Asset Managers on Autopilot

The recent fatal accident involving an Uber self-driving car has, according to some sources, put back the argument in favour of this technology by several years. The fatality has come relatively early in the development of these vehicles; proponents had hoped that more than 100 million miles of safe journeys would have been completed before an accident like this – even Waymo, the Google company that is furthest ahead in testing, has only completed about 5 million miles.

In discussing potential causes of the tragedy, commentators point to the confusion of modern roads and the mixture of humans and automated systems that a computer has to deal with. There is a fear, as with all new technology, that computers are too linear, too binary to deal effectively with the nuances that modern life can throw at an individual.

There is another line of thinking that is worth considering at the same time – people are good at being involved with jobs; they are less good at supervising them. Mica Endsley is the former chief scientist of the US Air Force and author of ‘Designing for Situation Awareness’. She wrote an interesting discussion of the issue for the Financial Times which centred on this problem. In relation to self-driving vehicles, her experience is with autopilots in aviation. She says, “It turns out that the switch from doing something oneself to monitoring another process lowers people’s level of engagement, both decreasing their understanding of what is happening and making them slower to respond to critical events. It is as if the automation turns the driver into a passenger.” We are easily distracted by more interesting activities once we have faith in the computer systems. In fact, she says that the more competent the system, the less likely are we able to intervene to prevent an accident.

Let’s stretch this analogy to the contracts that we deal with every day – for example, the property management contracts that we help clients with have often failed because of a breakdown in trust between the asset managers and the property managers. Both “sides” blame the other – each says the other is unresponsive and unfocused; delays are frequent, and it is often third parties (in this case, the tenant) who become the victim of failures.

When we address the situation in property management contracts, we find that although there are failures from both parties, the asset manager has often abdicated responsibility for managing the contract because the work it contains is less interesting than other asset management work. It seems from the FT article that this is not a failure in management as such, but natural human psychology, and we need to safeguard against this by building in a way of retaining involvement on both sides of the contract. In our experience, giving both parties something to be responsible for increases each party’s reliance on the other, and the reliability of the relationship.

It sounds as if we may have a bumpy ride as computer systems become more competent at dealing with our busy and changeable roads, and as we adapt to trusting the car to drive competently – whilst simultaneously keeping ourselves alert and responsive to impending dangers. Thankfully, keeping all parties alert and focused within property management contracts is much easier.