The Federal Highway Administration (FHWA) is an agency that has provided more than 105 years of quality service to the nation. It is also an agency that, throughout its history, has continuously evolved, adapted, and grown to meet the changing needs of the country.

As long as 10 years ago, there were discussions about changing FHWA's regional field structure, and in the spring of 1997, FHWA started a two-phased evaluation of its organizational structure. Each phase of the evaluation was conducted by a task force compirsed of FHWA employees from headquarters and field units. Phase I included the identification of the roles and responsibilities of FHWA's field organization. Phase II started in March 1998 and focused on developing a detailed implementation plan for the proposed restructured field organization, identifying the headquarters functions that would more appropriately be performed by the field organizations and restructuring the headquarters. Restructuring enables FHWA to most effectively meet the challenges of the U.S. Department of Transportation Strategic Plan and the FHWA Strategic Plan, streamline operations in accordance with the Vice President Gore's National Performance Review, reduce fragmentation of responsibilities and clarify roles, and continuously improve to provide better service.

This evaluation has resulted in a plan to restructure FHWA's field and headquarters organizations. The major changes in the field organization eliminate the nine regional offices; delegate more authority to the 52 division offices (one in each state, Puerto Rico, and the District of Columbia); and provide four resource centers to support the federal-aid and motor carrier division offices in their primary role of program delivery to the state departments of transportation, metropolitan planning organizations, and other partners and customers responsible for providing highway transportation, safety services, and enforcement. The resource centers are located in Baltimore, Md.; Atlanta, Ga.; Olympia Fields, Ill. (near Chicago); and San Francisco, Calif. In the headquarters, the principal change is the establishment of a matrix management structure with five core business areas - planning and environment, infrastructure, operations, motor carrier and highway safety, and federal lands highway - and eight cross-cutting service business units - policy; research, development, and technology; administration; chief counsel; civil rights; public affairs; professional development; and corporate management. Professional development and corporate management are new units that will aid FHWA in its quality journey, ensuring that our employees are able to develop to their full potential and that FHWA's services are delivered in an environment of continuous improvement.

The field structure was implemented on Oct. 1, 1998. Changes in the headquarters structure became effective in mid-January 1999. However, as one would expect with such a significant reorganization, full implementation will be conducted in phases. The headquarters restructuring will be completed by the summer of 1999 and the last phase, which includes the completion of physical office reconfiguration, geographic relocation of some employees, and office closures, will not be completed until September 2000.

Why Are We Restructuring?
The short answer is to "make what's good, even better." Restructuring enables us to make better use of our most important asset - our human resources.

Restructuring was influenced by internal and external interests. In the past few years, a lot of things have been happening - such as the National Performance Review, a requirement to downsize from 4,000 people to 3,550 people in the time period of 1993 to 1999, and streamlining congressional interest in our field structure. The Transportation Equity Act for the 21st Century (TEA-21), which was enacted last summer, requires us to eliminate regional offices and to create resource centers. And, under TEA-21, we now have a program that is, on average, 40 percent larger in terms of the grants made to the states, and the motor carrier program is not only larger in dollars but more extensive in terms of the size of the industry we have to manage. So, putting it all together, it really means we must more effectively use our human resources to achieve our mission.

Despite the significance of these external influences, we would have restructured anyway. In my 30 years with FHWA, this is not the first time we've looked at the issues or changed the way we do business, and we've been evolving in how we do business and how we treat our partners and customers.

As executive director of FHWA, I have championed the "Quality Journey," and one very important tenet of the Quality Journey is to focus on the needs of our partners and customers. The way we are going to be more responsive to our partners and customers and to provide better customer service is to delegate more responsibility to our division offices, and we have been doing this over the last nine months. By restructuring, we can provide more staff resources to the division offices and be closer to the partner and customer.

Another tenet of quality is to continually look at processes. One process change is to eliminate having programmatic and project approvals at a regional office level; this enables the partners and customers to deal with only one level of approval - the division - and one level of appeal - the headquarters.

Another quality tenet is to strongly look at your human resource system and plan a proactive way to ensure sound human resource management. Restructuring will enable us to better align our skills in resource centers so we can pool our technical talents better than we have before. And as part of this, we are making a strong commitment to retraining to make sure we have the most highly trained staff in a variety of areas - safety, finance, planning, engineering, and environment.

One of the other tenets of quality is a sound strategic direction and planning, and about a year ago, FHWA published and implemented its new strategic plan. The full leadership team and the restructuring task force spent many months identifying the strategic core business areas for the future of the agency, and the new structure of the headquarters reflects the changes needed to move in the appropriate strategic directions.

For example, planning and environment has taken up a great deal of the staff time for our field offices, and the legislative requirements keep growing in the planning and environment area. This is an area that obviously needs more attention as we go into the 21st century; therefore, we established this as a core business area with a senior program manager for planning and environment.

Operations is another core business area that needed to be redefined. During the interstate era, the emphasis was on building the system, and now, we focus on operating the system. To have a clear focus on operations in the future, we created a senior program manager for operations to cover the intelligent transportation systems, traffic engineering, mobility, freight operations, and maintenance practices.

Another critical area is safety, and the reorganization pulls together our highway safety and motor carrier people into a core business area so we can have a combined thrust toward achieving our strategic goal in safety.

Restructuring was necessary to position FHWA for the future. To really perform our mission, we needed to be closer to our partners and customers and to pool our technical resources better. Our program is growing in size, but the total number staff is shrinking. The solution is to delegate down more responsibility to the lowest appropriate level in the organization and to assign the appropriate staff there. Consequently, the size of the headquarters and of mid-level organizations must shrink while we structure ourselves to focus on the most strategically important business areas for the future and allocate staff resources to our state level offices.

How Are We Caring for People?
The restructuring will result in extensive redeploying of personnel, particularly in the field reorganization. The leadership of FHWA is deeply concerned about the effect this redeployment will have on our field staff. I visited all the regional offices this past summer and met with all the regional office employees. During the restructuring process in the field, we are doing our best to accommodate individuals in the former regional offices.

Different from some government agencies when they restructure, we will not conduct a reduction in force (RIF). Different from other government agencies and certainly different from the private sector, we are giving redeployed employees a transition time to accommodate family needs. Everybody in the former regional offices will have a job in FHWA if he or she wants it. Obviously, in the five cities that are losing a regional office and in which there is no resource center, employees may have to relocate, but jobs are available throughout the agency.

The resource centers have been operating since Oct. 1, 1998. Since then, teams of people in the former regional offices are working as virtual members of one of the resource centers. For example, the staff in Albany and the staff in Baltimore are part of the eastern resource center located in Baltimore. The staffs in Kansas City and Chicago are a virtual team for the resource center in Olympia Fields. Last September and October, all employees in the former regional offices filled out questionnaires and were interviewed. By the end of December 1998, we will have concluded the voluntary reassignment of staff. People bid on job opportunities in resource centers, in division offices, and at headquarters. By late spring of 1999, we hope to be through the process of lateral reassignments as well as advertisement of jobs still unfilled. At that time, we will meet with all employees whose situations are still unsettled.

Finally, if necessary some employees will be given directed reassignments. Some will be separated, because they will not move or they are offered a job elsewhere, and they will receive severance pay, as appropriate.

We are focusing on training so that people moving into new positions can perform well and the staff in resource centers can be as technically competent as possible. I am making a budget commitment to try each year to increase three areas - training dollars, travel dollars, and information technology dollars, all of which will be needed for our staff to effectively accomplish the mission. We need to continue training all of our staff so we can be helping to create the niche that we are defining for FHWA as a value-added agency.

A consulting firm conducted a skills assessment of FHWA a year ago and identified some skill areas with real voids. Innovative finance was one deficient area. Another was the lack of highly skilled experts in intelligent transportation systems (ITS) (telecommunication, electrical engineering, systems integration). Also, there is a general need to upgrade the communication skills of everybody in the agency. If we are going to move to an agency that is going to be selling technology, selling good ideas, selling good practices and enforcement, all of us have to be better at communicating with the public - speaking and writing.

Almost everyone in FHWA will be affected by the changes. There is going to be a lot of change. There are new people in key leadership positions in both headquarters and the field, and we will have some leadership and personnel changes at lower levels as well. The leadership team and task force have received advice from consultants who are experts in organizational change. For employees, we are offering counseling services, including counseling in financial and training matters. We will make a concerted effort to help employees as they go through these changes - particularly employees who are moving for the first time.

What Are the Most Significant Changes?
In the field, the most significant change is the delegation of authority to the lowest appropriate level in the organization - delegating everything we could to the division offices, including program and project approval.

There are some exceptions. In the motor carrier area, some due process enforcement requirements have to stay at an appeal level above the division office. In civil rights, the staff at the resource center deals with external complaints, but all other civil rights complaints or activities, such as compliance reviews and Title VI requirements, are delegated to the division office.

With this delegation of authority, there was a commensurate need for additional staffing at the division level, particularly in the areas of environment and planning and civil rights. In addition, the strategic objectives of the agency warranted that a higher level of attention be given to the delivery of innovations, such as intelligent transportation systems, and other new technologies and to safety. The division offices were allocated 100 additional full-time equivalent positions.

The resource centers serve as locations for technical and program specialists who assist the division offices, partners, and customers, as needed. In addition to technical and program assistance, the specialists will develop and present training, support technology transfer activities, and assist with intermodal and interagency coordination.

An important distinction from the regional office concept is that the resource centers have no program authority and will not exercise any program control over the division offices. Communication from the headquarters goes directly to the divisions.

Each resource center is led by a leadership team of two people: a senior executive service director and a GS-15 operations manager. Each resource center will have a team structure that is consistent with the agency's core businesses. Also, the federal-aid division administrators and the motor carrier state directors report directly to the center's leadership team.

In division offices, we still have two separate entities, the federal-aid division staff and the motor carrier division staff, but they will work together in a stronger fashion than they did in the past with more teaming activities in the safety area and in ITS. That is a very significant change.

Another significant change is in the area of civil rights. It is necessary for this agency to spend more time and energy enforcing, promoting, and encouraging our partners to live up to all the civil rights requirements that we have. To do that, we must have a larger dedicated staff. Before restructuring, only two division offices had a full-time civil rights staff person. All the others had part-time support. We will now have a full-time staff person in 20 division offices and two full-time specialists in California and Texas, and we will have a rigorous training program to ensure that all 52 division offices have thorough training in civil rights.

The headquarters restructuring resulted from the need to focus resources on core businesses that are aligned with our strategic goals and objectives, reduce fragmentation and duplication, align better with and serve the field, and improve collaboration throughout the organization. While there is no perfect organizational structure, the characteristics of a matrix-type organization, in which teams work across organizational units to develop and deliver key products to partners and customers, best fit our requirements. As mentioned previously, the matrix structure consists of five core business areas, and eight service units.

Although each core business unit defines a unique part of FHWA's business, there are common functions, including:

Setting strategic direction to shape the agency's strategic plan and performance objectives.
Program and policy development, such as the development of legislation, regulations, and programs.
Resource management through grants, as well as the application of "human resources" to carry out the program objectives.
Delivery of technology and bringing innovation to our customers.
Performance management, including setting milestones and objectives and evaluating our performance.
Quality advancement - that is, continuously looking for ways to better serve our customers and to improve our efficiency and effectiveness.
Communication and knowledge-sharing so that we can be a catalyst for the growth of knowledge in the transportation community.

The five core business areas of headquarters are strongly supported by the eight cross-cutting service business units. The units report to the office of the administrator, and their key functions, in addition to providing support to the core business areas and to the field, are to provide coordination across the core business units and to provide a pool of expertise in their particular functional areas.

The new Office of Research, Development, and Technology, which combined the former Office of Research and Development and the marketing staff from the Office of Technology Applications (OTA), will conduct research and assist the core business units in technology transfer. The core business units have the lead for the delivery of technology, and most of the OTA staff will go to the core business areas.

Professional Development is a new office, and it will have the charge to coordinate the internal and external activities that focus on training and professional development.

The Office of Corporate Management also incorporates a number of new responsibilities. It includes the coordination of and sharing of good practice in quality, performance planning, knowledge-sharing, and information analysis, which are key components of the agency's corporate management strategies.

Another important cross-cutting mechanism is the integrated product team, which involves two or more of the core business units. These teams are charged with the delivery of specific technologies, programs, or other products. It is envisioned that these teams will draw upon the resources of various offices, including the resource centers. In all likelihood, there will be a relatively small number of these chartered by the agency's leadership, and it is expected that they will have a limited life span - a "sunset date" - so they can complete their task and the staff assigned to the team can move on to some other priority activity.

Are There Other Benefits of Restructuring?
Restructuring is mutually beneficial for the agency and for our partners and customers. It is a better alignment of our human resources, pooling our technical talents better so that the four resource centers will have experts in safety, pavement, structures, air quality, planning, environment, and finance instead of trying to stretch this expertise across the nine regional offices. We will also have teams in the resource centers that will align more closely with the headquarters structure. They are not supervised by headquarters, but the mutually beneficial relationship will facilitate networking and sharing knowledge. Delegation of authority to the divisions and increased staff should bring about enhanced decision-making and faster approval of actions. Also, it will be a lot easier for state agencies to work with FHWA because they will be working with people who are geographically closer to them and people with whom they work frequently.

The resource centers are like consulting firms, and I can see them developing annual business plans with their clients, the division offices. Divisions may need different levels of help in particular areas. One year, the resource center may respond to many calls in pavements or structures, and the next year, it may be focusing more on air quality issues. So the resource center should be a very proactive support organization, annually developing business plans, targeting client needs, networking with the other resource centers, and assisting the division offices and their state and local partners to meet our strategic goals.

Some people have been concerned that the four resource centers would be stretched too thinly geographically compared to nine regional offices. However, while acknowledging that face-to-face coordination is sometimes necessary, much of the information-sharing today is conducted with electronic communication. Communication technology, including e-mail, the Internet, and teleconferencing, will permit rapid and relatively inexpensive information-sharing. In addition, our long-term goal is to have a higher level of technical expertise in the four resource centers than we may have had in the nine regional offices. That will be evolutionary because it requires a long-term investment in training.

The restructuring also supports the ONE DOT concept of intermodal collaboration in solving mutual problems. We have talked with the other agencies within the Department of Transportation, and we will be assigning a full-time FHWA staff person to each of the 10 regional offices of the National Highway Traffic Safety Administration (NHTSA) so that we can enhance coordination on safety issues. We have coordinated with FTA about using the four resource centers to help FTA. FTA and FHWA share an interest in many issues, including air quality and transportation planning. And because FTA doesn't have an engineering staff, particularly on the construction side, the expertise of the resource centers and division offices could be very helpful. The resource centers continue to be involved in the regional intermodal planning teams and regional safety teams, and some resource centers may be active on more than one regional team. For example, the resource center in Olympia Fields participates with both the Kansas City and the Chicago USDOT regional teams. In fact, the delineation of the resource center areas of responsibility was decided with the NHTSA and FTA regional areas in mind. Our Eastern Resource Center serves the states that are also served by the NHTSA and FTA regions 1,2, and 3. Our Southern Center serves NHTSA/FTA regions 4 and 6; the Midwestern Center covers NHTSA/FTA regions 5 and 7; and the Western Center takes in NHTSA/FTA regions 8, 9, and 10.

Conclusions
To sum up, let's hear from a couple of the people who were directly involved in developing our restructured organization and are helping to make it happen. Julie Cirillo, the co-chair of the Phase II task force and the agency change manager for the restructuring effort said, "As we begin to function in our new structure, there are several important things we must remember."

A1. The resource centers will evolve to meet the needs of the partners, customers, and the times. The structure we have established today will change as we gain experience in this new role. Resource centers in two years and in five years will be significantly different than they are today.

A2. The resources of FHWA are available to all of FHWA. Divisions, resource centers, and headquarters must ignore geography and bring the necessary resources to bear on specific problems. The geographical boundaries for each resource centers are for internal span of control only and should not be considered as boundaries on services. In addition, divisions must also begin to share resources.

A3. The new way of doing business is to share, collaborate, and cooperate. We are all about agency business and not the business of the specific unit. The headquarters structure has been devised to encourage cross-cutting and teaming activities. I am hopeful that the agency will devise some method for recognizing those leaders that adhere to this new way of doing business."

Dale Wilken, director of the Eastern Resource Center and chair of the Phase I Field Restructuring Study, which started in the spring of 1997, said, "There are a number of short- and long-term benefits for both FHWA and employees in the field restructuring." From an agency standpoint, our resources will be more effectively located, and we will be capable of providing higher quality technical and program assistance and training that will be more readily available to our partners and customers. For the employees involved there will be greater opportunity to advance in a discipline or specialty, to become a national or an international expert, and to be exposed to and work with the latest technologies. It should be remembered, however, that these benefits all come with a cost. In the short term, there will be significant disruption to people's lives as relocations are carried out and offices close. There is also the cost commitment the agency must make to support the employees who may need additional training or work experience, updated equipment, and adequate travel funds to effectively provide their services. I believe this restructuring can effectively meet the future needs of FHWA and our partners if the agency and the employees make the commitment and we continually check in with our partners and customers to see whether what we are doing still has value and what new services they need."

In addition to Julie and Dale, several other FHWA leaders deserve special recognition for their leadership in the restructuring effort. Among them are Tom Ptak, who recently retired from FHWA and who along with Julie co-chaired the task force that developed the implementation plan for field and headquarters restructuring, and Leon Witman, Western Resource Center director, who was tasked with developing the logistics and staffing plan to include how we are going to deal with the lateral reassignments for people in the regional offices and the process of advertising and interviews over a two-year period, and Gary Maring, then director of the Office of Information Management, who managed the effort to assess headquarters structural alternatives.

I am confident FHWA is positioning itself to take on the significant transportation challenges of the 21st century. And, as Secretary Slater often says, "The best days are yet to come."

Making What's Good Even Better