Strategic Direction

This chapter provides assistance to transportation agencies with the Strategic Direction component of Transportation Performance Management (TPM). It discusses where the strategic direction occurs within the TPM Framework, describes how it interrelates with the other nine components, presents definitions for associated terminology, provides links to regulatory resources, and includes an action plan exercise. Key implementation steps are the focus of the chapter. Guidebook users should take the TPM Capability Maturity Self-Assessment as a starting point for enhancing TPM activities. It is important to note that federal regulations for strategic direction may differ from what is included in this chapter.

Strategic Direction is the establishment of an agency’s focus through well-defined goals and objectives, enabling assessment of the agency’s progress toward meeting goals and objectives by specifying a set of aligned performance measures. The Strategic Direction is the foundation upon which all transportation performance management rests.

Introduction to Strategic Direction

A Strategic Direction is established when an agency develops and institutes goals, objectives, and a set of aligned performance measures to track progress. Defining these elements is a critical first step in the TPM process because together they determine the strategic direction for an agency and the means to assess performance changes. Carefully considered and connected goals, objectives, and measures become the structure upon which an agency’s transportation performance management approach rests. This strategic direction should be integrated into an agency’s business plan and related documents.

Establishment of a Strategic Direction benefits an agency by:

• Bringing about staff support for the agency’s purpose;
• Clarifying what the public and other stakeholders expect from the agency;
• Focusing on current and future performance outcomes;
• Setting a clear direction for agency decision-making;
• Outlining how individual employees play a role in achieving agency goals and objectives;
• Guiding day to day activities using a unifying and overarching structure; and
• Identifying possible funding needs.

When establishing a Strategic Direction, first an agency determines “where do we want to go,” by crafting goals and objectives through a collaborative and inclusive process involving both internal staff and external stakeholders (e.g., policymakers, partners, citizens). The purpose of the resulting goals and objectives is to identify longer term outcomes for an agency. Assessing progress toward achievement of the goals and objectives, performance measures create a direct link between actions taken by an agency and results. For example, the construct displayed in Figure 1-1 communicates to staff that the agency is focused on providing efficient movement of people and goods and that the achievement of this outcome will be determined by a reduction in travel time index.

“If you don’t know where you are going, you will end up somewhere else.”

Source: Laurence Peter, US educator & writer (1919 – 1988)

Figure 1-1: Relationship Between Goals, Objectives, Performance Measures, and Targets

Source: Strategic Highway Research Program 2¹

Together goals, objectives, and performance measures set the stage for an agency to answer, “how are we going to get there.” To begin answering this question, agencies use baseline data, information on possible strategies, funding constraints and forecasting tools to collaboratively establish performance targets (Component 02). The Strategic Direction combined with established targets describe how an agency will measure its achievement of identified performance outcomes. The agency will use that description of achievement as the foundation from which strategic decision-making occurs, thereby guiding the identification of strategies and investments that can and should be implemented during Performance-Based Planning (Component 03).

“Agency goals should become the steady drumbeat in the background that inspires action—the goals should be ingrained in the subconscious of workers so that they live the performance management culture.”

Source: “Moving from Reactive to Strategic Decision Making.” TR News 293 July-August 2014

From there, the Strategic Direction influences how the agency answers “what will it take,” using Performance-Based Programming (Component 04) to prioritize and allocate resources within and across performance areas. The Strategic Direction also drives an agency’s response to “how did we do” by linking the answer to this question back to agency goals and objectives and using performance measures to assess progress. The Monitoring and Adjustment (Component 05) activities agencies conduct expand the understanding about what is influencing performance outcomes and improve the delivery of programs in order to achieve desired results. The goals, objectives and measures in the Strategic Direction also serve as the foundation for communicating performance changes. In short, every stage of the TPM process links back to the Strategic Direction and the pursuit of attaining agency goals and objectives.

For a Strategic Direction to become engrained in the agency culture and embraced by external stakeholders, it should be grounded on four major building blocks:

• Performance information: The selected goals, objectives and measures focus an agency’s policy and investment decisions and therefore should be based on performance condition information across a range of performance areas. On what key area(s) does current performance data and future projections suggest that an agency should focus? An agency’s ability to answer such questions is dependent on its ability to use, analyze, and manage its data. See Data Management (Component C) and Data Usability and Analysis (Component D).
• Internal buy-in: To create a performance atmosphere within an agency, individual staff must be able to see their role in attaining goals and objectives by connecting their daily activities to the agency’s strategic direction. See Organization and Culture (Component A).
• External buy-in: Agency goals, objectives and measures must reflect what the public, customers, policymakers, and other stakeholders care about and align with regional priorities to appear worthwhile to the public. See External Collaboration and Coordination (Component B).
• Continuous messaging and demonstration of commitment to goals: In order to cement the Strategic Direction at an agency, goal language should appear in internal and external communications (e.g., signature lines for emails), be visually displayed (e.g., posters), be included in regular business activities (e.g., employee performance plans), and discussed during interactions with external stakeholders. See Reporting and Communication (Component 06) and Organization and Culture (Component A).
  

  Subcomponents and Implementation Steps

  The component Strategic Direction is defined as the establishment of an agency’s focus through well-defined goals and objectives, enabling assessment of the agency’s progress toward meeting goals and objectives by specifying a set of aligned performance measures. The Strategic Direction is the foundation upon which all transportation performance management rests.

  Strategic Direction is broken down into two complementary subcomponents:

  • Goals and Objectives: Goals are broad statements articulating a desired end state that provide strategic direction for an agency. Objectives are specific, measurable statements that support achievement of a goal.²
  • Performance Measures: Performances measures are based on a metric that is used to track progress toward goals, objectives, and achievement of established targets. They should be manageable, sustainable, and based on collaboration with partners. Measures provide an effective basis for evaluating strategies for performance improvement.

   

  Goals and Objectives

  Goals indicate the desired state of the transportation system according to both agency staff and external stakeholders. While goals are broad, their formation should be given careful consideration and due time because the dialogue and collaboration necessary to identify sound goals lays the groundwork for implementing transportation performance management practices. A transportation agency’s goals should reflect the community’s vision for the future and tie transportation to wider societal goals such as livability, economic prosperity, and environmental sustainability. Goals that address aspects of the transportation system that people experience directly will resonate with the public (e.g., access to jobs), but the agency must recognize that such outcome-oriented goals are often not fully under agency control. For example, equity and livability are important and resonate with the public, but transportation agencies have limited ability to affect these outcomes among other factors such as economic forces, job growth, and land use/zoning laws.³

  “When WMATA asked the Jurisdictional Coordinating Committee (JCC) what the goal “deliver quality service” meant, staff was surprised that “overcrowding” was identified as a concern. WMATA had traditionally viewed crowded platform, trains and buses as a sign of success, but with this feedback, the agency created the objective “Relieve overcrowding.”

  Source: WMATA staff

  Some agencies begin the process of defining goals by first engaging in a visioning exercise. At the same time, staff may draft a mission statement to articulate the core function of the agency (e.g., plan, build, and maintain a transportation system). The resulting paired statements (vision and mission) are often displayed inside agency facilities as a reminder to employees about the ultimate purpose of their activities. Creating vision and mission statements is addressed further in the TPM Guidebook under Organization and Culture (Component A).

  Objectives make strategic goals more actionable by breaking down the goals into more specific statements. Defining objectives also provides agencies with the opportunity to ask the public and other external stakeholders, “what does X goal mean to you?” Agencies can also use the acronym S.M.A.R.T. (Specific, Measurable, Attainable, Realistic and Time-bound) to assist them in creating useful objectives. Refer to the Performance-Based Planning and Programming Guidebook and Step 1.1.4 for more information about S.M.A.R.T. objectives.⁴

  The FHWA Performance-Based Planning and Programming Guidebook states that:

  A good objective should include or lead to development of a performance measure in order to support decisions necessary to help achieve each goal. Objectives that include specific targets and delivery dates (e.g., reduce pedestrian fatalities by 15 percent from 2010 levels by 2018) are commonly called “SMART” (specific, measurable, agreed-upon, realistic, time-bound).

  Initially, a State, region, or agency may start out by developing a general objective, which identifies an issue of concern or focus area under a goal area through public and stakeholder outreach. Data and analysis tools used as part of CMP, Transportation Asset Management Plan (TAMP), SHSP or other processes are helpful in first identifying focus areas (understanding what factors are most important in attaining goals).⁵

  Goals and objectives serve as a cornerstone for every subsequent step in the transportation performance management process. In light of this, goals and objectives should reflect certain desired characteristics as discussed in Table 1-1.

Performance Measures

Once goals and objectives have been defined, performance measures need to be selected to track progress toward attainment,¹⁰ enabling agencies to evaluate their decisions. Careful selection of performance measures is important because the measurement of particular outputs can influence what strategies are employed. For example, if an agency chooses to measure congestion using volume/capacity ratio, strategies to expand capacity (such as road widening) will take preference over more multimodal solutions because capacity-specific activities will have the most impact on this measure. Because measures indicate progress toward meeting goals, agencies could end up focusing more on moving the needle of a specific measure, possibly producing undesirable results.

“Measures should not be created for the sake of it. Instead, develop the correct measure for the correct purpose and audience.”

Source: Tim Henkel, Minnesota DOT

In addition, measure selection is strongly affected by data availability (see Data Management, Component C and Data Usability and Analysis, Component D). Existing data are the logical place to begin measure development, and often agencies are pushed toward using particular measures because data are already available. The absence of data for areas of public concern like livability can result in a disconnect between how an agency tracks its progress and what external stakeholders care about. Agencies should continually assess what data gaps exist and, over time, make efforts to close those gaps and develop different measures that may be more desired. In the meantime, agencies can use qualitative measures for livability, or can attempt to measure some aspect of livability that serves as a proxy. These challenges should be debated both internally and externally to ensure the best possible list of measures is selected.

Like goals and objectives, measures also have desired characteristics (see Table 1-2). In addition to the characteristics in Table 1-2, the overall number of performance measures should be limited to the “vital few.” Measuring everything wastes limited resources because an agency does not have the capacity to incorporate each measure into decision-making. Choosing the “vital few” over the “trivial many” will keep redundant and unimportant measures from obscuring the critical information needed for effective decision-making.¹¹

Figure 1-2: Logic Map for the Development of Performance Measures

Source: Federal Highway Administration

Figure 1-3: Logic Map for the Development of Performance Measures

Source: Performance Measures to Improve Transportation Systems¹³

To assist with selecting performance measures, some agencies create a logic map. This can help make the connections between agency staff’s day-to-day activities and desired performance results (see Figure 1-2 and Figure 1-3). Output measures assess the level of activity (e.g., miles of pavement resurfaced) and are useful for determining how efficient the agency’s budget has been used. In contrast, outcome measures assess effectiveness of an activity. Rather than measure tons of salt applied (an output measure), an agency can measure number of ice-related crashes to gain an understanding of how salt application (an agency activity) impacted public safety through reducing, or not, crash rates due to winter road conditions. A logic map can also serves as documentation of the measure selection process, to promote transparency and repeatability. There are additional factors and challenges to consider when selecting performance measures, which are discussed in detail in the implementation steps and in Chapter 4 of the Performance-Based Planning and Programming Guidebook.¹⁴

Outline of Implementation Steps

The establishment of the Strategic Direction is a progression from broad goals, to more specific objectives, to quantitative measures. The example in Figure 1-4 demonstrates the relationship between the different elements addressed in this chapter. An overarching rule of thumb to keep in mind when developing the Strategic Direction is that all three pieces (goals, objectives and measures) need to be defined in a manner that will guide investment decisions and reveal the effect those decisions have on results.¹⁵ Only then can an agency determine how to accomplish the desired outcomes and if those outcomes are in fact being achieved.

Figure 1-4: Formation of Goals and Objectives and Selection of Performance Measures

Source: Federal highway Administration

Goals, objectives and performance measures are intricately linked, but are treated separately in implementation because each is individually important in creating a strategic direction for transportation performance management. Table 1-3 lists the implementation steps for each subcomponent that will be discussed further in this chapter.

Clarifying Terminology

Table 1-4 presents the definitions for the strategic direction terms used in this Guidebook. A full list of common TPM terminology and definitions is included in Appendix C: Glossary.

Relationship to TPM Components

The ten TPM components are interconnected and often interdependent. Table 1-5 summarizes how each of the nine other components relate to the strategic direction component.

Regulatory Resources

This Guidebook is intended to assist agencies with implementing transportation performance management in a general sense, and not to provide guidance on compliance and fulfillment of Federal regulations. However, it is important to consider legislative requirements and regulations when using the Guidebook. In many cases, use of this Guidebook will bring an agency in alignment with Federal requirements; however, the following sources should be considered the authority on such requirements:

Federal Highway Administration

• Transportation Performance Management: http://www.fhwa.dot.gov/tpm/links_fhwa.cfm
• Fact Sheets on Fixing America’s Surface Transportation (FAST) Act: https://www.fhwa.dot.gov/fastact/factsheets/
• Fact Sheets on Moving Ahead for Progress in the 21st Century (MAP-21): https://www.fhwa.dot.gov/map21/factsheets/
• Resources on MAP-21 Rulemaking: https://www.fhwa.dot.gov/tpm/rule.cfm

Federal Transit Administration

• Fact Sheets on FAST Act: https://www.transit.dot.gov/funding/grants/fta-program-fact-sheets-under-fast-act
• Resources on MAP-21: https://www.transit.dot.gov/regulations-and-guidance/legislation/map-21/map-21-program-fact-sheets