Opinion: On Governing New Jersey – Leadership Agenda for the Port Authority

Andrew Sidamon-Eristoff | November 16, 2015 | Opinion
The agency is close to completing its national search for a new CEO, a critical position as it both moves ahead and returns to ‘traditional’ role

Andrew Sidamon-Eristoff
In May 2014, the governors of New York and New Jersey commissioned a Special Panel on the Future of the Port Authority to “review and evaluate reforms of the Port Authority’s mission, structure, management, operations, and overall governance.” A key recommendation of the panel’s final report in December 2014 was replacing the current two-headed governance structure with a single, unified chain of command under a chief executive officer. Almost a year later, published reports suggest that the Port Authority’s board of commissioners is nearing the completion of a nationwide search for the first CEO. Here is a suggested agenda for the Port Authority’s impending new leadership.

The context: an inflection point for our region

The two governors and the board of commissioners have determined that the Port Authority will return to a core mission of “moving people and goods” under a profoundly revised governance structure. The first CEO will thus have an extraordinary opportunity to preside over one of our nation’s oldest and most important experiments in regional government at a crucial inflection point in its institutional history. In so doing, she or he should be mindful that this point is not limited to the Port Authority itself. Our entire region faces profound economic, demographic, and even physical change and challenges. The authority’s success will be largely a function of its institutional capacity to anticipate, champion, adapt to, guide, and enable change within its purview in a way that advances its rebooted core mission and, consequently, the economic vitality and competiveness of our region.

The challenge: building institutional capacity

To be successful, the Port Authority must again build the institutional and organizational capacity to pursue efficient, nonpartisan administration that is vigorous, affirmative, competent, and — when appropriate — capable of pursuing an independent, even “entrepreneurial” programmatic agenda. This will require leadership that understands that building internal capacity is a prerequisite to articulating and advancing an affirmative external agenda.

The Port Authority does not need to build internal human capacity from scratch. It enjoys a depth of experienced and capable professional, technical, and operational talent. The challenge for the next leader will be to identify and support those individuals who are ready and willing to step up to the responsibility of leadership and help build an affirmative institutional culture that is forward-thinking and eschews systemic risk aversion and bureaucratic retrenchment.

In addition to empowering leaders and change-agents at every level within the organization, rebuilding the institutional capacity to plan and execute complex, long-term projects and initiatives will require the use of modern processes and management-information tools. To the extent not already in use, the Port Authority needs to leverage tools and techniques such as project-portfolio management, performance management and budgeting, and management-information systems that support capital planning, construction management, and asset review.

An affirmative institutional culture should be customer- and performance-oriented. The Port Authority’s senior leadership should challenge the agency’s varied components to identify their respective “customers” (whether as function of direct or indirect service delivery), establish performance objectives, and then measure and publicize key performance indicators, both internally for management and externally for public review and accountability. Although simple and one-time in conception, this exercise should evolve into an ongoing process that will substantially define the work culture for many of the agency’s managers and employees.

Finally, with its considerable resources, the Port Authority should again deliver the gold standard in credible and actionable analytics of all kinds. From setting toll charges or rents to evaluating investment/divestment options or designing capital facilities, there are few, if any, important choices facing the authority’s leaders that do not require intensive data-driven analysis. Moreover, the capacity to harness superior analytics in planning will be critical to the agency’s ability to advance an affirmative public agenda.

The agenda: leveraging institutional capacity

Given the recent controversy over lane closures at the George Washington Bridge, intensifying debate over the scope and allocation of resources under the current 10-year capital plan, and governance changes still in process, the region’s political leadership, the Port Authority’s staff, and a broad array of external stakeholder organizations will expect the new CEO to move quickly in outlining his or her vision and agenda for the agency. They will look for assurances that the authority is under affirmative management and once again ready to move forward. Here some specific ideas for leveraging the Port Authority’s renascent institutional capacity to make the most of this opportunity:

Accelerate ongoing planning priorities: The special panel’s report makes a compelling case for three major ongoing planning programs: 21st Century Airports, Trans-Hudson Transportation, and Ports as the Nation’s Gateway. Notwithstanding the importance of careful and comprehensive planning, there comes a time when it is necessary to say “pencils down,” make decisions, and move forward. Therefore, the CEO should accelerate these three planning programs with the goal of identifying specific, actionable projects or initiatives that are amenable to review and approval by the board and the two governors as soon as practicable. The Port Authority needs a real win or two. I would urge a focus on those projects or initiatives that offer the best opportunity to put points on the board over the next three to five years.

Amend the current 10-year capital plan as soon as practicable: The special panel’s report praises the current 10-Year capital plan but suggests that revisions may be appropriate to accommodate the need to replace the obsolete Port Authority bus terminal, among other priorities. If revisions are warranted, the CEO should insist on a relatively quick amendatory process. Extended uncertainty undermines fragile political consensus and invites bureaucratic inertia.

Of course, it remains to be seen whether and to what extent the recently announced state-federal agreement (or at least conceptual framework) for funding Amtrak’s $20 billion Gateway Tunnel Project will affect or even supplant the Port Authority’s existing capital priorities. Per the agreement, the Port Authority is to create a new special-purpose development corporation to oversee the construction of the project, jointly staffed by the Port Authority and Amtrak and overseen by a separate board comprised of representatives of Amtrak, the federal Department of Transportation, and the two states through Port Authority members. As of this writing, the extent of the Port Authority’s financial commitment to the project is uncertain. What is certain, however, is that the build-out of the development corporation will present the new CEO with complex governance as well as financial challenges.

Appoint a restructuring and realignment “czar”: As adjunct to its recommendation that the Port Authority return to a core mission of moving people and goods through the region, the special panel suggested that the authority divest itself of noncore assets, including real estate interests at the highly sensitive World Trade Center site. This is will be an enormously complicated and risky process that will require special expertise and focused leadership over some years. To that end, the CEO should recruit or designate an experienced professional to coordinate the restructuring and realignment of the Port Authority’s portfolio of assets, giving that individual broad authority to draw upon a range of resources from across the agency’s operating and support units.

Create and publicize a customer-service program. As noted above, the authority should build a customer- and performance-oriented culture. In addition to many internal benefits, a publicized and well-executed commitment to customer service (in its many manifestations) would help improve public perceptions of, and confidence in, the Port Authority. Leveraging a performance-management program, the authority should utilize “dashboards” and social-media platforms to disseminate key public-facing performance information. Although occasionally embarrassing to management and staff, publicizing performance builds credibility and drives positive cultural change within an organization.

Define and execute an affirmative legislative and regulatory agenda: The special panel report enumerates a number of important legal and/or regulatory issues that will impact the Port Authority and the region in the years to come, including but not limited to the cap on passenger facility charges, landing slot restrictions, modernization of the nation’s air-traffic control system, and regulatory oversight of the PATH. Given its history, scope, and expertise, the Port Authority is well positioned to build and lead state and national advocacy coalitions on these and other issues. Given its makeup and responsibilities under the revised governance structure, the CEO should leverage the board of governors as a major resource in any advocacy initiative.

Stewardship: back to basics. As part of an emphasis on customer service, performance, and the agency’s renewed focus on its core mission, the CEO should emphasize and publicly commit Port Authority resources to the highest standards of public stewardship, particularly with respect to its public-facing transportation assets. Borrowing from the concept of “broken windows” policing, Port Authority assets should be clean, orderly, and well-maintained, thus reflecting and supporting both institutional and civic self-respect, pride, and discipline.

The unfinished: governance reform

As noted, the governors, through the special panel’s report, have committed to a new governance paradigm in which the CEO is to preside over a single chain of command within the agency while members of the board of commissioners are to provide policy oversight and assume “representational” functions on behalf of their respective states that heretofore had been exercised by the executive director (NY) and deputy executive director (NJ). Although there is some interest in enshrining this and other new governance “reforms” into law through legislation, the two states have not yet agreed and prospects for an early reconciliation seem remote. Yet the new CEO can’t and shouldn’t wait for legislation to move forward. With or without specific legislation in place, the reforms already instituted and the political commitments already extended (including the Gateway funding agreement) will oblige the new CEO and the board to devote considerable time and effort to building and then institutionalizing a clearly understood equilibrium of roles and responsibilities between the office of the CEO, the board, and the two governors. How this unfinished process will play out in the real world is a major unknown.

As public faces of the authority, the CEO, the chair, and vice-chair will share a responsibility to advance the interests of the bi-state region and a fiduciary responsibility to the Port Authority itself as a regional institution. These responsibilities will not always be in obvious alignment, requiring constant monitoring, calibration, and adjustment. In this context, the CEO should bear explicit responsibility, and be held accountable, for managing and advancing the interests of the agency itself, while members and elected leaders of the board should exercise appropriate nonoperational oversight to ensure that the agency remains focused on its core mission.

As the “synapse” between a 7,000-person bureaucracy and the board, the CEO will have to manage both down with respect to staff and up with respect the board and the governors. Information flow is the circulatory system of any large organization. Consequently, it will be critical for the CEO to seek and obtain unequivocal authority to monitor and coordinate the flow of management information both within the agency and between staff and the board and respective governor’s offices.

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