Universities are inherently decentralised entities. Each researcher, driven by their intellectual curiosity, chooses their research trajectory. While this promotes individual creativity, it presents a considerable challenge for institutional strategy. At the core of this challenge is the balance between nurturing scientific inquiry and aligning it with the strategic objectives of the institution. Decentralised decision making, while fueling innovation and discovery, complicates the alignment of individual efforts with institutional goals.
An essential task for university leadership is to balance bottom-up intellectual pursuit with the top-down strategic imperatives of the institution. The goal is to foster academic freedom and creativity while ensuring that the whole is more than the sum of the parts. Achieving this requires effective management systems that recognise and respect the intrinsic autonomy of researchers while fostering alignment with institutional strategies. The search for such systems takes on an even greater significance as we wrestle with how to build the social compact between universities and the broader community, and as we look for methods for accounting for the impacts of public investment in research.
The Dilemma of Decentralisation
In the ecosystem of a university, the interplay between top-down strategic intentions and bottom-up research projects and programs can be both enriching and perplexing. It's a complex dynamic that can either fuel an institution's progress or completely thwart its strategic aspirations. On one hand, institutional intentions provide the strategic vision, setting the broad direction for research endeavours. They often reflect the university's commitment to societal impact, and the aspiration to achieve excellence in specific research domains. However, the specificity and prescription of these intentions can stifle the innovation and creativity at the heart of academic research - for example, when a university suddenly withdraws from entire disciplines as we have seen in recent COVID-inspired firings and restructures.
On the other hand, bottom-up research opportunities reflect the idiosyncratic interests of individual researchers. They encapsulate the spirit of academic freedom, underpinning breakthroughs and advances in diverse areas. Nevertheless, without a coherent alignment with the institutional strategy, these diverse paths lead to fragmented potential, causing the organisation to fall short of achieving its strategic goals, and limiting the colelctive impact they could achieve.
In this context, well-designed management systems becomes the linchpin to both scaling the best of what comes from the below into strategic priorities, while also aligning the bulk of the isntitutional efforts towards institutional aspirations. Management systems are tasked with the complex mission of fostering a productive dialogue between strategic intent and research interests. This system should not impede the spirit of academic freedom, but instead should ensure that it flourishes within the institutional strategy. The operationalisation of such a system is not a trivial task, and on the whole it is done relatively poorly in most Australian universities.
Management Systems: The Glue of Organisational Structure
Management systems can be thought of as the glue that binds together the disparate elements within an organisation's structure. In the context of a decentralised, research-intensive organisation like a university, management systems are critical for achieving balance between autonomy and strategic direction. They offer a mechanism to coordinate and orchestrate the complex dynamics of the institution, harmonising the seemingly divergent forces of strategic intent and research autonomy.
The strategic power of management systems lies in their ability to transform bottom-up initiatives into strategic intentions. These systems create channels for researchers' creative energy, diverse skills, and research interests to be recognised, valued, and integrated into the university's strategic canvas. They nurture a culture of innovation, encourage researchers to explore new ideas and, simultaneously, ensure that these explorations are oriented towards the institutional strategy.
Conversely, management systems also influence researcher behaviors by echoing top-down strategies within the academic environment. They do this not by exerting command and control, but by subtly shaping the institutional context in which researchers operate. They set expectations, provide guidance, and foster an environment conducive to strategic alignment. This could involve creating incentives aligned with the strategic goals, providing resources for strategic research areas, or facilitating cross-cutting collaborations that enhance strategic research activities. It is not, I want to emphasise, the current trend towards 'strategic pillars' or 'themes' that has domiated so-called strategy in recent years. These are simplistic overlays that have little to no practical value in most cases.
By contrast, management systems integrate bottom-up initiatives into strategic planning and to imbue research culture with top-down strategic intent. They are complex, highly cusotomised, and require lots of tinkering before they pay divdends.
Case study: Roche
To get a better idea of what an effective management system looks like, we turn our attention to Roche, a leading multinational pharma company that provides an exemplary analogy for universities to look to - a decentralised research and development (R&D) organisation that is effectively moderated by a robust management system.
Roche employs globally >100,000 people, with an annual turnover of >$64b. In 2020 it spent over US$13b on R&D, making it one of, if not the world's largest spender in pharmaceuticals, depending on the metric. For comparison, Australia's university sector spent AU$12.7b on R&D in 2020, and employs around 130,000 FTE.
According to CEO Severin Schwan, "It's one of our principles to decentralise and give people the freedom to be creative". He goes on to say:
the one thing I know for sure is that those furthest from the science are the most likely to get it wrong. You need committees, of course, to gather information, but those closest to the action will always have the best hunch, and at the end of the day it’s a single individual who has to be accountable. In my experience, the quality of a decision gets worse the higher up it is delegated.
As he succinclty puts it, "[s]trategies at Roche follow the science, but the problem is that you just don’t know where it’s going to take you." This could all be easily transfered to the case of Australia's universities.
And yet, despite having no global head of R&D, and their labs operating in relative autonomy, even to the point of duplication, Roche has consistently excelled in delivering novel diagnostic and therapeutic solutions. This autonomy extends to their collaborations with some 150 independent labs, where they refrain from imposing specific research agendas.
In this seemingly chaotic setup, management systems play an indispensable role. A notable component of this system is Roche's late-stage portfolio committee. This committee is pivotal in reviewing the progress of research initiatives. When a therapeutic shows promising potential for commercialisation, the committee steps in to evaluate and decide whether to proceed with the expensive and complex late-stage commercialisation process.
Should a project receive the green light, one of two senior executives assumes sole responsibility for steering it through the remainder of the commercialisation journey - the head of global development or the head of product strategy. This allows for a streamlined decision-making process, accelerating the pace from research to market and ensuring that resources are focused on the most promising products. It also allows Roche to take advanatge of efficiencies at the expensive end of commercialisation.
Roche's model is akin to an upwards funnel, allowing a broad range of autonomous explorations at the base and gradually refining the focus towards the apex of commercialisation. This illustrates how a well-orchestrated management system can harness the power of decentralisation, while maintaining strategic alignment and operational efficiency.
Lessons for Universities
Universities, much like Roche, operate on a highly decentralised structure, where the synergy of myriad parts contributes to the overall organisation's effectiveness. Drawing from Roche, universities can glean valuable insights on how management systems can facilitate an operational balance between the institutional strategic intentions and the autonomy of researchers.
The lesson is the value of establishing clear, efficient, and flexible management systems (and we are not talking about shared services, here). Similar to Roche's late-stage commercialisation committee, universities could, for example, implement institution-wide strategic committees or bodies to assess and support promising research that requires significant financial backing to get to the next stage of development. These committees would serve as facilitators, fostering strategic alignment - both upwards and downwards - without stifling the autonomy and creativity fundamental to academic research.
Moreover, the role of senior executives at Roche offers an interesting parallel to senior academic leaders. As custodians of research direction, they should be actively involved in shepherding the strategic course of research, especially when it promises substantial impact.
Furthermore, universities must foster cross-cutting capabilities across their organisational structures. Such capabilities include enhancing interdisciplinary collaborations, refining resource allocation processes, and refocusing their hiring practices to align with institutional startegy, not just scientific excellence. These cross-cutting management practices can help universities realise their potential as more than just the sum of their parts.
With effectively implemented management system, universities can harmonise their decentralised structures, balancing researcher autonomy with strategic alignment, and thus amplify their overall impact. By balancing these often counter-vailing forces, they can gain the significant organisational efficencies we know are possible from studies, but also from what we have seen with our own consulting work with universities building these capabilities and systems with clients.
In the top-down, bottom-up dynamic of decentralised research organisations, the role of management systems is crucial. But at the very heart of these systems lies a truly effective strategy, which is not merely a set of predetermined plans but an ongoing, adaptive process of decision-making. It recognises strategy as both intended and emergent.
While the concept of 'strategy' might evoke images of documents filled with long-term objectives and elaborate blueprints, it is in fact a living, breathing entity . It's not a static, once-in-a-while activity confined to annual reviews or strategic planning cycles of a few years. As someone put it to me last week when discussing our approach, "it's about sensible choice-making, not wish-making".
A strategy in this context thrives on a culture of continuous reassessment and recalibration. It feeds on the bottom-up initiatives and navigates through top-down intentions, blending the two. It allows for flexibility, resilience, and innovation in the face of shifting terrains. Hence, the most critical management system in these organisations is an authentic, adaptive strategic process - an ever-evolving guide for continuous, informed, and sensible choice-making.
These systems serve as the glue that holds the disparate elements of the organisation together, allowing it to function as a harmonious whole rather than a mere collection of autonomous parts. They are the enablers of strategic alignment, directing individual creativity and autonomy towards the broader institutional mission.
An effective management system allows an organisation to capitalise on the strengths of decentralisation - namely, the freedom for researchers to explore and innovate - while minimising its drawbacks. By providing structure and strategic direction, it ensures that individual research programs align with and contribute to the organisation's overarching strtageic goals.
If a company like Roche - which is the size of our entire university sector - can effectively develop these systems and thrive in the process, it doesn't seem like too much to ask that at least one of our universities can do the same.