A common question is whether the Board of Directors should approve the Asset Management Policy. The short answer is yes. The longer answer is maybe because the Asset Management Policy should be consistent with the Board's Strategic Plan. If this is the case, whether the Board of the chief administrator approves the Asset Management Policy is insignificant.
A common problem is the Strategic Plan is outdated. In this case, the Asset Management Policy commits the organization to a management approach that may be inconsistent with Board policy. In other cases, the Asset Management Policy is inconsistent with other policies (such as health & safety or quality management) which produce conflicts within the day-to-day operations. The correct answer is for the current Board of Directors to get the Strategic Plan right. Everything else follows.
Defined: Strategic Plans Defined
According to Merriam-Webster, Strategic is defined as "of great importance within an integrated whole or to a planned effect." A plan is defined as "a detailed formulation of a program of action." There is nothing in the definition about dynamic, public relations, external communications, or how it makes you feel. In fact, terms like great importance, integrated, planned effect (outcome), detailed, and program imply that there is something tougher and more rigid about a Strategic Plan than most organizations think.
Management systems are defined by the International Standards Organization (ISO) as "the way in which an organization manages the interrelated parts of its business in order to achieve its objectives." Like the definition of strategic, those pesky concepts of integration and outcomes stand out. ISO goes on to say, "these objectives can relate to a number of different topics, including product or service quality, operational efficiency, environmental performance, health and safety in the workplace, and many more." This sounds like some of the components of a Strategic Plan.
Defined: Asset Management Policy
The international asset management, ISO 55000, describes asset management in terms of a management system. According to the Institute of Asset Management ((IAM), an asset management policy is a statement by the organization of the principles by which it manages its assets, or anything of value to the organization. It sets down the rules of organization engagement for things like strategic asset management plans and tactical action plans. The asset management policy is signed at the executive level of the organization.
Common Attributes
The IAM’s Subject Specific Guidance (SSG 1) lists good and bad practices for asset management policy. This table provides a summary comparison of good practices for Strategic Plans and Asset Management Policy. The commonalities are evident.
Summary
Strategic Plans are the single piece that flanges the policy board to the staff that manages the organization. The organization’s staff and management system should look to the Strategic Plan to fully understand what is of "great importance to the integrated whole." A bigger question for the organization is whether there is a formal management system (such as ISO 55000 or ISO 9000) or a hybrid management system generally consistent with a formal management system(s). All policies should flange to the highest-level policy document, the Strategic Plan.
JD Solomon, Inc provides asset management services related to facilities, infrastructure, and the environment. Contact us for more information on facilitating strategic plans and developing asset management policies and frameworks.
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