Mark Aesch usually slept pretty well.
The recently appointed chief executive of the Rochester Genesee Regional Transportation Authority in New York State was definitely not used to being woken at 3.30am by the sound of his home’s front windows being smashed in by some disgruntled employees. But that’s exactly what happened shortly into his tenure.
“It’s certainly one way of capturing your attention,” he recalls, laughing. “At the time, ours was a very militant, organised workforce. We also had a pipe bomb go off in a garage and a preplanned walkout of a meeting of 600 unionised employees.”
Fast-forward five years, though, and that same workforce had voted for a pay per performance compensation structure and Aesch – with no formal business training – had overseen a reduction in fares, turned multimillion dollar deficits into multimillion dollar surpluses and achieved a vastly reduced reliance on taxpayer funding. Sounds too good to be true? Actually, it really happened.
Time to turnaround
It’s fair to say that Aesch – who had previously worked as a district director for a member of Congress – was not bequeathed the easiest of inheritances. When he started work there in 2004, the authority’s vehicles were on schedule only about 70% of the time and it was poised to raise fares, lay off employees, and slash services.
“The organisation was in dire straits economically,” he admits. “We were running a 40% operating deficit, and whether you’re in the public sector or private sector, spending 40% more money than you take in every year is not a recipe to keep the lights on. But a big piece of it for me was that I was raised on a farm in upstate New York with very limited means financially. I just did not find it acceptable to simply charge people more for an inferior product.”
With price rises off the agenda, Aesch and his team got down to work. The first priority was to introduce a new stream of non-taxpayer revenue. “Traditionally in the transportation space, you would either raise fares or tell the taxpayer they had to pay more,” he says. “But we introduced a new revenue stream whereby user groups who were benefiting from services – hospitals, shopping malls, manufacturing facilities – helped to underwrite the costs of service, and this introduced tens of millions of dollars of new revenue every year.”
The second stream of activity revolved around the introduction of new performance management, which enabled them to substantially increase the productivity of their systems, with the result that revenues per mile increased by 97% over a four-year period. Here, the deployment of new technologies helped enormously – but only because they were strategically aligned. “Too often, governments try and ‘chase their neighbour’ rather than make sure they have the technology they actually require,” says Aesch. “They also need to make sure they take the data which technology produces and learn how to distil it into information. Technology has made government agencies very data-rich but information-poor.”
And the third priority involved the New York State government’s ‘needs-based model’ of aid distribution. “Essentially, the more screwed up you were, the more money they gave you,” says Aesch. “We led a transformation to literally enact legislation to make that a performance-based model of aid distribution. This meant that the organisations which were over-performing were rewarded for their performance. These three elements combined were really the underpinnings of what allowed us to be successful.”
Tips for transformation
So that’s what happened, but how it happened is another story entirely. It is clear that Aesch placed great emphasis on being a visible leader – no-one could doubt his commitment to the cause. “A leader needs to be in the appropriate number of meetings – you can’t just describe the outcomes you want achieved and then turn it over to others to go do that,” he says. “You have to be actively engaged in driving and inspiring that transformation. And you also have to have the information systems in place to be able to inform a senior executive whether their plan is working.”
Clear communication, too, was vital – both formal and informal. “Every single day I wrote a note to the workforce – sometimes as little as a sentence or two – but every day they would have a communication from me about what was going on, so they would know what was top of my mind,” he explains. “That was the formal type of communication and, more informally, every couple of weeks I would go shoot pool in one of the drivers’ rooms or in the mechanics’ break room. I’d just take about half an hour, but it really didn’t take long for a group of guys to appear who wanted to play and chat.”
Such methods helped him overcome the resistance that springs up in any major programme of change, but he is adamant that what really underpinned the changes was the fact that it was genuinely about making government work better – which is something that all of us should support.
“The language here matters enormously,” he observes. “We listen to politicians globally talk about how we need to run government services more like a business. But no-one in their right mind wants to dial 911 when your house is on fire and have the despatcher ask for your credit card details. But this is what government as a business would look like.” Instead, he believes, it should all revolve around performance.
“What people do expect, and I think reasonably so, is that we could deliver public sector services with a private sector mindset focused on things like performance and efficiency,” he says. “After all, no-one wants to stand in line for three hours to get your driving licence renewed. When you can enact these core principles, it shows taxpayers and consumers of public services alike that we can really get government to perform every bit as well as the private sector.”
Performance culture creation
Today, Aesch is the author of two bestsellers, has his own firm, TransPro, which advises public sector organisations on transformation, and mixes being a senior advisor at The Boston Consulting Group with providing monthly executive leadership coaching and mentoring. In all of this advisory work, he places great emphasis on the importance of achieving the right culture among public sector workforces.
“A culture of accountability is relatively easy to build – put KPIs in place and manage people against them,” he says. “But getting people to the place where you have hearts and minds invested, so that employees of all levels actually care and are inspired to produce a result, is more of a challenge. But if you can get that culture of organisational ownership to exist, then you have created a framework to do some pretty amazing things.”
Partly, he believes, it comes down to finding a way for the risk-averse nature of government agencies to reverse course. Instead, he says, employees need to be empowered to step out of their comfort zone and try something new. “If a public sector employee takes a risk, makes a courage-based decision and it goes well, there is very limited upside for that employee but pretty substantial downside,” he points out.
“But in the private sector, if you make a risk-based decision you get a bonus and maybe a promotion. I think we have to create the environment where it is safe and appropriate to reward public employees for making risk-based decisions. It comes down to having a culture which is policy-based or judgement-based – we want to create the environment where employees can use their judgement to make good decisions, rather than just blindly following policy.”
Although Aesch is no longer in public service himself, he remains a passionate believer in government’s ability to be a force for good. “The opportunity to have a positive impact on millions of people’s lives is exponentially bigger in the public sector than in the private sector,” he says.
And his remains a supremely optimistic disposition. Maybe this is down to living in the Florida sunshine, but – more seriously – his story is living proof that governments possess the ability to meet challenges head-on and emerge stronger, with systems and outcomes enhanced and workforces energised anew.
“Sure, globally you can see the frustration that people have with the performance of government institutions,” he concludes. “But equally, you can look at numerous examples of great success stories. There is no doubt that we can replicate these successes, scale them across multiple jurisdictions, and make them the norm rather than the episodic.”
The result will not only be the outcomes that citizens everywhere will welcome – but will also spare other government leaders an unfortunate wake-up call in the middle of the night
Want to find out more? Check out Driving Excellence: Transform your Organization’s Culture – and Achieve Extraordinary Results and Saving America: 7 Proven Steps to Make Government Deliver Great Results
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