4

Research Restructuring and Assessment at Ford

John P. McTague

If you look at Ford as a company, it has some characteristics in common with the other organizations being discussed today, and some things that are very different. One important difference is that to a first approximation, we have one product and its main attribute has not changed over the years. The automobile is something that provides a way of moving people and goods from place to place.

Characteristics that are the same at some level are complexity and scale. Ford is a very large company. It is the second largest company in the United States. The economies of scale are extremely important to this business, probably more important than to any other business in the world.

The other characteristic of an automotive company, which it shares with some companies but which makes it different from others, is that the automotive business is more appropriately characterized as a systems integrator than as a full-scale producer and developer of commodities. It is more like the aircraft business than it is like the microelectronics business, for example. And that has been true throughout its history.

The company is now 92 years old, and if you look back to the beginning, or almost to the beginning, what Ford has been is an extremely efficient mass manufacturer of personal transportation worldwide. It has the broadest possible customer base. The first Henry Ford had a very deliberate vision of selling vehicles to everyone, not just to the elite.

The business has always been a systems integrator, taking brake systems from somebody, electrical systems from someone else, glass from somewhere else, and having them put together. At one time, Henry Ford owned rubber plantations in Brazil, coal and iron mines in Minnesota, a shipping fleet to transport all of that to Detroit, a steel mill, an electric power plant to power the steel mill, a glass plant to make the glass for vehicles, a paint company to produce the paint, and so on. The raw materials went in at one end of a big complex, and cars came out at the other end. At all stages of their development, automotive companies have been systems integrators.

Is the vision or the broad statement of what we are still valid 90 years later? The answer is yes. Of course, the real question is what you do about today's business and research environment, which as we have heard, is very traumatic for almost everyone in industry.

PHASES OF CORPORATE RESTRUCTURING AT FORD

The company has gone through several phases, although its general vision and character have always been the same. The period from the founding of the company until World War II had two primary characteristics. The first was a relentless attempt to decrease manufacturing costs and design costs, sometimes with good methods and sometimes with bad. For example, one of the ways of reducing design costs is to not design very often. That is what happened with the Model T. The Model T was a great success when it first came out. Fourteen years later, it was no



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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? 4 Research Restructuring and Assessment at Ford John P. McTague If you look at Ford as a company, it has some characteristics in common with the other organizations being discussed today, and some things that are very different. One important difference is that to a first approximation, we have one product and its main attribute has not changed over the years. The automobile is something that provides a way of moving people and goods from place to place. Characteristics that are the same at some level are complexity and scale. Ford is a very large company. It is the second largest company in the United States. The economies of scale are extremely important to this business, probably more important than to any other business in the world. The other characteristic of an automotive company, which it shares with some companies but which makes it different from others, is that the automotive business is more appropriately characterized as a systems integrator than as a full-scale producer and developer of commodities. It is more like the aircraft business than it is like the microelectronics business, for example. And that has been true throughout its history. The company is now 92 years old, and if you look back to the beginning, or almost to the beginning, what Ford has been is an extremely efficient mass manufacturer of personal transportation worldwide. It has the broadest possible customer base. The first Henry Ford had a very deliberate vision of selling vehicles to everyone, not just to the elite. The business has always been a systems integrator, taking brake systems from somebody, electrical systems from someone else, glass from somewhere else, and having them put together. At one time, Henry Ford owned rubber plantations in Brazil, coal and iron mines in Minnesota, a shipping fleet to transport all of that to Detroit, a steel mill, an electric power plant to power the steel mill, a glass plant to make the glass for vehicles, a paint company to produce the paint, and so on. The raw materials went in at one end of a big complex, and cars came out at the other end. At all stages of their development, automotive companies have been systems integrators. Is the vision or the broad statement of what we are still valid 90 years later? The answer is yes. Of course, the real question is what you do about today's business and research environment, which as we have heard, is very traumatic for almost everyone in industry. PHASES OF CORPORATE RESTRUCTURING AT FORD The company has gone through several phases, although its general vision and character have always been the same. The period from the founding of the company until World War II had two primary characteristics. The first was a relentless attempt to decrease manufacturing costs and design costs, sometimes with good methods and sometimes with bad. For example, one of the ways of reducing design costs is to not design very often. That is what happened with the Model T. The Model T was a great success when it first came out. Fourteen years later, it was no

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? longer such a great success. The notion was to drive down costs to make the product more affordable, to increase both the customer base and the size of the company. It also increased the problems. The second phase was to manufacture where the customers are worldwide. By the mid-1920s, Ford had plants in about 20 countries around the world. In those days, of course, with transportation and communication being so inefficient, that basically meant that you had 20 companies around the world somewhat linked together. The research contribution in this phase of the business really was in materials assessment, testing the properties of metals and plastics, and developing them. Early on, for example, Ford used aluminum block engines, but unlike what was going on at General Motors during this period, the research was not so much on how to make a new product, or a new propulsion system. The research emphasis all along has been attention in research to manufacturing efficiency. Research until after World War II was, by and large, a decentralized activity in the company. After World War II, the next phase basically involved styling and feature innovation—cruise control, air conditioning systems, power steering, tail fins, and the like. In the mid-1950s, research was organized as a central enterprise. Engineering also received a big boost at that time. It is not clear exactly why that happened, but it was able to happen because the company went public and there was a massive infusion of funds into what was basically a bankrupt company. Research was founded as a central division in the company. It very deliberately went in the direction of “Let a thousand flowers bloom. ” That is, hire smart people and turn them loose—the kind of mistake that was, I think, almost universal with corporate America at that time and characteristic of research in the country in general. It is important to remember that Ford is a company that makes automobiles and nothing else, not linear optics, superconductivity, or magnetic resonance. Some of those fields are relevant; some of them are not. The notion was that if you hire smart people, somehow something good would come out of it. But do not tell them what to do. Well, one of the results of being prosperous and satisfied is that eventually you may be neither. The next crisis occured in the 1970s when the oil shock came about and the Japanese learned how to make better cars more cheaply. They discovered what Henry Ford had tried to do in 1903 and the fact that they discovered it, by the way, was not an accident. The real turning point was that Dr. Toyota, back in the 1950s, spent six months in the Rouge plant doing nothing but observing how Americans made automobiles, and he was very grateful. So, the Japanese learned how to run our business, in what I call phase one, better than we did. At that time, there was obviously a major response in the corporation, a very traumatic period, much like what has occurred more recently at IBM and AT&T. There was a major redirection of research. A central corporate research committee was set up, chaired by Lee Iacocca by the way—who has been president of the company and chief financial officer, the head of manufacturing, the head of engineering, the head of product development, and the head of what is called technical affairs—to try to decide what to do, particularly in terms of research. One objective, obviously, was to cut costs. A second was that for the first time, the research department asked its internal customers what they really wanted from the research lab, their top 10 list. The third objective was to centralize the research that was still going on around the company in various divisions—the glass division, the plastics division, the paint division, et cetera—back in the research department. Also, the advanced engineering part of the company was combined with research under technical affairs, with the goal of trying to get better throughput. The idea was to find out what really needed to be done from the corporate point of view and to overcome some of the internal barriers that existed back in the 1970s. In the 1980s, there was an attempt to get even more formalized—to formalize a total corporate technology strategy, as opposed to just sending a letter out to the heads of the various operations to ask them what they wanted. The idea was not only to have a strategy, but to try to improve internal working relationships. A point that was emphasized quite heavily, and has been at least over the last 10 years, is how to develop technical people and researchers to their full potential. Another thrust was to have the technology process focused on a product attribute leadership strategy (PALS), which basically decided what you want to be. Do you want to be very good at ride and handling, for example? Do you want to be the world's leader in styling? About 10 of these were set out to determine where we wanted to be—where we were willing to be a follower, et cetera —to be used in the strategy process. This was arrived at by consensus by everybody in the company, from the chairman down, and reexamined annually. Another process that became extremely important at that time was benchmarking the competitors' technology. What is General Motors doing? What are Toyota, Nissan, and Volkswagen doing? What is Mercedes doing in its product that we could look very carefully at? Where are they, and how can we tell where they are heading from what they have done? It became very important to benchmark the competitors ' technology in order to look at where Ford should be putting its efforts.

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? From a structural point of view, as far as the advanced activities of the company were concerned, there was what is called a technical affairs committee, which I chaired, whose members were the chairman of the company, the president, the heads of all major operations, and all of the senior technical people of the company. The technical activities were then organized according to what were called “theme groups.” These were oriented around major company technologies: power trains, manufacturing, electronics, and vehicle systems. Each of these was chaired by a vice president of the company. Underneath that structure was what were called technical forums. Transmission is an example; all of the technical transmission people around the company gathered to decide where transmissions were, where they should be, what their programs should be. They also examined how they compared to the competition, what resources they needed, and how they could make trade-offs in programs around the world in the different organizations of the company to add a unified approach to transmissions. At the same time, Ford organized what was called a technical excellence committee, in which the chief technical people around the company —not necessarily the top managers, by the way—assessed the position of the company in terms of the development of people, recruiting. They would ask questions such as, Does the company have the right physical infrastructure for the technology? They would make recommendations to the top management of the company, and that had an enormous impact. Also at the same time, I organized a group called the technical succession management group, which consisted of the top operating vice presidents of the company. This group looked at technical personnel around the world—how they were developing, how the company could get better interchange of people, how we could identify top talent and make sure that management was aware of who the best technical people in the company were, who could handle managerial roles, et cetera. We had to make sure that we had an advancement process for people who were interested merely, so to speak, in technology and not necessarily in general management of the company. That process basically, if you want to characterize it, was a bottom-up process, with the technical people feeding into the top of the company and saying from their perspective what the company should be doing. That was a very new thing for the company, which had always been driven from the top down, mainly by the financial part of the company, the Robert McNamaras, for example—to bring up someone who is in the news these days—and the Lee Iacoccas. Today, and by “today” I mean the last year or so in which the company has undergone probably the biggest change in its history, the goal of the company is to integrate globally, not just to be everywhere in the world but to be integrated everywhere in the world. This involves co-locating people who are involved in the various enterprises related to producing a vehicle, and to not just benchmark the technologies of others, but to know how they achieve them. It is of greater interest to us to know how General Motors, or Toyota, or Volkswagen, or Xerox, or AT&T goes about doing its business than to know what these companies think their product will be five years from now. The stable thing is the process; the products continue to change. Thus, we have spent an enormous effort over the last couple of years in benchmarking how our competition does business. THE CURRENT RESEARCH ORGANIZATION AT FORD Recently we have tried to organize the technology process not around technical systems and subsystems, such as power trains, but around what the customer sees in the product. For example, one of the characteristics that a customer considers important is how the vehicle sounds—the so-called noise vibration and harshness. Ford has organized its technology processes around customer attributes, as opposed to the technologies themselves. Figure 4.1 shows Ford's organizational structure. FAO is Ford Automotive Operations. The main thing we do is develop vehicles and manufacture them, and this portion of the organizational chart focuses on corporate research. Instead of being Ford of Europe product development, Ford of the United States product development, Ford of Australia product development, et cetera, there is one product development organization worldwide that is organized according to vehicles. There are five so-called vehicle centers (VCs); for example, there is a vehicle center that develops all the small and medium vehicles around the world. It happens to be located in Europe, but one organization develops all the vehicles in a certain category for the entire world. The organization may be distributed geographically, but it is a single organization. There is one manufacturing organization, which is linked to each of the vehicle centers, and at these nodes there are people and organizations located physically with the vehicle center. In addition, there are advanced vehicle technology (AVT), which does the early systems development for all vehicle systems worldwide;

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? FIGURE 4.1 Organizational structure at Ford. FAO, Ford Automotive Operations; PD, product division; VC, vehicle center; AVT, advanced vehicle technology. purchasing; and technical affairs, which includes research and some other technical activities. These people form the executive committee for Ford Automotive Operations. Interestingly enough, if you look at this chart and look at history, the fellow who heads the entire enterprise, which is about a hundred-billion-dollar-per-year business, is a Ph.D. nuclear physicist who came out of the research lab. The group vice president for manufacturing is an engineer who came out of the research lab. The head of global advanced vehicle technology is a physicist, who came out of the research lab. I am a chemist who—at least for Ford's purposes—came out of the research lab. The vice chairman of the company came out of the research lab. He is one of two inside board members of the company, the chairman and the vice chairman. There is another person who is not shown on the chart, the vice president who heads new market development, who is a Ph.D. electrical engineer, and his early development was in the research lab. So, out of the 40 corporate vice presidents or higher, six of the people either started or worked in the research lab. This experience is something that the corporation has valued. You can hire some extremely good people through research that you do not have the opportunity to reach otherwise. If you ask what the point of all this technology is, it is basically to have the right technologies on the right vehicles at the right time. That sounds obvious, but it is important to state the obvious every now and then. As I indicated above, we have five vehicle centers, all with worldwide responsibilities per class of vehicles, plus manufacturing operations, who together decide what we want to be doing in our business. What kind of vehicles do we want to turn out? What can we afford to do? How we are going to actually make the vehicles? How are we going to improve our manufacturing capabilities? What are our goals for that? We also have technology councils, which as I mentioned are organized around consensus major customer attributes. They try to translate general concerns into what is understandable at the technical level of the company and to formulate that into what we call a technology-cycle plan to match the vehicle-cycle plan. This looks at what the company wants to develop on a certain time scale. It makes sure that we test technology in real vehicles, so-

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? called technology prove-out vehicles. They are used to test, for example, how to do the best possible job in terms of fuel economy. What we are trying to do is focus on what the product actually should do. How do we do this? Well, we have an established time scale. Every January we start trying to figure out where we want to be with respect to things that customers may want over the next 10 years. We also examine what the corporation needs in terms of manufacturing efficiencies and the like. We try to translate that into technology strategies, by consensus between the technical community and the rest of the company, which ends up in advanced project portfolios. We establish our expectations and how we measure whether we are getting the right results and product. There is a natural annual cycle for that. Who are the players in this process? As Figure 4.2 shows, we have what is called a strategic technology board—consisting of the president, the automotive operations, and the major heads of all the technical activities around the company—which I chair. The technical organizations around the company are distributed in advanced vehicle technology, advanced manufacturing technology, automotive components, technical affairs, electrical and fuel handling, glass, the design center, and so on, who interact as a group monthly, to make sure that their technical efforts are aligned with what the vehicle centers want. The vehicle centers and the technical community together work out what they should be doing after the general strategy has been set by the strategic technology board. Then they go to the technology councils, which are organized around customer requirements, to translate those requirements into something that the engineers can understand. FIGURE 4.2 “Players” in Ford's technology deployment process. AVT, advanced vehicle technology; AMTD, advanced manufacturing technology division; ACD, automotive components division; EFHD, electrical and fuel handling division; VC, vehicle center.

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? FIGURE 4.3 Distribution of Ford's research portfolio. VC, vehicle center. It was a big shift for the company to be organized around attributes and systems as opposed to technical specializations. It is going to be very interesting to see whether that is, indeed, more effective. It certainly is oriented more along what we want to do. We do not know yet whether it is going to be effective because this was just put in place in the last year. The typical technology council—for example, noise vibration and harshness—has representatives from all of the five vehicle centers, manufacturing, research, and advanced manufacturing. These are the technical specialists of the company, who are a separate group in some sense and who are represented in all the technical decisions. Then we try to set some sort of metrics for what we want to produce. Some of the metrics focus on how we do things internally and some on the end results. Figure 4.3 shows the distribution of the company's research portfolio targets. A majority, but not a dominance, of projects is sponsored by the internal end users, the vehicle centers, the people who develop the small vehicles or the manufacturing operations people who actually do the manufacturing. Roughly 10 to 15 percent of the projects should be in areas of what you might call emerging technology. About the same amount should be in areas of methodologies —for example, crash simulation—that are not direct, but that are related more to the processes by which these vehicles are produced than to the attributes of the vehicles themselves. The final 10 to 15 percent, roughly the same number that Jim McGroddy gave, is devoted to areas that are too long term or too risky for the other internal corporate end users to sponsor. The fundamental research projects are decided more at the local research lab level. What we look for the technical community to provide every year to the strategic technology board is, once again, an assessment of where we are. We want to benchmark what the competition is doing and predict where we will be relative to them in the future, rather than where we are now. We need to make sure that we have decided what customer attributes we want to be leaders in for the next product cycle, say the next 10 years, and then to determine how we align what we are doing in technology with the vehicles that are coming out over those next 10 years. LESSONS FOR OTHER RESEARCH ORGANIZATIONS A major lesson we have learned is that the development of people is a prime technical goal. It is not just whether you make a better transmission. In fact, it is more important to make sure that you are developing better technical people who can make transmissions. This is a big effort that has not just resulted in better transmissions; as I mentioned above, the top management of the company now is thoroughly populated with people who came

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? from a very small part of the organization. Ford employs a third of a million people. The research lab has around 700 people, but one out of seven top managers of the company has come out of that small organization. Another thing that we have found to be very important is to make sure you know where you are going. What does success mean to you? That, by the way, is an interesting question in terms of the difference between the government and the private sector. The greatest difference that I have found between them is that in the private sector everybody knows the general purpose of the organization. For example, at Ford it is easy to say that our purpose is to make vehicles that customers want to buy and to make a profit from them. You can define broad strategies around that. In government, the most difficult part is deciding what its purpose is: to decide what you want to be when you grow up, so to speak. For the National Science Foundation, the hardest part is to decide what success is in research and how it fits in with the overall goals of government. Once you do that, it is not as difficult to decide what the metrics are. And as mentioned earlier, the metrics do not necessarily have to be quantitative. The easiest methods are quantitative, but they are often the least relevant. The third lesson that I would impart is to benchmark the competition. To do this you have to decide what the competition is. Is the competition the way France manages technology in science or how Germany or Japan do it; or is it what the private sector does versus the public sector; or is it what one government agency does relative to another government agency? You ought to establish what you consider the competition to be and how it is doing its business. The fourth lesson is to obliterate walls. What we have done at Ford is to co-locate just about everybody. For example, in research, the main research managers all report two ways. They report up into research and they report into some piece of advanced technology or manufacturing or somewhere else. They have at least two homes. The final lesson is to work constantly on honing your processes, not just your product. Those are the things that we try to work on at Ford. GENERAL DISCUSSION DR. LINEBERGER: John, you have presented a picture of a restructuring that is some years further along than those we have heard about earlier. Do you have a sense of how long it takes before we see a steady state? DR. McTAGUE: Well, the biggest cultural change that was central to the research and technical communities occurred in the 1970s. The reorientation of the research laboratory in terms of capturing “ the minds and hearts,” so to speak, probably took six or seven years, and it was extremely traumatic. People who came in with a given set of values were in many cases told that they had the wrong set. Then there was the interesting question of whether we could convert these exceptional people or whether they should go elsewhere. I would say that the success rate might have been 50:50. Maybe they were both successful, but the capture rate was about 50 percent. The people who became embedded in the company, though, really have changed the company. I do not know of another corporation that has the kind of structure that Ford does with so many top management people coming out of the research labs. DR. LINEBERGER: That, in fact, is part of the reason I am asking this question. When I look at the remarkable permeation of research people throughout your corporate structure, the question I would like to ask you is the following: Are you currently carrying into the research division the seeds for the next three generations so that this process can continue to recreate itself? That was the steady state I was looking for. DR. McTAGUE: The answer is I hope so. Unlike most research labs, we are expanding significantly and on a worldwide basis. Whether we are still hiring the real outliers, the truly exceptional people, is a good question. We try very hard to make sure that we do. Whether we are getting as many exceptional people applying to the organization or are identifying them is always the difficult question. We are not getting as many people as we used to who have devoted their graduate educations to esoteric areas. My guess is that we have not hired very many nuclear physicists recently. I am sure we have hired some, but probably not as many as we used to, and that is probably because they are not coming to us. I mentioned the people at the top of the company, but if you look at the next layer down, the head of advanced manufacturing in Europe came out of the research lab. The head of the next layer down in advanced vehicle technology is a materials scientist, who came out of the research lab. The whole computer-aided engineering effort in the company, including its management, was a spin-off from the research lab about seven or eight years ago, shortly after I came. So, that whole culture is research lab people. It is true, basically, at every level. DR. HACKERMAN: After five years, do they still consider themselves physicists and chemists and electrical engineers, or something else?

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? DR. McTAGUE: That is a good question. If you ask the head of Ford Automotive Operations, who is a nuclear physicist, whether he is a physicist, he would say no. He is extremely careful to make sure that as few people as possible know that he has a Ph.D. I think that was a defense mechanism at one time inside the company. But now it is more to let people know what he really is, which is the head of Ford Automotive Operations. DR. SCRIVEN: Ford has long been international, and I look back at your description of formalizing the corporate technology strategy and process. I think I see a contrast with what I read in the NSF strategic plan. You brought out, if I can translate, that benchmarking international science and technology commitments, trends, and policies elsewhere would be parallel to your benchmarking of competitors. DR. McTAGUE: If that is who you think the competition is, yes. DR. SCRIVEN: Also, the development of people and their performance might parallel identifying and tracking scientists and engineers who are impacted by the National Science Foundation, not only in the United States, but back in their country of origin, where I find many of them leading the competition. Would you comment further on this attempt to draw parallels? DR. McTAGUE: Developing strategies and goals in the government is a precarious business. It is more precarious than it is in the private sector, as I mentioned, because people argue about what the purpose of government is. People inside government argue about it. The voters argue about it all the time and constantly change their minds. The most organized attempt at a strategic plan that has occurred in the government was when Bernadine Healy headed the National Institutes of Health (NIH). Remember Bernadine Healy? The community really destroyed the process because I guess it was not involved in the process early enough. Scientists were not convinced that it was good for them, as well as being good for the country. By the way, what was good for them, of course, was good for the country. It was so obvious to them. So, the most difficult task for NSF, as I mentioned, is to decide what it means to be successful in science. Is it to be successful for economic purposes? Is it to be successful for aesthetic purposes? Is it both? Is it to be successful because you are developing very good people who have influence on other goals? Is it to capture very good people from other countries to enrich this country? Is it to capture good people from other countries so that they will come here and then go back to their countries and become consumers of our products? What is it that you are after? Then you have got to decide who your competition is, what you can learn from your competition, and how you can be ahead of the competition. One of the things that NSF might decide is that its competition is NIH. One of its competitors is. NIH is certainly a better competitor at the congressional trough than NSF. Its budget over the past 20 years has been growing at easily double the rate of NSF. Is that a measure of success, by the way? I do not know. NSF has to decide whether its fraction of the pie is a measure of success. DR. BUSECK: You described an interesting pattern of success for Ph.D. scientists in the corporate world. I would be interested in knowing how smooth the transition is and what the board does to facilitate this. DR. McTAGUE: We work very hard at making it a smooth, and not just a passive, process. For some people, it is a passive process. They just happen to ask, “What am I doing in this laboratory studying Raman spectroscopy of molecules on surfaces when this company is making automobiles? I want to make automobiles.” Some people do that, and then what you must do is make sure that you can find a home for them where they can get their feet wet. But there are other people who may not yet be aware of that, and you want to make sure that they are aware of these options. So, our technical development process looks at that annually. One of the things we discuss with our researchers is where they want to be and what their options are. There also is another discussion that takes place in the technical community as a whole about a given individual. For instance, through this process we might identify an individual who really would be very good if he were running advanced manufacturing in Europe, and then we would try to convince that individual to move into another career. So, we try to have an active process, as well as the passive process, and to make sure that the operations units want people from the research lab. They all want them because often they are headed by people from the research lab and they realize that there are a lot of intelligent people there. DR. SANKEY: This is more a comment than a question on the benchmarking issue. I think that an alternative point of view should be looked at. NSF is not really a competitor of anyone. Defining competition for NSF, I think, is not what should happen in the sense that corporations have competitors that are trying to get market share and that sort of thing. NSF is not trying to get a market share. It is very difficult to assess its competitors in terms of countries. We have to remember that the science community is an international community. It was an international community before NSF was in existence. So, a lot of its goals and missions should be based on that configuration

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RESEARCH RESTRUCTURING AND ASSESSMENT: Can We Apply the Corporate Experience to Government Agencies? of the science and engineering community. Rather than trying to find competitors for NSF, we should be careful in making sure that the welfare of science and research is not just for NSF. It is for the world. So, NSF has to think about its mission first in terms of those types of goals and the goals of science for both national and international objectives, rather than trying to find a competitor. DR. McTAGUE: I could not disagree with you more, and let me explain why. First, from a crass point of view, NSF is a competitor and it is competing. If it does not want to compete, it is going to die. It is going to die, first of all, fiscally. If it does not convince the congressional appropriations committees that its support of research has importance alongside the support that those same committees give to the National Aeronautics and Space Administration (NASA), it will not get the funding. A dollar that goes to NASA is a dollar that does not go to NSF. It is that simple. It goes through exactly the same committees. If it does not compete for the advanced research budget in the government, it will not get that budget. That is very, very clear. You can say that you do not like to compete or that we are above competition, but you are not above competition. The second point has to do with other forms of competition. NSF surely, when it supports nuclear physics, wants to make sure it is supporting the very best possible nuclear physics. It does not want just to be a part of the world pool of nuclear physics. It wants to support the very best nuclear physics that it can support, or the very best in other fields of research that it can support. It is competing with others as a benchmark. Is our support of oceanography as good as Japan's support of oceanography, for example? It has to take a look at that. DR. SANKEY: That is exactly the point I am trying to make. Sure, NSF is competing with NASA, the Department of Energy (DOE), and the Department of Defense (DOD) for support, but these agencies need to talk together and emphasize their differentiation of missions. I do not think NSF's mission is the same as DOD's, NASA's, or DOE's, and I do not think that they are competing for the same dollars. Politically speaking, perhaps, they are. DR. VERMONT: Again, this is more a comment. My name is George Vermont and I am with the Office of Science and Technology Policy. But before you hold that against me, I was a research director in the chemical industry for about 35 years. I just want to follow up on a comment that was made about taking industrial metrics and rearranging them to measure fundamental research. A committee of the Industrial Research Institute, chaired by Bob Wood, has a list of some 50 or 55 metrics now that are used to measure industrial R&D. I have looked at those and I think most of them, if you have some creative people, could be adapted to fundamental science. I think that it is very important for people to start looking at some of these and to try to adjust them for nonindustrial R&D. DR. McTAGUE: But it is important that they not be imposed. One thing that must be learned about metrics and goals is that everybody has to accept them; otherwise, all you will do with them is measure failure. DR. VERMONT: Well, there is another philosophy, and that is that if you cannot measure it, you probably cannot approve it. DR. McTAGUE: But the measurement, as Erich Bloch pointed out, is not necessarily a number. Almost everything that is measurable by numbers is fairly trivial.