The National Research Council (NRC) has added several key brushstrokes to its new strategy for transforming the 95-year-old organization into the best research and technology organization in the world, positioned between academic research and the marketplace. The details were contained in a March 2 letter to staff by NRC president John McDougall following a four-day meeting of its entire management group in Montreal in late February.
The letter outlined the NRC's high-level intentions for reallocating its budget and announced the first four flagship programs that will demonstrate the agency's ability to address critical issues of importance to Canada (see chart). It also emphasized that while there will be a major funding shift towards outcomes-based activities that align with the new strategy, the process to be followed in the coming months is not a cost-cutting exercise as some rumours have implied.
In fact, the strategy's details and implementation plans will engage DGs and their staff across the organization, allowing managers to take ownership of the new direction and increase its odds for success. While such a democratic process appears to be welcome, the strategy also signals a significant strengthening of NRC's senior executive committee (SEC). McDougall — who declined to be interview for this article — revealed that 20% of NRC's strategic investments and all of its capital investment decisions will move "upward" to the SEC — a trend that, over time, will see 60% of all funding decisions controlled by the SEC.
As the strategy is completed and implemented, there will be major shifts in financial resource allocation among the NRC's four core businesses. As outlined in the letter, "specific revenue expectations" have been developed for each business line, including a goal of tripling industry revenue from $50 million to $150 million. McDougall writes that 15% of NRC resources will be devoted to launching its flagship programs while 20% of its budget will be retained for "capacity development, curiosity and exploratory activities and business contingencies". RE$EARCH MONEY has learned that the new strategy will require technology services platforms to derive 75% of their budgets from clients while strategic research programs must get 25% of their budgets from industrial clients.
"Strategic R&D and technical services must act very cohesively and IRAP (Industrial Research Assistance Program) should also align strategically with those activities. We have developed specific revenue expectations for each line of business," writes McDougall. "Science infrastructure and IRAP will be mostly publicly funded while strategic R&D and technical services will modify their approach to generate significant incremental third party revenues."
The SEC is also playing a key leadership role in the selection of future programs. It is currently examining more than 70 two-page summaries of potential programs tabled by the institutes in recent weeks. The vetting process indicates that some tough choices lie ahead as the NRC seeks to adapt to a rapidly changing global business environment.
"Our initial observation is that we have a lot of interesting activity underway but it was quite difficult to identify the market driver behind the work or purposeful direction and leadership with the majority of the activities," writes McDougall. "We also noted similar activities underway at several institutes — medical devices and imaging being the most notable examples."
McDougall says the agency-wide exercise is designed to achieve greater clarity for strong value propositions by identifying challenges, outcomes and specifications, adding "key skills, facilities, leadership, timelines, milestones, key challenges, deployment paths and partners will also be identified".
The NRC is also launching a new Commitment to Excellence program for performance management. McDougall describes the initiative as one in which "personal goals will align with the program goals and/or with the standard of service we need to achieve to effectively and efficiently support our programs and other work". The overall objective is to use the new program as a means of aligning staff contributions to the new strategy.
Not all NRC employees are reacting positively to thrust of the new strategy. It appears to be pitting those who see the future NRC in the service of the private sector against those who hold the more traditional view that it should endeavour to be at the forefront of S&T and undertake activities such as applied research that cannot be effectively pursued in academia.
The four flagship programs are also being scrutinized, with at least one NRC employee alleging that the selection of the programs are politically motivated to gain votes in the regions where they will be undertaken (southern Ontario, the Ottawa region and the Prairies).
McDougall acknowledges that not all employees currently support the new direction. He notes that most of the NRC management team "have made the intellectual and emotional commitment to help us move forward and are rallying behind the new agenda. Those who are still hesitant will need our help to develop their courage and conviction."
Regardless of opinion on the new strategy's pros and cons, there's little doubt that major changes are pending. McDougall concludes his staff letter by suggesting that all NRC employees should approach their work by considering four actions:
* Evaluate everything in terms of the new strategy;
* Take steps to re-direct efforts away from misaligned activities;;
* Do what we can to fix the under-performing activities; and,
* Terminate the unfixable.