Asset Management Parable – Two Companies Compared

This asset management parable is based on a true-to-life situation. See a stark contrast in outcomes influenced by the approach to asset management.

asset management parable

Asset Management Parable – Part One

One company saddled a single person to spearhead the asset management program.  Despite a consultant’s up-front admonishment – “Organize a Team” – the project was to be this person’s baby.

The False Start

Up-front setup followed this person’s view of how the business operated.  There were many options to be considered.  With a single decision maker at the helm, choices and decisions could be made quickly.  There was no conflict.

No issues surfaced until this person took the first big picture view of the new setup.  It seemed clumsy and clunky.  Even though a lot of work had been done, and much time had passed, it was scrapped for an alternative approach.

The revised approach addressed shortcomings of the initial approach.  The new arrangement was tidier and better suited to this person’s requirements.

The Poor Fit

Fast forward six weeks.  A larger group met to talk about the setup and how it was going with the new asset management program.  This was the first time some had seen the arrangement in place.  As questions were raised and new, novel, scenarios were floated, a strong undercurrent developed among meeting attendees – “Why did you set it up this way?” and “It won’t work for me because of how you set this up.”.

The setup had now been in use for some time.  Reversing some of the choices would entail starting over.  The arrangement, with all its shortcomings, would stand for the foreseeable future.

Asset Management Parable – Part Two

Another company appointed a project champion to lead their asset management program – an individual who saw the merits of formalized asset management. S(he) knew this would affect, and ought to engage, numerous people in the organization.

A kickoff meeting had an open invitation to all.  Specific invitations were sent to associates in different functional areas of the business.

The Good Start

The meeting began with opening remarks about potential gains from asset management.  Then there was discussion of a specific type of asset about which all had keen interest.  The initial work would focus on better managing this specific asset type.  Attendees from all business disciplines looked forward to the next meeting with anxious anticipation.  Everyone was given an assignment to prepare for the next meeting – “Make a list of specific characteristics and features you would use to describe this type of asset to someone who is not familiar with the asset.”

Everyone came well-prepared for the next meeting.  Attendees had been with the company for some time and were well familiar with the type of asset being discussed.  Surprisingly, there was a lot of variation in each person’s view of how the asset ought to be described and what characteristics were considered important.

This vital up-front exercise mimicked the parable of blind men and an elephant.  This is a story of blind people who learned about an elephant by touching it.  Each man felt a different part of the elephant – say an ear, the side, or a tusk.  Conclusions were drawn based on each person’s sense of their contact with the elephant.  Their descriptions of what an elephant is varied widely.

People involved in asset procurement described the asset in terms of lead time, supplier, and cost.  Those who routinely used the asset described the asset in terms of its weight, size, and appearance.  Others who had experienced the disposal of the asset, at the end of its service life, focused on its scrap value and environmental considerations.

The lively, sometimes impassioned, discussion drew upon diverse perspectives.  The team created a comprehensive list of descriptive, point-by-point, vernacular agreed by all to completely describe the asset.

Subsequent get-togethers created a feature-rich framework for tracking and evaluating the assets.  This established the way assets would be described and managed by a simple, manual, asset tracking system.

The Good Fit

The original team spawned other teams that were interested in other types of assets.  Adopting the recently-developed framework and discussion agendas, new teams quickly seized stewardship of other asset types.

A manual approach to tracking assets was later upgraded to a simple, standalone, cloud based, system.  The system was configured to accommodate the unique frameworks developed by the teams.  This arrangement has been in place, with only minor touch ups along the way, for several years.  Participants beam with delight and can spontaneously enumerate the many ways they are extracting more value from their business-critical assets.