How FMs can convince executives to solve problems they can’t see

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Operational managers enter hazardous territory when asking executives to fix problems they don't know exist.

Convincing executive management to spend money on solving problems they have yet to recognise is always a challenge. Covaris’ CHRIS BURDEKIN reveals how operational managers can address invisible risks, while ensuring executives remain happy.

One of the great questions in the long-term utilisation and management of physical assets is not one of measurement and tracking, but of how to justify budget requests to executive management who have perspectives and priorities that differ from those of operational supervisors. All too often we hear that budget allocations have been determined based on historical data and real opportunities for improvement are missed. Therefore, any investment that deviates from this determination, and from the perspective of the executive, is seen as a poor investment.

Such responses place considerable stress on those who have the responsibility of ensuring infrastructure continues to function in the day-to-day operations of the business. They also tend to be more common in organisations where risk is pushed down the line to operational managers, placing further burden upon them.

That’s a serious concern, especially in companies where executives make decisions on a priority-oriented basis. In these companies, the absence of a well-structured business case identifying and quantifying the risk associated with failing to carry out programmed work as per corporate standard or expert recommendations can prove costly in more ways than one.

So what are operational managers to do?

There are two key elements to gaining the attention and approval of executives who manage corporate risk.

The first is to extract work history transaction and cost data, and apply engineering principles/algorithms to accurately model trajectories in operation losses to present trending risk. A suitably qualified and experienced adviser who specialises in asset management can attend to this element.

The second is to establish a quantifiable base line to demonstrate the company is utilising best practice and to show the data can be depended upon.

Establishing the base line

ISO 5500x is the standard specific to asset management. It focuses on the management of risk, cost and performance in a balanced manner that seeks to unlock business value from the utilisation of assets. While ISO 5500x does not dictate how to undertake specific asset management tasks, it does specify the key elements that should be present.

Establishing the base line means mapping business policy, management structure, systems, procedures and accountabilities to this standard. This process takes the form of an ‘asset maturity assessment’.

Outcomes include a report with a clear graphical or dashboard representation of a corporation’s maturity as per the standard, coupled with a suggested continual improvement plan.

ISO 55000 states, “Assets exist to provide value to the organisation and its stakeholders.” The relevant term here is value, and what value is currently being lost as a function of how asset management is currently being delivered.

There are three areas where value can be assessed:

  • Strengths and improvement opportunities classified from a forensic treatment of evidence presented in formal session interviews
  • Assessment of the document framework that defines and governs asset management, and
  • Analysis of data relevant to work delivered and reliability of the assets.

These areas are considered in a maturity audit in various ways. One common way is through the rating of areas on a four point scale, where four is the exemplary performance, three represent competence and two denotes an opportunity for improvement. Through analysis of this data, an assessor can note gaps in aspects of the asset management system and make recommendations for strategic improvement.

Results that can’t be ignored

Through the utilisation of historical data and analytics, a solid argument can be prepared to validate a company’s strategy for asset management.

By mapping a recognised best practice methodology to ISO 55001, a company executive can confirm core processes are undertaken with accepted best practice, that the investment is justified and that critical decisions are well-validated.

With the application of these two key elements confirmed, the decision-making process is returned to operational managers, and leaders can more accurately determine and invest in top priorities. What’s more, they can identify and help deliver potential cost savings by avoiding over-servicing, unnecessary capital outlay and ineffective servicing schedules.

For more information, or to book a consultation, contact Chris Burdekin at Covaris.

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