Strategic Research Investment & Research Leaders

Strategic research investment is an area that forces the engaged research leader to navigate the nexus between faculty and the administration.

Presented below is an adapted excerpt from chapter 7 of my book, Catalyzing Research: Research Leaders and the Complex Faculty/Administration Interface. (Previous articles in Medium’s Catalyzing Research publication presented adapted excerpts from the book’s introductory chapter and chapters on research leaders [part 1|part 2], core research facilities, research centers and institutes, & research development.)

Strategic Research Investment

Research enterprises require significant operating funds. They must cover the direct costs of research and the indirect costs related to conducting research, a share of which typically accompanies direct costs on research grants and contracts awarded to an institution. At the same time, they need sizeable additional funds to operate their research enterprises.

Ideally, the vast majority of an institution’s research expenditures will be funded by external sources, but as the most recent available data reveals, over one-fifth (22%) of academic research expenditures come from the institutions themselves, the highest level ever.¹ These institutional resources support a range of costs, including some direct costs for research and under-recovered indirect costs, among others.

What is meant by strategic research investment?

The phrase, as used here, refers to the use of resources available at the research organization to systematically invest in, or fund, activities at the institution that are believed to benefit the research enterprise in a meaningful manner. For such investments, it is reasonably expected that there will be a positive return on investment, although not necessarily in a financial sense. For example, research findings, discoveries, publications, presentations, or preliminary data expected to make future grant proposals more competitive may all represent positive returns that stem from a strategic research investment at the organization.

Borrowing a definition from the general strategic management literature:²

An issue, decision, opportunity or challenge is “strategic” if it is likely to significantly alter the trajectory of future performance.

A research investment is similarly strategic if it is likely to significantly alter the trajectory of future performance of the organization’s research enterprise.

Strategic research investments can be made at numerous locations within a research organization, including at the chief research officer level and within departments, divisions, centers, institutes, colleges, and schools. However, institution-level research leaders have unique investment opportunities and expectations given their role, charge, vision into the overall research enterprise, and likely access to institutional funds available for strategic investment.

Importance to the Research Enterprise

Research, by its nature, is an inherently inefficient process. Research organizations necessarily invest to build up research enterprises and infrastructures — defined broadly to include faculty and other key research and administrative personnel in addition to physical buildings, infrastructure, and equipment — and support them in the hopes that they will be successful and productive, both in terms of research outputs and the ability to secure significant external funding.

Resources available to research organizations and research leaders for this support include but are not limited to:

• Recovered indirect (or facilities and administrative) costs from external research grants and contracts
• Distributions from institutional endowments
• State appropriations or other funding to an institution
• Direct costs associated with a limited set of external research grants and contracts focused on research capacity- and competitiveness-building
• Other sources of discretionary institutional investment — for example, licensing revenues from a successful intellectual property portfolio or a share of clinical revenues designated for reinvestment in the research enterprise

Recovered indirect costs from external grants and contracts represent partial recovery of real, expended costs associated with conducting research at an organization. They are uniquely valuable at many institutions in that they can be used in discretionary, strategic ways to invest in strengthening the research enterprise and incentivizing research. Of course, such use of these funds requires that there are other funding sources available to support the indirect costs of research.

Complexity at the Faculty/Administration Interface

Strategic research investment is an area that forces the engaged research leader to navigate the nexus between faculty and the administration. Properties associated with strategic research investment that clarify this area’s position at the faculty/administration interface include:

• By design, strategic research investments affect research, which is largely the purview of faculty at the organization.
• Strategic research investment decisions (for example, for internal seed grant competitions) are often made by faculty committees or groups.
• Resources at the institution available for strategic research investment are generally controlled by the administration, with some exceptions (for example, research incentive funds that might be allocated from recovered indirect costs to individual faculty accounts for local investment in activities in support of the faculty member’s research program).
• Strategic research investments involve some degree of regulatory and compliance management, which necessitates administrative expertise and involvement.

Potential Risks and Rewards

Research leaders are often intimately involved in strategic research investments — both out of the necessity of their roles and their experiences and interests in related areas. This said, there can be times when research leader inaction in certain strategic research investment areas can lead to potential research enterprise and organization risks. Focused research leader attention on the organization’s strategic research investments can lead to creative, better tuned, and more effective investment decision-making.

Not included in this excerpt are specific examples in the book from my consulting experiences that highlight:

• Potential risks of research leader inaction — specifically: (1) misaligned research investment resources, and (2) suboptimal seed grant mechanisms
• Potential rewards from research leader attention — specifically: (1) interinstitutional research collaboration, and (2) more holistic investment in the research enterprise

References

1. National Science Board. Science and Engineering Indicators 2016. Arlington, VA: National Science Foundation; 2016.
2. Warren K. Strategic Management Dynamics. West Sussex, UK: John Wiley & Sons, Ltd; 2008:17.

This material is excerpted and adapted from the book, Catalyzing Research: Research Leaders and the Complex Faculty/Administration Interface.

RAND HALEY has devoted his career to helping organizations strengthen their scientific research enterprises. He has partnered with leadership and faculty at a wide range of leading and emerging research institutions and led research strategy and management projects at over 50 organizations.