Over the last several weeks we have looked at problems for infrastructure decision makers when directions change – but before construction has started.  However, since large scale projects can take a long time to construct many changes are likely to take place (and today much more so than in previous decades).  If we were to stop and start again each time a new development comes on line, nothing would ever get done and budgets would explode.  So do we accept that once a project starts construction, we ‘leave well enough alone’?  Consider the following:

in 1950, Port Adelaide was rated as Australia’s third busiest port with berthing capacity for 41 ships and 6 kilometres of wharfs. The Greater Port Adelaide Plan was published that year with plans for the expansion of the port. A great deal of development then took place: reconstruction of wharfs, bulk handling facilities for coal and other bulk materials installed. Huge grain silos were constructed in 1963 and many storage sheds.

Then along came containerisation and made it all largely redundant as not only were the storage facilities not needed, the new container ships had a deeper drafts which required moving this shipping to the Outer Harbour because the Inner Harbour where the reconstruction had taken place, did not have the depth required.  Compounding the misery for the port was another change that saw an increase in transportation by land rather than sea.

Looking back we always say ‘the signs were there’ –  and no doubt they were, but how are we to tell ‘the signal from the noise’ to use Nate Silver’s phrase.   Yes, the first container ship was launched in 1956 and it is hard to believe that this had not been a subject of much discussion in the navigation industry for years before its launch, possibly back to the time of the publication of the Greater Port Adelaide Plan but information was then not as easily accessible as it is today and it is also likely that the full potential of container shipping only gradually became apparent after that first voyage, i.e. while the reconstruction, much of which was to prove redundant, was going on.

So, our question for today is:  Given the long lead times for planning and developing major infrastructure – and the likelihood of increasingly rapid change – what can we do to protect ourselves from such seismic changes, or even smaller, but nevertheless expensive, ones?

A second question is: How can we build in processes that make adaptation to new information easier?

As a board member of several boards I learnt to be suspicious of a ‘one-off’ reason/excuse for failure. Especially if the same problem returned but was ‘explained away’ with a different ‘one-off’ answer. It was always worth drilling down for the root causes, always worth examining the process.

A poor outcome can be used as an opportunity to improve a process. You will find that the trust in you and your processes will increase if you do, as illustrated in the following two stories:

1. The Quality Control Manager of a large white goods industry tells how sales considerably increased when he took the trouble to explain to sales staff what problems had occurred in the past and what had been done to ensure that they would not happen again. The sales staff used these stories in their conversations with potential buyers who were impressed by the quality improvement processes involved. They bought into the process – and the product. But even more interesting, he told me that if customers had had an initial problem with a product butit was fixed promptly and courteously, they became more loyal customers than those who had not had a problem at all! The reason is that with their good experience of correction, they now trust the process.

2. This is a personal story:  I was working on a report, one of a series, for the South Australian Public Accounts Committee, and discovered a flaw in the modelling – at the 11th hour!  The Committee had approved it and the House had been advised we would be tabling but when we sat down to write the press release it became evident something was wrong. Worse, I had no idea how to put it right.This presented somewhat of a problem as the rules are that once the Committee commences an investigation, it must publish its findings. Nobody had noticed, and perhaps nobody would, but I knew it was there. We could not let it go ahead and had to advise the House that there would be a delay. In the event I was able, after much further and anxious work, to find the solution. But I was convinced that after this embarrassing hiccup the Committee would never trust my judgement again and I was prepared for a hard time when I presented the next report in the series. It never came. In fact, they were less, not more critical and searching.  I was very puzzled. The Committee Secretary grinned: “Why should you be surprised? They now know that the process can be trusted, for when the going gets tough you will protect them from embarrassment at the cost of your own”. That poor outcome had, paradoxically given me an advantage!  With the chance to refine and demonstrate the strength of our checking procedures, trust levels went up!

Question: Could this be an answer to our decision-maker’s dilemma’s (Oct 21 and Oct 25)?

It happens a lot!  A senior staff member visits another country, sees something new, comes back full of enthusiasm to have the system installed here. His idea is new and exciting and it is given consideration.  Time passes, the protagonist commits all his energies to getting the new project accepted and he is successful.  In the meantime, over in the original country, experience with the new system is already throwing up a great many problems. Already the original country is starting to regret adopting the idea and is making excuses for the problems that have already arisen. The protagonist and his team, of course, hear about these problems.

Now they have a decision to make. Do they bring these problems to the attention of their superiors?   If they do so, their position on the most innovative departmental project team, which is bringing them lots of interest and kudos, is at risk.  Besides the directors, department chiefs and even the Minister have already made favourable noises about the project.  Not so much that it could not be quietly shelved, but still it could be a bit of an embarrassment. Do they risk embarrassing their seniors or go ahead with the project despite the serious objections now being raised overseas?

This problem is not confined to the public sector, and is certainly not avoided by contracting out the work to the private sector.

Questions:  

• What are the arguments in favour of change in these circumstances?
• What are the arguments in favour of doing nothing?
• Would a change in the system help?  If so, what?

In his October 11 post, Gregory introduced the trolly problem and asked whether it is ethical to not take action when by doing so you could save a life. It is a tricky problem, a real ethical dilemma which is why the trolly problem has lasted so long in the literature.  It might seem that as advisors on asset decisions we are never in such a dire life-or-death decision, yet is this really so?  Consider the Railway Signalling Project.

The signalling system was part of a larger redevelopment of the railway station and had taken many years to design and develop and to pass all the various hurdles that such large scale public developments require.  It had also languished a long while with the cabinet sub-committee entrusted with making such decisions. Now, during this time it had become perfectly obvious to all the departmental protagonists that there was a far better signalling system now available, one that would be cheaper, easier to install and maintain and far more reliable.  The question was:  Do we issue an amendment to the original design to take account of this new development which would invitably slow the already lengthy procedure even more, but would save considerable money and, quite possibly, lives because of the greater reliability of the new system?. The ease of installation of the new system would allow us to recoup some of the extra planning time involved. Or, now that we are so close to the finish line and have spent so very much time in deliberation already, do we simply run with the inferior system and say nothing?

The organisation chose the latter course of action and the railways thus ended up with a more costly and worse performing system than it could have had.

Question:  Were they right to have done so?  What would you have done?

“When the first attempts at systematic weather forecasting were made, one idea was to look back through the records for a day where the weather was much the same as the day when the forecast was being made.   The assumption was that the weather on the following day would be the same as the weather on the following day in the historical past.     But surprising events are always occurring to disrupt this sort of forecasting.”   (from Len Fisher’s talk on the ABC’s Okham’s Razor, 11 May 2016.

We laugh now at the absurdity of these first weather forecasters. However, many in the stock market still analyse charts of past stock prices to predict future changes (this is a bit more complicated, perhaps, but it still seeks to find answers to the future from the past)   At least, if you get it wrong with stock prices, you lose a bit of money but can try again tomorrow. But if you apply these ‘looking back’ ideas to future infrastructure investment decisions that will impact our communities for decades, that is a very different matter.

Thirty years ago when I became interested in infrastructure planning, it was common to take a rising trend and simply extrapolate it and although it often resulted in major oversupply, we still did it. And we are still doing it!  We just use more complicated algorithms.

But if not extrapolation of the past, what techniques are available for anticipating a changing future?

Switch (courtesy Falk2)

If we have information that can lead to better decisions, can we fail to act? Can we excuse ourselves with “it’s their job”, “not my responsibility”, “I don’t want to be involved”.

Philippa Foot devised a thought experiment in 1967, routinely called the “Trolley Problem”. The experiment involves a train (trolley) heading toward 5 workers. The train is a runaway and all 5 workers will certainly be killed if nothing is done. There is a side track with only one worker and you are in the right place at the right time to make a decision. You can activate the rail switch, diverting the train and resulting in a single certain death. Or not. There is no time to alert the workers, or gain assistance; the train can’t be stopped.

As a tool to teach ethics this particular experiment is deceptively simple, should I sacrifice 1 to save 5? It does however raise numerous questions, “am I obliged to act?”, “do I have a duty?”, “is interfering wrong?” “do I act morally or ethically?”, “do I act for the greater good, the good of the people involved, or for myself?”

This dilemma is very long lived and has captured the imagination of the professionals and public. There are many variations – is it Ok to stop the train by pushing someone in front of it? What if that person was responsible for the runaway train? What if the workers could be saved by sacrificing a bystander, or a loved-one?

When anyone is faced with making a decision at a switch they can make a moral choice, an ethical choice, a popular choice, and when making that choice they can include longer time frames, wider consequences, how the action will make them feel, how others will think of them.

Questions today:  When it comes to infrastructure decision making, when our decision takers are standing at the switch, how do we know if we should contribute to the conversation? When would we join in if we do, and with what level of action?