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.
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