February 6, 2025 • 28 mins
Join host Frank Morphis III and Hexagon's Rachel Wagner as they dive deep into the world of asset management. Wagner shares expert insights on moving beyond traditional maintenance strategies, addressing the challenges of data quality and creating dynamic asset management frameworks. The conversation explores how companies can build more effective programs that balance risk and opportunity, offering practical wisdom for maintenance professionals looking to drive operational excellence in today's complex industrial landscape.
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Episode Transcript
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Speaker 1 (00:08):
This is a Risk Matters podcast with ABS
Consulting, where our goal is tofocus on industrial
organizations and what mostfolks are dealing with from an
asset management and riskmanagement perspective.
My name is Frank Morfis, I'myour host today and I'm honored
to be joined by Rachel Wagner,who's an account executive with
Hexagon.
Rachel, thanks for joining us.
Speaker 2 (00:30):
Hey, thank you.
I'm so excited to be part ofthe podcast.
Really appreciate it.
Speaker 1 (00:34):
Absolutely so, to kick this off, I'd love for you
to give a little backgroundabout yourself, about what
you're doing, and hopefullytransition into what we're going
to talk about today, about what?
Speaker 2 (00:45):
you're doing and hopefully transition into what
we're going to talk about today.
Definitely so.
I am an account executive, asyou mentioned, at Hexagon, where
we specifically focus on waysto help industrial customers
find ways to effectively managetheir assets.
So it's a combination ofsoftware and services that we
provide and we're just lookingfor the most effective means to
(01:07):
help customers meet theirobjectives.
Speaker 1 (01:10):
Awesome and, as everybody would imagine, that's
our goal with this Risk Matterspodcast.
Previously, this podcast hadbeen focused specifically on
cybersecurity and the vital rolethat it plays in the industrial
setting cybersecurity and thevital role that it plays in the
industrial setting and I thinkthat our goal and specifically
(01:30):
with you today, Rachel is toexpand on that, to focus on
other areas where we see riskplay a big goal, and today,
specifically, asset management.
The risk that we're talkingabout is asset failure,
something that I think everybodydeals with on a daily basis,
things that you and I, Rachel,talk to folks about regularly,
right?
Speaker 2 (01:47):
Every day?
Speaker 1 (01:48):
Absolutely so, rachel .
My goal is to share some of ourthoughts, some of your insights
, some of the experiences thatyou've had based on personal
experiences, discussions withother folks, as well as some of
the antidotes and stories tohelp bring this podcast together
and make it fruitful for thelisteners that we have joining
(02:10):
us.
So, as I mentioned previously,in this episode we're going to
talk about asset management whatit is and what it isn't, teeing
up some of the things that someof those industrial customers
deal with on a day-to-day basis,some of the discussions that
are happening internally andsome of the ways that they're
working to improve in thisconcept.
So, to pass it over to you, Iwant to simplify that a little
(02:32):
bit.
What do you see typically asthe end goal and some of the
ways that people can or aregetting there?
Speaker 2 (02:42):
Well, thank you.
Yeah, so you know, as I thinkabout that question.
I mean the end goal, the, whatis actually pretty simple,
pretty consistent, regardless ofindustry, it's the how we get
there.
That is a little bit morenuanced but more challenging.
And you know, regardless ofwhatever industry that you're
operating in whether it'saerospace and discrete
(03:04):
manufacturing, power, gen, oiland gas, really doesn't matter
those heavy industrialindustries have spent a large
capital investment on thoseassets and, of course, they
expect them to perform.
So that end goal is simpleright, make sure those assets
are generating value so that youcan recoup that initial capital
(03:29):
investment, and then thoseassets just continue to generate
value until they reach somepoint in the future end of life
or even extended end of life.
So again, that end goal ispretty simple.
But how they actually go aboutachieving that end goal this is
where you start to get somevariance in different customers
(03:51):
and there's a number ofstrategies or a number of
different ways that people tryto achieve this right Extraction
of value of your assets.
A lot of them rely on hope andluck to get them there, believe
it or not, I've seen thatstrategy a number of times.
It is a strategy, it's just nota very good one.
(04:15):
There's also the infamous donothing strategy.
Maybe you're on the non-planplan.
If you think about your car,how long do you think that would
last if you never spent $1 onmaintenance, never changed the
oil, never put air in the tires,never took it in for a tune-up?
(04:35):
Nothing Last a year, maybe two,before you're ditching it on
the side of the road.
If you think about the size ofthe investment, you're spending
tens of thousands of dollars onthat vehicle versus the size of
the maintenance spend, which isprobably something in the
hundreds.
(04:55):
Those are two very differentorders of magnitude.
So these are some of thetrade-offs that, when you're
putting in place good assetmanagement principles, you're
directly looking at the costversus performance trade-off,
for example.
There's also the when we thinkabout strategies.
(05:16):
There's this let's let someoneelse tell us what our strategy
should be.
Strategy.
This is when you're relyingsolely on OEM recommendations
which, believe it or not, thisis probably the most common
strategy I've seen.
This is a recommendation that'sreally just based on averages.
So the OEM or the originalequipment manufacturer of the
(05:38):
asset is saying things like foryour car, for example change
your oil every 3,000 miles,rotate your tires annually,
change the brakes every 30,000miles, etc.
It doesn't actually count forany variation whatsoever in
things like your drivingpatterns or how often you
(05:59):
operate the vehicle, maybe whatthe driving conditions are like
Are you in a city, are you in arural, backcountry?
So those variables actually candirectly influence how that car
, that asset, is performing.
And so when you have a strategythat's based on nothing other
(06:21):
than these as-designed averages,it creates a lot of opportunity
for improvement.
I'll just put it that way thisis okay.
And again, it works for a lotof customers.
Again, I've seen this probablythe most in all of the customers
that I've talked to, wherethey're just using the OEM
recommendations.
(06:42):
But there's a lot of what Iwould say value leakage.
Essentially, you're probablyspending more than you need to.
The reliability of the asset isprobably not operating in its
most optimal condition, so yourstrategy is not shaped around
(07:03):
the operational context in whichthat asset's being operated.
And then, finally, as we talkabout all these different
strategies, there's what Iconsider really true asset
management strategies.
It does account for variation,it is dynamic, it adjusts based
(07:24):
on how the asset is performingin the environment that it lives
in.
A true asset managementstrategy is constantly in motion
, it's changing, it's evolving,based on new information and one
of the authors.
Well, frank, let me ask youthis have you read the book
Atomic Habits?
Speaker 1 (07:46):
I have not.
I have not read it.
We talked about that previously, but I have not had the chance.
Speaker 2 (07:50):
Oh my gosh, okay, run , don't walk to go, read that
book.
It's an amazing book and verysimple read, very quick read.
Absolutely love it.
But James Clear, the author ofAtomic Habits, he says but James
Clear, the author of AtomicHabits, he says success is not a
goal to reach or a finish lineto cross.
It is a system to improve, anendless process to refine.
(08:13):
So when we're talking aboutstrategies, that's kind of the
framework we should put these in.
It's a continual process, it'scontinually evolving.
It should be dynamic, it shouldreflect the operational
conditions your assets areoperating in.
And what we're talking abouthere when we say asset
management, we're not talkingabout the overnight miracles.
(08:35):
We're not talking about thetotal 2x performance change
overnight.
We're literally just trying toimprove continually over time so
that you can put in place theright disciplines, the right
systems to make sure that youare positioned to actually
manage your assets mosteffectively.
Speaker 1 (08:56):
Yeah, that's awesome.
Thank you for sharing.
I think one of the things thatstands out to me the most, too,
is just talking aboutcontinually refining.
Right, that's that's one of themost difficult things I think
that we see the most is that'sone of the most difficult things
for an organization to do.
Right, understanding the, thechange management concept, even
Right, so many folks don'talways love to talk about being
(09:25):
able to accomplish those goalsand encouraging the buy-in from
the shop floor to the to thepenthouse or all the way to the
top, and and what it takes toget the entire organization
brought, uh, bought, into thesestrategies.
Speaker 2 (09:35):
Um, yeah, it does take a lot.
I mean, change management isprobably one of the hardest
things to overcome.
When you're talking aboutputting in place different
systems, different frameworks tohelp you on a day-to-day basis,
people typically resort to thisis how we've always done it or
this is what works, and everyonehas different opinions, and so
(09:57):
it makes it really hard to movean organization.
But I think because assetmanagement really puts in place
flexibility within a framework,so it helps with change
management.
It helps give you some abilityto move within more of a
(10:17):
structure, more of a bestpractice approach to managing
your assets, which helps from achange management perspective
because you're not making hugechanges to what people are
accustomed to.
Speaker 1 (10:30):
Absolutely, and I think one of the key words you
mentioned was it's dynamic.
Right, it's dynamic from a userperspective, from a system
perspective, like you hit on.
User perspective, from a systemperspective, like you hit on.
Typically not everybody's doingthings the same way, right?
So it has to be manipulated tofit what your organization is
doing, the focuses, what thoseKPIs or just performance goals
(10:53):
look like.
So I think that that's great.
Speaker 2 (10:56):
Yeah, exactly Awesome .
Speaker 1 (10:58):
So kind of not a different path, but looking at
something very specific right.
I'd like to talk about thedifference between managing
assets and asset management.
Sometimes it sounds like ashifting of words, but
understanding that these are twocompletely different concepts.
When you and I were preparingfor this, I think one of the
ideas that we threw around wascomparing it to a diet or the
(11:23):
process of implementing a diet.
Thinking of thinking of this asthe difference between a
lifetime of a structured dietand exercising regularly to to
maintain healthiness, versus theidea of eating a salad or doing
a juice cleanse the nightbefore you go on vacation.
Right, one of those very quickfix I want to look better, I
(11:45):
want to feel better.
Very slight adjustments to toyour day to day for a very short
term result Right, one of thesetakes very hard planning, it
forms a habit and it putstogether that structured plan
that you referenced previously.
And the other is simply forinstant gratification right,
(12:06):
it's super short-lived.
It addresses that immediateproblem and oftentimes makes you
feel really good about thatchange in the time.
I think the biggest issue is,or the biggest question is, how
long does that last?
Right.
Speaker 2 (12:28):
That's so true.
It's such a such a great visualright.
Because, um, I think we've, allyou know, gone through periods
where it's like, oh, you know, Ineed to go into the dentist.
I, you know, need to brush myteeth three times today to to
make sure the dentist doesn'tnotice, you know that I have a
cavity or something.
So it's like you're trying toput in place a quick fix, but
you don't have to live with theconsequences because you don't
have the structure, the rigor inplace to actually have a
(12:53):
sustainable system that lets youreap the benefits over the long
term.
So, yeah, I think I think, tosummarize exactly what you said,
the difference between managingassets and asset management is
just short term versus long term.
It's like a short fix versus a,you know, a long standing
system that you put in place.
That's really the bigdifference there.
Speaker 1 (13:16):
Absolutely.
Oh, that's awesome.
So my next question or nexttopic on this is is how do we
best manage those assets, or howdo we know how to best manage
those assets?
Is it looking at what we'redoing currently?
Is it comparing this toindustry standards and what
other folks are doing?
What is your take on how tobest manage assets?
Speaker 2 (13:39):
Yeah, so I mean, I think the best, the best
illustration I can give abouthow to best manage assets.
Yeah, so, I mean, I think thebest illustration I can give
about how best to manage yourassets is to think of it like a
playbook.
Like you're the coach of aprofessional sports team and
you're managing a team of assetsand you need to figure out, or
team of athletes Sorry aboutthat Team of athletes and you're
(14:01):
trying to figure out.
Or team of athletes Sorry aboutthat team of athletes and
you're trying to figure out, howdo I put, how do I, you know,
get them to gold, how do I makesure that we win the game?
Um, the capabilities that eachof them brings to the table, in
(14:23):
a way that I'm, you know,ultimately achieving my end
goals, which is like peakperformance, or you know, uh,
winning the game.
So, um, you know, if we thinkabout treating our assets as if
they were athletes, it kind ofputs it into a different
perspective.
So so, frank, like, for example, I mean you coach a baseball
(14:44):
team, right?
Speaker 1 (14:45):
I do yes, youth baseball.
Speaker 2 (14:47):
Youth baseball, oh great.
So childs in their, you know,young forming years, I love it.
So, you know, how do you thinkabout managing, you know, the
these kids to really leverageall of their individual
strengths but to have them work,you know well, together as a
team to ultimately, you know,win the baseball game, for
(15:09):
example?
Like, what are some of thethings that you think about when
you're coaching this team?
Speaker 1 (15:13):
Sure, no, that's a really good point and it's nice
to think about it in a differentway, such a simple way.
I think most people would putthat.
But, to answer your question,the ultimate goal is to win the
game or games.
Right, we want it to be acontinuous winning cycle, but I
think you mentioned it Each oneof those players has their own
(15:34):
strength, right, and as the headcoach or as the organizer of
this team or of this group, theyhave to play to their strengths
.
There are some that swing thebat a little bit better, there
are some that are good in thefield, but being able to
manipulate that or to set thatup in a way that makes the whole
group successful, right.
(15:54):
If I was to put focus on oneindividual player you know that
best player or the one thatproduces the best statistics, or
whatever that may be I don'thave sight of the end goal,
right?
I don't have sight of the teamor the organization as a whole,
(16:16):
therefore losing sight of whatthat end goal is right and what
success looks like for my teamor for my organization.
Speaker 2 (16:24):
Um, so it's a it's a really good way to think about
that yeah, yeah, and it'sexactly the same with assets,
right, like if we treated ourassets like a team of athletes.
The the way that you think aboutputting in place the strategy,
utilizing a playbook of sorts,which we can call asset
(16:45):
management as our playbook.
It really has the same kind ofparallel image.
And, yeah, I love that You'renot just isolating your best
player, your pitcher that isreally, really good at pitching,
right, well, that's great,right, but like you need you
need folks that are good atshortstop and you need kids that
(17:07):
are good in the outfield.
Like you really have tounderstand the mechanics of not
only the game and how to win,but the strengths utilized by
each of those players toultimately win the game and um
and so, yeah, there's a lot ofvariables as coach that you're
trying to figure out and you'retrying to manage at the same
time.
And you know, one of, I wouldsay, my favorite illustrations
(17:33):
of good asset management interms of athletic coaching is
have you heard of the storyabout Dave Bra brailsford?
Just curious if you've heard,yeah, yeah.
So he was an elite britishcycling coach and um.
(17:54):
He essentially, you know,inherited a team of uh cyclists
that had never won the Tour deFrance and were actually losing
endorsements because they werebasically exhibiting like
embarrassing mediocrity.
(18:14):
I mean, it was like belowaverage performance across the
board for all of these cyclists.
And so Dave Brailsford, as headcoach of this team, essentially
did what you did, you know, asyouth baseball coach, he
deconstructed all the componentsof being a coach and all the
things that would be required aspart of his playbook.
(18:37):
You know, he did things likeredesign redesigned the seats
and put alcohol in the wheels ofthe cycle of the um of the
bicycles to increase friction.
He hired a surgeon to teach allof uh the cyclists how to
properly wash their hands to getrid of germs and um reduce, you
(19:01):
know, illness and things likethat.
He looked at their sleepingpatterns.
He looked at, you know, the likecushion of their pillows and
mattresses they were using.
I mean very, very small,nuanced things that individually
really don't make a huge impact.
But he believed in whatactually James Clear, from, who
(19:23):
wrote Atomic Habits, talks about, which is the power of 1%, or
the power of the aggregation ofmarginal gains, which
essentially says if you, youknow, if you improve by 1% over
time, those, those 1% start tocompound and then, all of a
(19:43):
sudden, you are exponentiallybetter than you were initially.
And the result of DaveBrailsford's strategy, execution
and breaking down all of thesecomponents for his team was that
(20:05):
not only were they winning theTour de France, but they were,
you know, taking they took 70%of gold in the 2012 Olympics and
they continue this trajectoryfor 10 years beyond that.
So, from total, embarrassingmediocrity losing endorsements
(20:27):
to, you know, absolutelydominating the Olympics and like
continuing this path for 10years beyond, I mean, it's just
such a such a great illustrationof just how you can compound
these small, you knowimprovements over time.
Speaker 1 (20:43):
Yeah, absolutely.
That's good, and I think thatwe can both attest to the fact
that the organizations that wework with all are at different
levels of success or atdifferent levels of maturity in
their asset management game orcycle right when they live.
So that's great, thank you.
(21:04):
I think the next question forme, and that most of the
listeners are probably wondering, is you know where?
Where do we start?
We talked about being atdifferent levels of maturity.
We've talked about you knoworganizations or strategies
where maybe you start in themiddle or you start with what
that end goal is.
(21:24):
How do organizations actuallystart on this path towards
effective asset management anddeveloping that?
You know air quote playbook tosuccess?
Speaker 2 (21:38):
Yeah, it's such a great question.
I get this question almostevery day, you know, looking for
recommendations and yourecommendations and where do we
start?
Where can we have the biggestimpact right away?
And typically what I find ispeople think initially very
linearly First you have toperfect your maintenance
(21:58):
organization and youroperational rhythms and your
data has to be in almost perfectform for then you to be able to
take advantage of more insightsand better decision making with
respect to asset management.
Or they think I'm just notready, I'm not mature enough,
(22:18):
I'm too small.
Asset management is reserved forthese big conglomerates, these
massive organizations, globalorganizations.
But both of thesemisconceptions just quite
frankly, aren't right.
It's typically where people aregrounded initially, but it's
(22:40):
absolutely untrue.
And, as you know, one of myfavorite, one of my favorite
authors says Douglas Hubbardsays if you know almost nothing,
almost anything will tell yousomething.
That's good.
So just kind of interesting,right, because it's like
(23:00):
everyone always thinks like, oh,I need to have all this
information to then first takeadvantage of asset management.
It's just not true.
So first to dispel some of thosemisconceptions maturity doesn't
matter, size doesn't matter,data quality doesn't matter much
.
I will put a little caveat onmuch.
I mean, you need to have somelevel of quality, but you do not
(23:23):
need to be anywhere close toperfection, believe me.
And then there's absolutelyzero dependency, when putting in
place an asset managementframework, on the types of
systems or the volume of systemsyou have in place already.
For example, you don't have tohave some sophisticated
condition monitoring system oreven a maintenance management
(23:46):
system in place before you cantake advantage of the best
practices, the insights, theframework, the things that asset
management offers.
So back to your question wheredo we start?
Well, you start with what youdo have.
You start with the informationyou have at your disposal about
(24:09):
your assets and how they'reperforming today.
If you want to get to a placewhere you're performing better,
you first have to baseline whereyou are so you can track the
progress.
Of course, it doesn't take alot of effort.
It just takes time putting in,or it just takes putting in some
(24:29):
time to put together the planor the roadmap to get you from
where you are now to, ultimately, where you want to be to hit
those objectives.
Speaker 1 (24:39):
That's great, that's awesome and I think, typically,
pivoting that right into thethree big takeaways, you hit on
some of those Well thinking ofasset management as your
playbook.
You have to know where you are.
You have to know the rules thatyou're following.
You have to know, at least ingeneral, what your end goal is
right now.
That is dynamic.
(25:00):
That does change, and I thinkone of the coolest things that
you said was that it's not aboutovernight miracles, right.
You can't expect to flip aswitch.
You can't expect to make achange within your organization
and it to happen overnight,right.
We do not see that typicallyhappen.
(25:21):
So is there anything else, anyfinal takeaways that you want to
share with the folks that arelistening here, that have spent
their time with you?
Speaker 2 (25:31):
Yeah, I mean I think you hit the takeaways.
Think of asset management asyour playbook, like you're a
coach coaching a team ofathletes, but you are an
operations or maintenanceprofessional looking after a set
of assets, and so you can thinkof asset management as your
(25:51):
playbook or your framework tohelp you best manage those.
So that's the big one.
The second is this is not afinish line, it is not a noun,
it's a verb.
Asset management is aboutcontinuous improvement,
refinement and what I like tosay, seasoning to taste.
It should be dynamic.
(26:12):
It is not a static thing.
It's not a finish line that youreach.
And then, third, is there'snever a bad time to start
putting in place an assetmanagement framework.
I mean, if we think about themisconceptions and the I'm too
big or I'm too small and my dataquality isn't good enough,
those typically are justroadblocks or things that you
(26:35):
have, those in your mind to justsort of like stop progress
moving forward.
And so if you just think aboutthis with an open mind and just
think of asset management, assetmanagement as that framework to
build that roadmap or buildthat plan to get from where you
are to where you want to be, itreally just opens up a lot of
(26:57):
doors and you can really startthinking about how to move and
shape your organization toachieve that end goal.
Speaker 1 (27:05):
Absolutely.
This has been fantastic.
It's been a pleasure having youon the podcast, Rachel.
Speaker 2 (27:10):
It's been good to be back you as well.
Thank you, yeah absolutely.
Speaker 1 (27:14):
Thanks for sharing some of your experiences and, I
think, key insights into whatrisk and asset management are
for so many different people.
Don't be surprised if we haveyou back on here again to share
some of this information.
Speaker 2 (27:30):
Happy to join.
Thank you so much.
Speaker 1 (27:34):
Absolutely Well.
There you have it, folks.
As we continue this riskmatters podcast journey, I
encourage you to join us tolisten to some of the longtime
folks that are in this industryor have dealt with this idea of
asset and risk management, andeven some up-and-coming experts
in the industry that have newtakes and, as Rachel mentioned,
(27:56):
a fresh taste on things.
Until next time, I'm FrankMorfis.
Thanks for listening.
Speaker 3 (28:04):
You've been listening to Risk Matters X.0, an ABS
consulting podcast focused onall.
Thanks for tuning in.
This is a Risk Matters podcast with ABS
Consulting, where our goal is tofocus on industrial
organizations and what mostfolks are dealing with from an
asset management and riskmanagement perspective.
My name is Frank Morfis, I'myour host today and I'm honored
to be joined by Rachel Wagner,who's an account executive with
Hexagon.
Rachel, thanks for joining us.
Speaker 2 (00:30):
Hey, thank you.
I'm so excited to be part ofthe podcast.
Really appreciate it.
Speaker 1 (00:34):
Absolutely so, to kick this off, I'd love for you
to give a little backgroundabout yourself, about what
you're doing, and hopefullytransition into what we're going
to talk about today, about what?
Speaker 2 (00:45):
you're doing and hopefully transition into what
we're going to talk about today.
Definitely so.
I am an account executive, asyou mentioned, at Hexagon, where
we specifically focus on waysto help industrial customers
find ways to effectively managetheir assets.
So it's a combination ofsoftware and services that we
provide and we're just lookingfor the most effective means to
(01:07):
help customers meet theirobjectives.
Speaker 1 (01:10):
Awesome and, as everybody would imagine, that's
our goal with this Risk Matterspodcast.
Previously, this podcast hadbeen focused specifically on
cybersecurity and the vital rolethat it plays in the industrial
setting cybersecurity and thevital role that it plays in the
industrial setting and I thinkthat our goal and specifically
(01:30):
with you today, Rachel is toexpand on that, to focus on
other areas where we see riskplay a big goal, and today,
specifically, asset management.
The risk that we're talkingabout is asset failure,
something that I think everybodydeals with on a daily basis,
things that you and I, Rachel,talk to folks about regularly,
right?
Speaker 2 (01:47):
Every day?
Speaker 1 (01:48):
Absolutely so, rachel .
My goal is to share some of ourthoughts, some of your insights
, some of the experiences thatyou've had based on personal
experiences, discussions withother folks, as well as some of
the antidotes and stories tohelp bring this podcast together
and make it fruitful for thelisteners that we have joining
(02:10):
us.
So, as I mentioned previously,in this episode we're going to
talk about asset management whatit is and what it isn't, teeing
up some of the things that someof those industrial customers
deal with on a day-to-day basis,some of the discussions that
are happening internally andsome of the ways that they're
working to improve in thisconcept.
So, to pass it over to you, Iwant to simplify that a little
(02:32):
bit.
What do you see typically asthe end goal and some of the
ways that people can or aregetting there?
Speaker 2 (02:42):
Well, thank you.
Yeah, so you know, as I thinkabout that question.
I mean the end goal, the, whatis actually pretty simple,
pretty consistent, regardless ofindustry, it's the how we get
there.
That is a little bit morenuanced but more challenging.
And you know, regardless ofwhatever industry that you're
operating in whether it'saerospace and discrete
(03:04):
manufacturing, power, gen, oiland gas, really doesn't matter
those heavy industrialindustries have spent a large
capital investment on thoseassets and, of course, they
expect them to perform.
So that end goal is simpleright, make sure those assets
are generating value so that youcan recoup that initial capital
(03:29):
investment, and then thoseassets just continue to generate
value until they reach somepoint in the future end of life
or even extended end of life.
So again, that end goal ispretty simple.
But how they actually go aboutachieving that end goal this is
where you start to get somevariance in different customers
(03:51):
and there's a number ofstrategies or a number of
different ways that people tryto achieve this right Extraction
of value of your assets.
A lot of them rely on hope andluck to get them there, believe
it or not, I've seen thatstrategy a number of times.
It is a strategy, it's just nota very good one.
(04:15):
There's also the infamous donothing strategy.
Maybe you're on the non-planplan.
If you think about your car,how long do you think that would
last if you never spent $1 onmaintenance, never changed the
oil, never put air in the tires,never took it in for a tune-up?
(04:35):
Nothing Last a year, maybe two,before you're ditching it on
the side of the road.
If you think about the size ofthe investment, you're spending
tens of thousands of dollars onthat vehicle versus the size of
the maintenance spend, which isprobably something in the
hundreds.
(04:55):
Those are two very differentorders of magnitude.
So these are some of thetrade-offs that, when you're
putting in place good assetmanagement principles, you're
directly looking at the costversus performance trade-off,
for example.
There's also the when we thinkabout strategies.
(05:16):
There's this let's let someoneelse tell us what our strategy
should be.
Strategy.
This is when you're relyingsolely on OEM recommendations
which, believe it or not, thisis probably the most common
strategy I've seen.
This is a recommendation that'sreally just based on averages.
So the OEM or the originalequipment manufacturer of the
(05:38):
asset is saying things like foryour car, for example change
your oil every 3,000 miles,rotate your tires annually,
change the brakes every 30,000miles, etc.
It doesn't actually count forany variation whatsoever in
things like your drivingpatterns or how often you
(05:59):
operate the vehicle, maybe whatthe driving conditions are like
Are you in a city, are you in arural, backcountry?
So those variables actually candirectly influence how that car
, that asset, is performing.
And so when you have a strategythat's based on nothing other
(06:21):
than these as-designed averages,it creates a lot of opportunity
for improvement.
I'll just put it that way thisis okay.
And again, it works for a lotof customers.
Again, I've seen this probablythe most in all of the customers
that I've talked to, wherethey're just using the OEM
recommendations.
(06:42):
But there's a lot of what Iwould say value leakage.
Essentially, you're probablyspending more than you need to.
The reliability of the asset isprobably not operating in its
most optimal condition, so yourstrategy is not shaped around
(07:03):
the operational context in whichthat asset's being operated.
And then, finally, as we talkabout all these different
strategies, there's what Iconsider really true asset
management strategies.
It does account for variation,it is dynamic, it adjusts based
(07:24):
on how the asset is performingin the environment that it lives
in.
A true asset managementstrategy is constantly in motion
, it's changing, it's evolving,based on new information and one
of the authors.
Well, frank, let me ask youthis have you read the book
Atomic Habits?
Speaker 1 (07:46):
I have not.
I have not read it.
We talked about that previously, but I have not had the chance.
Speaker 2 (07:50):
Oh my gosh, okay, run , don't walk to go, read that
book.
It's an amazing book and verysimple read, very quick read.
Absolutely love it.
But James Clear, the author ofAtomic Habits, he says but James
Clear, the author of AtomicHabits, he says success is not a
goal to reach or a finish lineto cross.
It is a system to improve, anendless process to refine.
(08:13):
So when we're talking aboutstrategies, that's kind of the
framework we should put these in.
It's a continual process, it'scontinually evolving.
It should be dynamic, it shouldreflect the operational
conditions your assets areoperating in.
And what we're talking abouthere when we say asset
management, we're not talkingabout the overnight miracles.
(08:35):
We're not talking about thetotal 2x performance change
overnight.
We're literally just trying toimprove continually over time so
that you can put in place theright disciplines, the right
systems to make sure that youare positioned to actually
manage your assets mosteffectively.
Speaker 1 (08:56):
Yeah, that's awesome.
Thank you for sharing.
I think one of the things thatstands out to me the most, too,
is just talking aboutcontinually refining.
Right, that's that's one of themost difficult things I think
that we see the most is that'sone of the most difficult things
for an organization to do.
Right, understanding the, thechange management concept, even
Right, so many folks don'talways love to talk about being
(09:25):
able to accomplish those goalsand encouraging the buy-in from
the shop floor to the to thepenthouse or all the way to the
top, and and what it takes toget the entire organization
brought, uh, bought, into thesestrategies.
Speaker 2 (09:35):
Um, yeah, it does take a lot.
I mean, change management isprobably one of the hardest
things to overcome.
When you're talking aboutputting in place different
systems, different frameworks tohelp you on a day-to-day basis,
people typically resort to thisis how we've always done it or
this is what works, and everyonehas different opinions, and so
(09:57):
it makes it really hard to movean organization.
But I think because assetmanagement really puts in place
flexibility within a framework,so it helps with change
management.
It helps give you some abilityto move within more of a
(10:17):
structure, more of a bestpractice approach to managing
your assets, which helps from achange management perspective
because you're not making hugechanges to what people are
accustomed to.
Speaker 1 (10:30):
Absolutely, and I think one of the key words you
mentioned was it's dynamic.
Right, it's dynamic from a userperspective, from a system
perspective, like you hit on.
User perspective, from a systemperspective, like you hit on.
Typically not everybody's doingthings the same way, right?
So it has to be manipulated tofit what your organization is
doing, the focuses, what thoseKPIs or just performance goals
(10:53):
look like.
So I think that that's great.
Speaker 2 (10:56):
Yeah, exactly Awesome .
Speaker 1 (10:58):
So kind of not a different path, but looking at
something very specific right.
I'd like to talk about thedifference between managing
assets and asset management.
Sometimes it sounds like ashifting of words, but
understanding that these are twocompletely different concepts.
When you and I were preparingfor this, I think one of the
ideas that we threw around wascomparing it to a diet or the
(11:23):
process of implementing a diet.
Thinking of thinking of this asthe difference between a
lifetime of a structured dietand exercising regularly to to
maintain healthiness, versus theidea of eating a salad or doing
a juice cleanse the nightbefore you go on vacation.
Right, one of those very quickfix I want to look better, I
(11:45):
want to feel better.
Very slight adjustments to toyour day to day for a very short
term result Right, one of thesetakes very hard planning, it
forms a habit and it putstogether that structured plan
that you referenced previously.
And the other is simply forinstant gratification right,
(12:06):
it's super short-lived.
It addresses that immediateproblem and oftentimes makes you
feel really good about thatchange in the time.
I think the biggest issue is,or the biggest question is, how
long does that last?
Right.
Speaker 2 (12:28):
That's so true.
It's such a such a great visualright.
Because, um, I think we've, allyou know, gone through periods
where it's like, oh, you know, Ineed to go into the dentist.
I, you know, need to brush myteeth three times today to to
make sure the dentist doesn'tnotice, you know that I have a
cavity or something.
So it's like you're trying toput in place a quick fix, but
you don't have to live with theconsequences because you don't
have the structure, the rigor inplace to actually have a
(12:53):
sustainable system that lets youreap the benefits over the long
term.
So, yeah, I think I think, tosummarize exactly what you said,
the difference between managingassets and asset management is
just short term versus long term.
It's like a short fix versus a,you know, a long standing
system that you put in place.
That's really the bigdifference there.
Speaker 1 (13:16):
Absolutely.
Oh, that's awesome.
So my next question or nexttopic on this is is how do we
best manage those assets, or howdo we know how to best manage
those assets?
Is it looking at what we'redoing currently?
Is it comparing this toindustry standards and what
other folks are doing?
What is your take on how tobest manage assets?
Speaker 2 (13:39):
Yeah, so I mean, I think the best, the best
illustration I can give abouthow to best manage assets.
Yeah, so, I mean, I think thebest illustration I can give
about how best to manage yourassets is to think of it like a
playbook.
Like you're the coach of aprofessional sports team and
you're managing a team of assetsand you need to figure out, or
team of athletes Sorry aboutthat Team of athletes and you're
(14:01):
trying to figure out.
Or team of athletes Sorry aboutthat team of athletes and
you're trying to figure out, howdo I put, how do I, you know,
get them to gold, how do I makesure that we win the game?
Um, the capabilities that eachof them brings to the table, in
(14:23):
a way that I'm, you know,ultimately achieving my end
goals, which is like peakperformance, or you know, uh,
winning the game.
So, um, you know, if we thinkabout treating our assets as if
they were athletes, it kind ofputs it into a different
perspective.
So so, frank, like, for example, I mean you coach a baseball
(14:44):
team, right?
Speaker 1 (14:45):
I do yes, youth baseball.
Speaker 2 (14:47):
Youth baseball, oh great.
So childs in their, you know,young forming years, I love it.
So, you know, how do you thinkabout managing, you know, the
these kids to really leverageall of their individual
strengths but to have them work,you know well, together as a
team to ultimately, you know,win the baseball game, for
(15:09):
example?
Like, what are some of thethings that you think about when
you're coaching this team?
Speaker 1 (15:13):
Sure, no, that's a really good point and it's nice
to think about it in a differentway, such a simple way.
I think most people would putthat.
But, to answer your question,the ultimate goal is to win the
game or games.
Right, we want it to be acontinuous winning cycle, but I
think you mentioned it Each oneof those players has their own
(15:34):
strength, right, and as the headcoach or as the organizer of
this team or of this group, theyhave to play to their strengths
.
There are some that swing thebat a little bit better, there
are some that are good in thefield, but being able to
manipulate that or to set thatup in a way that makes the whole
group successful, right.
(15:54):
If I was to put focus on oneindividual player you know that
best player or the one thatproduces the best statistics, or
whatever that may be I don'thave sight of the end goal,
right?
I don't have sight of the teamor the organization as a whole,
(16:16):
therefore losing sight of whatthat end goal is right and what
success looks like for my teamor for my organization.
Speaker 2 (16:24):
Um, so it's a it's a really good way to think about
that yeah, yeah, and it'sexactly the same with assets,
right, like if we treated ourassets like a team of athletes.
The the way that you think aboutputting in place the strategy,
utilizing a playbook of sorts,which we can call asset
(16:45):
management as our playbook.
It really has the same kind ofparallel image.
And, yeah, I love that You'renot just isolating your best
player, your pitcher that isreally, really good at pitching,
right, well, that's great,right, but like you need you
need folks that are good atshortstop and you need kids that
(17:07):
are good in the outfield.
Like you really have tounderstand the mechanics of not
only the game and how to win,but the strengths utilized by
each of those players toultimately win the game and um
and so, yeah, there's a lot ofvariables as coach that you're
trying to figure out and you'retrying to manage at the same
time.
And you know, one of, I wouldsay, my favorite illustrations
(17:33):
of good asset management interms of athletic coaching is
have you heard of the storyabout Dave Bra brailsford?
Just curious if you've heard,yeah, yeah.
So he was an elite britishcycling coach and um.
(17:54):
He essentially, you know,inherited a team of uh cyclists
that had never won the Tour deFrance and were actually losing
endorsements because they werebasically exhibiting like
embarrassing mediocrity.
(18:14):
I mean, it was like belowaverage performance across the
board for all of these cyclists.
And so Dave Brailsford, as headcoach of this team, essentially
did what you did, you know, asyouth baseball coach, he
deconstructed all the componentsof being a coach and all the
things that would be required aspart of his playbook.
(18:37):
You know, he did things likeredesign redesigned the seats
and put alcohol in the wheels ofthe cycle of the um of the
bicycles to increase friction.
He hired a surgeon to teach allof uh the cyclists how to
properly wash their hands to getrid of germs and um reduce, you
(19:01):
know, illness and things likethat.
He looked at their sleepingpatterns.
He looked at, you know, the likecushion of their pillows and
mattresses they were using.
I mean very, very small,nuanced things that individually
really don't make a huge impact.
But he believed in whatactually James Clear, from, who
(19:23):
wrote Atomic Habits, talks about, which is the power of 1%, or
the power of the aggregation ofmarginal gains, which
essentially says if you, youknow, if you improve by 1% over
time, those, those 1% start tocompound and then, all of a
(19:43):
sudden, you are exponentiallybetter than you were initially.
And the result of DaveBrailsford's strategy, execution
and breaking down all of thesecomponents for his team was that
(20:05):
not only were they winning theTour de France, but they were,
you know, taking they took 70%of gold in the 2012 Olympics and
they continue this trajectoryfor 10 years beyond that.
So, from total, embarrassingmediocrity losing endorsements
(20:27):
to, you know, absolutelydominating the Olympics and like
continuing this path for 10years beyond, I mean, it's just
such a such a great illustrationof just how you can compound
these small, you knowimprovements over time.
Speaker 1 (20:43):
Yeah, absolutely.
That's good, and I think thatwe can both attest to the fact
that the organizations that wework with all are at different
levels of success or atdifferent levels of maturity in
their asset management game orcycle right when they live.
So that's great, thank you.
(21:04):
I think the next question forme, and that most of the
listeners are probably wondering, is you know where?
Where do we start?
We talked about being atdifferent levels of maturity.
We've talked about you knoworganizations or strategies
where maybe you start in themiddle or you start with what
that end goal is.
(21:24):
How do organizations actuallystart on this path towards
effective asset management anddeveloping that?
You know air quote playbook tosuccess?
Speaker 2 (21:38):
Yeah, it's such a great question.
I get this question almostevery day, you know, looking for
recommendations and yourecommendations and where do we
start?
Where can we have the biggestimpact right away?
And typically what I find ispeople think initially very
linearly First you have toperfect your maintenance
(21:58):
organization and youroperational rhythms and your
data has to be in almost perfectform for then you to be able to
take advantage of more insightsand better decision making with
respect to asset management.
Or they think I'm just notready, I'm not mature enough,
(22:18):
I'm too small.
Asset management is reserved forthese big conglomerates, these
massive organizations, globalorganizations.
But both of thesemisconceptions just quite
frankly, aren't right.
It's typically where people aregrounded initially, but it's
(22:40):
absolutely untrue.
And, as you know, one of myfavorite, one of my favorite
authors says Douglas Hubbardsays if you know almost nothing,
almost anything will tell yousomething.
That's good.
So just kind of interesting,right, because it's like
(23:00):
everyone always thinks like, oh,I need to have all this
information to then first takeadvantage of asset management.
It's just not true.
So first to dispel some of thosemisconceptions maturity doesn't
matter, size doesn't matter,data quality doesn't matter much
.
I will put a little caveat onmuch.
I mean, you need to have somelevel of quality, but you do not
(23:23):
need to be anywhere close toperfection, believe me.
And then there's absolutelyzero dependency, when putting in
place an asset managementframework, on the types of
systems or the volume of systemsyou have in place already.
For example, you don't have tohave some sophisticated
condition monitoring system oreven a maintenance management
(23:46):
system in place before you cantake advantage of the best
practices, the insights, theframework, the things that asset
management offers.
So back to your question wheredo we start?
Well, you start with what youdo have.
You start with the informationyou have at your disposal about
(24:09):
your assets and how they'reperforming today.
If you want to get to a placewhere you're performing better,
you first have to baseline whereyou are so you can track the
progress.
Of course, it doesn't take alot of effort.
It just takes time putting in,or it just takes putting in some
(24:29):
time to put together the planor the roadmap to get you from
where you are now to, ultimately, where you want to be to hit
those objectives.
Speaker 1 (24:39):
That's great, that's awesome and I think, typically,
pivoting that right into thethree big takeaways, you hit on
some of those Well thinking ofasset management as your
playbook.
You have to know where you are.
You have to know the rules thatyou're following.
You have to know, at least ingeneral, what your end goal is
right now.
That is dynamic.
(25:00):
That does change, and I thinkone of the coolest things that
you said was that it's not aboutovernight miracles, right.
You can't expect to flip aswitch.
You can't expect to make achange within your organization
and it to happen overnight,right.
We do not see that typicallyhappen.
(25:21):
So is there anything else, anyfinal takeaways that you want to
share with the folks that arelistening here, that have spent
their time with you?
Speaker 2 (25:31):
Yeah, I mean I think you hit the takeaways.
Think of asset management asyour playbook, like you're a
coach coaching a team ofathletes, but you are an
operations or maintenanceprofessional looking after a set
of assets, and so you can thinkof asset management as your
(25:51):
playbook or your framework tohelp you best manage those.
So that's the big one.
The second is this is not afinish line, it is not a noun,
it's a verb.
Asset management is aboutcontinuous improvement,
refinement and what I like tosay, seasoning to taste.
It should be dynamic.
(26:12):
It is not a static thing.
It's not a finish line that youreach.
And then, third, is there'snever a bad time to start
putting in place an assetmanagement framework.
I mean, if we think about themisconceptions and the I'm too
big or I'm too small and my dataquality isn't good enough,
those typically are justroadblocks or things that you
(26:35):
have, those in your mind to justsort of like stop progress
moving forward.
And so if you just think aboutthis with an open mind and just
think of asset management, assetmanagement as that framework to
build that roadmap or buildthat plan to get from where you
are to where you want to be, itreally just opens up a lot of
(26:57):
doors and you can really startthinking about how to move and
shape your organization toachieve that end goal.
Speaker 1 (27:05):
Absolutely.
This has been fantastic.
It's been a pleasure having youon the podcast, Rachel.
Speaker 2 (27:10):
It's been good to be back you as well.
Thank you, yeah absolutely.
Speaker 1 (27:14):
Thanks for sharing some of your experiences and, I
think, key insights into whatrisk and asset management are
for so many different people.
Don't be surprised if we haveyou back on here again to share
some of this information.
Speaker 2 (27:30):
Happy to join.
Thank you so much.
Speaker 1 (27:34):
Absolutely Well.
There you have it, folks.
As we continue this riskmatters podcast journey, I
encourage you to join us tolisten to some of the longtime
folks that are in this industryor have dealt with this idea of
asset and risk management, andeven some up-and-coming experts
in the industry that have newtakes and, as Rachel mentioned,
(27:56):
a fresh taste on things.
Until next time, I'm FrankMorfis.
Thanks for listening.
Speaker 3 (28:04):
You've been listening to Risk Matters X.0, an ABS
consulting podcast focused onall.
Thanks for tuning in.
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