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STRATEGIC PLANNING AND MANAGEMENT IN TRANSIT AGENCIES SUMMARY The purpose of this synthesis project was to examine the practice of strategic planning and management in the transit industry. It was developed to answer a number of specific questions including: How is it being used and to what extent? What forms does it take? How effective has it been? What benefits has it produced? Are there any related research or training needs? Strategic planning is a management tool widely used in the private, nonprofit, and public sectors. It is used to define an organization's vision, mission, core values, challenges, and opportunities; establish long- and short-range goals; guide business processes; and measure performance. It can assist an organization in creating its future rather than just reacting to it. It also can help to integrate the organization's various activities and programs, and to better align the organization with its stakeholders' objectives. The project involved a review of relevant literature on the subject, both in general and as related to public transportation. In addition, two surveys were conducted of transit agencies. The first was a random survey of one agency from each state and the District of Columbia to determine the prevalence of the use of strategic planning and management. There were 38 responses to this survey. The second was a more detailed survey of selected agencies to examine specific practices. Twenty-four agencies responded to that survey. In addition, five agencies were selected as case studies based on the comprehensiveness of their process or innovative or noteworthy practices that they use. The study concludes that strategic planning and management is alive and well in the tran- sit industry, with some form of strategic planning and management being implemented by more than 80% of the transit agencies that were randomly sampled. This indicates that the practice is providing some real value. Moreover, its use has increased substantially since other studies examined the practice in 1986 and 1990. As would be expected, its use is more prevalent in large agencies than in small- or medium-size ones. A number of benefits from its practice were identified. These include internal benefits such as helping to create a new organizational vision; helping the agency become more customer- oriented; creating better alignment between the board, management, and staff; and aiding in decision making and priority setting. Other internal benefits were derived from its use in establishing budget priorities, redirecting staffing levels, and creating more effective work- flows. It has also been used to restructure services to gain a more efficient use of resources or to expand existing services. Strategic planning provides many external benefits as well. It has increased external stake- holder awareness and input (e.g., from local, state, and federal governments; the public; and local businesses) and has resulted in greater stakeholder support. Also, it has been used in conjunction with funding concerns and decisions and has helped in obtaining more funding. Finally, it has helped define an agency's core role and responsibilities to the community. Many of the agencies have come to recognize that for strategic planning to be effective it must be linked to key organizational processes such as budgeting, capital programming, and

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2 performance measurement. This is one of the important ways that "strategic planning" becomes "strategic management." In addition, it needs to be tailored to the needs and capa- bilities of the organization, and it must have the support and involvement of top management. If it is to be relevant, it cannot be overly elaborate or formal--a perfect plan is of no use if it is out of date by the time it is produced. Finally, strategic management needs to be based on good data, and the plan needs to be updated on a regular basis. There are a number of relatively common ingredients in a strategic management process, including: "Planning to plan"--deciding who should be involved in the planning process, what their roles should be, and the appropriate time frame for the process. Creating an organizational vision and a vision statement. Developing a mission statement, and goals and objectives. Identifying the organization's core values. Clarifying organizational mandates (e.g., enabling legislation). Conducting a stakeholder analysis (i.e., who are the important stakeholders and what are their interests or needs?). Assessing the organization's external and internal environments to identify strengths, weaknesses, opportunities, and threats (a "SWOT" analysis). Identifying the key strategic issues facing the organization and formulating strategies to manage these issues. Developing an effective process for implementing and managing the strategic initiatives. Evaluating progress and making necessary mid-course corrections. The TCRP project investigating "emerging new paradigms" in public transportation has suggested that fundamental change will have to occur in the transit industry if it is to succeed in a world where such significant social, economic, political, and technological change is occurring (Project J-6, Task 21). Strategic management may be an important tool for effect- ing such change. The report concludes with some ideas for additional studies and training.