Establishing the Value System Through Long Term Planning

Abstract

Large organizations, especially those in relatively stable environments like infrastructure managers, are in general managed incrementally with implicit objectives. The rationale for this is quite clear. If the performance of the asset base was adequate in the past, doing more or less the same as last year cannot be that wrong. In volatile times (i.e. the required rate of change exceeds the adaptive capabilities of incremental change) this strategy fails and explicit planning and prioritization (the basic idea of asset management) are needed. A prerequisite for such an exercise is the existence of a shared organizational awareness of what is right (e.g. documented in mission, vision, policy and strategy and the value system as captured in the risk matrix). However, given the incremental past, it is not uncommon to have multiple conflicting versions of the truth. Resolving this directly is almost impossible, as decision makers would (and should) require a reasonable estimate of the consequences for any decision they make. With regard to redefinitions of the value system these consequences are highly uncertain. In this paper, we present an approach which we used to help decision makers specify their value system. We start with modeling the asset base in respect to the dominant change agent (in many cases ageing), so that we can prognosticate cost, performance and risk for diverse concepts of what is right. This helps the decision makers understand what the long term consequences will be of the implicit values they impose on the organization by means of ambitions and objectives, and thus helps them understand if their objectives are right. This approach has been successfully applied in a variety of depths (with associated effort) in several organizations.