It's easy to lose focus in the fast-paced, technology-driven world that is tolling. The answer to staying on course lies in a management tool the private sector has used for decades: strategic business plans. No large, respected company would think of operating without one, and today’s sophisticated toll agencies shouldn’t either.

In this white paper:

• The top reasons why every toll agency should have a strategic business plan
• A template for building a plan that aligns disparate organizational functions
• The No. 1 mistake agencies make after completing their plans

Tolling's changing landscape underscores the need for strategic plans

Have you ever second-guessed a business decision? The answer from many toll agency executive directors and board members undoubtedly is yes. It's not easy making day-to-day decisions in such a rapidly changing industry. Agency leaders have to consider the political, financial, legal and operational ramifications of nearly every "Yes" and "No" they render.

Yet, there are executive directors and board members who honestly can say they feel confident in every decision they make. What critical factor allows these managers to sleep easily at night while others lie awake, wondering if the decision they made today was the right one? A strategic business plan.

"A strategic business plan elevates your focus from the nitty, gritty administrative issues to the strategic level," said Patrick Jones, executive director and CEO of the International Bridge, Tunnel and Turnpike Association. "Operating at that level allows an agency to create its own future instead of reacting to it."

For many agencies, that future may include partnering with transit agencies, connecting to other toll systems to promote interoperability, implementing managed lanes or converting to all-electronic tolling.

"A strategic business plan is like dashboard GPS, it provides direction when agencies are trying to sort out the answers to these 'horizon' questions," Jones said.

Today, there are more reasons than ever for agencies to have one:

• Diversification. As recently as 15 years ago, toll agencies were created to perform one specific function: operate a toll road, bridge or tunnel. Many agencies now are expanding their services to include managed lanes or multimodal lanes. These sound traffic management tools, often necessary for enhancing mobility, are not big profit centers and can strain an agency's resources.

The transition from a single-service business model to a multiservice model is perhaps the best argument for strategic business plans. Through these living documents, toll agencies can understand how they are going to incorporate new services while continuing to meet customer expectations through core competencies.

"Through these living documents, toll agencies can understand how they are going to incorporate new services while continuing to meet customer expectations through core competencies," said Jim Ely, vice chair of HNTB toll services.

• Silo syndrome. As a toll agency expands its service offerings and organizational functions, it invariably adds more departments. These departments often have a myopic view of their role within the agency. Instead of focusing on how they can advance the agency toward its overarching mission, they concentrate on hitting annual, departmental targets.

"A strategic business plan provides the unifying goals and objectives that point all of those arrows in the same direction," Ely said.

• Changes at the top. Leadership changes at dynamic enterprises such as toll agencies can occur quickly and frequently. Whether it is a new executive director, a freshman class of board members or a new chief information officer, strategic business plans provide continuity during transitions. They are excellent mechanisms for passing on institutional knowledge and the context in which prior decisions were made, ensuring costly mistakes aren't repeated. In short, they allow new leaders to build on past progress.

• Increased accountability. Presenting an annual budget or increasing a toll rate can generate significant public and political scrutiny, requiring executive directors to justify their requests and prove their organizations are operating as efficiently as possible. When the validity of a request is questioned, an agency’s first line of defense always should be its strategic business plan.

When an executive director says, "This budget request is necessary if my agency is to meet the performance measurements as outlined under strategic objective A, which is listed in our business plan and endorsed by our board of directors," the request is no longer unsubstantiated but anchored in the mandatory due diligence of strategic planning.

• Competitive intel. A plan is only as good as the information on which it is based. The strategic planning process should begin with gathering the latest information on key audiences (e.g., stakeholders, customers and transportation partners), regulatory changes, political expectations, and economic and market conditions. Perform an analysis of the strengths, weaknesses, opportunities and threats facing the organization. Review feedback from previously established key performance measures and recent audits that have pointed out areas of needed improvement. Understand the marketplace and identify the niche your agency can fill. This also is a good opportunity to look beyond the front door of the agency to see what others are doing, identifying lessons learned and best practices from industry events and individual outreach. The planning process is a lens through which your agency can focus on information that is relevant and critical to its programmatic success.

• Industry newcomers. Strategic business plans are needed for all types of transportation organizations: start-ups, emerging and mature. Start-up toll agencies and state departments of transportation just entering the tolling world can use the plan as a launch vehicle for a new program. Managing expectations is very important for newcomers as they lay out a logical progression toward opening a new facility and getting both internal and external buy-in for the steps needed. The most effective plans will build on the past and prepare for the future by growing a toll business from a single project to an entire system.

Shorter is almost always better
Delete the stereotypical image of thick, bound tomes that arrive on desks with a thud.

"If that's what a strategic plan is, it's a waste of time and money," Jones said. "Strategic planning is as much an attitude as it is a document. It's making the choice to continually question and refine the agency's direction."

Today's strategic business plans are nimble documents, sometimes no longer than a short story. According to Jones, IBTTA's strategic business plan is eight pages, easily held together with a paper clip.

Shorter is almost always better because brevity promotes flexibility. A strategic business plan is not a prescriptive document, plotting every move an agency should make now through 2017. It lives at the macro level, as reference tool, helping agency leaders make confident, more informed decisions.

Continual updating is part of the process
Nor are strategic plans to be written, approved and then promptly shelved only to be revisited in five years to see "how close your organization came" to achieving the objectives. The No. 1 mistake agencies make after completing their plans is to shelve them, thinking the task is over when it has only begun. Political, operational, legal and financial variables will continue to shape the document long after it has been printed, copied and distributed. Strategic business plans are living documents. The real work and benefits come from continually implementing, evaluating and updating it.

"There are so many variables affecting toll agencies today — changes politically, operationally, financially and legally," Ely said. "Strategic plans need to be continually updated and modified to stay in step with — or even one step ahead of — those changes."

A pyramid structure creates alignment
A strategic business plan has five primary functions:

1. Define an organization’s vision, mission and core values
2. Identify challenges, opportunities
3. Establish short- and long-range goals and objectives
4. Guide business processes
5. Measure performance

When organizing these elements in a document, it is helpful to envision a pyramid. The vision statement forms the apex. Immediately below that is the mission statement. Under it are the short- and long-range objectives for achieving the mission, followed by the strategies for achieving each objective. At the base of the pyramid are specific performance measures or action plans and the parties responsible for implementing them. All parts of the pyramid work to support the apex or mission.

Jones offers an even simpler structure: "Who are you as an organization? What business are you in? Who are your customers? What good are you trying to accomplish for what group of people and at what cost? Those are the tough questions every strategic business plan needs to address."

Those simple questions can be surprisingly difficult to answer, especially when agencies rely solely on internal resources. Employees may lack experience in strategic planning or, more commonly, are just too close to the subject matter.

Outside counsel adds greater perspective, best practices
There are differing schools of thought about seeking outside counsel to develop a strategic business plan. Some advocate for the hands-on approach. They argue that if the plan isn't written internally, there will be no ownership among those employees responsible for implementing it.

Others believe it's wise to hire expert counsel if not to write the plan, then to facilitate its development. They argue for the bigger picture outside expertise can provide. The toll agency may be the expert on tolling within its own state, but does it know what other agencies are doing — and not doing — nationwide? This limited view could be a weakness.

Jones sees advantages to doing both, "Experts from outside the agency can monitor the process, and the people who need to execute the plan can focus on content," he said. "Having to focus on both content and process puts considerable stress on the organization."

Ultimately, the role of outside expertise largely depends on the client's preferences. If an agency is looking to incorporate best practices, one potential source is a national firm that serves as general engineering consultant to other toll agencies. As such, HNTB has helped numerous agencies develop strategic plans. Below are a few insights:

• Make sure your board agrees that a strategic business plan is needed before you start one.
• Get board members to agree upon the need for the plan and the development process. Keep them apprised of the plan's content and direction during its development. No one wants to learn of a proposed policy change from the 12-point type in a strategic plan.
• Involve everyone the plan will affect — both internally and externally.
• Effectively communicate the plan’s details inside and outside the organization upon completion.

Often an agency needs a strategic business plan for implementing the individual performance measures or action steps listed in the overall strategic plan. For example, the Miami-Dade Expressway Authority developed a strategic plan for implementing an intelligent transportation system. The New Jersey Turnpike Authority has a strategic plan focused solely on maintenance, and the New York Thruway Authority used strategic planning to understand the pros and cons of implementing all-electronic tolling.

Planning is time well spent
Strategic business plans give executive directors and boards permission to spend time thinking about their organizations — to uncover what makes them tick, and why they tick. To have the answers before the questions are asked is an extremely empowering, clarifying feeling that allows toll agencies to move forward with purpose.

"I once had a boss who would gather the senior staff three times a year for a retreat," Jones said. "He would often begin those meetings by saying, 'We don't plan because we don't have time. And, then he'd follow that by saying, 'We don't have time because we don't plan.'"

Additional resources
For more information about strategic business plans, consult the following:

Jack Finn, HNTB Corporation
Chair Toll Services
(407) 805-3768; jgfinn@hntb.com

Jim Ely, HNTB Corporation
Vice Chair Toll Services
(850) 619-0264; jlely@hntb.com

Jerry Hiebert, HNTB Corporation
Senior Advisor, Toll Client Services
(214) 790-5194; jhiebert@hntb.com

Patrick Jones, Executive Director & CEO
International Bridge, Tunnel and Turnpike Association
(202) 659-4620; pjones@ibtta.org

International Bridge, Tunnel and Turnpike Association
http://www.ibtta.org

For other HNTB-issued papers and viewpoints, visit HNTB.com

HNTB Corporation is an employee-owned infrastructure firm serving public and private owners and contractors. With nearly a century of service, HNTB understands the life cycle of infrastructure and solves clients' most complex technical, financial and operational challenges. Professionals nationwide deliver a full range of infrastructure-related services, including award-winning planning, design, program delivery and construction management. For more information, visit www.hntb.com.

© 2012 HNTB Companies. All rights reserved. Reproduction in whole or in part without written permission is prohibited.

Strategic_Biz_Plans_2012.pdf