Leading in Lean Times

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					     Leading in Lean Times

     AASHTO Spring Meeting

               Hal Kassoff
           Parsons Brinckerhoff

Maryland State Highway Administrator for 12 years
                  (1984 -1996)

                                                    Page 1
    Leading in Lean Times

From DOT Leaders . . .

 “. . . we‟re constantly challenged to do
    more with less. We‟re running out
               of options . . .”

 “. . . you reach a point where the only
   choice is to do less with less . . .”

                                            Page 2
         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

                                                     Page 3
        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

                                                          Page 4
          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‟

                                                     Page 5
       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)

                                                Page 6
       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)
                                                  Page 7
   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?

                                   Page 8
   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…?”

                                      Page 9
              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 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‟?

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