Guide to Creating and Sustaining a Culture of Innovation for Departments of Transportation (2018)

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2018 N A T I O N A L C O O P E R A T I V E H I G H W A Y R E S E A R C H P R O G R A M NCHRP RESEARCH REPORT 885 Guide to Creating and Sustaining a Culture of Innovation for Departments of Transportation Julie Lorenz Danny Rotert Amy Link Burns & McDonnell engineering coMpany, inc. Kansas City, MO Joe Crossett HigH street consulting group, llc Pittsburgh, PA Subscriber Categories Administration and Management • Education and Training Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration

NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research is the most effective way to solve many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be studied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation results in increasingly complex problems of wide inter- est to highway authorities. These problems are best studied through a coordinated program of cooperative research. Recognizing this need, the leadership of the American Association of State Highway and Transportation Officials (AASHTO) in 1962 ini- tiated an objective national highway research program using modern scientific techniques—the National Cooperative Highway Research Program (NCHRP). NCHRP is supported on a continuing basis by funds from participating member states of AASHTO and receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board (TRB) of the National Academies of Sciences, Engineering, and Medicine was requested by AASHTO to administer the research program because of TRB’s recognized objectivity and understanding of modern research practices. TRB is uniquely suited for this purpose for many reasons: TRB maintains an extensive com- mittee structure from which authorities on any highway transportation subject may be drawn; TRB possesses avenues of communications and cooperation with federal, state, and local governmental agencies, univer- sities, and industry; TRB’s relationship to the National Academies is an insurance of objectivity; and TRB maintains a full-time staff of special- ists in highway transportation matters to bring the findings of research directly to those in a position to use them. The program is developed on the basis of research needs identified by chief administrators and other staff of the highway and transportation departments, by committees of AASHTO, and by the Federal Highway Administration. Topics of the highest merit are selected by the AASHTO Special Committee on Research and Innovation (R&I), and each year R&I’s recommendations are proposed to the AASHTO Board of Direc- tors and the National Academies. Research projects to address these topics are defined by NCHRP, and qualified research agencies are selected from submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Academies and TRB. The needs for highway research are many, and NCHRP can make significant contributions to solving highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement, rather than to substitute for or duplicate, other highway research programs. Published research reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America NCHRP RESEARCH REPORT 885 Project 20-108 ISSN 2572-3766 (Print) ISSN 2572-3774 (Online) ISBN 978-0-309-47991-2 Library of Congress Control Number 2018911332 © 2018 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report.

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. C. D. Mote, Jr., is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to increase the benefits that transportation contributes to society by providing leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board’s varied committees, task forces, and panels annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR NCHRP RESEARCH REPORT 885 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Andrew C. Lemer, Senior Program Officer Sheila A. Moore, Program Associate Eileen P. Delaney, Director of Publications Natalie Barnes, Associate Director of Publications Scott E. Hitchcock, Senior Editor NCHRP PROJECT 20-108 PANEL Field of Special Projects Charlene R. McArthur, Idaho Transportation Department, Boise, ID (Chair) Socorro “Coco” Briseno, California DOT, Sacramento, CA Rachel L. Bain, Massachusetts DOT, Boston, MA Ghada M. Gad, California State Polytechnic University-Pomona, Pomona, CA Jason J. Siwula, Kentucky Transportation Cabinet, Frankfort, KY Llans E. Taylor, Missouri DOT, Jefferson City, MO David Kuehn, FHWA Liaison Lloyd Brown, AASHTO Liaison James W. Bryant, Jr., TRB Liaison

NCHRP Research Report 885: Guide to Creating and Sustaining a Culture of Innovation for Departments of Transportation presents guidance for government transportation agencies on encouraging and sustaining a culture of innovation within the organization, its partners, and other stakeholders. A culture of innovation supports agency managers and staff efforts to encourage and accept innovation as a means to enhance the agency’s success. This guide is designed to assist agencies in assessing their culture with respect to innovation, identifying ways to make the organization more adaptable and open to beneficial change, and sustaining the organization’s adaptability to respond effectively to evolving technology, workforce, and public priorities. Innovation in an organization occurs when people alter existing products, processes, and services, or develop new ones that improve the operations of the organization or the services or other outcomes for customers and stakeholders. For state departments of transportation (DOTs) and other government transportation agencies, successful innovation can mean improving the movement of people and goods, better serving a diverse range of stakeholders, using public funds wisely, providing effective stewardship of the public’s investment in facilities and systems, supporting the economy, and enhancing safety and environmental quality. The benefits of such innovation can include improving quality of service, reducing costs, enhancing economic productivity, increasing safety and environmental quality, and enhancing the organization’s effectiveness. Acknowledging the benefits of innovation, many agencies have appointed innovation officers or established innovation councils. However, technological change, increasing globalization of our lives, and changing workforce dynamics pose continuing opportunities and challenges to the public as well as leaders of organizations in government and the private sector. Having an organizational culture that accepts and encourages innovation is an important contributor to an agency’s success. This culture provides the enabling environ- ment for innovation leaders, speeding the rate at which good new ideas are shared, accepted, and become common practice. A culture of innovation supports DOT managers and staff in their ongoing efforts to enhance the agency’s performance. However, DOTs vary—in their legislative settings, organizational structures, operating policies, and staffing, for example, and they vary as well as in the geography and customer bases of their states. So, too, do they vary in the specific characteristics and management practices that will encourage and sustain a culture of innovation. Many DOT leaders might characterize their agencies as innovative, but they and their staffs would likely recognize that more can be done to encourage innovation within their organizations and among their partners. The culture of innovation encompasses leadership, staff, contractors, and customers: all play roles in the innovation effort. F O R E W O R D By Andrew C. Lemer Staff Officer Transportation Research Board

The objective of NCHRP Project 20-108 “Guide to Sustaining a Culture of Innovation within Departments of Transportation” was to produce a guide for encouraging and sustain- ing a culture of innovation within a DOT or within other government transportation agency and their partners. The guide is intended to provide (1) internal and external stakeholders with a practical understanding of what a culture of innovation is and why it is important in a DOT; (2) implementable strategies that staff at all levels may apply for developing such a culture, channeling its efforts, and sustaining its vitality; and (3) specific examples of mea- sures and tools that staff and leaders can use to assess and report, within the organization and to others outside the organization, the outcomes desired and benefits realized through innovation. This research was conducted by a team led by Burns & McDonnell Engineering Company, Inc., of Kansas City, MO. The research team conducted a review of literature, surveyed practitioners, and applied web-based tools to identify important components of a culture of innovation and case study examples applicable to government transportation agencies. Based on their findings, the team developed a framework of primary components of an innovation culture and a simple self-assessment questionnaire for characterizing an organization’s level of innovation culture development. The guide then offers practical strategies for encouraging development of an innovation culture, addresses weaknesses and obstacles to the culture’s spread, and offers examples of organizations that have successfully used these strategies to manage the risk associated with innovation and improve the outputs and outcomes of their business activities. The guide is supplemented by a report of the research team’s work, available as NCHRP Web-Only Document 248: Research on Creating and Sustaining a Culture of Innovation for Departments of Transportation, available for download on the TRB website (www.trb.org) by searching for “NCHRP Web-Only Document 248.” In addition, the research team prepared a high-level summary of the project, available for download from the NCHRP Project 20-108 web page at https://apps.trb.org/cmsfeed/TRBNetProjectDisplay. asp?ProjectID=4060.

Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions. 1 Innovation or Irrelevancy? 2 Section 1 Your Guide to Innovation—Introduction 2 1.1 Your Guide to Innovation 2 1.2 Five Essential Building Blocks 4 1.3 Guidance Grounded in Research 4 1.4 A Resource for All DOTs: How to Use This Guide 6 Section 2 Self-Assessment 6 2.1 Use the Self-Assessment to Jump Start and Keep Improving Your Efforts 8 2.2 How to Calculate Your Results 12 2.3 How to Sequence the Building Blocks: An Overarching View 13 Section 3 Innovation Culture 101 14 3.1 What Is a Culture? 14 3.2 What Is a Culture of Innovation? 15 3.3 The Why, How, and What of Innovation Culture in DOTs 16 3.4 Employee-Driven Innovation 16 3.5 Two Types of Innovations 17 3.6 Managing Public-Sector Risk 18 3.7 What Is the Process of Innovation? 19 Section 4 Innovation Building Blocks 19 4.1 Leadership 25 4.2 Empowerment 34 4.3 Communication 38 4.4 Recognition 43 4.5 Measurement 47 Section 5 Case Studies: Practical Advice from Organizations with Effective Cultures of Innovation 47 5.1 Large DOT: Caltrans 49 5.2 Public Sector: City of Los Angeles 51 5.3 Private Sector: Google 53 5.4 Small DOT: Idaho Transportation Department 56 5.5 Private Sector: Kiewit Corporation 58 5.6 Medium-Sized DOT: Minnesota Department of Transportation 60 References C O N T E N T S