Is ‘Best Practice’ a Roadblock to Improving Asset Management?
Asset Dynamics Director Andrew Gatland considers whether a belief in the existence of asset management 'best practices' has contributed to New Zealand's infrastructure deficit.
For organisations managing significant public infrastructure, asset management is a critical strategic capability that ensures the safety of people, the protection of property, and the delivery of cost-effective and reliable services to customers. To consistently achieve these outcomes, organisations must adopt structured and integrated management systems, underpinned by evidence-based processes and methods of working. These systems must be supported by competent individuals and continuously improved as the organisation evolves and learns.
These systems, processes, and methods of working are often referred to as the organisation's asset management practices. In this context, this article explores the use and potential misuse of the term 'best practice' by asset-intensive New Zealand organisations, and the implications for how we approach asset management improvement.
Before proceeding, some definitions are required. The Oxford English Dictionary defines practice as "the actual application or use of an idea, belief, or method, as opposed to theories relating to it." 'Best practice' may therefore be understood as "the actual application or use of an idea, belief, or method, currently believed to be the best."
When is ‘best practice’ not best practice?
Public infrastructure organisations are generally required to publish asset management strategies, plans, and other information to keep stakeholders informed and enable external scrutiny of asset management performance. In these documents, a common claim is that the organisation has implemented, or is in the process of implementing, 'best practice asset management' — a significant assertion.
The notion that critical service providers have implemented 'best practice' is undoubtedly appealing for consumers and may help foster confidence among stakeholders. However, there are two important reasons why this confidence may not be justified.
The first is that authoritative sources of these 'best practices' are seldom referenced, and where they are, it is often unclear exactly which practices have been adopted and to what extent. Independent verification is rare. This makes it impossible to determine whether the claim can be substantiated.
The second reason relates to actual performance and outcomes. It is difficult to reconcile claims of 'best practice' asset management with the reality that New Zealand's infrastructure performance is not where it needs to be to optimally support a modern and growing economy. There are now several examples of organisations that have claimed to deliver 'best practice' asset management, only for clear and high-profile symptoms of poor practice to emerge a few years later. The only conclusions to be drawn are that the 'best practices' were either not adopted as claimed, or that they were ineffective in enabling asset management objectives to be met.
Does ‘best practice’ asset management even exist?
The human resources management literature establishes a dichotomy between what are referred to as the 'best practice' and 'best fit' approaches. Advocates of 'best practice' argue that certain practices will support the competitive stance of an organisation irrespective of context - size, location, culture, or business model. The 'best fit' approach holds that the appropriateness of any particular practice depends on the specific organisation's strategy, internal structures and capabilities, and external environment.
There is support for a 'best fit' approach in the asset management domain. The Institute of Asset Management's Maturity Scale and Guidance describes the highest maturity grade, 'Excellence', as "a dynamic and context-sensitive state." Organisations that report verifiably higher levels of asset management maturity tend to focus on delivering improvements based on self-identified gaps between where they are and where they need to be to consistently meet stakeholder expectations.
There are undoubtedly certain requirements for asset management that are broadly, if not universally, applicable. An organisation must know what assets it owns and the risks and opportunities related to those assets; it must have a plan to manage those risks and opportunities in alignment with organisational strategy; and it must carry out work on assets safely and to appropriate quality standards. Returning to our definition of 'practice', however, these requirements are general statements of 'what' should be done rather than actual applications of 'how' something should be done. They are management requirements, not practices.
What about ISO 55001?
Updated in 2024, the ISO 55000 series of standards addresses asset management. The core standards cover concepts and terminology (ISO 55000), requirements for an asset management system (ISO 55001), and guidelines for implementation (ISO 55002).
ISO 55001, against which an organisation may become certified, specifies the requirements that an asset management system must meet. The standard is silent on practices or 'how' asset management should be done — a fact which may itself be commentary on the existence of context-independent 'best practices'.
Meeting the requirements of ISO 55001 requires an organisation to consolidate its existing practices into a coherent process framework, identify and close gaps, and put in place methods to ensure ongoing organisational learning and improvement. In this way an organisation develops and refines practices that are appropriate for its own context.
Conclusion
All infrastructure and asset-intensive organisations should be striving to become better asset managers tomorrow than they are today. This requires asset management fundamentals such as those set out in the ISO 55000 standards to be understood and translated into effective practices within each organisation. Knowledge transfer between organisations and across industries should be encouraged — even where practices are not directly transferable, exposure to different ways of thinking and working is valuable.
Use of the term 'best practice' is problematic for the reasons discussed, but perhaps the biggest issue is this: if an organisation's senior people truly believe it has achieved 'best practice', motivation for further improvement will be dampened.
“In our experience, organisations that are comparatively mature tend to describe their progress as a dynamic process or journey and see excellence as a moving target.”
My final suggestion on 'best practice'? Foster within your organisation a culture supportive of learning paired with an insatiable hunger for evidence-based improvement, and leave 'best practice' for others to use to describe you.
Ready to move beyond best practice?Asset Dynamics works with infrastructure organisations to develop evidence-based asset management systems and practices tailored to their specific context.
Get in touch