30Jan 2018

Infrastructure decisions: easy choice?

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For senior decision makers, infrastructure used to be a relatively simple matter – assign different teams of engineering and finance specialists to determine if it could be built and could be afforded. Infrastructure decision making is no longer simple, more a matter of juggling many factors, each of unknown severity and immediacy.  This is why I have introduced the ‘big picture’ issues now being dealt with by the world’s financial elite at the World Economics Forum, and the many practical issues essential for economic, social and environmental sustainability, that the United Nations are grappling with in the 17 SDGs, the sustainable development goals.

Being aware of the issues is clearly the first step, but then what?

How would you go about including these goals in your own infrastructure decision making?  And how would you know when you have been successful?  The Australian Senate has recently launched an inquiry into the implementation of the SDGs.  Here is what they are looking at.   (Note that the last 4 line items refer to Australia’s work in supporting other nations.)

Questions for Today:

  • Are they the right questions for the Senate?  What is missing?
  • Are they the right questions for You in your own infrastructure decision making?  What questions would you add, or modify?

Here is the Senate Inquiry’s Terms of Reference

An inquiry into:

  1. the understanding and awareness of the SDG across the Australian Government and in the wider Australian community;
  2. the potential costs, benefits and opportunities for Australia in the domestic implementation of the SDG;
  3. what governance structures and accountability measures are required at the national, state and local levels of government to ensure an integrated approach to implementing the SDG that is both meaningful and achieves real outcomes;
  4. how can performance against the SDG be monitored and communicated in a way that engages government, businesses and the public, and allows effective review of   Australia’s performance by civil society;
  5. what SDG are currently being addressed by Australia’s Official Development Assistance (ODA) program;
  6. which of the SDG is Australia best suited to achieving through our ODA program, and should Australia’s ODA be consolidated to focus on achieving core SDG;
  7. how countries in the Indo-Pacific are responding to implementing the SDG, and which of the SDG have been prioritised by countries receiving Australia’s ODA, and how these priorities could be incorporated into Australia’s ODA program; and
  8. examples of best practice in how other countries are implementing the SDG from which Australia could learn.
25Jan 2018

Infrastructure: a global game

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Our January theme is ‘Getting Ready for Change’. One of the biggest changes is that infrastructure is no longer a national, but a global game.

In the last several posts we briefly looked at the issues being addressed at the World Economic Forum.  But WEF is not Australia’s only major international commitment impacting our infrastructure decisions.

The Australian Government is also a signatory, along with over 190 other countries, to the United Nations 17 sustainable development goals, or SDGs. This requires the co-operation of all levels of government, all business and really all individual Australians.  Yet how many of us are even aware of these goals?

The Senate has recently opened an inquiry into the implementation of the SDGs and we will look at this next few posts. But first, consider the goals themselves. Unlike the United Nations’ earlier Millenial Goals which focussed on developing countries, the SDGs apply to all, developing and developed alike.

One of the first steps is getting ready for change is to be aware of the global game we are now playing in.

So Three questions today:

  1. On an individual level:  how many of the goals apply to consumption choices you make?
  2. On an organisational level:  how many of the goals apply to the work your organisation does?
  3. On a government level: how many of the goals apply to the decisions our governments make (at all levels)?

If you would like to share  your thoughts on these issues, please do – just click in the menu above the item ‘leave a comment’.

23Jan 2018

Creating a Shared Future in a Fractured World

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‘Experts’ have been taken to task for being ‘close focussed’, thinking only of their own area and not connecting with the wider world.  If infrastructure decisions are to improve our world, they need to take in the wider context.  How difficult this will be is, I think, indicated in the following statement of purpose for the World Economic Forum that begins this week in Davos.

Creating a Shared Future in a Fractured World

“The global context has changed dramatically: geostrategic fissures have re-emerged on multiple fronts with wide-ranging political, economic and social consequences. Realpolitik is no longer just a relic of the Cold War. Economic prosperity and social cohesion are not one and the same. The global commons cannot protect or heal itself.

Politically, new and divisive narratives are transforming governance. Economically, policies are being formulated to preserve the benefits of global integration while limiting shared obligations such as sustainable development, inclusive growth and managing the Fourth Industrial Revolution. Socially, citizens yearn for responsive leadership; yet, a collective purpose remains elusive despite ever-expanding social networks. All the while, the social contract between states and their citizens continues to erode.

The 48th World Economic Forum Annual Meeting therefore aims to rededicate leaders from all walks of life to developing a shared narrative to improve the state of the world. The programme, initiatives and projects of the meeting are focused on Creating a Shared Future in a Fractured World. By coming together at the start of the year, we can shape the future by joining this unparalleled global effort in co-design, co-creation and collaboration. The programme’s depth and breadth make it a true summit of summits.”

18Jan 2018

Global Risks 2018

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Next week Australia will join world leaders, big business and international institutions at the World Economic Forum in Davos.   Ahead of this meeting WEF has released its Insight Report “The Global Risks Report 2018”.   It is worth reading – and fascinating! This is the world for which we need to make future infrastructure decisions. Here is a glimpse.

Also of interest for future planning is the section of the report that contains a chart showing how the risk profiles have changed year on year.

Thoughts?

16Jan 2018

Change, can we do better?

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Penny: We talk a lot about change today but as Chris Adam, Director of Strategic AM Pty Ltd, Brisbane, Qeensland, points out in this post, change has always been with us – and we have survived. But consider our reactions to the changes that have occurred within the last 100 years. Have we really done much better than just blunder through?  And, can we do better now?  Indeed, “how” do we ‘rethink the future’.

1. The Inevitability of Change

We need only reflect on the last century to recognise the inevitability of change:

  • The second decade of the 20th century was defined by “the war to end all wars” which brought destruction and dislocation on a scale never before experienced
  • The 1920s were a decade of social and economic change finishing with the most disruptive stock market crash of all time;
  • The 1930s yielded the depression with further social and economic dislocation on a grand scale;
  • The 1940s was defined by WWII with death, destruction and dislocation on a scale that dwarfed our previous efforts;
  • The 1950s were a massive social and economic challenge as the world rebuilt and millions immigrated;
  • The 1960s sexual revolution;
  • The 1970s energy crises;
  • The 1980s “greed is good” decade;
  • The 1990s with the “dot com bubble”

My point is not to undermine the idea that current forces are not indeed a major challenge but to demonstrate that change is inevitable and, as a species, we have a proven capability to respond to such challenges

2. How do we “Re Think” the Future?

We tend to see change as a threat and prefer it didn’t occur, so how do we address this challenge and avoid a “head in the sand” attitude?

We need to take the future seriously but predicting the future is problematic. With the possible exception of WWII, practically no-one forecast the massive changes that characterised each decade of the 20th century. Current predictions that IT will lead to massive unemployment as machines take over reflect the exact same claims in the 1990s where it was forecast that traditional retail was “dead” as people would abandon shopping (as an inefficient and limited way to produce what we want and need).

3. So, if we can’t predict the future, how do we “take the future seriously”?

Ideas?

05Aug 2017

Asset Budgets and Transparency

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Editor:  You can find earlier posts on budgets, by using the search function, and all posts by Mark by selecting his name.

Further to my earlier posts about asset budgets, I couldn’t help but want to have another go at this by asking a slightly different set of questions. These relate to the principle of transparency.

By transparency I mean:

Is there a clear and documented basis for the estimates upon which the asset budget has been based?

  • Are the estimates based on ‘simple’ or ‘averaged’ projections of expenditure rather than ‘modelled’ projections that emulate realistic timings and patterns of expenditure for the nature of the works involved and how they will be procured?
  • Is it based on estimates for all assets over the full period that the budget is meant to address? By all I really mean a schedule that lists all of the assets, including those for which a $NIL expenditure is forecast for the relevant period. (I ask this as a check that all assets have been given consideration.)
  • Are the underlying assumptions documented and made clear to those being asked to approve the budget – especially the reliability / sensitivity of rates used and associated finance costs?
  • Are the priorities inherent and sequencing / pace of the proposed works also made clear and demonstrably aligned with corporate business and services priorities for the forecast period? How does this align with projected cashflow requirements and funding availability? (A projection showing a skewed acceleration of expenditure towards the final quarter must raise concerns – not only about reliability of delivery, but also in relation to business and services priorities being effectively supported, and in relation to getting value for money from what is going to be spent.)
  • Are the risks that are inherent to the portfolio and the proposed program delivery made clear and ‘current’ for the immediate and forecast context of the program and its delivery?

If these aspects are not transparent to the decision-makers then there is greater risk that the program will not be delivered and the budget will be nowhere near accurate

26Jul 2017

Simplicity

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Edward de Bono wrote much.  His book, Simplicity, I think is very appropriate to apply to asset management and KPI decision making. The part that resonated with me is the difference between simple and simplistic.

In Infrastructure decision making a simple model is a great thing, a simplistic model is a destructive and dangerous thing. This is true in all fields, engineering, economic and social included. Simplistic by definition is overly simple. Unfortunately many of out decision makers have a simplistic understanding of both the English language and the role of infrastructure.  You will hear many people calling for a more simplistic solution or approach. They mean “simple”, but one doubts whether the inability to differentiate between simplistic and simple translates into the making of sound decisions.

Regardless, satisfaction surveys, mandated bureaucratic KPIs, single-digit comparisons to like organisations and other such endeavors are  simplistic management techniques.  They have been over-simplified and are as a consequence of no value.

Simplicity before understanding is simplistic; simplicity after understanding is simple.
– Edward De Bono

Simplistic decisions are tolerated and often demanded by our populations.  I believe this is because the general public has little understanding of the complexities of the modern world, and no desire to embrace that understanding.  While the situations and decisions can be presented simply by our leaders, there is no political advantage in straying from binary arguments, right and wrong, black and white.  The issue here is to help people understand that complex arguments about infrastructure can be presented simply, and be debated on their merits.  With this understanding, the people can call for rational debate, not simplistic decision making.  As professionals in our fields we can assist by presenting our work as simply as possible and resisting pressure to make our work simplistic.

Question for the day:  

What techniques do you use, or know of, that help you to determine whether your reasoning is ‘simple’ or ‘simplistic’?

 

 

05Jun 2017

Talking Überstructure

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No I’m not talking about huge structures, but about talking with Uber drivers about infrastructure decision making, and what I have learned from them.

Uber drivers are business people, they are characterised by having a drive for improvement of their lives and are often driving as a second career or while transitioning from one life circumstance to another, new job, new city, new family, etc. They are also polite.

As professional drivers they have a serious interest in transport infrastructure, especially roads. As service providers they will listen to customers’ stories. My drivers are often surprised when I voice the opinion that we don’t need more lanes, roads and tunnels; especially if we are in slow-moving traffic. There then follows a discussion, usually around 20 minutes, that covers the underlying needs for roads, traffic loads and the factors that contribute to peak congestion, the available solutions to the problems of road transport and the contribution that smart, connected technology can make to the problems of city life.

Since my drivers are constant consumers of connected technologies (GPS, booking apps, forecasting software) they have no trouble understanding the benefits that flow from the ideals of “Smart Cities” and easily understand that improvements flow from having information sources connected. They see that transport issues are directly related to things that can be adjusted with a connected view of the world. They also comprehend that the technology needed to address these issues has been available for years, and that it is the lack of integration of business, government and social information and policy that retards us.

What I have learnt from Uber drivers is that a conversation of 20 minutes can change a person’s understanding of infrastructure needs completely, from a view that continuous infrastructure construction is essential to a view that the solution to congestion of all kinds can be addressed with understanding and leadership.

Smart cities are coming, but I’d like the benefits now. Rather than upgrading highways, I’d like to see freely available information that can be used to tell drivers that leaving 15 minutes later will get you to your destination at the same time and with less fuel and frustration. Then service providers like Uber can give me an option to have a cup of coffee before my car arrives and everybody wins.

07Feb 2017

Trumpfrustructure

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President Trump’s protectionist stance has been cemented by executive order withdrawing from the Trans-Pacific Partnership (TPP). Protectionism has swept Europe; Trump is not an isolated believer.

Much of the world’s infrastructure is built by international firms, their success built on scales of economy and expertise.

In the new protectionist environment, major infrastructure will increase in expense and/or decrease in quality.

My question is – where are the economic advisers, educators and leaders that help people understand the facts of globalisation, rather than the beliefs about globalisation?

03Feb 2017

If you build it, they will come

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Sydney, the second most expensive city in the world. The new Premier, Gladys Berejiklian, declares it “the biggest issue”.

Nationals leader Barnaby Joyce tells us to accept it.

But why?

I see this as a complete failure of leadership, and of understanding.

Sydney is lovely, beaches, rivers, parks, infrastructure. There are beautiful beaches for the length of the eastern coast. There are rivers and creeks everywhere. Parks abound. So infrastructure is key to the attraction of Sydney, and to the escalating costs, congestion and other trials for our leaders.

To quote “Field of Dreams” “If you build it, they will come.” And they do, by the thousands.

I spoke to a group of young people and asked them why they moved to Sydney, “because it is close to everything” they told me.

Building more infrastructure in our capitals generates more demand to live in our capitals.

Our regional centres spend year after year, planning different ways to improve the lot of their citizens, without significant success. The deck is stacked against them.

Until our secondary cities can offer proximity to services (and that means infrastructure) they will remain a “negative good” in the minds of our young people, our new people and our businesses.

Long term planning is necessary to relieve the pressure on our exploding Capitals and bring equity to our regional centres. We don’t need a way to build more free-standing dwellings in Sydney. We need to lift the service provision in other areas.

How can this be done?