Integrating Effective Transportation Performance, Risk, and Asset Management Practices (2022)

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42 DOTs may nd that integrating performance, risk, and asset management is most eectively accomplished through structural changes to the agency—changes to organizational charts, new reporting lines and areas of responsibility, new positions, and groups. It is important to recognize that DOTs across the country are trusted with dierent assets, housed in dierent areas of state government, and subject to dierent legislation. is variance in organizational context makes sweeping recommendations and guidance somewhat challenging to implement. is chapter identies the building blocks of the organizational structure of performance, risk, and asset management and discusses how a DOT can mature its practice regardless of its situation. Organizational Functions A DOT’s organizational chart with respect to performance, risk, and asset management may include the following functions: • Capital and strategic planning: – Collection or generation of a complete list of potential capital projects; – Harmonization of capital projects for eciency and minimization of inconvenience to the public (e.g., multiple types of assets at a single location or a single type of asset along a corridor); – Accounting and projection of funds available for capital work on specic types of assets and types of projects (federal, state, and local); – Design of funding programs (which may or may not be asset specic) that allow for the most ecient and transparent distribution of funds to projects; – Allocation of funding resources to programs and projects; – Identication and weighting of organizational priorities, including both internal and external sources of risk; – Scoring/prioritization of capital projects, whether global or within an asset-specic program; – Management of complex capital projects (scheduling, monitoring, and reporting); and – Advocacy for additional funding resources using current and projected future performance relative to the eectiveness of intelligent investment in assets. • Bridge and culvert management, design, and engineering: – Inspecting bridges and culverts; – Identifying bridges and culverts uniquely vulnerable to future oods and scour; – Using and maintaining bridge data within a bridge management soware package; – Modeling bridge condition on an element level and identifying treatment options/priorities; – Engineering and designing treatments for bridges and culverts; POLICY AND AGENCY STRUCTURE

Policy and Agency Structure 43   – Performing maintenance work specific to bridges and culverts; and – Reporting on bridge condition to FHWA and state channels. • Roadway management, design, and engineering: – Inspecting pavement (and managing contracted inspectors); – Inventorying (or inspecting) other roadway assets (e.g., markings, signs, guardrail); – Identifying roadways uniquely vulnerable to natural disasters and other external risks; – Using and maintaining pavement data within a pavement management software package; – Using and maintaining spatial data and geocoded inventory of general roadway assets; – Modeling pavement condition and identifying treatment options and priorities; – Engineering and designing roadway projects (e.g., repaving, reconstruction, widening, intersections, geometric improvements); and – Reporting on pavement condition to FHWA and state channels. • Preventive maintenance (e.g., painting, cleaning, clearing of brush, mowing, crack sealing): – Identifying needed preventive maintenance work; – Budgeting for needed preventive maintenance work; – Scheduling needed preventive maintenance work; – Executing/managing needed preventive maintenance work; and – Recording/reporting on preventive maintenance work through a work management system. Arrangement of Functions DOTs may disperse or align functions in several ways: Hierarchically. Hierarchy is determined by how close to the chief executive officer (CEO) a function is housed (e.g., secretary or administrator). If not directly connected to the CEO, how far down in the organization is the person responsible for the function? Is the function isolated off to the side of the organizational chart? Which functions report to the same managers or executives (this implies that the DOT thinks they are related or should be coordinated)? Geographically. Is a function housed at headquarters or in the field (e.g., maintenance garages)? Does the DOT operate multiple headquarters-type office locations? Which functions are colocated (this implies that the DOT thinks they are related or should be coordinated)? Financially. Is the function budgeted or prioritized in the same process as other functions? Which functions have their investments evaluated together or funded by a shared pot (this implies that the DOT thinks they are related or should be coordinated)? Technically. Do functions share databases and/or software packages? Do staff frequently move between functions? Is there an established program to cycle staff through a specific set of functions (this implies that the DOT thinks they are related or should be coordinated)? Through Accountability. When the manager of a function takes a risk, to whom must he or she defend it? To whom must that person then defend the risk and account for negative consequences (and on up the chain)? If someone in the organization is looking for permission, support, confidence, cover, or advice when taking a risk, whom do they go to? Examples of Organizational Structures The following hypothetical organizational structures can be observed within DOTs: Performance-Centric. A performance management leader reports to the chief executive and directly manages strategic planners in headquarters who model asset performance, set priorities, Organizational Structures ✓   Performance-centric ✓   Asset-specific ✓   Geographic ✓   Functional

44 Integrating Effective Transportation Performance, Risk, and Asset Management Practices and design the capital and maintenance work program. Inspection is managed centrally for the whole state. Day-to-day maintenance is managed in the field but coordinated by the performance management (or asset management) group at headquarters. Asset-Specific. Asset management for bridges, pavement, and other key asset groups is led by leaders and groups at headquarters that manage inspection, inventory, performance report- ing, maintenance, and capital project design. These functions may be spread out to regional branches in the field. Strategic planning and capital planning are handled centrally, but only to the point of distributing funds among asset-specific programs, after which projects are selected by the asset-specific staff. Geographic. Asset management for bridges, pavement, and other key asset groups is housed in the field and reports to a regional leader for all assets (the regional leaders then report to the chief executive). Some inspection or capital planning functions may be housed centrally and contracted out at regional request. Strategic planning and capital planning are responsive to MPO priorities, and resources are distributed geographically. Different MPOs and regional DOT offices may prioritize their investments differently. Functional. Engineering/design and maintenance functions are entirely separated and report separately to the chief executive. The former group manages inspection, inventory, performance reporting, treatment identification, risk management, and design, while the latter group manages preventive maintenance. Strategic planning and capital planning are handled centrally for all assets together and report to the chief executive through a separate structure that may also contribute to performance reporting. Best Practices To integrate performance, risk, and asset management effectively, DOTs should keep the following best practices in mind. Risk Should be Measured Through Performance, and Performance Should Drive the Process. From executives having access to high-level business intelligence down to maintenance crews deciding on a materials supplier or whether to delay work on a rainy day, everyone at an agency should be aware of how their actions affect the bottom line. In many businesses, the bottom line is defined by profit and loss. For a transportation agency, it is defined by performance metrics. Whether performance is addressed globally at the DOT or for specific assets separately, decisions on appropriate treatments, investments, and capital priorities should be based on public input and the performance benefits of each relative to cost and accounting for uncertainty. At the least, performance and risk modeling should not be siloed away from day-to-day inspec- tion, preventive maintenance, and work management. Performance, Risk, and Asset Management Should All Have Strong Executive Support. Performance, risk, and management touch upon nearly everything a DOT does. To integrate them effectively, the people leading the effort (and maintaining the integrated system thereafter) must be in positions high enough in the agency to exert influence on almost every aspect of the business. For instance, many DOTs have placed an asset management manager as a direct report to the chief engineer. Regardless of Structure, DOTs Should Create a Culture That Values Collaboration. Integrating performance, risk, and asset management is an incremental process likely to take many years. Leaders of later phases of the effort may be in staff positions today, and the benefits Best Practices ✓   Drive with performance and risk. ✓   Obtain strong executive support. ✓   Create a culture that values collaboration. ✓   Respond to legislative mandates.

Policy and Agency Structure 45   of integrating and coordinating these functions will likely need to be passed down through generations of managers and executives. To do this, DOTs may want to consider regular training for staff on the benefits of integrated management and programs to circulate junior staff through all performance-, risk-, and asset-related functions to expose future managers to the value of all these processes and what they can offer each other. Generally, DOTs should avoid siloed, mistrustful, or cliquey cultures and should take a proactive role in promoting communication, collaboration, and cooperation in the integration of management practice across the agency. Committees that reach across organization lines, such as the UDOT Performance Management Committee or the VTrans Asset Management Bureau should be staffed by experienced cross-divisional leaders and visible to junior staff within those groups. Integration Efforts Benefit Greatly from Legislative Mandates. At the base of most success- ful approaches to integration is a galvanizing or catalyzing directive from state government. Following are some examples: • Florida’s Strategic Intermodal System (SIS). The SIS is a set of recognized priority assets for all modes that have outsized influence on Florida’s overall economic health and mobility. They are identified by the DOT and receive a set-aside portion of state investment. • Massachusetts’s legislation calling for an “integrated performance and asset management system.” The Massachusetts DOT has answered this call by going above and beyond federal requirements in producing an annual “Tracker” report for performance metrics and estab- lishing a Performance and Asset Management Advisory Council with representation from agency partners in municipalities, regions, and the construction industry. • California’s Transportation Development Act. This act is a robust set of legislation that helped to establish performance-based investments that must be tracked. Mandates at times provide a necessary first step in cultivating champions and empowering change management for process integration. Developing targets and metrics to measure integra- tion as it matures drives accountability to legislative mandates and enhances integration over time.

46 Integrating Effective Transportation Performance, Risk, and Asset Management Practices Integration Maturity: Policy and Agency Structure To assess an agency’s level of maturity in the key topic of policy and agency structure, the benchmarks below may be considered. 0 1 2 3 4 Level Preintegration Management practices are largely siloed, with no active interest on the part of agency executives in reconsidering legacy practices. Level Level Level Level Initial Conversations have begun, and executive leadership has recognized the potential value of reorganization. No practical changes have been made to the operations of the agency. Defined Executives may have identified some helpful reorganization steps, or legislation may have stepped into define those steps for the agency. A change management consultant may have been hired, and a champion, or champions, for the changes has been identified. Expandable, Repeatable The agency has taken the plunge and has reorganized in ways conducive to integrated performance, risk, and asset management. Feedback sessions or town hall meetings may be organized to ensure that initial growing pains are addressed and the thoughts of line staff are heard and incorporated into continued organizational growth. Managed With the reorganization in full effect, the agency begins to consider ways to make it last and continuously evolve. These may include rotation of staff and managers to build well-rounded leaders. Level 5 Optimizing The agency is optimally organized in a way that is sustainable. Clear paths are identified and functioning to produce well-rounded leaders who are bought intoan organizational vision while still being empowered to evolve practices and organizational structures in the future.

Policy and Agency Structure 47   Integration in Practice Transport Scotland’s asset management branch has taken ownership of its integration efforts and, with the support of the branch manager, has established a distinct vision and plan. This has brought in a variety of leaders within the organization and has helped to cut across the largely siloed nature of the agency. In this way, the asset management branch manager has become established as a champion for the integration effort, playing an invaluable role in the branch’s evolution. As the agency pushes toward a more integrated approach to asset management, it is working to draft policy that will directly support this. Becaue integration is complex, requires buy-in from a broad variety of agency roles, and must be conducted over a long period of time, it is important that such efforts be formalized through policy. This ensures that practices remain consistent and effective, despite periodic changes in leadership, staffing, and resources.