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14 TABLE 3 TABLE 5 USE OF STRATEGIC PLANNING (by size of system) PERFORMANCE OF STRATEGIC PLANNING Perform Strategic Do Not Perform No. of Size of System Planning Strategic Planning Total Status of Strategic Planning Agencies % Small 17 (74%) 6 (26%) 23 (100%) Currently perform it 17 71 Medium 9 (90%) 1 (10%) 10 (100%) Never performed it 2 8 Large 5 (100%) -- 5 (100%) Stopped performing it 2 8 Total 31 (82%) 7 (18%) 38 (100%) Not really strategic planning 3 13 Total 24 100 justify a need to increase funding or were used in con- junction with funding decisions (five responses). Two Benefits of Strategic Planning respondents indicated that through strategic planning their agencies realized a need for more resources than Respondents cited numerous impacts or benefits from strate- they currently have to meet the needs of their region. gic planning; some general, some specific. In the more gen- eral category, the following impacts were cited: RESULTS--SELECTIVE SURVEY · Created a new vision for the agency. Use of Strategic Planning · Created a shared understanding of goals and objectives among staff, management, and the board. Of the 24 agencies that responded to the second, selective · Helped everyone in the agency to work together. survey, 2 reported that they do not perform strategic plan- · Facilitated the prioritization of projects and programs. ning. On closer examination, three other agencies that reported · Promoted greater board ownership of overall agency performing strategic planning appeared to be referring instead initiatives and less emphasis on pet projects. to the federally required Long-Range Transportation Plans · Provided greater agency support from external stake- and/or Transportation Development Programs. Two agencies holders. that previously performed strategic planning no longer do so · Helped agency become more customer oriented. (see Table 5). Table 6 shows the percentage of agencies that · Allowed agency to establish budget priorities, redirect perform strategic planning according to the size of the agency. staffing levels, and create more effective workflow. · Helped define the agency's core role and responsibili- One of the agencies that previously performed strategic ties to the community. planning, but no longer does so, stopped the process to focus more energy on pressing short-term problems. The other More specific responses included: agency did not stop so much as put their process temporarily on hold. The agency had a 5-year strategic plan and intended · Helped shift emphasis from design and construction to to revisit it in 2001 for updates and revisions. However, this corporate management. was abruptly interrupted by a series of financial crises, includ- · Noted that the average age of the fleet has declined, oper- ing a plummeting economy, major budget deficits, service ating reserves have expanded, and ridership has grown. cuts, and layoffs. · Led to the development of various agency initiatives such as Safety First, a return-to-work program, and a The following survey results are based on the 17 agencies new agency logo and marketing strategy. that currently perform strategic planning. Although there are · Cited internal process improvements, such as the accounts many commonalities, as will be seen, there is also a variety payable process, procurement cycle time, and recruit- of different approaches to conducting strategic planning in ment and selection. transit agencies. There is no single uniform model. · Enabled development of a marketing plan that dovetails with the strategic plan's objectives. · Substantially reduced customer injuries and employee TABLE 4 COMPONENTS OF STRATEGIC PLANS lost-time accidents. Percentage Who Strategic Planning Components Use Them Vision statement 74 TABLE 6 Mission statement 97 PERCENTAGE OF AGENCIES PERFORMING External environmental scan 52 STRATEGIC PLANNING (by size) Internal environmental scan 52 Identification of strategic issues and/or 81 Agency Size Yes % Yes No % No initiatives Small 1 100 -- -- Recommendations 94 Medium 10 83 2 17 Action plans, etc. 77 Large 6 55 5 45 Performance measures 77 Total 17 71 7 29
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15 Name of Process transit board. For four of the agencies the primary impetus was state law (two agencies each in New York and Washing- Most agencies call their process strategic planning, although ton State). For one agency, it was required by the metropoli- several respondents use the term strategic business planning tan government. The responses are summarized in Table 9. or refer to their documents as strategic business plans. This is particularly true for the two agencies under the MTA in New York, which prescribes the name and nature of the Responsibility for Strategic Planning process for its subsidiary agencies. Three organizations did not have specific departments or individuals charged with the responsibility for strategic plan- The use of the term "strategic business planning" may ning (one was a small agency and two were medium in size). reflect one or both of two sentiments. It may be an attempt to Of the 14 organizations that did assign specific responsibil- merge the somewhat different concepts of strategic planning ity, there was quite a variety of where and to whom it was and business planning or it may simply reflect a movement that assigned. In terms of organizational location, five agencies began a few years ago in an attempt to make public-sector indicated that the responsibility was primarily in the execu- agencies more "businesslike." tive office. Three agencies indicated that the responsibility was in some kind of strategic planning department (e.g., strate- gic organizational planning). Two agencies cited more gen- Duration of Process eral planning departments (e.g., planning and development Eight agencies take fewer than 6 months to complete their or transit planning). The administration and human resources planning processes. Five agencies take from 9 to 12 months. departments were cited by two other agencies. Two of the agencies regard their processes as continuous or ongoing. Table 7 summarizes these responses. With regard to who was responsible for the function, three agencies indicated that the general manager, executive direc- tor, or assistant executive director was the key person. Three Time Period Covered by Plan agencies indicated an executive vice president or vice presi- dent, and three more indicated a director of a strategic plan- The range of time periods covered by strategic plans overall ning unit. Other managers cited were a strategic business was between 1 and 30 years. The average number of years manager and a senior transit manager. In three cases, staff was eight, with the most common answer being five. Table 8 level positions were cited--a human resources specialist, a shows the distribution of responses over the various time transit planner, and a principal management analyst. periods. Usefulness of Strategic Planning Impetus for Starting Strategic Planning Respondents were asked to rate the usefulness of strategic For the most part, the impetus for conducting strategic plan- planning at their agency on a scale of 1 to 5 (with 1 being "not ning was an internal decision by either management or the at all useful" and 5 being "extremely useful"). Overall, the respondents rated usefulness as a 4, or "very useful." The responses are summarized in Table 10. TABLE 7 DURATION OF PLANNING PROCESS TABLE 9 IMPETUS FOR STARTING Duration No. % STRATEGIC PLANNING 2 months 1 6 36 months 7 41 Impetus No. % 912 months 5 29 Internal decision 12 71 Ongoing 2 12 External requirement 5 29 Other 2 12 Total 17 100 Total 17 100 TABLE 10 TABLE 8 USEFULNESS OF STRATEGIC TIME PERIOD COVERED BY PLANNING PLAN Rating No. % Time Period No. % 1 (not at all useful) 0 0 13 years 2 12 2 (somewhat useful) 1 6 5 years 7 41 3 (fairly useful) 2 12 610 years 2 12 4 (very useful) 10 59 11+ years 2 12 5 (extremely useful) 4 23 Undefined 4 24 Total 17 100 Total 17 100 Average rating 4.0
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16 Note that 82% of respondents rated strategic planning as counties. There was no clear pattern here. For the most part, "very useful" or "extremely useful." external agencies do not have to approve the strategic plans. They are more likely to be involved in their development. Respondents were also asked about the reason for their This was particularly true in the case of MPOs--they are ratings. Typical answers included: sometimes involved in the development but usually not in approval. A common role of the MPO was to provide demo- · Our annual goals and budget are driven by goals that graphic and environmental types of information. (In two come from the strategic plan. cases, the transit agency is the MPO.) Table 12 summarizes · Strategic initiatives set forth by the board help manage- the involvement by other agencies. ment and staff to set priorities. · It puts the board and staff on the same page and makes Use of Retreats it easier to get the board to agree with our annual goals and objectives. Three-fourths of the respondents use board and/or manage- · It focuses our energies. ment retreats as part of their process. Most of the retreats are · It increases interdepartmental coordination. done annually. One agency has a mid-year retreat to review · It is used as a management tool--performance metrics with the board the overall priorities that the executive man- are linked to the strategies, thus holding departments agement team would like to pursue in the next year, and accountable for results. another retreat late that year to update the board on the bud- · It helps to identify areas for improvement and the need get implications. Another agency uses quarterly planning for additional funds. workshops involving both board and management. · Performance indicators associated with the strategic plan are an important means for measuring progress. The duration of the retreats ranged from one-half day to · It caused us to recognize the importance of our role in 1 week. (The 1 week retreat, at the Metropolitan Transit the region. Authority in Nashville, was with all levels of staff repre- · It was useful in the agency's successful sales tax ballot sented on a rotating basis.) The retreats included a variety of initiative. activities such as an environmental assessment (or scan), a · It outlined a vision for how we want transit to develop SWOT analysis, development of annual goals and objec- in the region for the foreseeable future. tives, generation of a "strategic portfolio" (a set of strategic initiatives or priorities), and creation of a strategic vision. Involvement in the Planning Process Use of Consultants Respondents were asked about who was involved in their internal planning process. All of the agencies indicated that Two-thirds of the agencies used a consultant at some stage to "executive management" was involved. Approximately three- assist them with the process. Many of these agencies only fourths of the agencies also involved other management, the used a consultant when they began strategic planning and cur- board, line and staff departments, and strategic planning staff. rently do not. Consultants were sometimes used for substan- Table 11 summarizes this involvement. The "other" category tive purposes (e.g., designing a strategic planning process or primarily included external stakeholders such as taxpayers, conducting an environmental scan); however, many agencies elected officials, and citizen and community groups. used them primarily as professional facilitators at meetings; for example, at planning retreats. Involvement by External Agencies Plan Approval Respondents were also asked about the involvement by exter- nal agencies such as a metropolitan planning organization The agency board approves the strategic plan in more than (MPO), a regional transit agency, or local municipalities or one-half of the agencies. It is approved by top management in approximately 20% of the agencies. In one-fourth of the TABLE 11 INVOLVEMENT IN THE PLANNING PROCESS TABLE 12 INVOLVEMENT BY EXTERNAL AGENCIES Who Is Involved? No. % Board of directors 13 76 Development Approval Executive management 17 100 Agency No. % No. % Strategic planning staff 12 71 MPO 8 47 4 24 Other management 13 76 Regional transit agency 3 18 3 18 Line and staff departments 12 71 Municipalities and/or counties 9 53 5 29 Other 6 35 Other 4 24 1 6
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17 agencies, the plan is approved by a regional transit agency or · Four agencies combined their strategic planning docu- local government. Table 13 summarizes the approving bodies. ments with their financial plans/capital improvement programs. · Two agencies used a balanced scorecard approach, an approach being used in many private-sector companies. Plan Content · Three agencies' plans contained educational pieces either describing the terms of strategic planning and/or the The plan documents contain a number of common elements process, or explaining why the organization is conduct- of a strategic plan, such as a vision and/or mission statement, ing strategic planning. an internal and external environmental scan, and an identifi- · Two plans were as brief as a board meeting document cation of strategic issues and initiatives. The most common outlining strategic initiatives or a four-page outline of plan element (in 100% of the agencies) was the identification goals and strategies for the year. of strategic issues and/or initiatives. Table 14 indicates the prevalence of the various types of plan elements as reported One agency, the San Diego Association of Governments by the survey respondents. (SANDAG), has an interesting strategic plan. Known as the Transit First Strategic Plan, it contains only a few of the spe- Respondents were also requested to provide copies of cific elements identified previously. Instead, it lays out a their strategic planning documents. Fourteen agencies did so. visionary strategy for increasing the role that public trans- Following are some key observations from a review of these portation plays in meeting the region's mobility needs over documents: the next 20 years. It focuses on three areas that will be key to the success of the Transit First strategy: · Six of the plans were called "Strategic Plans." Six oth- ers were titled "Strategic Business Plans." The remain- 1. An increased regional funding commitment to both ing two were named "Destination 2010" and "Strategic transit operating and capital improvements. Initiatives." 2. Close integration of land use and transportation plan- ning ("Smart Growth"). · Several of the plans contained statements about organi- 3. Implementation of transit priority measures to bypass zational values. This is a relatively new development in congested areas to improve travel times and reliability. strategic planning that has been more common in the private sector. The general intent is to define the orga- Adopted in October 2000, development of the Transit nization's core values so that they can serve as a con- First strategy was a collaborative effort between the Metro- text or framework for its plans and activities.) politan Transit Development Board, the California Depart- · Some agencies have well fleshed-out plans, but their ment of Transportation, the North County Transit District, yearly updates were sparse. Conversely, some agencies SANDAG, and local jurisdictions. (Note that in January had detailed yearly updates and a sparse plan. It appears 2003, SANDAG assumed many of the transit planning, fund- that the more detailed the plan, the less need for detailed ing allocation, project development, and construction respon- annual updates, and vice versa. sibilities of the Metropolitan Transit Development Board and the North County Transit District.) Although not a traditional TABLE 13 strategic plan, it is certainly strategic (in terms of its time PLAN APPROVAL frame, number of agencies involved, and changes that will be Approving Body No. % necessary for it to succeed, and it is a clearly a plan. It cre- Agency board 9 53 ates a strategic vision for transit in the region. Therefore, it Agency top management 3 18 has been included in this analysis. Local government 2 12 Regional transit agency 2 12 Other 1 6 Total 17 100 From Planning to Implementation Many of the comments about moving from planning into TABLE 14 implementation centered on the need to translate the plan into PLANNING DOCUMENT ELEMENTS annual goals and objectives and to implement them through Plan Elements No. % the budgetary and capital programming processes. Several Vision statement 10 59 agencies have monthly or quarterly progress reviews that Mission statement 14 82 External environmental scan (e.g., opportunities and threats) 12 71 might include presentations to the board. A few agencies go Internal environmental scan (e.g., strengths and weaknesses) 12 71 an additional step by linking the accomplishment of goals Identification of strategic issues and/or initiatives 17 100 and objectives with individual performance appraisals. In Recommendations 10 59 Action plans, etc. 15 88 several cases, the evaluation of the general manager or exec- Performance measures 13 76 utive director by the board is tied directly to the achievement Other 7 41 of strategic plan goals.
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18 A common theme regarding implementation was the need ing it to operational planning, the annual operating budget, for good communication. This included holding meetings capital planning and programming, financial planning, and with various groups to explain the plan and their role in it, performance measurement. Most agencies have made these regular discussion at senior management team meetings, linkages, as summarized in Table 16. regular reporting to the board, and the posting of goals and results on the agency website. Use of Performance Measures One agency, LACMTA, reported a very comprehensive Most systems reported using some kind of performance mea- process. In addition to the communication strategies described sure in connection with their strategic planning process. They previously, this agency forms teams tied to each strategic are developed or identified in a variety of ways. Generally, goal. These teams meet monthly or bi-monthly with facili- they are developed at a management level, sometimes with tators from the Organizational Development and Training guidance from the board. Sometimes they are developed Department, whose job it is to coach the goal "owners" as jointly between a manager or executive and the units that they work on achieving their goals. In addition, the executive report to that individual. Some systems let the responsible management team holds quarterly reviews with the teams to individuals develop the measures and these are then reviewed ensure that they are recognized for their accomplishments and approved at the next level. One system reported that the and for meeting their milestones. Finally, the agency uses measures were identified as part of one of their planning key performance indicators (KPIs) that are reported to the retreats. chief financial officer as part of the operating management and budget process. For fiscal year (FY) 2005, the agency is At MTA New York City Transit, the performance indica- developing monthly performance monitoring using key, high- tors are selected by the MTA (Metropolitan Transportation level indicators. Authority), the regional transit agency, and specific targets for those indicators are established by responsible depart- ments in each subsidiary agency. These are then approved by Effectiveness of Implementation the agency's president and by the MTA board. Respondents were asked to rate their effectiveness at imple- menting strategic plan recommendations on a scale of 1 to 5, Mechanisms for Evaluating Success with 1 being "not at all effective" and 5 being "extremely effective." Overall, they rated implementation at 3.6, between Several respondents use monthly or quarterly reports to man- "fairly effective" and "very effective." Table 15 summarizes agement and/or the board. Similarly, several use some kind of the responses. quarterly management review process that assesses progress on goals or performance measures. Most agencies have at Respondents were also asked to explain their answers. least an annual report or review of some kind. In addition, A number of the respondents remarked on the difficulties many agencies formally update their plans each year and this involved in implementation; for example, overcoming years of involves a review of progress against the plan. stagnancy with entrenched staff, the need for "hand-holding" to keep people moving in the right direction, and the reality The Washington Metropolitan Area Transit Authority uses of new circumstances that redirect energies. Several systems a Corporate Alignment Plan, a tool for managing progress pointed out that they were just getting started or were still in much like a business plan. The Corporate Alignment Plan a learning phase. "aligns" annual performance targets with the strategic plan. It contains annual goals, objectives, and performance metrics A key aspect of making strategic planning effective is link- that are set by management, and that allow the organization ing it to other important organizational processes, not con- to track its accomplishments. The plan also uses the balanced ducting it as an isolated planning exercise. This includes link- scorecard concept described earlier in the literature review. TABLE 15 TABLE 16 EFFECTIVENESS AT LINKAGE TO OTHER PROCESSES IMPLEMENTING STRATEGIC PLAN Process No. % RECOMMENDATIONS Operations/service planning 15 88 Rating No. % Budgeting 15 88 1 (not at all effective) 0 0 Capital planning/programming 13 76 2 (somewhat effective) 1 6 Financial planning 13 76 3 (fairly effective) 8 47 Information technology 14 82 4 (very effective) 5 29 planning 5 (extremely effective) 3 18 Performance measurement 13 76 Total 17 100 Organization development 12 71 Average rating 3.6 Other 4 24
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19 Keys to Success · The difficulty of working with numerous individuals, dealing with differing opinions, and getting all of the Several common themes ran through the responses to the ques- information needed in the time frame available. tion about the "keys to success" in their planning processes: · External factors such as severe funding problems that delay or derail the process. · Support and commitment by the board and/or top · The use of goals that were too broad and that did not management. provide enough guidance for priority setting. · Broad participation and involvement by management, · Media scrutiny of the process. staff, and other key stakeholders. · The reluctance of some individuals to set ambitious tar- · Making the process collaborative and cross-functional; gets for which they are willing to be held accountable. getting broad "buy-in." · Inadequate communication and participation. · Good communication about the plan so that everyone understands their role in its success. In regard to how the challenges were overcome, support from the top was frequently mentioned as an important fac- Other more specific responses regarding keys to success tor. In one case, the "willpower" of the board chairman and by particular agencies included: executive director was cited as crucial. In another case, the agency president distributes a "guidance" memo at the begin- · Discussing budget implications at the same time as ning of the strategic planning process, which outlines where strategic initiatives. he wants to see more programmatic emphasis. He also reviews · Having one person dedicated to facilitating the process the draft plan before it goes to the board to see that it includes to ensure continuity. · Using the plan as a business tool. appropriate programs and performance targets. · Basing the plan on good data. · Holding departments accountable. Good communication was cited by many respondents as · Continuously reviewing the plan. a key ingredient in overcoming obstacles. Similarly, giving · Using it to develop annual goals. employees significant input into the process was cited as · Making reference to the plan in initiatives throughout important. One agency revised its employee appraisal form the year. to include accomplishment of goals developed in the plan- · Narrowing topic areas down to manageable goals and ning process as a factor in performance appraisal. objectives that can be achieved in a year or less. Lessons Learned One agency, LACMTA, cited two interesting features of its planning process. First, it uses a "Leadership Model" to In addition to the items mentioned previously under keys to communicate the strategic plan to middle management and success or overcoming challenges, other lessons learned were: frontline supervisors. Second, each business unit is given a video presentation in which the chief executive officer (CEO) · Integrate the strategic plan outcomes into typical oper- stresses the importance of achieving the business goals of the ating documents such as service plans and budgets. agency. [This is described in more detail in the Case Study · Make the plans and goals ambitious, but not so much so section (chapter four).] that they are unattainable. · Recognize that change will be difficult and that it will Challenges take time and effort. · Involve not just the organization but the community Several challenges were cited in response to the question too. The effort will not be successful without the sup- about pitfalls or obstacles typically encountered in the strate- port of community partners, as well as local, state, and gic planning process. federal governments. · The difficulty of staying focused on strategic issues Finally, one respondent advised "Take a deep breath, throughout the year in light of pressing day-to-day make a complete break from the tactical, and focus on the issues. strategic. Celebrate accomplishment."