How do we “do” Asset Management in an increasingly constrained world?
It’s been a few weeks since my last post. As is often the case, increasing demands direct our attention elsewhere, and it isn’t always possible to put pen to paper. However, the last fortnight has helped align my thinking on a subject that becomes more pertinent to our discipline every day: How do we “deal” with Asset Management constraints?
The Convergence of Asset Management Constraints
The most discussed constraint is almost always finance. However, we are seeing constraints appear in many other forms; organisational, legislative, societal, and traditional operational limits. While constraints have always existed, usually in the form of “the budget is limited” or “resourcing is capped”, it is my opinion that these pressures are now converging.
Our ability to work within them is being tested to the point where a damaging “loop effect” is forming.
Historically, when facing a financial gap, it was possible to find alternative delivery mechanisms or utilise spare capacity in our systems and people. But as resource constraints have become prevalent across the industry, placing additional requirements on existing staff is no longer a viable option.
This creates a self-sustaining cycle: Finance constrains delivery, delivery constraints place pressure on the organisation, which in turn reduces available finance. We are fast approaching a critical mass where these trade-offs are no longer sustainable.
The “Knee-Jerk” Trap
Asset Management is the art of ensuring organisations achieve value from their assets (you can read our [AM 101: Defining Value] post here). Applying stringent constraints forces Asset Managers into a struggle for value.
I notice this most in reactive repairs. In times of high constraint, organisations often “knee-jerk” back to what they know: spending the absolute minimum to patch an asset and keep it running. The “Line of Sight” onto future liability is, at best, acknowledged; and at worst, ignored completely. This creates a self-fulfilling prophecy of increased financial strain in future years.
Introducing: The Constraints Triangle
As Asset Managers, we have a duty to guide the conversation. We must acknowledge the damaging precedent set by ignoring these constraints. If done properly, the conversation can move an organisation forward rather than generating animosity between pressured departments.
During a recent discussion, I had a “lightbulb moment”. In Asset Management, we talk about the “Holy Trinity” of Cost, Performance, and Risk. We visualize this as a triangle: when one segment is influenced, an impact is felt on the others. This helps non-AM professionals recognise the need for a balanced approach.
I believe we need a Constraints Triangle to demonstrate the same logic to our stakeholders.
The Constraints Triangle consists of three segments:
- Financial: Capital and operational budget limits.
- Organisational: Legislative, societal, and policy-driven limits.
- Resource: Staffing, skills, and supply chain capacity.
Just like the Holy Trinity, if you lean too heavily on one (e.g., cutting the budget to zero), you negatively amplify the impact on the others (e.g., overwhelming your remaining staff or failing your organisational objectives).
Final Thoughts
It falls to us as Asset Managers to work within the constraints we have, but also to educate those around us on the long-term impact of those choices. By doing so, we can begin to change the narrative from “wanting more for less” to “achieving the best value possible.”
Do you agree with the concept of a Constraints Triangle, or have you found another way to communicate these trade-offs to your leadership?
If you’d like to use this model in your own organisation, you can download a copy of my Constraints Triangle One Pager for free via the link below:
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