Leading in Lean Times

1. Leading in Lean Times AASHTO Spring Meeting Hal Kassoff Parsons Brinckerhoff Maryland State Highway Administrator for 12 years (1984 -1996)

3. Leading in Lean Times (Doing Less with Less) Era of �doing more with less� began 30 yrs ago . . . following 20 years of plenty (50�s to �70�s) Late �70�s period of �Stagflation� Stagnant economy � revenues declining Double-digit inflation � costs sky rocketing Most DOTs have experienced varying degrees of �austerity� ever since � even when their programs were growing

4. Leading in Lean Times (Doing Less with Less) DOT Responses: At first - Pick low hanging fruit Zero-base budgeting � question everything Value engineering � are we designing efficiently? Freeze hiring � trim staffing through attrition Also, some opportunities Improve efficiencies Post-Interstate down-sizing Re-think mission and priorities

5. Leading in Lean Times (Doing Less with Less) DOT�s Responses: As low hanging fruit was picked over. . . . . . We began cutting limbs, not just fruit Programs & Projects Cut Maintenance deferred Furloughs and layoffs Some places raising revenue still an option At some point, �doing more with less� gives way. . . either do �more with more� or �less with less�

6. Leading in Lean Times (Doing Less with Less) Early �90�s Recession: (A Maryland Microcosm � After program tripled, the bottom fell out) Immediate response Hit the brakes or cancel contracts: The perils of cash flow accounting Suspend Lettings: 11-year letting streak ends for a year �Rubber band theory� � stretching to the limit Cut positions (4000+ down to 3800)

7. Leading in Lean Times (Doing Less with Less) Early �90�s Recession: (A Maryland Microcosm) Lemons to Lemonade Fostered asset management mindset System preservation priority reaffirmed Retained critical mass of core competencies Retained internal and external credibility Back to the fuel tax � it could still be done (By selling some projects for the 2nd time)

8. Leading in Lean Times(Doing Less with Less) Late �90�s: TEA-21: nearly 50% more Fed $ Yet austerity mind-set endured Doing more with less - - a permanent mindset somehow independent of workload?

9. Leading in Lean Times (Doing Less with Less) ��we�re challenged to run like a private business. What business could run this way and survive�?�

10. Leading in Have we picked every fruit, squeezed every drop?Lean Times (Doing Less with Less) 2010 & Beyond - What Now?: Are we making the right choices? In the right way? Have we demonstrated/communicated that we are? Are we losing credibility? Can we figure out how to gain credibility in lean times? If doing �less with less� is a response, what is our strategy for cultivating �more with more�?