Transportation agencies today are being forced to make significant adjustments as financial resources become more limited, career employees retire, and technology reliance increases. These changes are shifting agencies’ business landscape.

At the same time, external forces, including technology advancements, legislative requirements and changing public expectations are requiring DOTs to reexamine their mission and role. Together, these trends have important implications for transportation agencies’ capabilities.

This guidebook presents a framework and set of supporting resources to help transportation agencies create a plan for building their capabilities to meet future needs. The Agency Capability-Building (ACB) framework describes:

• Change Forces – disrupters that are impacting transportation agencies’ ability to deliver value;
• Organizational Needs – specific agency-level capabilities required to adapt to changes; and
• Strategies that can be used to meet the needs by building agency capabilities.

This chapter introduces the ACB Guidebook by answering the following questions:

The guidebook defines an organizational capability as the means by which an organization brings together its people and other resources to respond to changes in the business environment and deliver value to its customers and stakeholders.

Adapting to changes in funding, expectations, workforce, and technology will require building new capabilities. Agencies that don’t adapt to these changes will see diminished effectiveness in delivering value and risk loss of public confidence.

The guidebook presents the ACB framework, including change forces, organizational needs, and strategies. It explains how this framework can be used to understand and build agency capabilities to respond to change forces, and provides guidance on action planning for building agency capabilities.

The guidebook will benefit transportation professionals at transportation agencies who serve the agency in management and leadership positions, as well as agency staff responsible for performance management, data and information management, change management, knowledge management and workforce management. It may also be useful to other professionals who work in transportation.

Agencies can use this guidebook to:

• Understand the various change forces that are impacting transportation agencies;
• Understand where agency capabilities need to be strengthened or added in order to adapt to these change forces;
• Identify and plan strategies to build agency capabilities;
• Educate agency leaders on steps they can take to prepare their agencies for success into the future; and
• Create a capability building action plan that will help the agency focus on the actions that will yield the best results in a given timeframe.

The guidebook includes both role-based and situation-based guidance. Role-based guidance looks at how change forces impact specific DOT roles and what individuals in these roles can do to help the agency build needed capabilities. Situation-based guidance highlights common specific challenges that agencies face as a result of the change forces, and presents strategies that can be used to respond to these challenges.

Organizational capability is a foundational concept for this guidebook. Because this term is used in different ways by different people, this section provides some background on how it is defined in this guidebook – and the basis for this definition.

Webster’s dictionary defines the word “capable” as “having the qualities or abilities that are needed to do or accomplish something”. While one might generally think of a capability is something that an individual has, a capability can also exist at the organizational level.

A 2004 Harvard Business Review article characterizes organizational capabilities as:

“the collective skills, abilities, and expertise of an organization...” which are “the outcome of investments in staffing, training, compensation, communication, and other human resources areas.”

This article identifies eleven capabilities of well-managed companies: talent, speed, shared mindset, accountability, collaboration, learning, leadership, customer connectivity, strategic unity, innovation and efficiency.¹

Organizational capability is a core concept in the Enterprise Architecture (EA) literature. For example, in the TOGAF ², a capability is defined as:

“an ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve...Capabilities are driven by the organization’s business strategy. Defining desired or target state capabilities is integral to an organization’s strategic planning process.“

The Department of Defense Architectural Framework (DODAF) defines a capability as:

"the ability to achieve a desired effect under specified standards and conditions through combinations of means and ways to perform a set of tasks.” ³

In the DODAF, capabilities are linked to the agency’s mission, and serve as requirements that drive development of services and operational activities.

Developing a business capability map is one of the initial activities of creating a business architecture (which is one of the components of an enterprise architecture). The business capability map provides “a self-contained view of the business that is independent of the current organizational structure, business processes, information systems and applications, and the rest of the product or service portfolio.” ⁴

Figure 1.1 illustrates a capability map for a DOT. In this map, capabilities are segmented into strategic (or business-evolving), core and enabling categories:

• Business-Evolving or Strategic Capabilities enable the organization to respond to change and plan for future evolution.
• Core Capabilities are related to the core operation of the agency – which in a DOT would be things like maintenance management, project delivery and highway operations
• Enabling Capabilities support day to day operations and are common across multiple types of organizations. Examples are financial management, human resources management and information management. Capability maps are intended to provide a stable model that can be used to plan organizational improvements and relate them to value.

Organizational capabilities can be vertical, aligning with organizational functions, or horizontal, i.e. spanning multiple functions. Whereas many of an organization’s existing capabilities can be discerned from its structure (e.g. highway maintenance or human resource management), cross-cutting (horizontal) capabilities such as change management or innovation are more enterprise in nature.

Building on the several views of capabilities presented above, this guidebook uses the following definition of “organizational capability”:

the means by which an organization brings together its people and other resources to respond to changes in the business environment and deliver value to its customers and stakeholders

This definition focuses the strategic and enabling capabilities that DOTs need to adapt to change, recognizing that these same capabilities are needed to deliver value to customers and stakeholders on an ongoing basis. The definition also emphasizes that in talking about capabilities, we are interested in not only what the organization is able to do, but also how it is able to do it, through bringing together people and other resources.

Because many of the capabilities needed to adapt to change are intangible, some examples are listed below – along with associated evidence that might be used to determine that they are present in an agency:

• A State DOT has a high capability for agility – they have a streamlined management decision making process, they have flexible contracting mechanisms in place, and have a dedicated change management function.
• A State DOT has a well-developed capability for technology adoption – they have a strategic plan that is updated regularly and used to guide decision making, strong information technology-business partnerships, a dedicated innovation group whose job it is to experiment, and have set up mechanisms to partner with the private sector and educational institutions to support research and development of cutting edge technology.

See Chapter 2 for further discussion of how organizational capabilities are represented in the Agency Capability Building framework.

In order to be successful, state DOTs must anticipate future changes, envision a future state for their agencies, and build the organizational capabilities that they will need to adapt to this future state. This guidebook is intended to help DOTs:

• Understand agency strengths and weaknesses
• Make strategic initiatives actionable
• Systematize innovation and continuous improvement, and
• Develop greater agility in the face of change forces

When faced with a new challenge, it is natural for an agency to assume that they can address it using its current processes, tools and skillsets. However, by their very nature, disruptive changes present new paradigms that require agencies to move into unfamiliar territory. Agencies may not have existing expertise or resources to draw upon – even if they have been leaders among their peers in the past. It is important to size up current strengths and weaknesses in light of anticipated changes.

The capability-building process described in this guidebook is intended to align people, processes, and systems around a state DOT’s highest strategic objectives.
Strategic plans create the vision, the destination for staff to know where the agency is going. Capability building enables agencies to transform that vision into action by focusing energy and resources to carry out the plan. This could entail activities such as staff training or enhancing data management capabilities to improve the democratization of data for reporting and improving data-informed decision-making.

State DOTs are faced with accelerating rates of technology-related changes that impact how people move from point A to point B, how transportation systems are operated and managed and how information is collected, stored and used. These changes directly impact infrastructure, provision and pricing of transportation services and communications networks.

Capability building is not a “one and done” endeavor. It is a process of ongoing transformation to address emerging challenges and opportunities. By building essential capabilities to adjust and adapt to technology and other change forces, transportation agencies can meet transportation needs today while improving their resilience and agility to respond more easily to future change forces they cannot even foresee.

Innovation is not innate to organizations – it must be deliberately cultivated. To adapt to change forces, innovation and continuous improvement must be built into the fabric of the agency and become part of its culture. A culture of continuous improvement creates an environment where staff are empowered and encouraged to make low risk changes to improve productivity and where IT systems are flexible enough to support these changes.

Innovation and continuous improvement are enablers for developing other capabilities. For instance, a DOT that is implementing an action plan to improve its capability to collaborate and coordinate with its partners might take an iterative approach to working with its MPOs. Part of its capability-building effort could include annual reviews of the health and qualitative effectiveness of the collaborative relationship. Adjustments could be made to address any gaps in collaboration based on that annual review process.

The guidebook introduces the Agency Capability Building (ACB) framework, which provides a big picture view of the changes that are occurring that impact transportation agencies and the ways in which agencies can respond to these changes in order to continue to successfully deliver on their missions. The ACB framework consists of three components:

• Change Forces are factors and trends affecting DOTs. They are either positive or negative disrupters that impact an agency’s ability to deliver value to their customers. Example: MAP-21/FAST introduced new performance-based planning and programming requirements.
• Needs are defined as the essential capabilities that DOTs must strengthen to respond to the change forces. Needs can be interpreted as the gaps between an agency’s current capabilities and those required to adapt to change forces. Example: the MAP21/FAST requirements created the need for state DOTs to develop new data analysis capabilities.
• Strategies are ways that DOTs can respond to the needs. Strategies are used to strengthen existing capabilities and develop new capabilities to adapt to change forces. Example: a state DOT might use workforce management approaches to recruit and retain staff with data analysis skills needed to meet the MAP21/FAST requirements.

The ACB framework provides a structure for considering changes to organizational structure, workforce composition and training, management techniques, and technology using a holistic approach. Rather than responding to emerging issues in a piecemeal fashion, agencies can create an integrated plan of actions that responds to the full range of anticipated future changes.

The guidebook is organized into six chapters, which can be read comprehensively or individually.

Chapter 1. Introduction provides a definition of organizational capability, describes how capabilities will be presented and used in the guidebook and provides an overview of the guidebook organization.
Chapter 2. Agency Capability Building Framework describes the change forces, needs and strategies and presents examples that highlight the challenges and opportunities agencies face.
Chapter 3. Strategies describes the strategies that agencies can use to adapt to the change forces and needs, and points readers to available resources with further information on these strategies.
Chapter 4. Role-Based Guidance presents guidance geared to helping people playing specific roles within a transportation agency recognize and respond to change forces.
Chapter 5. Scenario-Based Guidance illustrates application of the ACB framework in different situations.
Chapter 6. Developing an Agency Capability-Building Action Plan details the steps involved in developing an action plan focused on capability building.

The guidebook will benefit transportation professionals at state DOTs and MPOs in management and leadership positions, those with serving as functional leads, as well as district office leads and program managers. It may also be useful to other transportation professionals who work in federal agencies, universities and research centers, and private industry. The guidebook can be read cover-to-cover as a comprehensive primer, or individual chapters can be referenced for specific guidance on the capability-building framework, strategies, role- or situation-based guidance or action planning.

Different audiences and users with various needs should be able to find levels of detail that are most pertinent to their situation. A reader who wants information on general aspects of capabilities and agency capability-building can read the introductory section that defines capabilities and puts capability-building in the context of transportation agencies. A reader who wants to understand the mechanics of the ACB framework can refer to the chapters describing the framework components. An individual who is looking for guidance on how to address the change forces affecting their role over the next 5-10 years can read the role-based guidance most relevant to them, as well as the situation-based guidance that matches the challenges they are facing. Users looking to embark on a capability-building effort can refer to the capability-building action planning chapter.

There are two different lenses to view the guidance:
• Role-Based Guidance examines the change forces relevant to each of a defined set of State DOT roles, along with their implications for the organization from each role’s perspective within several time periods: now, over the next few years, and five years and beyond.
• Situation-Based Guidance is directed at the change forces that are relevant to a defined set of existing and anticipated State DOT situations.

The reader can refer to their own or a similar agency role or another role of interest in the guidebook as a reference for change forces relevant to that role over several time periods.

The roles included in the guidebook are:

• Chief Executive Officer (CEO)/Chief Operating Officer (COO)
• Chief Financial Officer (CFO)
• Information Technology Director/Chief Information Officer (CIO)
• Human Resources (HR) Director
• Operations Lead
• Communications Lead
• Planning Director
• Performance Management Lead
• Knowledge Management Lead

The reader can also look at the guidebook to understand potential current or future situations impacted by change forces. The situation-based scenarios allow the reader to see multiple views of some common state DOT situations.

The situations included in the guidebook are:

• Need to undertake a major system upgrade
• Dealing with budget cuts
• Initiative fatigue
• Increased emphasis on multimodal transportation
• New accountability requirements
• Responding to increased flooding
• Coping with workforce transition
• Planning for CAVs and other transformational technologies

Both the role- and situation-based scenarios incorporate the change forces, needs and strategies described in the ACB Framework to understand trends, identify capability needs and identify strategies that can be directed at addressing any gaps in the agency’s capabilities.

An action plan is the document that brings a vision, such in the agency’s strategic plan, to life. An action plan establishes a set and sequence of actions that will achieve a vision. An action plan aligns with and supplements other strategic plans by incorporating the steps needed to achieve the vision and goals in strategic plans.

An agency capability-building action plan is directed at the use of specific strategies used to develop essential capabilities.

The agency capability-building action planning steps are to:

1. Determine Scope including using the ACB Framework to determine which change forces matter most, what needs to focus on and which strategies are likely to support the selected need(s)
2. Build a Vision means determining what needs to be achieved within the scope of the effort, how it aligns with other strategic initiatives and what measures can be used to communicate the vision
3. Select/Develop Strategies includes selecting a set of strategies and adding sufficient detail so that they can be appropriately implemented
4. Create Actions is documenting the set and sequence of actions that will achieve the vision, including who will do what and by when
5. Build a Team includes determining at a tactical level who will conduct the capability building actions, ensuring leadership support, creating an “elevator speech” and other mechanisms to communicate the effort and facilitate change management
6. Monitor and Adjust includes periodic check-ins on the progress of the implementation, designing reporting mechanisms and triggers for adjusting the approach, as well as designing a feedback loop to establish a foundation for future action plans.

Developing an ACB action plan creates a scope for the capability-building effort. It builds a vision for the end goal, incorporates strategies to guide actions, and establishes actions to achieve the vision based on those strategies. It relies on building a team to carry out the plan, and allows for monitoring and adjusting the approach as needed to both achieve the goal and create a baseline for future action plans. While this chapter depicts a six-step action-planning process, it is flexible enough to be scaled back into a less complex incremental process or can be made more detailed if warranted to implement a more comprehensive, transformational action plan.

This guidebook is available for those wanting to read the guidance in a traditional format. The content within this document has been developed using several mechanisms, including crowdsourcing, practitioner interviews and searches by the research team.

The online ACB Portal provides additional flexibility, allowing the user to search capabilities to find specific topics, including related roles and scenarios. While this guidebook will remain static, the content on the portal will be enhanced over time as new or more critical change forces and needs are experienced – and as new capabilities and supporting strategies are needed within state DOTs.

The online ACB Portal includes a resource library for browsing and searching for resources using the ACB Framework. Resources on the portal are indexed by their relevant change forces, needs and strategies.

The portal includes a practitioner directory that provides access to a voluntary list of transportation professionals who are willing to support the transportation community by sharing their expertise related to their experiences with various strategies for capability-building.

The portal also includes several shared practices resources to assist in capability-building:

• An Events Directory that provides a listing of meetings, webinars and peer exchanges pertaining to capability-building
• Position Descriptions for transportation agency leaders and practitioners to assist in building better job descriptions in emerging transportation fields. This resource can be used as part of an overall workforce management or information and data management strategy to develop agency capabilities.
• Tools for capability-building, including links to web portals, software tools, online information repositories and other digital information directly available from online sources as well as other tools submitted by users.

Like the other elements of the ACB Portal, the portal’s shared practices, library and practitioner directory provide the ability to add to and strengthen this resource base over time.