I teach people about Asset Management – up to 1000 a year – and I get to see a wide range of reactions. Best is when someone in class decides Asset Management is what they have been looking for their whole career, its mixture of technical and people and business challenges exactly right for them. Or the maintenance guy who, by the end of the course, was explaining to everyone else to “do the math” for optimal decisions.
For some, on intro courses, it’s mildly interesting, at least as long as their leaders tell them it is.
Sometimes, however, people resist.
I taught a class of design engineers a few years ago, who argued the toss on everything, and failed the exam afterwards. I think we can take it that they didn’t get it because they didn’t want to. (I have also taught a class to project engineers who had understood AM was the way forward for them personally and had got together to sign up for it.)
Recently, I was working with an organisation – an early-ish adopter in the USA – where they were keen enough on AM to create a series of jobs for ‘Asset Manager’. Not necessarily what I, personally, would call Asset Managers, but rather engineering roles to develop priorities by asset class for replacement capital projects.
The way we teach AM, following the lead of Richard Edwards and Chris Lloyd (two very smart UK pioneers) is top down. If strategic AM is aligned to organisation priorities and levels of service targets, we start with what those targets are, with external stakeholders interests, the role of top management, and demand forecasting. In other words, context and goals. I warn everyone about this right at the start – and also make it clear that nothing else matters if we don’t understand what we want the assets for in the first place.
I was struck, this time, by the lack of curiosity the class had. No-one knew what their level of service targets were, they stumbled to think about who their key regulators were, where demand was heading, even who might have a legitimate interest in what assets were being replaced, outside of engineering and operations. It wasn’t just that they didn’t know, they also didn’t much care. They were not stupid.
I was struck by how weird it is, really, that we have to teach anyone about alignment. That smart people working with assets don’t stop to ask what their organisations are really doing with those assets.
What a good Asset Manager really needs more than anything is curiosity – asking all the questions about why and how and how we can do it better in future.
But some people just aren’t very curious, for some reason. They are not much fun to teach!
It’s always an interesting question: why do things arise when and where they do? Why Asset Management in Australia in the 1980s, when plenty of other useful asset ideas came from other places and times – reliability engineering in US commercial airlines post-war, for instance?
And when I explain where much best practice comes from, why is New Zealand such a paragon? There are very good reasons, when you ask about the when and the where.
There is something about fundamental ideas that makes understanding the specifics important. An approach that seems like such a good idea as Asset Management – why wasn’t it more obvious, earlier, to more people? A fabulous clue as to how what seems like an obviously sensible mindset, required something major to shift. A chink in older assumptions, even culture, that let someone, something start to question, to let a new light in.
I suspect a lot of us struggle about why people resist what seems backed by logic, evidence and good sense. But I don’t want us to go down the deep, dangerous rabbit hole that is conventional economics, making a simplifying assumption that people are ‘rational’ the way they define it – a definition which doesn’t really care why people do what they do, or how what seems ‘obvious’ in one situation doesn’t work in another, or anywhere.
And that is partly why I love physical infrastructure. One size really doesn’t fit all* – a good strategy for one kind of asset would be barking wrong for another, and even for an identical asset in a different context. And it all depends on what you are trying to achieve, specifically.
Physical assets are the opposite of idealised generalisations. Yes, there are generally good questions; but not universal good answers, at least not in my experience.
Infrastructure Asset Management is the epitome of the full appreciation of time and place.
Watch here for the publication of the first part of Penny Burns’ history of Asset Management, from its beginnings in South Australia….
*Thanks to a Bay Area shoestore billboard, and Robyn Briggs ex Pacific Gas & Electric, for this!
Appealing though it might be to be a secret hero*, like Fedora Perry – cool hat! – even this misunderstands platypuses. The internet has plenty of cute images of things that are labelled platypuses but aren’t.
In particular, many cartoons (like Perry) show them with a beaver tail*. They are sort of like an Australian beaver, so we assume they look like them. Even the robot platypus has a beaver tail. But platypuses have furry tails.
Once someone put a beaver tail on a platypus, it was easier for people to copy than check a photo of a real platypus*.
And I guess they were the inspiration for Fantastic Beast the niffler – and now nifflers show up in seaches for platypus images.
And since almost no-one has ever seen a baby platypus*, fake pictures circulate (and there’s a furious debate about what they are even called).
Yes, platypuses are widely misunderstood, when people have even heard of them.
What does a good infrastructure Asset Manager really do*?
*Hint: not a lone hero, not a construction engineer, not necessarily what people think, and they don’t spring fully formed from college…
“The worst misunderstandings sometimes happen between different teams within the supposedly same ethnic group, particularly if they [come] from different locations or had different professional training (say, IT workers mingling with engineers)” – Gillian Tett
I have long been fascinated by differences in approach between engineers and Asset Management professionals – how AM is not just another variety of engineering. And, for that matter, why Operations managers don’t think like AMps, or how IT teams look at the world. For instance: what is it that motivates people in IT teams? (Not, I think, the pleasures of making users happy.)
In my own life, I seem to have sharply favoured working with maintenance, or ex-maintenance people, rather than Engineers with Capital E. Because they were very different experiences.
It is not that there have not been engineers who are massively important to me, such as my brother, or my parents’ best friend Ed – but then again, they never acted like typical engineers, and were not very polite about such ‘grey men’ (Ed’s phrase) themselves. That engineering does have its own cultural norms, some quite odd, has been a question for me for many decades.
So my eye was caught by the review of a book by Financial Times editor Gillian Tett, Anthro-Vision: How Anthropology Can Explain Business and Life. About trained anthropologists such as Tett who have found themselves working in businesses, such as Google or GM, or what they would advise governments on dealing with COVID-19.
She describes how anthropology is about both investigating what’s strange, other, exotic, and about the tools to see our own culture/s, to understand what is weird (or even WEIRD) about it. The book has plenty of interesting examples – about Kit Kats in Japan become an indispensable good luck charm for school exams, about dealing with Ebola or ‘CDOs’, as well as more effective advertising and work practices.
But it particularly made me think of how to understand the oddities of current engineering – why is so often tends towards the short term, to silos and uncoordinated stupidity, even resistance to data. Surely none of those attitudes are ‘logical’ – so what is really going on? I take it as given that, like IT, there is a coherent motivation, a vision of what it means to be a good engineer. So how come… that doesn’t play nice with Asset Management, so often?
And then again… what is the culture of Asset Management, developing before our eyes?
Because I also take it that if you don’t try to understand the water you swim in, you also don’t really understand what you are doing – how it might need to change or evolve – and why it gets up the nose of others who don’t share your basic values.
There is always culture, always weird to someone outside it, and managing infrastructure involves several different ones. So we must have anthropology in our Asset Management toolkits, too!
Next: Ethnographic approaches we might use in practice?
When I managed a small subsidiary company in the 1990s, I read a book by ex ICI chair John Harvey Jones on values. He said – and I am paraphrasing wildly – that any useful organisational value must have an opposite which would work in other circumstances, otherwise it’s so much mom-and-apple-pie stuff you can’t disagree with, but which does not motivate or drive very much, either.
When my team tried articulating our collective values, we all agreed on loyalty – which the marketing men said was not an appropriate marketing slogan, so I knew we were on to something. What could be (in other contexts) a useful opposite? Impartiality, for example. Loyalty was something we felt, and it also turned out to be something our clients could feel (and appreciate). Someone else could contribute impartiality.
As we face a puzzling current widespread refusal of North American infrastructure agencies to set clear SMART targets, we have wondered aloud if it’s because they don’t want anything they could fail at. I begin to wonder if it’s worse than this, a lack of clear purpose or value at all.
I think I have just spotted the worst yet: a transportation agency that’s adopted ‘We Make People’s Lives Better’. Their top leadership are very proud of it, since who doesn’t want to Make People’s Lives Better? The detail of what counts as better, which people, how we will do this – and what we do if one lot of people want something that would adversely affect another group of people? Well, don’t be negative, we can work that all out later. (And don’t even bring up all the critiques of naïve utilitarianism.)
Do we want a bus company to ‘make our lives better’, or do we just want them to concentrate on running an efficient and comfortable bus service?
For the moment, we asset managers can play the game of what, if anything, would not fit under this rhetoric. How could it even in theory rule out a bad option?
Yeah, it was a high-priced consultancy that facilitated this, but why does this even feel right to the executive, apart from being a meaningless feelgood statement?
Is it a triumph of the marketing men, or a complete dereliction of duty?
When a government runs a ‘balanced budget’ its spending (and the jobs that this spending creates) is compensated for by its taxing (and the jobs that this taxing destroys). It follows that the justification for infrastructure can never be the jobs it creates for it doesn’t create any – it simply shifts jobs from one part of the economy to another.
The job losses are not easily measured but they are real. As asset managers we see it all the time, when, following an infrastructure spending splurge, governments try to claw back the money spent by reducing funds for operations and maintenance. So that not only is there not only no net increase in funding and jobs but we are now left with distortions in the economy – more assets to maintain but smaller budgets with which to do it.
We can see this level of distortion when it happens in our own organisations. But impacts extend beyond those organisations that benefit from the infrastructure spending, to those many companies, associations, individuals that now experience higher taxes or lower government spending in their areas or lower demand because spending has been shifted elsewhere. This is difficult to see and where logic must apply.
How can we be sure that spending money on a new infrastructure project trumps spending the same amount of money on hospital staff or teachers, out-of-work youth, or any one of a number of other spending opportunities?
For the distortions to be worth it to the community, we must be pretty sure of the ongoing value of the infrastructure to the community – see Jeff Roorda’s comments to the previous post.
Make a term, or an idea, popular and any number of people will latch onto it and attach it to their own agenda – and it doesn’t matter if their agenda is diametrically opposed to yours. In fact, it might serve them better if it is.
For example, I have seen instances of the term ‘asset management’ taken over by developers, applied to office cleaning, and, of course, to maintenance itself. The one I really objected to was the developers. Figuring that their own term had come into disrepute this particular group had decided to take ours!
We see what we want to see
Another problem with communication of ideas is that we tend to see what we want to see.
Years ago the Public Accounts Committee produced a report showing how much would need to be spent on hospital infrastructure renewal IF nothing was done by way of better maintenance, accounting and planning practices (ie without better asset management). A few days later the Minister for Health, completely ignoring the intent of the ‘if’ statement (as people are sadly inclined to do) profusely thanked the PAC Chairman since this ‘proved’ he needed a larger budget!
On another occasion, I was walking in the city when the State Treasurer dashed across a busy main road to tell me enthusiastically that it was thanks to me that the State had kept its triple A credit rating! What?! I had looked at our asset base and saw a future renewal problem that threatened to dwarf the state’s budget, however the credit agencies had looked at the dollar value of our assets – which we had made visible for the first time – and, ignoring the budgetary impact of restoring the deterioration that had already occurred and would need to be attended to, saw only billions of dollars in assets. We are all subject to this restricted vision. We see what we want to see.
All of this is by way of saying that the term I used almost 30 years ago for accounting for infrastructure has long since been hijacked, and by so many, that it is unwise to continue using it. So, I want to start again with greater neutrality.
First: let us be clear about the task – namely to develop financial metrics that drive good infrastructure management and meet the need for financial responsibility and accountability. This requires genuine dialogue between two disciplines – and a listening ear.
Let’s start with a thought experiment
There may be lots of things you like about the current way in which we account for infrastructure, but what don’t you like? Are there problems that it creates for you or your organisation?
In the 1960s you were young and growing rapidly. We supported you as we do all youngsters. It was the right thing to do. But now you are grown and need to take your place in the support and protection of others. We have already passed the point where we should have weaned you and helped you grow to full independence. That is our fault. We weren’t seeing the bigger picture. But if we continue to baby you, to protect you, to put your needs ahead of others, we will end with a flabby, overgrown infrastructure, absorbed in itself, incapable of recognising its true purpose – which is to support the wellbeing of the community.
This possibility is being brought into clearer view by Covid 19. The global pandemic is having a negative impact on infrastructure demand which, while we may expect some recovery, won’t recover completely. It follows that increasing the supply whilst demand is falling will not produce the economic recovery effects we seek. We need to think again.
So, Infrastructure, the time has come for you to take your rightful place in the world, to underpin the four community wellbeings – social, cultural, environmental and economic. It is time to consider how best you can serve these wellbeings. You need to be clear about your purpose. Simply ‘being’ is self indulgent and will no longer cut it. Like all adults today you need to change and develop, learn new skills, and to do things not done before. Growing bigger is no longer the objective, it is now time to grow wiser, to demand less and provide more. For this you need a new image.
In your youth, you were brash and grey and analog – all concrete and steel. But now we say goodbye to this old image. In your maturity, you need to be self effacing, indispensable, but in the background and not the foreground. In this world, you are no longer grey, but white – the invisible whiteness of digital technology, of human intelligence, of caring, and yes, of love. No longer the focus of attention, it is now your role to help others grow and shine.
We are moving into a “perfect storm”where our natural and built assets move into states of uncertainty and instability. We must rapidly build an understanding of the integration between our ecology and built infrastructure because rapid changes will increasingly challenge or capacity to foresee and manage risks. We are already seeing the initial evidence or these risks in major fire and flood events and likely pandemic events.
Growth boom infrastructure is approaching end of life, ageing population requires infrastructure realignment, climate, environment and virus risk changes start to move from debated possibility to clear and present dangers. Technology is the wild card with the potential to provide new solutions or exacerbate existing problems. Where we allocate our resources is more important than ever before.
The decisions made by this generation will determine the quality of life of future generations. A future that could be bleak and fearful or exciting, prosperous and filled with hope. Our current decision-making framework and decision support processes, systems and assumptions need rapid overhaul to support our current leaders guide us to the future we want and the following generations deserve. We can avoid reacting to preventable or manageable disasters by developing integrated rather than fragmented strategic plans.
What do we want for our future?
Talking Infrastructure’s Visionis a world in which decision makers understandand care about the cumulative consequences of their decisions and their constituencies understand the trade-offs involved in those decisions.
What do we have to stop doing?
We need to stop thinking of ‘infrastructure’ as a panacea for all economic ills, but rather to consider individual infrastructure projects and their individual contributions to general wellbeing – economic, social, and environmental. What questions do we need to ask of all projects to make sure that we are ‘future friendly’? What do we need to know about the relationship between future change and infrastructure? What changes do we need to make to current decision processes to achieve this goal? Could these resources be better allocated to prepare for future foreseeable risks.
We want to avoid infrastructure waste. Stranded assets are assets that are now obsolete or non-performing and recorded in corporate books as a loss of profit. Current estimates vary but run into the many trillions of dollars. Climate, technological and demographic changes all contribute to this problem. But so do we – when we construct infrastructure better suited for the 20th than the 21st century. Every year we use up valuable resources and add to environmental damage and often social damage, constructing long-living assets destined to end on the stranded assets scrap pile. Resources that could be used to mitigate more urgent foreseeable risks.
We believe we can do better
In the past, governments have tended to see infrastructure as an expenditure ‘blob’ – useful for soaking up unused corporate savings to ‘kickstart’ the economy or as a generic ‘source of jobs’. These are the attitudes that have got us where we are now. We believe that if we focus on ‘future friendly’ projects, that takes future change into account and specifically designs for it, we can avoid unnecessary waste and manage future risks.
This requires us not to think of ‘infrastructure’ as a panacea for all economic ills, but rather to consider individual projects and their individual contributions to general wellbeing – economic, social, and environmental. What questions do we need to ask of all projects to make sure that we are ‘future friendly’? What do we need to know about the relationship between future change and infrastructure? What changes do we need to make to current decision processes to achieve this goal?
This is what Talking Infrastructure is about!
Do you also believe we can do better?
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This is the kind of comment that you might expect from a new economics, or a new age group, but you probably would not expect to hear it from a major multinational.Yet that was how the new CEO of Suez Environment, a major global water and waste organisation, opened his announcement of the company’s 2030 Vision.He was referring to physical size for he went on to speak of reducing capital (physical structures) and increasing IT, of focusing not on ‘growth’ as such, but on selecting just those areas in which they could add most value.In other words, to grow performance and profit.And yes, profit is a ‘good thing’, if it is a reflection of good performance.
I have a feeling we are about to see more of this kind of growth take place from now on. We can contrast this approach to the older approach where companies seek to grow simply by amalgamations and mergers. In the recent past, there has been a lot of this ‘growth’ but it really isn’t growth at all, because nothing has been added by the merger (despite claims to the contrary). It is just a re-packaging of what already exists.This has been particularly prevalent in engineering and consulting, and yes, also in asset management, companies. Yet it seems that every time a merger occurs, not only do we add more ‘administrative’ levels (i.e. more cost) but many of those employees who are most able and innovative, leave the mega businesses and set up their own businesses as small, more flexible, more imaginative units – and thrive.
So is ‘size’, as such, a good indicator of company strength? What examples do we have of growing ‘smarter’ rather than simply larger?If we are in future to focus on growing ‘smarter’ rather than ‘larger’, what would we measure, what indicators would/should we focus on? How does ‘big data’ and algorithms offer opportunities for smart growth?
And the important question:
How can strategic asset management contribute to such ‘smart growth’?