More than a decade ago, Chris Lloyd and Charles Johnson wrote in the Seven Revelations of Asset Management that we must “embrace uncertainty”.
This year we want to build on good practice to help our profession do this.
Let’s cut to the chase: our role as asset managers is to develop plans for the future, and yet the future, even next week, is uncertain. (Particularly at the moment.) We can’t not plan because we don’t know everything. In fact, uncertainty makes it even more essential to have plans.
Chris and Charles were right: we have to leap in.
It’s better to be roughly right than perfectly wrong. And there is no other option. Aiming for certainty is how we would ensure we are adding little value to asset decisions.
Board member Todd Shepherd has worked in North American power and water to develop a better approach to infrastructure risk and uncertainty, based on good practice in other professions and sectors. It’s not about a new tool, not software, but a more fundamental understanding of what managing uncertainty requires.
It requires not even trying to get a perfect answer.
Because the cost of perfect information is infinite – impossible. And good decisions don’t need it. What’s needed from us is practical ways to reduce our organisations’ uncertainty.
We’re currently drafting a much longer piece about how we make better decisions through better estimating and grasp of probabilities. And how it is, in the end, easier to deal with uncertainty than some of the weird things we do in infrastructure at the moment.
Are you in with us?
(We’d love to hear from you on risk.)
ID 26212151 | Child In Shallow © Pavla Zakova | Dreamstime.com
When we look back at the history of Asset Management, there is one curious feature.
In a world in which many people go on about data, many act like the revolution of AM is the discovery of asset data.
Why?
Penny many years ago made the point – well, that the point is making better long-term decisions about assets. Wave 1, ‘asset inventory’, only has any value when we use such data to make better decisions, in Penny’s Wave 2: strategic asset management. As Penny says, when you focus on the decisions, you have a much clearer idea of what data you actually need. Wave 2 improves Wave 1.
But there must be some kind of reason why organisations seem to have to go through Wave 1, collecting and organising data, first.
Cynically, we might think it’s because it’s easier than questioning decision-making: something middle level asset managers can do without challenging business at the top level. Or, and/or, there are plenty of suppliers willing to sell you help in collecting data or implementing the transactional IT systems to put it in. Few that actually know how to make better decisions.
But I come to suspect that, weirdly, asset-centric data is more radical than it sounds. What suggests this is how hard other teams kick and scream about collecting and handing on asset inventory, the very basic data on what assets we have where. (Capital projects, IT, even some maintenance teams.)
It doesn’t seem to help to stress that we cannot manage what we don’t know we have. Is the problem that they don’t understand that we do have to continue to manage assets into the future?
Or is it – back to basics – that the whole concept of an asset is the first revolution?
Other people manage projects, budgets, sites, even value on the balance sheet. Only Asset Management believes the fundamental unit of management is the operational asset.
Can we rewrite the advice on implementing Asset Management to get us to decisions faster?
Are too many organisations still not making that very first leap into the water?
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