The National Academies

NCHRP 20-24(14) [Completed]

Managing Change in State Departments of Transportation
[ NCHRP 20-24 (Administration of Highway and Transportation Agencies) ]

  Project Data
Funds: $200,000
Research Agency: Various
Principal Investigator: Robert C. Johns and Stephen Lockwood
Effective Date: 10/26/2000
Completion Date: 5/31/2001

Change Management in State DOTs

State departments of transportation are operating in an environment of unprecedented change. Evolving demands for transportation services, new technologies, workforce composition, stakeholders' concerns, and a constantly changing political environment create continuing demands for institutional change. To address these challenges, many state DOTs are undertaking a range of initiatives such as strategic planning, organizational restructuring, performance measurement, process engineering, and outsourcing.

Both anecdote and survey suggest that change management is now the major preoccupation of senior management. However, the rate of change is very uneven and not well-understood. Indeed, there appears to be more innovation than imitation -- since the creative approaches being introduced are not documented or widely discussed. Little "literature" on state DOT change management has been developed -- either case studies or "how to" material.

AASHTO's Strategic Interest

A 1998 AASHTO report on "The Changing State DOT" identified drivers of change and approaches being taken by state DOTs in change management. AASHTO's Year 2000 Strategic Plan activities then introduced an element concerned with facilitating institutional change. Meanwhile, a newly reorganized TRB Committee on Strategic Management, through calls for papers and annual meeting sessions, focused on studying the range of changes occurring in transportation organizations. This led to the formation of a committee to plan a special workshop on strategic management under the joint sponsorship of the Transportation Research Board Committee on Strategic Management, AASHTO Standing Committee on Quality, and the Federal Highway Administration (FHWA).

The Strategic Management Workshop

The two-day workshop (June 25-27, 2000) in Minneapolis was organized to facilitate peer-to-peer discussions among the CEOs and senior staff of the state DOTs about their experiences in managing internal and external change. This workshop focused on sharing recent experiences with managing internal and external change and lessons learned. Twenty state DOT CEOs participated in the workshop, and 35 state DOTs were represented by CEOs or senior staff. Conference dialogue dealt with three principal management challenges:
  • Strategic planning-related initiatives
  • Workforce and reorganization-related initiatives
  • Process and program delivery-related initiatives

The discussions identified a wide range of specific issues within each area that attendees felt deserve organized review via case studies, assessment of the state of the practice, and identification of promising concepts, approaches, and tools. Workshop participants used the results of these discussions to identify research that would help state DOTs lead and manage their changing organizations. Twenty-two research problem statements were crafted around the three subject areas.

TRB, at the urging of AASHTO and participating CEOs, immediately set up an NCHRP panel, chaired by Mary Peters of Arizona DOT, to develop a multiyear NCHRP research program under the 20-24 program established for special AASHTO research related to DOT administration. The panel combined and prioritized problem statements into eight strategic management issues for priority research. In view of the lack of written material on these subjects, the panel decided to start with broad "scans" of the state of the practice in each area to provide guidance for a substantive multiyear research program. Each scan would summarize the challenges, document examples of current innovations, and recommend the appropriate initial components of a research program. The eight-month scan program -- including presentations at AASHTO Board meeting roundtables -- represented a highly unusual rapid-response approach to the priority placed on these issues by AASHTO and TRB.

Cross-Cutting Findings from the Initial Eight Scans

The eight scans produced considerable evidence of the number and breadth of change management initiatives within state DOTs. In general, these initiatives are concerned with the agencies as institutions, their mission and leadership, organization and workforce, process, and resources. The principal, common forces of change include
  • Deliberate reorientation of strategic objectives in response to program limitations (Scan 3, operations), new technology (Scan 6, information technology), or funding (Scan 8, innovative finance)
  • Evolution of new forms of cooperation for improved service delivery with other public agencies (Scan 7, partnerships) and the private sector (Scan 2, outsourcing)
  • Workforce strategies (Scan 5) in response to downsizing, retirements, competition, and the need for new capabilities
  • The need to institutionalize and measure change management (Scan 1, strategic leadership) and improve agency image in the overall constituent context (Scan 4, positioning)

Overall, state DOTs today appear to be evolving away from single-purpose entities with standard approaches to producing a limited number of well-understood products and services. Instead, they are moving toward more flexible organizations designed to respond to constantly changing missions with ever-increasing efficiency through a shifting coalition of partners and stakeholders. Managers of these changes can clearly benefit from access to collective experience, including a better sense of the state of the practice and specific resources based on the more promising approaches. The scans identify some of the most valuable experience and provide important pointers to key issues for further dialogue and research.

Individual Scan Highlights

Scan 1 -- Innovations in Strategic Leadership and Measurement for State DOTs: Strategic planning itself is increasingly widespread in state DOTs. However, many CEOs find that the process often breaks down in the implementation stage -- creating buy-in and "institutionalization" of key change vectors. Yet some promising solutions are being found, including widespread participation of a variety of stakeholders in the process, a customer focus in terms of strategy and priorities, top management commitment to implementing the strategic agenda, ongoing communication to promote it, and "omni-directional alignment" among goals, performance measures, and budgets. Further research in each of these areas is needed to strengthen and integrate strategic management practices. (Scan by T.H. Poister and D.M. Van Slyke of Georgia State University)
Scan 2 -- Innovations in Private Involvement in Project Delivery: Outsourcing -- commonly employed for construction and design services to cope with lumpy demands or staff downsizing -- is spreading to other functions within the project and service delivery functions. It is increasingly important to understand the relative costs and quality of work conducted in-house versus by external private firms. Current evidence is not conclusive, as cost comparisons may not have been systematic. More research and more collaborative efforts are required by transportation organizations to identify best practices and possible standard procedures. (Scan by Dr. D. Hancher, P.E. and R. Werkmeister, P.E., University of Kentucky)

Scan 3 -- Innovations in Institutionalization of Operations: Systems operations and management is already considered a mission priority by many state DOTs. However, the several types of operations-related activities -- ranging from ITS to maintenance of traffic -- are stovepiped and decentralized in most state DOTs. In most cases, there appears to be no common department-wide policy framework around which to organize for efficient integration of services and sustainable funding. Some member departments are establishing performance measures by conducting customer surveys, but implementation for program management is still in the very early stages. Further case study research into promising approaches is needed to connect customer interests and performance measures to integrated operations activities. (Scan by Philip J. Tarnoff )
Scan 4 -- Innovations in DOT Communications, Image, and Positioning: The scan focused on states known to be addressing issues of communications, image, and positioning. Those that were most advanced focused on improving both internal communications with staff and external communications with the public, elected officials, and the media. Some innovative states are assessing their image and identifying ways in which to clarify and improve it with the public, recognizing that image enhancement and improved constituent communications may lead to an improved position for the agency, to new resources, and to a more supportive audience for the agency's work. Increasingly, states report that proactive efforts to better communicate and to position the agency positively with decision makers have led to increased public support and legislative funding for the DOTs. Additional research in communications, positioning, and marketing to various constituencies was felt to be needed. (Scan by K. Stein and R. Sloane of Howard/Stein-Hudson Associates)

Scan 5 -- Innovations in Work Force Strategies: State departments of transportation face severe challenges in recruiting and maintaining their workforces. Innovative approaches are being taken to recruitment of core competencies such as IT and senior civil engineering. Retention and succession approaches were also investigated, including mentoring and reverse mentoring. However, more case study and research are needed in defining, recruiting, and retaining the necessary workforce. (Scan by C. Gilliland of the Texas Transportation Institute)

Scan 6 -- Innovations in Organization Development as a Result of Information Technology: The rapidly changing environment of IT is challenging DOTs to deal with emerging opportunities and problems. This scan identified the range and types of new opportunities related to IT itself as well as related organizational development implications. Key issues include organization of the IT function, the cost-effective degree of outsourcing, and a range of management issues such as handling information overload, funding, procurement, and training. These areas suggest future research directions. (Scan by C. Cluett and K. Baker of Battelle Seattle Research Center)
Scan 7 -- Innovations in Public-Public Partnering and Relationship Building in State DOTs: A wide variety of partnerships among state DOTs; other state, local, and federal agencies; and public stakeholders are improving project and program delivery and increasing efficiency across agency or jurisdictional lines. Promising areas for partnering include achieving environmental streamlining, rationalizing state-local maintenance responsibilities, and joint community problem solving. Examination of successful partnerships and relationships identifies common elements of success and provides a starting point for the development of new partnering tools more applicable to longer-term, peer-to-peer relationships among DOTs; other state, local, and federal agencies; and non-governmental stakeholders. (Scan by Mark Ford of HDR-Portland)
Scan 8 -- Innovations in Project Financing: There is now a very rich menu of innovative revenue sources and finance techniques. New revenues are available from toll facilities, HOT lanes, value or congestion pricing, special assessments and fees, shared resource projects, and/or joint development. These revenues can be combined to leverage scarce federal aid through both debt and equity approaches, capitalizing on the new flexibility within the federal aid and some state programs. Such new approaches to project financing can also benefit from innovative project development approaches. Research is needed on promising approaches to mainstream these approaches within transportation agencies. (Scan by A. Reno and L. Hussey of Cambridge Systematics, Inc.)
Future Research Program

Based on the scan results, the NCHRP 20-24 Panel will develop a set of priorities for research, taking into account other ongoing research efforts and capitalizing on opportunities for combining related efforts. A multiyear program is under development, with the first projects expected to be procured late in 2001.

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