Update (2:24 p.m.): An earlier version of this article contained reference to an Accenture report that was not, in fact, a report. It was a pitch from Accenture to the MTA given back in December 2009. The post has been updated to reflect this view.
In late December 2009, as part of its efforts at renegotiating its preexisting contracts, the MTA worked with Accenture, a management consultant firm, to assess the structure and operations at the authority. During its pitch, Accenture noted, based on its past experiences, that the MTA had been rife with cronyism, bureaucratic overmanagement and downright laziness. For anyone paying attention, it was not a surprise, but with Accenture’s guidance, the authority was able to identify over $700 million in internal savings.
Heather Haddon, now at The Post, has got a hold of the pitch, and she highlights the areas Accenture planned to target, including:
- Promoting people based on “friendship and familiarity,” rather than skill.
- Failing to differentiate between top-quality employees and the bottom of the barrel. At times, employee evaluation is weak or nonexistent, and it is very hard to lay off bad apples, according to sources.
- Wasting a “huge” amount of time by appointing underlings to discuss issues when only executives can make decisions. At Long Island Rail Road, for example, the organizational chart includes layers of confusing titles, and administrators often aren’t up to speed with what other managers do, transit sources said.
- Being stuck in the past and lacking any “demonstrated desire” to do better.
- Suffering from a “horde” mentality that sparks protracted turf fights, with bureaucrats scuffling over limited resources.
Those who keep a close eye on the goings-on inside MTA Headquarters echoed the results of this report. “Things don’t get improved, or the decisions just don’t get made,” William Henderson, head of the Permanent Citizens Advisory Committee to the MTA, said to The Post. “There is a lot of inertia.”
From my own experiences researching and covering the MTA, I’ve seen many of these problems in action. The authority, for instance, does not have its past budgets in digitally-readable format. They instead keep hard-copy reports on file but seemingly have to put analytic reports showing budget changes over time together by hand. The stories of bureaucratic in-fighting and turf battles are endless.
For its part, Accenture has urged the MTA to trim its administrative structure and eliminate numerous middle management positions, cut overtime spending and freeze some discretionary expense accounts. The MTA, who paid Accenture $3 million for the consulting treatment, has already enacted numerous cost-saving suggestions. Earlier this year, the Accenture ideas had saved the MTA $202 million and now the authority says they will realize savings of $381 million and $525 million annually going forward, increasing to $750 million.
With these savings in hand, implementing them will take some time. Consolidation and work-rule efficiencies have begun, but offices need to be modernized while redundancies ironed out. No CEO likes to tell his employees that they’re unnecessary, uninspired or extraneous. Yet, if Jay Walder is to earn the public’s and Albany’s trust, he must continue to push for Accenture’s recommendation reorganize. He came from McKinsey; he hired Accenture; and now he’s acting on it. The future of public transit in New York City may depend on it.
5 comments
I give the MTA credit for hiring this consultant. Too often all they do is tell the company who hired them what they want to hear. If it produces positive results, it’s $3 million well spent.
Everyone knows about the bloat, but cronyism is something employees have been complaining about for years, but could never prove. Anyone complaining was categorized as a disgruntled employee. Now it’s finally official.
Regarding employee evaluation, the way it is set up now, it is really a joke, and just used to justify giving favored employees higher raises. Sometimes, the employees supervisor doesn’t even fill them out, but assigns it to an employee who is not even familiar with the person’s work, because he is too lazy to do them himself. Worse yet, sometimes the employee completes his own evaluation and the supervisor reviews it and either just signs it or alters it first.
Once my supervisor, spent about an hour completing my evaluation which I thought was very unfair. For one thing I did much more work than she gave me credit for. I wrote an appeal, and it took her about four more hours to correct the evaluation. I told her that if I bothered to tell her every little thing I was doing, I wouldn’t have time to do them in the first place. The following year, she just asked me to write my own evaluation and she would just sign it. In later years, I always completed my own evaluation, but it didn’t mean I received higher raises, because they were already pre-determined and the ratings were given to justify the pre-determined raises, 0 through 4%.
Another rule was that each unit’s evaluations had to be on a bell curve. If the supervisor had six employees, one had to be excellent, one had to be marginal, and the rest had to be fair average or very good. If there were ten or more, I believe someone also had to be found unsatisfactory. This makes absolutely no sense when dealing with small numbers of employees. Maybe it makes sense for 100 or more, but not for 10. In the early 1980s, I had six employees whom I was very satisfied with. I didn’t have a bad apple in the bunch. I believe I gave half of them excellent reviews, and the others good or very good. Because of this, without knowing my employees, my supervisor considered me a poor manager because there wasn’t anyone I didn’t like. He just thought I wanted them to like me or I was just an easy grader. He was looking for a bell curve. Believe me, if I wasn’t pleased with the work they produced, I wouldn’t hesitate to give them all poor evaluations.
Any sense as to how much money Accenture thinks the MTA could save with maximum bloat killing? Are were talking $750 million a year or $3 billion a year?
Also, speaking of bloat and bureaucracy, the charges of cronyism worry me. The typical way government agencies respond to such charges are to install ever more elaborate and time consuming evaluation procedures in place to “prove” everything is done by merit. Sadly, you can game the most complex system if you want, so the cronyism remains and operation grows ever more inefficient. The MTA needs to eliminate they cronyism with systems that are both fair and really, really efficient.
I wish MTA would have thought a little out of the box and brought in a consultant that was more focused on service delivery and innovation — someone like IDEO (who’s done wonders for the healthcare segment) or Frog — I suppose the management side needs to be looked at too. But we do need to start looking at problems in the way that the MTA is interfacing with public, not just the structural behind the issues… (Maybe that’s next after the MTA gets its management and administration house in order?)
Still Accenture seems like such a dry and boring choice. I suppose we can be glad it wasn’t McKinsey.
Why not Accenture? Tiger is their mascot right?
Accent on the Future!
seriously? this was not a job appropriate for IDEO or frog. it’s far far far outside of what they do.
the insane way that the MTA has constructed itself prevents it from doing business in any sensible or efficient manner. once this is corrected, then the delivery of service can also be fixed. you need the right people and structure in place to get the job done or even the best ideas will fail in implementation.