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43 transportation agency. Performance measurement and report- Culture and Leadership ing also structures organizational reporting and accountabil- Definition ity among units and individual managers in the organization. In addition, performance measurement is fundamental to Culture is a broad term that includes how an agency reflects resource allocation in association with performance standards (and embodies) the professional orientation toward SO&M and targets. It is (or should be) fundamental to the political and the overall public policy context that defines the trans- process associated with the justification of funding for new portation agency's mission and public expectations. The per- and/or ongoing programs. Increasingly, state legislatures are spective on culture is descriptive rather than analytical, as the beginning to demand this type of information during their observations come from various sources, including the sur- budgeting processes. Finally, effective partnerships can be vey, interviews, and existing literature. forged only in the context of an agreement on measures and related remediation and improvements. Indicators and Range Culture has a series of components that establish the con- The Key Categories of text for professional, policy, organizational norms, and user/ Institutional Characteristics stakeholder expectations and that together substantially enable In the following discussion, the findings were analyzed in (or inhibit) program modifications. There are nine key aspects terms of the four categories of institutional characteristics for of culture that are relevant. the range of variation across the DOTs and for their impli- Vision evidencing a clear commitment to SO&M as a cus- cations regarding institutional differences between mature tomer service-focused core mission of the transportation agency. and transitioning states that appeared to be relevant to the An implicit and shared vision of the future of transportation more effective business processes. These findings--combined infrastructure services is an essential component. Formaliz- with evidence from organizational theory--suggest that there ing this vision and interpreting the transportation agency's are four key categories of institutional characteristics that role in the form of its mission is important where culture is capture important relationships between business processes changing or needs to change, as it establishes the baseline for and institutions: SO&M strategy applications and their relevance. SO&M is increasingly, if indirectly, included in the mission of most of Culture/leadership related to the level of understanding and the mature transportation agencies (and many of the transi- potential leverage of SO&M, as reflected in values, mission, tioning agencies) in language that refers to level of service leadership, and related legal arrangements and strategy or congestion. Whereas few explicitly call out operating the applications, and as demonstrated by leadership. system as part of the mission, visible program components, Organization and staffing related to how structure aligns especially TMCs and safety service patrols, have sometimes responsibilities and accountabilities vertically and horizon- been branded with catchy names intended to market their tally, consistent with capabilities and incentives at the staff public purpose. A formal strategic planning process, includ- level. ing an adjustment in the formal statement of goals and objec- Resource allocation for operations and capital, and the degree tives to relate to systems operations and management, can be of transparency and sustainability in relationship to pro- an important signal of a change in culture. gram improvement. Partnerships in terms of degree of alignment and stability Politics and public policy. Public policy is projected in in objectives, procedures, roles, and relationships. both formal programmatic terms--as embodied in law and regulations--and the more informal political process through The findings for each characteristic are presented below, legislative and stakeholder influence on resource allocation. including definition of the characteristic, indicators found in The expectations include visible (politics, media) expressions data or survey, and the related range of variation. While at a of public satisfaction or dissatisfaction regarding agency per- high level the identified characteristics of institutional archi- formance in dealing with congestion (especially NRC). The tecture correlate well with conventional wisdom, the specific expectations establish the context for SO&M actions, includ- features of each characteristic and the distinct relationships ing both focus and boundaries. They include both informal between levels of business process capability and specific insti- and formal expressions. The informal expressions are the pre- tutional architectures have been illuminated. Whereas most sumptions regarding proper role of the public agency in pro- of the examples are drawn from state DOT experience, many viding facilities and services and their general quality level. of the same features apply to larger local government trans- The formal expressions comprise the authorizing environment portation entities. for the agency's activities, including conventions regarding

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44 customary responsibilities and activities, state resource alloca- states identified in this project, technical understanding of the tion, and legal scope as per state government mandates, com- potential of operations has spread beyond operations staff, mittee jurisdictions, and other federal and state program resulting from a combination of conditions including recon- mandates. ciliation to capacity constraints and CEOs with previous Level of public expectations. In general, the level of expecta- operations exposure, strong middle management or technical tions regarding SO&M are low, based on experience and on champions, and a major disruptive event. The transitioning lack of official commitment. There are occasions (major traf- states typically have one or two of these conditions. fic disruptions, special events) when there is a focus on SO&M, A business model, focused on systems management. The tradi- usually in terms of inadequate response or the need to prepare tional state DOT business model and the larger local govern- for an expected problem. However, the external environment ments is revealed in both stated assumptions (about its role, the that influences transportation policy (elected officials, key role of its partners, its intentions, and its commitment to deliv- legislative committees, organized stakeholder associations, ering improved levels of service) and unstated presumptions. media) rarely shows continuing interest in or support for The traditional transportation agency model evolved during a aggressive SO&M at the program level--especially in terms of long period of successful development of new capacity. The investment or staffing--even in the more mature states. Even business model was designed to construct and maintain safe in the limited instances where senior management has publicly and adequate upper-level highway facilities at a level to meet declared a commitment to operations, there has been limited the peak-period demands of future growth. Part of this model external interest or support. In part, this shows that many has been unstated presumptions, including the transportation external decision makers and interests have considerable stakes agency's relative independence of service providers, lack of need in maintaining the conventional programs, which they often to communicate with users, and a presumption that impacts view as already underfunded, with SO&M seen as a diversion. of external events was substantially outside the agency's The states with dominant or substantial small urban and rural influence--with congestion considered to be the outcome of environments, where recurring congestion is modest, are espe- uncontrollable factors (behavioral, weather, business patterns) cially slow in recognizing that NRC is the major source of dis- that are not the responsibility of the transportation agencies. It ruption and delay. is also not considered the responsibility of the public safety Agency and professional background, values, and level of tech- community whose actions may add to congestion in the nical knowledge regarding SO&M conventions. This includes pursuit of their different mission. professional, technical, and institutional values; background Impact of new technology-related developments. The prevail- of management and staff; assumptions about what is the norm ing business model for state DOTs (and many local transporta- regarding the job of transportation professionals and the tion and public works entities) remains focused on providing related lifestyle in offices and the field; the relevance of special and physically maintaining basic roadway capacity and technical knowledge; and the bureaucratic and civil service viewing congestion as a symptom of capacity shortfalls that, in culture of public agencies. The dominance of civil engineering the long-term, may be overcome. However, there are a few and civil service cultures in both mission and capability is a instances where this traditional business model is beginning to principal feature of the legacy context in most transportation transition to something closer to mobility management agencies--with a professional orientation to medium-tech, responsibility. The impact of vehicle tracking and communi- organized capital project implementation on a nine-to-five cations with systems users, the federal interest in performance, basis, and with substantial span of control over the project examples of aggressive management from abroad, in combina- environment. Newer (younger) professionals are introducing tion with constraints on capacity additions, have led to some a systems-oriented, technology-comfortable element into this initiatives that support modest changes in the traditional busi- environment, and gradually introducing a technology-oriented ness model. and partner-dependent performance regime. Visible leadership. Leadership in SO&M implies change Technical understanding of the potential of SO&M compared management and visibility and identification of individual se- to other service improvement programs and investments. Insti- nior managers (central office and districts) with an SO&M mis- tutionalization of operations necessarily depends on the level sion, both internally and externally. The lack of familiarity with of technical appreciation by staff and management of the SO&M and the lack of external support contribute to inhibit potential for leveraging improved operations. It must also be such visibility. In addition, top management in most state based on an understanding of the basic concepts of SO&M, DOTs and most local government entities have been reluctant as well as of the more detailed specialty knowledge regarding to commit to a formal SO&M program, as they are concerned individual applications. Few senior transportation agency with over-promising and raising expectations that cannot be managers have an SO&M background or seem to project a met in areas where visible success is dependent on factors out- clear understanding of its potential. In some of the mature side of the agency's control. Furthermore, many state DOT

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45 CEOs come from outside transportation and most serve short share the same organizational structure as state DOTs, many terms that challenge the momentum of altering the current of these same issues are present. program. This concern is reinforced by an authorizing environ- Authority of top management. Position in management hier- ment, which, while forceful in regarding on-time, on-budget archy, relative to top management of other mission-related performance for construction, has no parallel expectations programs (maintenance and project development), has a sig- from operations other than to minimize exposure in the press. nificant impact on the ability of an SO&M program to secure Federal influence versus state and local priorities. The well- resources and align authority. SO&M is rarely represented by established federal-aid transportation program is a major influ- an undivided portfolio even at the second level within most ence on the culture of state and local transportation agencies state DOT central offices and districts. There is a more varied (and directly on the program priorities and process as well). mix in local governments when the traffic engineering unit Federal aid accounts for nearly 40% of state capital expen- may be separate from public works. This subsidiary status ditures and the grant conditions, regulations, and technical has an impact on the entire range of program, resource, and leadership of FHWA and FTA substantially shape state DOT, process issues. MPO, and local government priorities. SO&M has not long Organizational structure as it relates to clarity of roles, author- been part of the federal aid program (and many operations ities, responsibilities, and reporting relationships. All state costs were not eligible for federal aid until recently). The fed- DOTs--and most local government entities--are character- eral ITS and Operations program was only formalized in 1997 ized by an organizational structure that has evolved for con- as part of TEA-21 with the establishment of an FHWA office, struction and maintenance project development. In such a ITS deployment funds (since discontinued), and clarification structure, various systems operations functions (e.g., ITS, traf- of program intent and broad funding eligibility and a modest fic engineering, TMC management) are fragmented or decen- requirement for MPOs to consider SO&M. The legacy tralized across several traditional chains of command. At the FHWA capital programs and related funding still dominate state scale, the level of fragmentation versus consolidation the federal-state and MPO relationships. applies to both a state DOT central office and at the district level, depending on the scale of each. It also includes the rela- tionships between them. As most SO&M activities are rela- Relationship to Program and tively new, there is often a lack of clarity about which unit is Business Process Capabilities responsible for which activity or data. Both functional and The development of a formal SO&M program requires a geographic boundaries are unclear in terms of the following: strategic framework to structure and asserts the priorities of the needed business process development. The imperative for Roles and relationships among regional TMCs, districts, making these efforts and the political and policy permission to and the central office regarding program development; do so depends on an understanding, on the part of policy and Functions, support, and point-of-contact available to dis- management leadership, of the potential of SO&M. It also tricts from central office units; depends on a willingness to make changes in the current status Guidance from the central office regarding applications quo--requiring effort, resources, and disruption. priorities (with funding support) and consistency regard- ing platform, standards, data, and so forth; and Standardized chain-of-command at the regional and dis- Organization and Staffing trict levels regarding incident management field activities Definition among all players. Organization refers to the structure of and relationships among Decentralization. The degree of local discretion versus the functional units and individual managers and technical central oversight (i.e., centralization versus decentraliza- staff. Staffing refers to the availability of needed technical and tion) varies among states, particularly in response to size, managerial capabilities. with the larger states having decentralized most program development to the regions. Central office influence varies widely at the district level (where most SO&M services are Indicators and Ranges developed and delivered), with greater independence evi- Organization is only roughly reflected in the formal organiza- dent in the larger, multidistrict states. Degrees of fragmen- tion charts, because DOTs have important noncharted rela- tation are evident from organization charts, with traffic tionships that may be dominant. Nevertheless, the following engineering, ITS, TMC-based activities and maintenance characteristics are widely observed at the state level. In addi- often under different chains of command in both central tion, whereas local government transportation agencies do not offices and regional ones.

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46 Alternative models. There are three different styles among ment when the champion leaves his or her position. Most of mature states: the mature states have been or are now identifying the needed core capacities. Functional (operations related): state DOTs where the cen- Shortage of key expertise. There is a shortage of program- tral office tends to be focused on a single type of activity or level managers in the public sector as a whole, for both cen- project; tral office and district-level positions, as states and the private Divisional (geography related): state DOT districts operat- sector compete for the limited number of experienced pro- ing substantially independent of the state DOT central fessionals. Even though several states have developed job office; and specifications with indicated knowledge, skill, and ability cri- Matrix (combined): discussed in principle but not observed teria, they have been unable to fill such jobs directly. A key in practice. component is the set of measures taken to develop and sup- port staff professional development and to clarify their roles There appears to be a trade-off between statewide standard- and careers in the departmental structure, including training, ization and regional initiative incentivization. At the regional certification, rewards and incentives, active recruitment, and level within state DOTs, the same issue is reflected in the degree retention activities. A few states have set up their own inter- to which operations activity is focused on transportation man- nal training activities or developed consortia academies for agement centers (TMCs). training purposes. Hierarchy. Even in states where there is a range of SO&M Outsourcing. The difficulty in finding staff with the neces- activities currently taking place, these activities have not been sary capabilities, combined with constraints on staff sizes and consolidated in the form of a formal program at the top-level hiring delays, has led some states into outsourcing a range of division within the state DOT hierarchy, equivalent to mainte- field functions, such as TMC operations, safety service patrols, nance and construction. SO&M activities are typically managed maintenance, and systems development. either as subsidiary components of a maintenance program, on a stand-alone ad hoc basis, or organized at the district level around a TMC. The Virginia Transportation Research Council Relationship to Program and survey cited earlier collected and reviewed state DOT organiza- Business Process Capabilities tion charts (Virginia Transportation Research Council, 2005). There is a high level of agreement that structure follows strat- This review revealed that several states have designated system egy and that decisions about organizational design must link operations units or divisions within their central offices and clearly to agency intentions regarding improving business established new second-tier positions to provide oversight of processes. The focus of these characteristics is to develop an operations activities. organizational structure and staff capacities that are capable of Responsibility, accountability, and incentives. Blurred or developing and managing the key business processes, and divided lines of responsibility make performance account- of developing the systems needed for SO&M functions and ability difficult. Central office managers typically have a for positioning SO&M within the agency at a level commen- limited direct contact with strategy applications in the field surate with other core programs. (except in small states) and, given the lack of performance information, do not hold project and regional activities managers accountable for the effectiveness of SO&M activ- Resource Allocation ities. As with the traditional capital program, the account- Definition ability focuses on project performance in terms of budget and schedule matters rather than in terms of measurable The key resources that are subject to agency-level policy are improvements in service. Largely absent is a clear frame- capital resources for systems and technology (and their main- work of incentives (rewards) for individual and unit efforts. tenance) and operating resources in terms of staff positions Technical capacity and staffing level. As reflected in the pres- and related support. ence or absence of the needed core capacities to develop and manage key SO&M activities, much of SO&M to date has Indicators and Ranges been conducted by professionals benefiting from on-the-job training. Many state operations activities appear to be devel- There is limited information or knowledge regarding the level oped and sustained by the intense and entrepreneurial efforts of expenditures related to SO&M by state DOTs, even within of middle-level unit manager champions who work within the DOTs themselves. Some of the key indicators include the existing system to implement projects. These activities SO&M expenditures as an eligible use of state and federal have been observed to stall in terms of extension or improve- funds; resource adequacy in terms of relationships between

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47 criteria-defined needs and available funding; staffing alloca- activities. Given the unfunded core program backlogs, cur- tion; and transparent criteria for resource allocation. rent resource allocation is based largely on modest departures SO&M expenditures as an eligible use of state and federal funds. from past trends in capital and maintenance expenditures, To date, SO&M activities have been funded at a level that rarely not in a systematic, criteria-driven, cost-effectiveness frame- merits its own budget category. As SO&M expands, the lack work for overall multiprogram resource allocation in which of clear funding source becomes an issue. Congestion man- SO&M could effectively compete. Furthermore, states have agement and air quality (CMAQ) funds have been passed not identified trade-offs among alternative investments (cap- through to metropolitan areas for ITS investments, though ital versus operations) to best serve state DOT's mobility mis- rarely related to NRC. Federal-aid ITS deployment funds were, sion. To make matters worse, during budget cutbacks, several in the past, a major source of capital investment for state states have cut extremely effective SO&M services, such as DOTs. The end of these programs has left SO&M competing safety service patrols, which have a limited internal or external for resources with well-established programs. In some cases, constituency. The lack of a predictable transparent resource there is the additional issue of whether SO&M investments allocation process, including clear and accepted criteria for are an eligible use of state or federal funds--capital, operating, allocation and presumed sustainability, renders the effective or maintenance. There appears to be wide variation among implementation of SO&M difficult. the states on this issue. In several states, legislative committees have explicitly excluded SO&M expenditures as an eligible use for certain Relationship to Program and state funding categories. What is clear is that few states have Business Process Capabilities an SO&M program budget category that is considered in the It is obvious that program development requires capital and multiyear or annual programming and budgeting process. staff resources to develop and manage the business processes Resource adequacy in terms of relationships between criteria- associated with the program. The lack of resources creates a defined needs and available funding. SO&M has not been a for- vicious circle in which lack of capability undercuts the ability mally defined program with its own budget category. Lacking to make the case for increased capability. line item status, it is without a known traceable funding level history. Only two states have clearly defined SO&M line item budgets. Without aggregated expenditures, management has Partnerships little idea of what has been spent or budgeted for SO&M as Definition compared to the established programs. Although, exclusive of occasional major ITS infrastructure investments and regu- Partners are organizations--public or private--whose coop- lar snow and ice control reserves, SO&M annual expenditure eration is essential to the execution of key SO&M strategy levels rarely exceed 2% of total state capital budgets, fund- applications. They include PSAs (police, fire, and emergency ing levels are always a concern, especially in the competition services), other state agencies (toll authorities and environ- with legacy construction and maintenance programs for mental agencies), local governments, and regional planning scarce resources. Only a small number of the mature states and transit authorities. have undertaken a systematic SO&M planning/programming effort that provides a defensible basis for defining priority Indicators and Ranges services and applications deployment, costs, and payoffs with a staging approach. All of the key strategy applications addressing NRC require Staffing allocation. A similar picture is apparent regarding the coordinated actions of several jurisdictional entities-- staff resources, especially in the large number of states with both transportation and nontransportation--for effectiveness. hiring freezes or cutbacks in total staff slots. Whereas small There are four key types of jurisdictional issues: numbers of slots have often been allocated (sufficient to man- age a small program), staffing for cost-effective SO&M expan- Mixed ownership. Metropolitan areas require cooperation sion at both the central office and district levels has not been among local governments, the MPO, and the state DOT in made available. Part of the problem is that the lack of formal both making ITS improvements and in real-time operations program status means that it is difficult to know what is spent on roads, especially on both a corridor basis (for strategies in aggregate on SO&M activities. such as incident management) and an areawide basis (for Transparent criteria resource allocation. SO&M is not a high- special events). level program or budget category in nearly all states. Almost Multimodal opportunities. Transit operations involvement all senior managers in state DOTs have no more than a gen- is relevant to planned events and major incidents where, eral idea of the total resources allocated in aggregate to SO&M with the support of operator coordination and traveler

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48 information, a modal opportunity exists to provide options with the private sector in the degree and amount of outsourc- for travelers and possible reductions in congestion impacts. ing. Public and private partnerships are increasingly a critical Functional authority. Incidents involving public safety and component of systems operations in response to such issues law enforcement are the primary jurisdiction of police (state as lack of coordination, instability, and reduced effectiveness. and local) emergency response, whereas medical issues Key issues include alignment and partnerships with public involve fire and emergency medical entities. Law enforce- agencies for effective field procedures and private-sector part- ment and emergency response entities typically have com- nerships for effective field procedures. mand in crash settings, with the state DOTs providing Alignment and partnerships with public agencies for effective support services, especially in relation to traffic control. field procedures. With few notable exceptions, partnerships Private services. Private towing and recovery services and with PSAs, other state agencies, local governments, and MPOs contracted private entities for patron safety service and have been based largely on a legacy of informal understand- asset management are also key players in the best practice ings, evolved for reasons that have little to do with optimal- concepts of operations for NRC strategy applications. The ity. Rather, they are the heritage of custom, presumed legal relationships vary from contract to legal and administra- jurisdiction, policies regarding agency size, and other factors. tive arrangements. There are a series of issues that require close cooperation if the effectiveness of SO&M is to be improved, including clar- As suggested in Table 6.1, it is apparent that these entities all ification of legal authority, standardization of roles, consis- have different functional or geographic priorities that must be tent interagency postevent follow-up, and management of reconciled for effective, cooperative application of the conven- private-sector third parties such as towing and recovery. The tional NRC strategies, where several parties play key roles. This absence of more formal commitments (memoranda of under- reconciliation is often developed to a workable arrangement standing, revised regulations, and co-training) and agreed- on an informal basis. However, such temporary arrangements upon roles and procedures undercuts more aggressive systems often deteriorate with turnover in personnel and cannot be operations. An informal approach also limits the potential to relied as the basis for sustainable improvement. achieve no-cost procedural modifications (evidenced in some A longer-range concern is the limits on interagency co- states) that can accommodate priorities of partners without operation and collaboration to achieve the highest level of compromising their own in areas of incident management, strategy application. The existing jurisdictional configuration-- environmental control, and integrated corridor management. established for generations--may not support the most effec- There is a parallel set of issues relating to the relationships tive approach to NRC. Indeed, other countries exhibit more between state DOTs (particularly but not only in interstate consolidated jurisdiction. corridors), the general-purpose local governments who own Presently, state DOTs--and larger local government trans- or manage major arterials (especially those that are part of portation agencies--have various business models regarding freeway-arterial corridors), and the MPOs, which are respon- the allocation of various SO&M functions among DOT staff, sible for planning. There have been a few bellwether formal private-sector entities, and other public entities (both public public-public partnerships in metropolitan areas in the form safety and general purpose local government). Business mod- of regional operations collaboration, formalized with charters els vary in the level of state DOTs' proactiveness in asserting and sustainable over a decade or more, typically in metro- transportation interests; in the degree to which DOT person- politan areas where there are relatively few jurisdictions. nel execute some functions; and in the level and type of col- Appendix D presents examples of several types of collabora- laboration with (and in some cases devotion to) MPOs, local tion among state DOTs, local governments, MPOs, and other governments, and PSAs. There is also a range of relationships regional entities. Table 6.1. Agency Mission Priorities Transportation Local Law Fire and Private Mission Agency Government Enforcement Emergency Contractor Law enforcement Low Low High Medium Low Emergency response Medium Medium High High Low Responder safety High High High High High Congestion management High Medium Low Low Medium