For centuries London's Watermen carried passengers both across and up and down the River Thames. The Watermen rowed a small boat, called a wherry. Purchasing a wherry and a licence to operate one was very expensive and they were often handed on from father to son. A wherry was a valuable asset.
In the eighteenth century, horse drawn carriages for hire started to carry people up and down the Thames, but not across it. Cabs threatened the upriver and downriver component of the Watermen's trade and reduced their income. Cabs were also a valuable asset, to the cab drivers, but not to the Watermen.
Later in the eighteenth century a major building program saw a series of new bridges span the Thames. These bridges effectively put the Watermen out of business and the value of a wherry dropped considerably. Crossing the river became relatively quick and easy. The bridges were, and still are, a valuable asset to the City of London and its people.
When developing a Strategic Asset Management Plan (SAMP) it can be tempting to start with the assets. What assets do we have? How do we manage them? A Waterman might have asked: How many wherries do I have? How can I improve the performance of my wherry to make it go faster? But your SAMP needs to be business focused, rather than asset focused.
Key stakeholders for the Watermen were their paying passengers. What did the paying passengers value? Getting from A to B: safely, quickly and cheaply. They didn't want a faster wherry, they wanted a shorter journey time.
The strategy comes before the assets.
There are a few Watermen still on the Thames today, but the wherry is mostly used for ceremonial purposes, not as a form of daily transport.
Who are your stakeholders and what do they value?
2011 was a momentous year: Brisbane suffered a catastrophic flood, my husband and I got married and spent a wonderful honeymoon in France, I won a scholarship to Harvard Business School and I wrote my first book, Pivot Point: making the decisions that matter in business. It was a time before the word 'pivot' was in vogue.
2020 is another momentous year. In recent months everyone is talking about how they need to 'pivot'. What does this mean for you?
It may mean that you've had an unexpected shutdown of your operations with an indefinite timeline for reopening. Or, you may have had to ramp up to meet escalating demand. Both are stressful. Both require a re-think of the way you do things and a re-set of strategic priorities. Whether you're ramping up or ramping down, now may be a necessary time to pivot.
In my book, Pivot Point, you'll find a straightforward framework to guide you through the key decisions required to change direction or re-frame your strategy under your current circumstances.
I've made Pivot Point available in pdf as a free download. I hope you'll find it valuable and if you have any questions, please be in touch.
Download Pivot Point here.
Boards make collective decisions. This is different to executive decision making, and it's an important nuance to understand if you're presenting a proposal to the board.
Last week I presented a webinar for the Asset Management Council on Asset Management in the Boardroom. We talked about the types of decisions boards make and also the nature of board decision making. If you're presenting a proposal to the board, there's more than one person you need to convince.
In my experience as a Chairman, I've always aimed to work towards consensus in the decisions of the board. It's important to listen to the dissenting voice. It's important to have a robust discussion and to hear different points of view.
If the board can't come to a consensus, based on the information provided in your proposal, they may ask you for further information. This could be to provide greater depth, or to add context and relevance. It means the process may take longer than you'd like, but the additional information will help the board come to a decision that best balances risk and opportunity.
My recent article series on the Board's Role in Asset Management can be downloaded here.
I was delighted this week to deliver the first of the Asset Management Council's AM Tuesday webinars.
We discussed asset management in the boardroom, including the nature of board decision making, the types of decisions boards need to make and how asset management practitioners can support board decision making.
In his book 'How to build a car' legendary Formula One designer Adrian Newey talks about the designer's role to push the performance of the car as far as possible, without breaking the rules. There are constraints on engine size, dimensions, weight and many other factors. The board's role is a bit like this, they need to ensure the organisation can perform at its best within the constraints of compliance requirements, while effectively managing ever-changing risks.
When preparing proposals or reports for the board, asset managers need to bear in mind the dynamics of board decision making and ensure they provide relevant and timely information, without excessive technical detail.
I've prepared some useful resources on board considerations for asset managers, which you can download here.