COTA and W. Curtis Stitt power on by creating efficiencies, working smarter

 

The public sector sometimes struggles with functioning like a business, but W. Curtis Stitt, president and CEO of the Central Ohio Transit Authority, says COTA is a business; it just has a different funding paradigm.

“Like any other business, we sell a product or service. Our service is public transportation. And there are lots of competitors out in the market, and an overwhelming majority of the people in our community have one of those competitors in their driveway — their personal vehicle,” he says.

col_cs_cota3_1116COTA not only has to compete against drivers, it also has to compete with taxis, Uber, car2go, bike share and other private transportation providers.

“Like every other business, you’ve got to continue to evaluate where we are as organizations, public or private sector, and continue to find ways to remain competitive,” Stitt says.

The key phase there is continue, he says. You’re never done trying to improve.

“There’s a scripture that talks about pressing toward the mark of the higher calling, and that really talks about this. (It) is a continuous effort, we’re always pressing toward that next level, that higher level,” Stitt says. “Once we feel that we’ve made it, that’s when we start falling behind.”

Part of that continual effort is looking for ways to create efficiencies within the organization, which has 1,000 employees and an annual budget of $100 million.

You want to improve your service, knowing that you have limited resources. Because if you can operate more efficiently, you will be able to push more service out onto the street, he says.

Adding efficiency

More than a decade ago, COTA wasn’t meeting the charge of providing public transportation needs in the community. It experienced a number of deficit budget years. It cut service. It laid off employees.

By taking hard steps to balance the budget and convince taxpayers to pass a sales tax levy, the organization turned itself around.

“Since 2006, we’ve increased our level of service by 80 percent,” Stitt says, who was with the organization but didn’t become president and CEO until 2012. COTA also has partnered with others to get people to areas of employment, such as the New Albany International Business Park and the Rickenbacker area.

COTA is well positioned financially now, although it is looking for voters to renew that sales tax this November.

To continue the work that was started, Stitt has continued to look for efficiencies.col_cs_wcurtisstitt6_1116

“It is something that we have to continue to remind ourselves, that we’ve got to operate with financial prudence,” he says. “We’ve got to look for new and creative ways to save money, and we’ve got to continue to think outside the box.

“We can’t continue to do the same thing that we’ve done for the last 35, 40 years at COTA and expect to be able to keep pace with the growing demands of our community.”

Stitt says COTA’s leadership team examined the budget to look at reducing the largest line items. The largest block is wages, salaries and benefits.

In order to reduce the cost of medical insurance premiums, a challenge for any business, COTA initiated wellness programs and biometrics testing. Stitt says this was something for-profit companies were already doing, but COTA hadn’t.

The initiatives weren’t popular when management first started talking about them.

The first step to getting buy-in was education about the reasons why, he says. Management worked closely with the employees — the majority who are union — to explain the program, including that it was voluntary, and stress the benefits.

The program also had an incentive component, lower employee contributions, which helped with buy-in.

After the program was up and running, COTA had employees learn of significant health issues as a result of a biometric screening.

“I can’t or won’t say, it did save their life, but there were potentially life saving discoveries about their health,” Stitt says.

Of course, the screenings are confidential, but some employees volunteered to step up and say how it helped them, he says. Sharing stories about individual successes encouraged others to get involved.

Unintended consequences

The second largest budget item for COTA is fuel, so Stitt says they took a hard look at the fuel consumption and how to reduce that cost.

In 2010, COTA invested in six hybrid electric buses, and a year later it decided to slowly transition the bus fleet to compressed natural gas.

col_cs_cota2_1116If COTA could have converted its more than 300 buses at once in 2011, it would have saved $6 million annual in fuel costs. But Stitt says those savings would have had other consequences.

It’s important to look at the big picture. You don’t want an efficiency to negatively impact another area. A short-term saving could end up costing as much or more in the long term.

COTA could have figured out a way to convert its fleet more quickly, but he says COTA would have to replace all of those new buses at the same time.

That was a lesson the organization learned the hard way. Previously, COTA bought 67 buses because it had the money available. But when those buses reached 12 years or 500,000 miles — the average lifespan of a transit bus — COTA couldn’t replace them.

“Our maintenance costs skyrocketed, because we were operating buses that should have been retired at 12 years. We were running them 14, 16, 18 years, in some instances, at a higher operating cost for maintenance, than we should have been, Stitt says.

“It was a conscious decision not to replace them all at once,” he says of the compressed natural gas buses, which still only make up about one-third of COTA’s fleet.

Question the status quo

When you’re looking to stretch your resources and operate smartly, ideas can come from anywhere. COTA looks both internally and at other transit agencies.

“We understand that in many respects there are no new ideas. There are just good ideas that are being used around the country that we haven’t yet adopted here,” Stitt says.

Over the past several years, COTA has been working on a transit system redesign, which it plans to roll out in 2017.col_cs_wcurtisstitt2_1116

Stitt says about three years ago, an employee stumbled across the first annual report of COTA from 1974. She was excited and wanted to show Stitt.

The report, which looked like a road map, showed COTA’s bus service map on one of its panels.

“In that service map, the thing that struck me was it looked almost identical to the service map we had at that time, and we have today,” he says.

Service came from the suburbs, ran into the downtown area, and then back out to another community. Stitt says the question was: Is that paradigm the best way to provide service today?

Intuitively, you know that demographics and workplace locations would be different enough from 1974, to say no, that’s not the most efficient way to meet the needs of the community today.

That was a creative way of looking at how you can operate more efficiently, Stitt says. It’s not always a matter of spending more; you can put pressure on yourself to find service improvements by questioning that way it’s always been done.

That’s why it’s important to always be looking for ideas.

“My advice to anybody who has got a workforce, large or small, is to put your employees first. Be willing to listen to them,” Stitt says.

You also want to make sure your employees understand that no matter how decisions play out, you’re going to be fair and make decisions that you believe are in the best interests of all the stakeholders involved, he says.

Those stakeholders include your employees, your investors and your customers. You want to a good balance for all three.

Build onto the foundation

COTA continues to strive to be a good steward of its funds, while serving the community, Stitt says. That’s certainly been demonstrated by one industry metric that shows how efficiently the organization is operating: cost per service hour.

“We’ve gone from a point where we were operating on a level 32 percent higher than our peers, to a level where we’re operating better than our peers,” he says.

col_cs_wcurtisstitt5_1116At some point, however, you do run out of ways to save money, if you’ve done a thorough job.

COTA isn’t there yet, but Stitt says they can’t forget about their responsibility for tomorrow, too.

Central Ohio is expected to grow by at least 500,000 people by 2050, with more than 300,000 new jobs being created. COTA has to have a solid plan to grow its service over the next 35 years, to keep pace with that and keep its public transit relevant.

“A community where public transit is nonexistent or irrelevant is a community that’s going to die,” he says.

Stitt and his team are filling in the solid foundation that was started with the previous leadership, in order to eventually build a next generation transportation system.

“You can’t focus just on today,” he says. “If you’re planning just for today, you won’t keep up because everybody else is planning what’s going to happen five years, 10 years, 15 years out. They’re pursuing those plans, and they’re laying the foundation for those plans today.”

 

Takeaways:

  • If you feel you’ve made it, you’ll fall behind.
  • Be open minded and creative to new ideas.
  • Operating smarter doesn’t just mean cutting costs.

 

The Stitt File:

Name: W. Curtis Stitt
Title: President and CEO
Company: Central Ohio Transit Authority

Born: Cleveland, Ohio
Education: B.A. from Kent State University, J.D., Chase College of Law, Northern Kentucky University

What was your first job and what did you learn from it? Paperboy. I developed a strong work ethic at a young age, and learned the value of good customer service.

What’s the No. 1 quality you strive for as a leader and why? I always try to lead by example in terms of my commitment to our mission, goals and values.

You said ycol_cs_cota1_1116ou face more internal and external responsibilities as COTA’s president and CEO. How have you changed how you manage yourself as a result of that? One of the things that I’ve learned, and I’ve had to do, as CEO, is just sit back and listen to the rest of the leadership team and others on our staff here — and not be so eager to offer my opinion.

Delegation is a difficult thing for some people, including yours truly, particularly in areas that are your strength.

When I first took on the helm here at COTA as CEO, sitting in leadership team meetings, my general counsel would give me strange looks because I was answering all of the legal questions, pre-empting her opportunity to even speak up. I had familiarity with COTA’s legal issues and could provide answers because of my experience, but it wasn’t fair to general counsel to speak so quickly.

What’s your favorite thing to do when you’re not working? I enjoy lots of things, but three favorites are:

  • Spending time with my family, especially my granddaughters.
  • Listening to jazz.
  • Coaching track and field.