With the future of the White House's Office of Science and Technology Policy uncertain and proposed budgets that significantly reduce spending for science and technology, government agencies focused on research and development face a challenging road ahead. For national security and defense agencies, the story is somewhat better; but many questions remain unanswered. While the 2018 budget proposal includes a $52 billion increase over the current Department of Defense budget, the specifics of how that funding will be applied to science and technology remain vague.
In R&D, the long game is critical. The advances seen today are based on decades of scientific and technological investments often supported by federal resources and their ability to integrate technologies across multiple disciplines. In the current political environment, where the focus appears to be on the near term, R&D managers will be faced with the difficult question of how to balance their investments to meet the current leadership focus while preserving a research pipeline in emerging areas.
Portfolio management, as applied to R&D programs, is no different than any other type of investment — it is all about risk management. It is the R&D manager's job to maximize value by ensuring investment dollars have the potential to generate benefits that outweigh the risks associated with pursuing the endeavor. Each organization is different and exists in a unique context of missions, strategies, goals, stakeholders, pressures and risk tolerance. After working in the government R&D space for more than a decade, I have identified the following five strategies being used to successfully navigate the frequent changes in leadership (both organizational and at the administration level), budget, and research prioritization.
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1. Fast to fail. Typical investment turnover (i.e., churn) for high-performing, federally funded applied research portfolios is about 30 percent. This should be a closely monitored performance metric of any R&D portfolio. Program managers should be encouraged to focus a set amount of investment on higher risk areas and be rewarded for terminating programs earlier rather than later. Clear pass/fail criteria must be set to empower portfolio managers; too many R&D portfolios suffer from never-ending programs that fall under the radar, result in limited impact or are no longer aligned with the core mission.
2. Mission alignment. More so than previous administrations, the current White House has made it clear that it will not tolerate mission creep and will express its displeasure with non-mission-related activities through budget reductions. Successful strategies in this area result from frequent training, disciplined new-start approval processes, and periodic assessment of the degree of alignment between the portfolio and mission objectives.
3. Communications and outreach. Several government R&D agencies have recently boosted investment in their corporate communications departments. As the commercial sector has known for decades, marketing is essential to showcase value and generate new business. In the case of federal agencies forced to justify their existence to Congress — and often looking for collaborative opportunities — communicating their value proposition using up-to-date media is now a critical function. Success stories, transitions, capability highlights, collaborations and high-profile programs should all be professionally documented and distributed through appropriate internal and external communication channels.
4. Retention of institutional knowledge and lessons learned. With leadership generally shifting every four years (even with second-term administrations), R&D agencies are often forced to realign with a new set of priorities and management processes. This disruption can be mitigated through disciplined program and process documentation, centralized data management systems, and succession planning. R&D portfolio managers should work to ensure new leaders are quickly brought up to speed on the current investment balance and its performance history.
5. Institutionalized assessment processes. R&D portfolio assessment and monitoring processes should be transparent, structured, repeatable, aligned with strategic priorities, and linked to both personnel- and program-performance management criteria. Additionally, experience shows significant internal bias if processes do not include external perspectives — high-performing R&D organizations routinely convene panels of subject-matter experts to conduct independent reviews. With these characteristics in place, R&D management processes rapidly become institutionalized, part of the organizational culture and much less desirable to displace in the face of changing leadership and priorities.
U.S. scientific and technological superiority is at a tipping point. The shift from low-skill manufacturing to high-tech occupations in low-income countries like India and China and the numeric advantage of science and engineering graduates in these countries have only been increasing over the last decade. With the current White House push to reduce funding of basic science and focus on later-stage science and technology, the superiority advantage is likely to erode further. At some level, it will be up to R&D portfolio managers to maintain the U.S. science and technology offset advantage through skillful balancing of investments against the near- and far-term, and low and high risk.
Russell King-Jones is a director with Navigant's Research & Development Management team. His primary specialty lies in providing strategic advisory and portfolio management services to politically charged organizations seeking structured and robust processes to review their R&D portfolios.
