So the key issues, and this is problem domain definition. This is Dr. Henning-speak here. So there’s a problem and a domain for that problem.
What are we trying to sort out? And so the key issue is what are we solving?
Are we solving a growth issue? Are we solving an economic decline and trying to manage the infrastructure through that decline?
If we’ve got some major new major industry or something coming, like a big new port or whatever it is, do we need to provide stuff for that? And how do we do that in the most efficient way?
Now the thing is it sounds easy. You’re just going to rock on up, do this analysis and then you can get a nice tight definition of the problem, but it’s not.
That is one of the hardest things to do. And the reason it’s hard is because there’s a lot of complexity and there’s a lot of unknowns and to get a decent strategic vision and statement, you’ve got to reduce that complexity to simplicity in a way that people can understand it or think they understand it and then you can tell them that message.
And I’ll just give you a tiny example that some years ago, I listen to a lecture by a guy who’ve done a Ph.D. in Bayesian Mathematics, which was used for probability analysis in infrastructure – or it can be.
And he got up and he wrote on the board and he had slides and there were mathematical equations of increasing complexity from the top to the bottom of the board.
And he’s a guy that so have a brain half the size of the planet almost, very very bright guy.
Actually, he was in New Zealand, but he’s over in the UK now. New Zealand might have been too small for the thinking he was doing and the application of it.
And he did all this, and to some extent, he was like, look at me I can do all this. I got lost about a third of the way through the math – I am not ashamed to admit that….
So I said to him, there was a social function in the evening, and I thought I will just mess with his head.
I said, do you know Albert Einstein.
And he said yes, I do, I really respect him.
I said, “What do you think his most famous equation is?”
He said that’s easy, E=mc2.
I said yes.
I said Einstein could have produced the board full of equations to prove that or he produced that nice simple one that everybody thinks they understand but in reality, they don’t.
He replied, I think I understand it, though, it’s one of those that you can unpack more and more.
And he started to think about and I could see the gears winding up in his brain. He just disappeared… in the corner thinking about it.
Because what he had done is, he produced an incredibly complex solution that he couldn’t sell to anybody because nobody understood it.
It’s the same with asset management strategy.
You can produce something that’s incredibly complex that shows that you are masterful of modeling and everything else like that but if nobody else can understand it or can buy into it, then you have had a lot of fun modeling – but at the end of the day, what produces the action is then reducing that to a simple problem statement that says, we’ve done all these analyses but this is the problem.
This is all this complexity comes back to simplicity. And the cold hard reality is that in any discipline the masters of the discipline reduce complexity to simplicity.
You have to understand something intimately to take it from complex to simple. It’s a real challenge. You’ll spend the rest of your professional lives working on that.
But part of the case for strategic asset management is taking as much complexity and reducing it to simple visions or simple statements that people, politicians, funders can buy into and can go, yes I get it, and then you go and get to do the rest of the project.
The other thing about strategic asset management is that it’s all about scenarios. Nothing is ever certain going forward.
So there are patterns and there are trends that you can go, yes the population trend is this, the demography trend is this, it’s locked in or the funding trend is at a certain level but at the end of the day, what you’re presenting is a series of scenarios based on a whole heap of assumptions.
And so, what you need to be thinking about is in terms of when you present this sort of information is, having underlying analysis to support those scenarios and then the test is – do the scenarios that you’re developing, support the understanding of the key issues.
It’s really easy, I’ve done it myself to go oh, this is a cool scenario, I’ll do this.
And you get carried away, write up to this wonderful scenario and then you go oh actually that was something I was interested in but it doesn’t really impact on the key issues.
And again, ‘do nothing’ is a scenario.
That’s the same with any sort of benefit-cost analysis, you always have a do nothing for the benefit cost.
It’s the same as asset planning and asset strategies.
[…] continues to talk more about strategy in asset management in this […]