use). It’s still a rare and precious ability.
And it’s surely still as big a challenge as ever.
Add to that how to bridge between an engineering mindset and business. I train engineers who still radiate – why do I care what the objectives of the organisation are? My job is to do the right thing by the asset, regardless of management.
It’s fascinating in all three cases, because scientists, just like engineers and IT in their different ways, are kinda proud of their ability not to compromise with business and organisational realities.
In particular, the issue of ’embracing’ uncertainty is just so relevant to Asset Management. But we educate scientists, engineers and IT to hanker after 10 decimal places of clarity.
And, I fear, not to ask ‘so what? – or, what happens next?’ as often as they should.
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.
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?
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.