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Aeronautics Innovation: NASA's Challenges and Opportunities (2006)

Chapter: 2 Innovation Facilitators and Accelerators for Aeronautics

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Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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2
Innovation Facilitators and Accelerators for Aeronautics

The lack of clarity about the purpose and priority of the NASA aeronautics program has made it difficult for the committee to comply with our charge—to recommend practical measures to enhance the implementation of NASA-developed technology in the Aeronautics Research Mission Directorate (ARMD). Obviously, the advice would not be the same for projects designed to yield fundamental knowledge of aerodynamics or materials or human factors and projects undertaken for clearly identified customers leading to prototype technologies, for example for fuel-efficient commercial aircraft engines or advanced air traffic control systems. If the former were to constitute the core of the NASA program, then our focus should be on how well fundamental knowledge is disseminated to all potential users, for example, via peer-reviewed publication, the participation of investigators in scientific and technical meetings, and training of entrants into the professional workforce. We focused instead on NASA’s efforts to develop solutions targeted to specific users’ needs and the efforts made to get the solutions adopted. Our focus on innovation in this sense led us to examine the management of the R&D process and the hand-off of resulting technologies.

In our view, refocusing the NASA aeronautics program exclusively on fundamental research is neither a likely nor a very desirable result of the policy deliberations so clearly needed. The public good areas of NASA R&D work in which the argument for government involvement is strongest—safe, efficient air traffic management and environmentally benign

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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aviation operations—are arguably the areas in which users need fairly well-proven technologies to be delivered and in which NASA’s technical capabilities are in some respects superior. In all likelihood, ARMD will continue to have a portfolio quite diversified in terms of the stage of technology development being pursued. If it does not, the program could rather quickly lose its relevance and much of its support. That, in any case, is our premise. We further assume progress in articulating a mission reflecting financial realities, stakeholder needs, and NASA personnel and contractor capabilities and research infrastructure.

In this chapter we consider a variety of decision-making processes, tools, and incentive structures that will aid the process and enhance the prospects of innovation in the remaining portfolio. These include cohesive portfolio planning, engagement of stakeholders in the prioritization process, preidentifying the stages of and criteria for resource allocation and project continuation or termination decisions (“decision gates”), and planning for technology transitioning. In addition, we outline a number of personnel and financial management practices that can contribute to innovation.

Those tools might broadly be conceived as process discipline. Fundamental to keeping an organization on a path of relevant accomplishment is a set of tools that accelerate decision making. Quite the opposite of constraining an organization in bureaucracy, process tools and discipline help accelerate results and aid in decision making by clarifying expectations among customers, leadership, and development teams. These tools provide an expectation that mechanisms and metrics need to be developed to keep innovation relevant in terms of the values it can provide. These tools also help clarify schedules and timelines. Notions that innovation cannot be scheduled, that invention has to happen on its own pace, contribute to ignoring customer needs and, on the part of the innovator, diminished expectations of creating value.

In recommending these tools, the committee recognizes that there are important differences between public agencies and private firms, for example in their ability to focus resources narrowly, to reallocate funds, and to change or transfer personnel. We do not thoughtlessly recommend practices that are appropriate solely for private firms but are inappropriate and impossible for ARMD to implement. In fact, a number of the practices that we think NASA should consider are ones that derive from public-sector experience, including that of NASA.

At the same time, the composition of our committee does not reflect sufficiently broad NASA experience to anticipate all of the challenges that

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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might arise in implementing our recommendations. We do recognize that objectives requiring negotiation with the Office of Management and Budget (OMB) or congressional authorizing and appropriating committees (or both) are likely to be harder to achieve and require more accommodation than measures within NASA’s current authority, but even in the latter case, some of our proposals may be at odds with traditional practices that are difficult to change. The recommendations are not intended to represent a package that must be accepted as a whole.

PORTFOLIO APPROACH AND COHERENT ALIGNMENT WITH MISSION AND CUSTOMERS

Although the strategic focus discussed in Chapter 1 is the single leading principle of best-practice R&D management, a close second is to


Recommendation 3-A: Conceive of R&D activities as a cohesive and strategically balanced portfolio of projects and competencies closely aligned with mission and stakeholder needs.


Individual R&D activities should not operate independent of an overall understanding and agreement of how they contribute to and fit within the portfolio.1 Key dimensions of the portfolio include balance across goals, timeframe, level of risk and potential value, and skill sets.

Another key dimension that should be explicit in developing the portfolio is the national additive value, that is, the degree to which ARMD is uniquely suited to pursue the R&D “as only NASA can.” Easy to say, yet difficult to identify. ARMD should focus on where it is not competing or

1  

Philips, for example, one of the world’s leading consumer electronics firms, calls its portfolio of R&D activities a “program haystack,” with cross-portfolio analysis of each program or research competency’s horizontal and vertical contributions to other programs or competency areas. Vertical research programs, such as health care systems, directly target specific customers and product areas. Competency areas, such as devices and microsystems, encompass broadly applicable technology components that support across the program silos horizontally. This allows Philips to view different R&D investments and make decisions across and among the different silos. See D. Busher et al., Management of Technology in Europe 2003: Comparing Strategies and Tools in 17 High Technology Organizations, T. A. Watkins, contributing ed. (Minneapolis: National Technological University, May 2003), p. 16. Available at http://www.lehigh.edu/~taw4/eumot03.pdf.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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duplicating what is or could be done in industry, universities, the Department of Defense (DOD), or other agencies. In pruning the portfolio, this should be a primary guiding principle.

Many useful portfolio assessment and planning tools exist (graphical representations like risk-reward bubble diagrams, technology roadmapping and milestones, future scenario visioning, stages and gates reviews, strengths-weaknesses analysis, cost-benefit-risk assessment, etc.), developed by a growing industry of consultants, textbooks, and how-to primers.2 Our committee’s collective experience suggests that


Recommendation 3-B: Graphical illustrations of the portfolio are particularly useful tools for fostering communication and discussion and identifying and resolving disagreements, both internally among managers and in engaging external stakeholders and customers.


We emphasize that what is important is not the specific tools employed—organizational idiosyncrasies suggest that no single set of tools will work in all contexts—but that the decision-making system is transparent, designed and understood by those who will implement it. The process should not be overly complex or burdensome; straightforward tools exist. The hard but most valuable part is not the tools or information gathering associated with them but the quality and depth of the conversations they can facilitate.

Best practice also means rigorous pruning of portfolio elements found to be yielding limited value. Hence, ARMD should


Recommendation 3-C: Use decision processes, sometimes referred to as decision gate processes, at predetermined points to establish common expectations among customers, leaders, and the technical team throughout the development process, to clarify goals, schedules,

2  

Some leading books include P. K. S. Rousel and T. Erickson, Third Generation R&D: Managing the Link to Corporate Strategy (Boston: Harvard Business School Press, 1991); and R. G. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Portfolio Management for New Products, 2nd ed. (Reading, MA: Perseus Books, 2001). Shorter articles include N. Danila, “Strategic Evaluation and Selection of R&D Projects,” R&D Management 19(1, 1989), pp. 47-62; P. Groenveld, “Roadmapping Integrates Business and Technology,” Research Technology Management (September 1997), pp. 48-55; D. L. Hall and A. Nauda, “An Interactive Approach for Selecting IR&D Projects,” IEEE Transactions on Engineering Management 37(May 1990).

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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deliverables, concrete target performance metrics, and review templates and to set decision criteria and force accountability of all constituents involved.


In the committee’s second workshop, David Whelan, a Boeing and former senior manager at the Defense Advanced Research Projects Agency (DARPA), described the notion as midterm exams for projects, deciding what should be required to pass. Decision gates and specific targets set criteria for hand-off from one phase to the next, including the hand-off to the user. Best practice also assesses and ensures that the technology readiness needed by the customer is understood and met by the developers. Key elements include sunset provisions and criteria for retiring projects. Terminating projects that fail midterms also increases economic flexibility to more rapidly pursue new opportunities. The process requires knowledgeable, disciplined leaders to operate effectively.

We heard repeatedly in our interviews and at our workshops that there are several impediments to successful R&D portfolio management at ARMD apart from lack of mission clarity around which to build a portfolio. First, ARMD and NASA research activities more generally have been “projectized” and decision making done largely top-down in silos isolated to a degree that we think runs counter to R&D portfolio best practices. Each project manager and the upper layers of administration should understand how each project fits within the broader portfolio and how it contributes to the overall focused strategy and to external stakeholder needs. We concluded that ARMD’s managerial approach does not fully meet this test. One NASA project manager, speaking about silos in a single NASA center, described it this way: “I look out the window here and see all these ostriches in separate sandboxes, not looking up to know what’s going on around in other sandboxes, or understanding why they are doing what, or how their activities connect with the customer.” Similarly, John Klineberg, chair of a National Academies study assessing NASA’s aeronautics technology programs, speaking before Congress in March 2005, testified that “subproject and task-level plans, funding, goals, metrics, staffing, and responsibility are often difficult to define or cannot be clearly traced back to a plan or vision for the program as a whole.”3

3  

Statement of Dr. John M. Klineberg, Chair, Committee to Review NASA’s Aeronautics Technology Program Aeronautics, and Space Engineering Board Division on Engineering and Physical Sciences, National Research Council, the National Academies, before the

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

The organizational and geographic separation of the three major ARMD facilities magnifies the silo problem. For example, our interviews with technology managers at the Ames Research Center led us to believe that work on air traffic management there is not closely linked to related work at the Langley Research Center. The groups appeared not to be thoroughly familiar with each others’ work or how their activities relate to one another. This is a clear sign that portfolio planning is not well established in ARMD. That said, one positive sign is that at the time of our visits the two groups were planning to meet in the near future to identify ways to leverage each others’ activities.

Second, best practice suggests there should be more coherence and organizational agreement about the balance across various dimensions of the portfolio. In our interviews, some ARMD mangers reported that they perceive themselves under great pressure, mostly from OMB, toward shorter term, nearer payoff development projects—“we need successes to justify our budgets.” And “long-term kinds of things seem consistently difficult to keep,” as they are “always the first thing to go when there are budget issues at almost all levels.” Some blue-ribbon external review committees agree that ARMD sometimes does not take its technologies far enough toward implementation. In contrast, other managers believe and some external reviews4 and political pressure against perceived corporate welfare suggest the opposite, that government-funded laboratories should focus more on long-term fundamental science and high-risk, high-payoff breakthroughs.

This kind of disagreement, this lack of coherence among the views of various managers in the organization as to what the research organization is or should be doing, is to us a signal that technology management best practices are not well established. The individual projectized parts do not add up to a cohesive whole nor do they have a common understanding of their collective purpose.

R&D portfolio management best practice is to avoid exclusive focus one way or the other but rather achieve a balance across long-, medium-, and short-term R&D. Along these lines, a 2003 national steering commit-

   

Committee on Science Subcommittee on Space and Aeronautics, U.S. House of Representatives, March 16, 2005. Available at http://www.house.gov/science/hearings/space05/Mar16/Klineberg.pdf.

4  

E.g., National Research Council, Review of NASA’s Aerospace Technology Enterprise: An Assessment of NASA’s Aeronautics Technology Programs (Washington, DC: The National Academies Press, 2004).

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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tee on aeronautics and aviation technologies, organized by the Office of Science and Technology Policy and sponsored by the American Society of Mechanical Engineers, suggested and we agree that NASA aeronautics should


Recommendation 3-D: Pursue a portfolio “balanced between near term needs, driven by market forces, and longer-term investments required to achieve transformational national capabilities.”5


Criteria for including or eliminating R&D activities should be driven by the focused mission and key stakeholder needs. We discuss the importance of engaging stakeholders in more detail below. A potential bonus of a balanced approach would be political: near-term successes could help defend longer term programs’ budget lines. The perceived public value of ARMD research would be clearer than with entirely long-term breakthrough programs.

We also heard multiple reports of a third significant impediment to R&D portfolio best practices, a reluctance to terminate projects Indeed, the incentive structure works strongly against it. Terminating projects does not quickly save resources because legislation makes it difficult or impossible for ARMD managers independently to move resources or reduce civil service staff quickly. This structural inability limits incentives to prune and to make midcourse corrections. We address staffing flexibility in more detail below.

One indication of the prevalence of this tendency is that it has an internal nickname: “slip and dip.” This refers to the pressure to first oversell a project’s potential to attract funding in the annual political cycles and then to stretch goals and timelines as budgets allow. One former ARMD manager put it bluntly: “Aeronautics has to make promises it knows it can’t meet in order to get funding…. A lot of times we stretch ourselves more than we think we should, to sell the program. Otherwise, we won’t have anything.” A second manager referred to “the hollowing out of milestones…. [I]t’s not that clear to me that there’s a penalty for not delivering.” He explained that project managers put most milestones in September, just before the end of the fiscal year. “You deliver something less but like what

5  

American Society of Mechanical Engineers, Aerospace Division, Persistent and Critical Issues in the Nation’s Aviation and Aeronautics Enterprise, (Washington, DC, November 2003).

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

you promised, and unless you’ve wasted money or done something stupid, they give you another crack at it.”

John Klineberg similarly noted, in the context of artificial five-year sunset provisions on research programs, that some longer term research had been disguised as a series of five-year plans under different names and different organizational structures.6 Such artificial timelines are budget driven, rather than technology and challenge driven. Unfortunately for innovation management, one- and five-year timelines do not fit all technologies. The result is that the time horizons of ARMD technology problems are not in line with pressures of external bodies and contingencies well beyond ARMD management’s control. This makes efficiently planning and managing the resources and gauging technical progress remarkably difficult.

An associated tendency we noted among ARMD managers is to see all projects as worthy. Clearly, the vast majority of ARMD activities do have value. Indeed, recent NRC reviews found few obvious weak projects from a technical point of view.7 But the relevant managerial criterion cannot be whether individual projects have absolute value but rather prioritizing their value relative to each other in the context of severely constrained and shrinking resources. Pursuing large numbers of hollow, isolated projects aimed exclusively at short-term results is characteristic of worst practice, not best.

This tendency continues even under the refocused new FY 2006 budget proposals. Of the 11 projects in the proposed FY 2006-FY 2010 Airspace Systems Program schedule, 9 have milestone slips of at least a year, including several that also “descope” (the dip). A tenth dips without extending the milestone. Only the eleventh is scheduled for cancellation. Organization-wide application of portfolio assessment and uniform decision gate processes would foster the conversations needed to enable cross-project evaluation.

A fourth major impediment to R&D portfolio planning at ARMD is the growth in congressional directly funded projects. At NASA as a whole, these projects increased from $74 million for six items in FY 1997 to $426 million for 167 items in FY 2005.8 This 28-fold increase in the number of

6  

Statement of Dr. John M. Klineberg, Chair, Committee to Review NASA’s Aeronautics Technology Program Aeronautics, and Space Engineering Board Division on Engineering and Physical Sciences, National Research Council, the National Academies, before the Committee on Science Subcommittee on Space and Aeronautics, U.S. House of Representatives, March 16, 2005.

7  

Review of NASA’s Aerospace Technology Enterprise.

8  

NASA FY05 Initial Operating Plan. Available at http://www.nasa.gov/pdf/107781main_FY_05_op_plan.pdf.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

projects and 5-fold increase in costs had to be funded by offsetting reductions in ongoing NASA programs. The FY 2005 NASA earmarks in aeronautics amounted to $92 million. Compare this to the entire budget for air traffic management research, the Airspace Systems Program for that same year: $152 million. Indeed, fully 14 percent of the ASP budget was congressionally earmarked. Given fixed facility infrastructure costs and civil service employment constraints, this means that a significant fraction of ARMD’s portfolio is largely beyond managerial control. To make matters more difficult, NASA is prohibited by Congress from charging administrative expense overhead to these projects, in contrast to the full cost accounting principle applied to other programs.

Earmarks can reflect a congressional perception that NASA officials are neglecting an important component of their program. For example, funds were increased for rotorcraft development following NASA’s elimination of this program. However, as is frequently the case, the rotorcraft funding mandate came without a corresponding increase in the aeronautics budget and forced a reduction in some other programs, playing havoc with the budget planning process. Increased stakeholder participation in portfolio planning and budget balancing can help contain earmarking motivated by disagreement with NASA’s priorities. But in some instances, earmarks are indicative of a philosophical conflict over whether a market failure exists to justify government intervention to support R&D. Earmarks are also used to appeal to local constituent interests. No budget planning process can eliminate earmarks in these circumstances.

Although this practice is unlikely to cease or even significantly decline, there are steps that ARMD can take to limit its disruptive effects. One constructive action along these lines was a suggestion by former NASA administrator Sean O’Keefe to the Senate Appropriations Subcommittee that NASA would begin to subject earmarks to selection criteria applied to all nonsolicited, noncompetitive proposals. These criteria include “relevance to NASA mission, intrinsic merit and cost realism.”9 NASA management is well aware of the problem and the technical disruptions they cause. We discuss below financial management options for handling externally mandated projects.

There are some promising examples of the use of portfolio planning tools in various parts of ARMD and evidence that these tools can in fact be

9  

NASA FY05 Initial Operating Plan. Available at http://www.nasa.gov/pdf/107781main_FY_05_op_plan.pdf.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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successfully implemented. We note, for example, that NASA participated in technology roadmapping working with the Federal Aviation Administration (FAA) in developing the FAA Operational Evolutionary Plan.10 We also understand that a NASA-wide core competency review and prioritization was under way in 2005. We noted earlier a problem with core competency understanding in the Vehicle Systems Program (VSP). These are good signs but appear to us as ad hoc, rather than parts of a systematic organization-wide practice of portfolio analysis and planning. For example, we are troubled that managers at Langley perceived that the review primarily focused on supporting space exploration, not aeronautics.


Recommendation 3-E: NASA should continue to undertake core competency reviews and explicitly include aeronautics among the highest priority core competencies. Within aeronautics, the ranking of competencies should take into account world leadership in technology, public additive value, and skills enabling partnerships and transitioning processes.


In this context, we also encourage expanded NASA-wide use of skills assessment tools, such as information technology systems, to collect and sort the status of all education, experience, and skills throughout the organization, so that the right people can be flexibly assigned high-priority tasks anywhere in the organization. This can be especially valuable in accelerating schedules in early innovation phases.

ARMD has also succeeded in some pruning in response to falling resources. External reviewers suggest that the result has been a reasonably internally balanced portfolio-like outcome. A 2004 RAND Corporation study of wind tunnel and propulsion-test facilities concluded that “currently, redundancy is minimal across NASA. Facility closures in the past decade have eliminated almost a third of the agency’s test facilities in the categories under review in this study. In nearly all test categories, NASA has a single facility that serves the general- or special-purpose testing needs, although some primary facilities also provide secondary capabilities in other test categories.”11 For the overall portfolio, it found “the test complex

10  

NASA, The NASA Aeronautics Blueprint: Toward A Bold New Era of Aviation. NP-2002-04-283-HQ. (Washington, DC, 2002).

11  

P. S. Anton et al., Wind Tunnel and Propulsion Test Facilities: An Assessment of NASA’s

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

within NASA is mostly ‘right sized’ to the range of national aeronautic engineering needs.”

Nevertheless, portfolio planning can be more fully internalized and regularized and external stakeholders more regularly engaged in the process. The RAND study concluded that closer coordination and planning across DOD’s Engineering Development Center and NASA could further identify national infrastructure overlap and reduce expenses on redundant facilities. The reviewers were troubled that “NASA’s recent unilateral decision to close two facilities at Ames without high-level DOD review shows that progress has been spotty.”

Another positive sign is increasing recognition among ARMD managers of the need for balance between short and long term, although disagreement remains about what mix is appropriate. One manager we interviewed tries in an ad hoc way to spend 20 percent of his research money on “high promise breakthrough kinds of things” that “you’re not sure are going to work,” an investment he described as “minuscule.” But he admitted that most of those resources are contained in related project budgets. However, because all budgets are projectized, this less than transparent approach to portfolio balancing defeats the best-practice possibilities for strategic-level conversations and healthy debate. The next steps should be to make the need for a balanced portfolio uniformly understood organization-wide and to bring the planning and debate more into the open. The strategy of balance should be explicit as it is at DARPA, for example, which aims for breakthroughs and focuses on high-change-potential projects, yet also explicitly maintains a portfolio across relatively near, medium, and longer term R&D.

The committee also supports an initiative in ARMD’s FY 2006 budget to create a central pool of funds for exploratory research. The associate administrator indicated to Congress that “a level of funding will be reserved for ‘seed corn’ research.”12 This would bring longer term exploratory thinking out from hiding and into the open as an explicit management tool.

   

Capabilities to Serve the National Needs. MG-178 RAND (Santa Monica, CA: National Defense Research Institute, 2004), pp. xviii-xxi.

12  

Dr. J. Victor Lebacqz, associate administrator for aeronautics research, NASA, “Appropriations Subcommittee Staff Briefing,” March 8, 2005.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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MANAGEMENT FOR TECHNOLOGY TRANSITION

In the final analysis, the value to the nation of ARMD R&D comes through implementation. NASA aeronautics strategy documents regularly acknowledge this: “We measure success by the extent to which our results are used by others….”13 NASA has achieved some notable successes in this regard. One example is the agency’s structural analysis software, NASTRAN, which began development in the mid-1960s and continues to serve as the basis for a large fraction of the finite element analysis software used ubiquitously today in industry in almost every area of mechanical structure and design.14 According to congressional testimony by a former General Electric official, the Energy Efficient Engine Program and the Quiet Engine Program of the 1970s and 1980s identified technologies that eventually found themselves in product lines such as the GE90 family of engines that powers the Boeing 777 today. They have also spawned products like the Genx, which will power the Boeing 787 tomorrow. Without this research, GE would not have the composite fan blades, high pressure-ratio core, or low emission double annular combustor that put the company in a leading position in the industry.15

We believe that this record of successful transition to implementation is at risk today in ARMD.


Recommendation 4-A: ARMD should implement and explicitly regularize for all projects organization-wide a series of management tools aimed at fostering technology transition to users.


This is particularly important for ARMD given its dependence on other entities to implement the technologies it develops. The implementation process is especially bifurcated in civil aeronautics, in which the FAA regulates and has to buy into new technologies operationally but lacks in-

13  

For example, see NASA, Aerospace Technology Enterprise Strategy. NP-2003-01-298-HQ. (Washington, DC, 2003), p. 5.

14  

J. A. Alic et al., Beyond Spinoff: Military and Commercial Technologies in a Changing World. (Boston: Harvard Business School Press, 1992), p. 72.

15  

Statement of Dr. M. J. Benzakein, Chair, Aerospace Engineering, The Ohio State University, before the Subcommittee on Space and Aeronautics Committee on Science, U.S. House of Representatives, March 16, 2005. Available at http://www.house.gov/science/hearings/space05/Mar16/Benzakein.pdf.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

dependent technical abilities to further develop them. Manufacturers must embody the technologies in equipment and products, but both private and public (e.g., FAA operations, local airport authorities, DOD) end users must signal their willingness to fund that embodiment though purchases. In contrast, on the space side of NASA and in the DOD, the ultimate equipment purchaser also directs the fundamental R&D. Although not ensuring technology transition, such linked structures far more directly align decision-making incentives and communication. This poses a huge challenge for ARMD innovation.

The first and most obvious implication of this institutional separation from implementation is that, unless ARMD effectively partners externally, it will fail. The technology management literature is quite clear that engaging users is a particularly important element of successful innovation and implementation.16 The users who would expect to be the recipients of ARMD innovations, in the main, require system-level innovation, for example, aircraft, engines, air traffic management systems. Advances in these broader areas require the integration of many technological advances. To be an innovative organization, where high-value solutions serve real needs and real requirements,


Recommendation 4-B: ARMD should cultivate close relationships with external partners, engaging them very early in jointly conceptualizing, planning, and prioritizing all R&D activities and sustaining regular involvement through the implementation phase.


A number of well-established techniques exist for engaging stakeholders in collaboration throughout the early and later phases. Such early customer engagement is, for example, central to quality function deployment (QFD), total quality management (TQM) and the house of quality. An extensive literature exists on these techniques.17

16  

For example, E. von Hippel, The Sources of Innovation (New York: Oxford, 1988), overviews a wide range of research evidence on the importance of lead users and mechanisms for identifying them.

17  

A quite readable product development–oriented primer on the multiple processes in customer needs assessment, TQM, QFD, and house of quality–related techniques is K. T. Ulrich and S. D. Eppinger, Product Design and Development, 2nd Edition. (Boston: Irwin McGraw-Hill, 2000). See also the QFD Institute, available at http://www.qfdi.org.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

Although there is no substitute for developing an overall culture of essentially constant informal interaction with external stakeholders, more formal venues may also be valuable. These include joint planning committees with implementers; periodic customer review sessions in which the external stakeholders are asked to evaluate the relevance of ongoing work performed;18 focus groups; and early phase incubation forums. Incubation forums involve external stakeholders in developing clear definitions of needs and seeking answers to questions such as “What five solutions don’t exist, but if we had them, would help break through this problem?” Participants in these sessions tend to be not only experts in the implementation area but also professionals outside that field.

ARMD faces a number of significant barriers to effective long-term engagement of external partners. The foremost is the extraordinary variance across ARMD’s sub-missions in terms of the relevant partners and partner skill sets. Key partners include, but not exclusively, NASA space operations, the multiple branches of DOD, the Department of Homeland Security (DHS), the Department of Transportation (DOT), the Transportation Security Administration (TSA), the National Transportation Safety Board (NTSB), FAA air traffic management operations, FAA acquisition and R&D functions, FAA regulatory functions, FAA’s foreign counterparts, air traffic controllers, local airport authorities, industry and university wind tunnel research users, large airframe manufacturers, small aircraft manufacturers, avionics manufacturers, information technology systems providers, propulsion system manufacturers, and university aeronautics and related departments. Working closely with that numerous and diverse a group of stakeholders by bringing them in early and jointly prioritizing projects represents a daunting challenge.

A second impediment relates to organizational structure. ARMD is embedded in a space organization that itself routinely implements new technologies. Top-level NASA administrators come predominantly from the space side. Transitioning new aeronautics technologies may not be understood as a different and in some ways more challenging task than it is with space tech-

18  

If these sessions yield glowing remarks from the reviewers, they probably do not involve real customers. In the committee members’ experience in industry, real customers with real needs do not usually view innovations altogether positively. When they do compliment the solutions, they tend to set higher expectations for the future. Receiving high marks from review panels is indicative of having perfunctory reviews or inattentive reviewers. Providers can be easily misled.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

nologies. The failure to engage stakeholders fully in the restructuring of VSP is not a good sign that NASA fully understands the importance of consultation. Its after-the-fact approach runs counter to best practice.

ARMD administrators frequently take credit for substantive coordination with external stakeholders and may believe they are doing an adequate job of it. For example, in a congressional staff briefing, ARMD highlighted the following activities:

  • ARMD associate administrator visits to industry and government customers to understand their business plan and technology needs, discuss ARMD plans, and identify gaps in ARMD research;

  • Reestablishment of the Industry Technology Leadership Team to obtain a broad perspective on aeronautics research from corporate chief technology and chief operating officers;

  • Populating the Aeronautics Research Advisory Committee with people of stature from industry; and

  • Participation in the Joint Aeronautical Commanders’ Group (DOD Joint Logistics Commanders).

Yet we observe a tendency to outsource strategizing and customer surveying, resulting in a long series of reports and customer surveys performed by external consulting organizations.19 To a degree this is appropriate, for example when it is likely to elicit more candid commentary; but it may also reflect lack of skill in NASA, or preoccupation with day to day operations, or both. Another sign that the institutional culture is not sufficiently attuned to understanding stakeholder needs and capabilities was a decision a few years ago to cut funding for ARMD scientists to participate in national scientific meetings. This not only reduced the visibility of NASA’s national aeronautics research role in national leadership but also opportunities for midlevel ARMD staff to interact informally with external stakeholders in professional forums. Integrating stakeholder needs analysis into technology management processes appears not to be regarded as an essential core competence.

When engagement does take place, the results are sometimes ignored. The extensive conversations and joint planning with industry during 2004

19  

See the large number of reports on strategy and customer assessment done for NASA aeronautics by Science Applications International Corporation, Technology Services Company, Arlington, VA. Available at http://www.aerospace.nasa.gov/library/da/study/index.htm.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

for the VSP were a positive development and recognized as such by both ARMD and industry participants. But these consultations did not serve as the basis for the FY 2006 budget proposals, narrowing the VSP agenda to four “breakthrough” programs. First engaging and then ignoring key stakeholders risks the portfolio’s becoming irrelevant.

ARMD’s efforts to avoid the appearance of promoting “corporate welfare” may themselves be an obstacle to sustained involvement of industrial partners. The supersonic aircraft programs of the 1980s linked the NASA aerospace centers together closely with industry. But when those programs were cut in late 1990s and the funds disappeared from the budget rather than being reallocated to other activities, the lesson for many NASA employees was that the aeronautics program had gone too far in engaging and helping commercial interests. One former NASA manager told us it “significantly and adversely colored subsequent relations with industry.” ARMD managers endeavor to avoid criticism and its potential adverse budget consequences, but this makes the hand-off to implementers more difficult.

Relations with commercial partners are not, of course, the only relationships crucial to innovation. With the possible exception of the activities of the Joint Planning and Development Office (JPDO), discussed below, ARMD interactions with the Federal Aviation Administration have been hindered by structural impediments. Planning and coordination of research activities has been the responsibility of the acquisition and research part of the FAA, whereas the introduction and use of new technology depends on FAA operations. The operational divisions of the FAA are preoccupied with the immediate problems of managing the air traffic control system and therefore may not have been involved in the planning of the research. The perception in ARMD is that FAA operations tends to view the introduction of the technology into an already overburdened system as infeasible or high risk, requiring major efforts in training controllers and changing accustomed behavior. At worst, this has led to the abandonment of some NASA projects. At best, it makes field-testing new concepts difficult.

A related hurdle is uneasy relations with the air traffic controllers union, the Professional Air Traffic Controllers’ Association (PATCO), whose code of responsibility affirms that decisions must be made and communicated by controllers. It is ARMD’s perception that technologies that would reduce controllers’ discretion or bypass their communication with pilots face strong resistance. Yet ARMD has worked on systems that would develop instructions to pilots and communicate them from the ground directly, not through controllers. With these and all other stakeholders, ARMD needs

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

to actively manage such barriers. The best-practice approach is to work directly and regularly with the stakeholders to thoroughly understand their needs and concerns, working with them to anticipate such issues early in the technology development process rather than encountering roadblocks late in the development cycle.

A final impediment to engaging external stakeholders is a perception that NASA has not always carried through on its commitments. The chopping and changing associated with the 2005 VSP reconfiguration is a case in point. A large body of literature suggests that developing trust and fairness are key ingredients to best-practice innovation partnerships.20


Recommendation 4-C: ARMD should work aggressively to solidify its reputation as a trustworthy, reliable partner.


This poor reputation stems from several sources. One, which we address in more detail below, is the recent implementation of full-cost pricing for the use of facilities. This has very strongly discouraged some potential partners. A remarkably uniform view among our interviewees and workshop participants was that full-cost accounting, as one participant put it, works against “the opportunity for relationships” because in the absence of NASA funding for facilities “the customer has to put up unreasonable cash if it wants to use it.” The charges are perceived by partners as not only uncompetitive but also unfair. A second source of the lack of confidence is the periodic reshuffling of priorities in the annual budget process. With aeronautics taking a back seat relative to space priorities, ARMD programs can and regularly have been arrested midstream with the approval of OMB. This perception of ARMD as an unreliable partner over time is a significant impediment to collaborative planning and ongoing engagement. Partners feel they cannot count on ARMD to continue long-term projects and so hesitate to enter into them.

20  

See, for example, T. K. Das and B-S Teng, “Between Trust and Control: Developing Confidence in Partner Cooperation in Alliances,” Academy of Management Review 23(3, 1998), pp. 491-512; Y. L. Doz and G. Hamel, Alliance Advantage: The Art of Creating Value Through Partnering. (Boston, Harvard Business School Press, 1998); C. Lane and R. Bachman, eds., Trust Within and Between Organizations: Conceptual Issues and Empirical Applications. (Oxford, Eng.: Oxford University Press); N. Lazarec and E. Lorenz, eds., Trust and Economic Learning. (Cheltenham, Eng.: Edward Elgar Publishing, 1998); L. G. Zucker, “Production of Trust: Institutional Sources of Economic Structure, 1840-1920,” Research in Organizational Behavior 8 (1986), pp. 53-111.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

There are nevertheless some encouraging signs for early and sustained involvement of external partners in ARMD activities, even though its organizational culture as a whole falls short of best practice. We are cautiously optimistic about the potential of the Joint Planning and Development Office to coordinate planning for the future of the nation’s air traffic management (ATM) system. Established by Congress under the FAA and including representatives of the Departments of Homeland Security, Transportation, Defense, and Commerce as well as NASA, the FAA, and the White House Office of Science and Technology Policy, JPDO involves a series of collaborative teams engaged in roadmapping and prioritizing technologies for various aspects of the nation’s future airspace management system. JPDO delivered its first major product, the “Next Generation Air Transportation System: Integrated Plan,” to Congress in December 2004. It lays out a multiagency agenda and governance model intended to facilitate cross-agency cooperation. This joint planning document in turn has guided NASA in developing its FY 2006 budget proposal.21

Although we have not evaluated this report nor closely examined the functioning of the JPDO, in principle this is the kind of external collaboration, yielding joint recommendations taken seriously in ARMD portfolio planning, that can serve as a model for other areas of ARMD activity.


Recommendation 4-D: JPDO may be a model for future ARMD technology management decision making through close external collaboration, with joint recommendations guiding ARMD portfolio planning.


JPDO is nevertheless limited in its capacity to raise the profile of the need for modernization of air traffic management and the role of technology development. It has, for example, no independent budget authority, although it can influence participating agency budget allocations. One option suggested to our committee is to shift control of the airspace management portion of the ARMD budget, together with the FAA’s Air Traffic Organization R&D budget to JPDO. JPDO could contract with ARMD to provide technical competency through secondment of personnel. The result could be an organization with more influence to protect and increase

21  

See the emphasis on JPDO recommendations in recent congressional testimony of Dr. J. Victor Lebacqz, associate administrator for aeronautics research, NASA, “Appropriations Subcommittee Staff Briefing,” March 8, 2005.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

resources for development of an advanced air traffic management system with much greater capacity. But this is dependent on an evaluation of the JPDO’s performance to date, justifying the promise of the concept.

Another example of ARMD’s engagement of external partners is the Access 5 Alliance, a jointly supported NASA and industry collaborative effort on technical, regulatory, and procedural issues related to high-altitude, long-endurance remotely piloted aircraft.22 Begun in 2004, the alliance plans to take technology to demonstration. Planning and prioritization are collaborative. NASA participates using a nontraditional funding approach whose flexibility we think is worth exploiting more often, a joint sponsored research agreement. Similarly, NASA also quietly participated in the Super 10 Initiative developing supersonic business jet technologies with all the large airframe and engine firms, by most reports working effectively and collaboratively.23 Finally, we encourage experiments like the science and technology park at the Ames Research Center in engaging corporate and educational partners.24

Despite the nod of ARMD strategy documents to measuring success by implementation, project managers told us that transition planning is not a regular expectation either as projects come up for consideration or when they commence. Some managers do include plans for how their project’s outcome might transition to users, but such explicit planning appears limited and ad hoc. This runs counter to technology management best practice.


Recommendation 4-E: Documented planning for technology transition (hand-off) to external stakeholders should be a universal managerial practice for all ARMD R&D projects and integral to the portfolio planning and prioritization process.


Transition planning starts with a clear understanding of who the receiving customers are, their needs and abilities to implement, their early involvement jointly identifying steps, deliverables, milestones, and perfor-

22  

Available at http://www.access5.aero/access5_custom/what.html.

23  

M. V. Lowe, “Meet the Supersonic Business Jet,” Popular Mechanics, Nov. 16, 2004.

24  

National Research Council, Board on Science, Technology, and Economic Policy. A Review of the New Initiatives at the NASA Ames Research Center. (Washington DC: National Academy Press, 2001).

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

mance metrics for tracking progress and changing course when needed, and their agreement to work to internalize and implement the results if successful.

Transition planning works at DARPA, for example, through two methods: taking technologies to the point of working demonstration and validation prototypes (a DARPA prototype showed the effectiveness of stealth technologies, for example) and working with industry to identify transition opportunities.25 DARPA has an easier task, however, in that its stakeholders have substantial independent ability to implement technologies. DARPA is not responsible for delivering final prototypes nor for maintaining infrastructure, relying instead on external performers, including ARMD wind tunnel facilities.

Effective transitioning can unfortunately raise costs. Transition planning experience at the Air Force Research Laboratory (AFRL), for example, suggests that management needs to be prepared to invest more per project. This in turn means narrowing activities and what an AFRL manager described to the committee as a fundamentally different approach to R&D, focusing on customer needs and capabilities and arriving at integrated solutions, not simply discrete technologies.26

Notwithstanding the cost implications of carrying development further in some cases than has been the practice, ARMD needs to exercise more flexibility in applying the concept of technology readiness levels (TRLs). Best practice suggests that


Recommendation 4-F: The variety of technologies and the diversity of stakeholder capabilities require increased ARMD flexibility and variability with regard to project time horizons and technology readiness levels.


The AFRL experience, described in the committee’s second workshop, is instructive. According to Colonel Mike Leahy, taking a broad array of

25  

As one example of the DARPA requirements for transition planning and taking technology to demonstration, see “Proposer Information Pamphlet (PIP), High-Precision Long-Range Laser Designator/Locator (HPLD),” Defense Advanced Research Projects Agency, Advanced Technology Office, BAA05-01. Available at http://www.darpa.mil/ipto/solicitations/open/02-21_PIP.htm.

26  

Testimony of Col. Mike Leahy, AFRL, to the committee, January 18, 2005.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

different technologies “to TRL 4 made no sense anymore. Some had to go to flight [i.e., TRL-6, flight test in a relevant environment], some did not. It took tough calls.”27 Recognizing the significant potential budget consequences, ARMD needs to consider taking technologies further than it has been accustomed to doing or believed it had the latitude to do. Apart from the nature of the technology, much depends on the sophistication and resources of the customer. In the case of the FAA, for example, its operational mission and lack of strong technical skills may dictate that ARMD needs to take whole systems to TRL-6 full flight demonstrations and through midterm R&D. In other cases, it is natural for ARMD to conduct high-risk breakthrough research while leaving more downstream technology development to its partners. Both DOD and the commercial airframe and engine manufacturers have huge budgets, extended implementation expertise, and their own R&D infrastructure. For these partners there is less need for ARMD to take technologies as far. One workshop panelist put it succinctly, “NASA can’t toss the ball to FAA at a low TRL level. There is no one to catch it. But they can in propulsion. GE can catch.” So too, with the airlines in air safety. Although the airlines’ financial condition limits their investment in the short term, they have large private incentives to improve safety, making it unlikely that ARMD need go all the way to a high level in air safety systems requiring their implementation.

ARMD has demonstrated an ability at the individual project level to field-test air traffic management demonstration modules working with the FAA. Research transition plans (RTPs) have worked in FAA’s Free Flight Phase II office.28 RTPs outline the roles and responsibilities of NASA and the FAA in transferring results.

Another successful example was the traffic management adviser (TMA), providing controllers advice about managing traffic flow into airports most efficiently. One ARMD manager described the process to us: “The need for demonstrating TMA was created by the Atlanta Olympics. TMA was carefully implemented on a shadow basis alongside the existing system, with displays configured to suit controllers. But it was developed within the constraints of the current system. It only deals with the planes crossing into the airport airspace. This works fine for DFW (Dallas-Fort

27  

Testimony of Col. Mike Leahy, AFRL, to the committee, January 18, 2005.

28  

Review of NASA’s Aerospace Technology Enterprise, pp. 46-47.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

Worth Airport), where the airspace is 200 miles in all directions. But things are much more complicated in the Northeast. So we’ve developed something called TMA multicenter. There are no technological obstacles, but it depends on sharing among air traffic controllers in different locations…. We had to become more responsive to the FAA, not because they wanted it, but to be more effective we had to stop pushing on a rope.” Although the manager was expressing some frustration, we take it as a positive sign that ARMD recognized the need to understand customer needs and limitations. The result was not only successful implementation but also increased trust and cooperation, leading to development and adoption of other decision support tools. “As a result of TMA success, the FAA decided we weren’t solely eggheads. We’ve jointly developed a ground management system that is being implemented at Memphis and Louisville. It is very popular with the cargo carriers, FedEx, and UPS.” Transitioning techniques of this sort need to be used systematically, not depend on individual managers’ being attuned to the circumstances of their customers.

Often there need to be changes on the customer side to facilitate successful transition management. An example is the decentralization of the FAA’s acquisition functions. ARMD is now compelled to deal with each of the operating and regulatory units rather than exclusively with the Office of Research and Acquisitions, which was removed from operations. Although some AMRD personnel thought this change complicated NASA’s interaction with FAA, in fact it may lead to more transparency and a more robust understanding of the customer more widely diffused throughout the ARMD organization.

The committee is also encouraged by ARMD’s new approach to management of the Aviation Safety and Security Program. It includes plans to “transfer these advanced concepts, technologies and procedures through a partnership with the Federal Aviation Administration (FAA) and the Transportation Security Administration (TSA) in cooperation with the U.S. aeronautics industry.”29 In this context, NASA has signed memoranda of agreement and memoranda of understanding with other agencies. Although touted as a success, as the FY 2006 budget plan suggests it remains to be seen how well it is implemented in practice and becomes an institutional norm.

29  

Dr. J. Victor Lebacqz, associate administrator for aeronautics research, NASA, “Appropriations Subcommittee Staff Briefing,” March 8, 2005.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

FLEXIBLE HUMAN RESOURCE PRACTICES AND INCENTIVES FOR CREATIVITY

Accelerating innovation in large part means managing change, particularly in dynamic technological fields such as the information technologies central to ATM modernization and to aeronautics design and simulation today. Managing change requires incentives for new ideas, flexibility, ongoing adjustments in portfolio priorities, midcourse corrections in projects, and regular realignment of staff and skill sets. ARMD innovation suffers significantly because of limited incentives for exploring creative new ideas, as well as constraints on its staffing flexibility, some of them legislative, and some structural and organizational.


Recommendation 5-A: ARMD should implement more flexible personnel practices, increase incentives for creativity, and actively manage existing constraints on staffing decision making to minimize their innovation-inhibiting effects.


One significant change in personnel policy outlined in the FY 2006 ARMD budget proposal is an overall reduction in the workforce, albeit a more rapid reduction of civil service positions than of contractor positions.30 In this section we consider other human resource practices that could enable more flexibility and innovativeness within existing structures.

The new ideas and fresh thinking that are often necessary ingredients in innovation are injected in part by bringing in new people. Finding ways to introduce the new people in an environment of significant budget decline and civil service regulations is particularly challenging. Nevertheless, we believe increased flexibility is possible by expanding several techniques already in partial use at ARMD and experimenting with additional human resources ideas used elsewhere.

30  

Dr. J. Victor Lebacqz, associate administrator for aeronautics research, NASA, “Appropriations Subcommittee Staff Briefing,” March 8, 2005.

Also see NASA’s FY05 Initial Operating Plan, particularly the description (p. 6) of actions and intentions regarding buyouts of civil servants during FY 2005 and FY 2006, including “voluntary separation incentives” for employees in “excess competency areas.” Available at http://www.nasa.gov/pdf/107781main_FY_05_op_plan.pdf.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

Personnel rotation is one approach that is common in industry.31 Similarly, DARPA explicitly rotates all technical program managers, who come to the agency on four-year commitments, seconded from then returning to their home organizations. DARPA believes this rotation revitalizes innovation and helps promote technology transfer at the same time.32 In fact, DARPA has no permanent program manager positions. This also allows flexibility for bringing in the most relevant expertise as priorities and competency needs evolve. An added benefit would be increased communication and joint understanding of external needs and capabilities. Several ARMD managers we interviewed noted that the lack of personnel exchanges among NASA, the FAA, and the airlines inhibited effective cooperation in ATM modernization. “Our customers don’t know who we are,” one said, adding that unless ARMD “can understand the end user’s requirements, we are shooting in the dark.”


Recommendation 5-B: ARMD should increase rotation and seconding of personnel to and from its several research centers and its external partners as tools for enhancing staffing and competency flexibility, fostering the early engagement of partners, and facilitating technology transitioning.


In the near term, this could entail expanded use of formal Intergovernmental Personnel Act (IPA) exchanges.

Short of full secondment,


Recommendation 5-C: NASA should foster external customer contact early in and throughout the careers of ARMD technical personnel.


This not only establishes from the start expectations and norms of customer engagement but also serves as a tool for personnel development and retention, making early job assignments more dynamic and interesting. Some high-technology firms that send their technical employees to

31  

The innovative oil services firm Schlumberger, for example, has an aggressive strategy, intentionally maintaining both high turnover and high international mobility within the firm to foster innovation and diversity at all their locations worldwide. See Busher et al., 2003.

32  

Defense Advanced Research Projects Agency, “Welcome to Employment Opportunities with DARPA,” last updated October 1, 2003. Available at http://www.darpa.mil/hrd/.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

interact with customers in the first few months of their careers report quite positive results for both development and retention of the most innovative employees.33

Innovative human resources practices can also encourage creativity on the part of existing personnel. We suggest several approaches. First, despite civil service promotion and pay structures,


Recommendation 5-D: ARMD should pilot test a dual track, pay-for-performance program similar to that in place at the AFRL.


The AFRL program is a contribution-based reward system that allows for the rapid advancement and pay increases for new people based on merit, not where or how long they serve.34 AFRL implemented this scheme as part of the transition from four super laboratories to a single laboratory and in anticipation of significant reductions in research budgets following the end of the cold war. A similar window of opportunity may now exist for ARMD to implement new personnel management policies in the context of its own downsizing.

Expanding innovation flexibility can also mean the freedom for individuals, for minor fractions of their time, to pursue their own ideas. Philips Central R&D Laboratory, for example, quite effectively allowed a few percent of researchers’ effort to be devoted to investigator-initiated work, outside any directed project.35 For many years, the lab hosted an internal fair or poster day, in which employees showcased this work to each other. In recent years, management opened that day to external customers, and they report that the nonpecuniary social incentives and the level of stimulated conversation resulted in considerably increased quality, utility, and relevance of the self-directed work. Philips’s experience suggests that the cost of such a program to ARMD could be minimal. NASA center directors do have available to them the Center Director Discretionary Fund, which allows them to fund basic research activities. This funding allocation (approximately $2 million per center) is under intense scrutiny by OMB examiners, who have concerns about the unstructured nature of this program. Its con-

33  

Busher et al., 2003.

34  

Testimony of Col. Mike Leahy, AFRL, to the committee, January 18, 2005.

35  

Busher et al., 2003.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

tinuation year to year is problematic. However, for the present the three aeronautics centers do have a small degree of flexibility in the funding of new ideas. The committee supports this arrangement and encourages its expansion.


Recommendation 5-E: ARMD should allow R&D personnel some fraction of their time for free thinking and encourage its use by organizing regular employee idea fairs that attract external stakeholders.


Another low-cost alternative to traditional requests for proposals (RFPs) for stimulating innovative ideas would be to invite ideas from nonemployees via significant competitions. Highly successful examples exist elsewhere. Nearly 200 independent teams entered the 2005 DARPA Grand Challenge for an autonomous ground vehicle for rugged terrain.36 The $2 million prize is a remarkably limited expense considering the thousands of people nationwide it encouraged to tackle the problem. Similarly, the $10 million Ansari X-Prize led to the first non-government-sponsored human space flight.37 By establishing a broad goal, without constraining or dictating either the solutions or who participates, such high-profile prizes generate large numbers of ideas from a wide array of viewpoints. The prizes are large enough to attract significant media and public attention but are quite limited investments by aerospace standards.

NASA recently launched the Centennial Challenges program of prize contests related to space exploration.38 The largest prize announced thus far—the 2006 Space Elevator Climber Competition—is only $150,000. Although this is an encouraging start, the program does not target aeronautics challenges, and the prize levels may not be large enough to generate both serious effort and public attention.


Recommendation 5-F: NASA should expand its Centennial Challenges program to offer high-profile aeronautics prizes of a magnitude sufficient to generate considerable participation and public attention.


The committee recognizes that flexible personnel management prac-

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

tices can be disruptive for organizations and employees. Staffing is often tied to particular programs and projects. Increasing employee mobility through rotations and secondments may impose financial penalties in transportation and temporary housing and may not be attractive to employees with families.

In general, workforce development and recruiting has not been a priority in ARMD’s downsizing environment. There has been little turnover, and the workforce is aging. Some employee educational programs exist NASA-wide, but with limited new hiring, aeronautics is not working closely with many higher education institutions. Moreover, education programs at NASA tend to focus on K-12 outreach, aiming to excite young people about space science. This approach does not compare favorably with the institutional support and aggressive recruiting by universities, often through partner-schools programs, and large high-technology corporations.

There are scattered examples of innovative human resource practices in NASA’s aeronautics program. The Ames Research Center recently established a university affiliated research center (UARC) and a joint university-level engineering program with leading West Coast universities. The UARC, a collaboration with the University of California, provides for faculty to be located adjacent to Ames to work on problems of common interest. In the joint university engineering program, Ames provides seed money that supports graduate students to investigate new concepts in air traffic management and opportunities for students and faculty to interact with aerospace industry technical experts and government officials.39 Stanford and two University of California campuses, Berkeley and Los Angeles, are participants in a program modeled after a similar East Coast program that includes the Massachusetts Institute of Technology, Princeton University, and Ohio State University. Again, the expenditure level, $120,000 per school per year, may be too small to have an important impact. By contrast, the General Motors PACE (Partners for the Advancement of Collaborative Engineering Education) program distributes several million dollars each to more than 30 universities worldwide.40

The Langley Research Center instituted another practice being used at one other center that could be duplicated elsewhere. The center reserves $3 to 5 million per year of its general administrative overhead budget for “cre-

39  

See Aviation Week and Space Technology, February 9, 2004.

40  

See http://www.pacepartners.org.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

ativity and innovation.” Researchers may submit a proposal to spend a part of their time on projects of their own conception. This is a more formal arrangement than we envision, but it nevertheless conveys a strong signal that individual imagination and initiative are valued. Believing that time rather than money is the more severe constraint on creativity, we encourage ARMD to institute more such programs for in-house investigators.

FINANCIAL MANAGEMENT TO MINIMIZE THE DISRUPTIVE EFFECTS OF EXTERNAL DEMANDS

Our last set of recommendations for fostering aeronautics innovation through NASA deals with the structuring of financial management at ARMD. To a significant degree, best-practice approaches to financial management aim to send clear signals internally and externally about the value of resources to help managers make efficient choices about how to allocate those resources within and across programs. When signals are not aligned with priorities, resource misallocation and inefficiency result. This is especially important to correct in an era of significantly declining resources.

In FY 2004 NASA completed implementation of an agency-wide full-cost accounting system, which had been in planning and pilot-testing since 1995.41 The purpose of full-cost accounting is to give mangers more complete information about the real costs of their activities, including the costs of personnel and facilities. Historically, program managers were not responsible for certain significant costs associated with their activities, including the actual cost of civil service personnel. As a result, agency administrators believed that the cost implications of program decisions were not well understood and appreciated. Although we strongly support the objective of achieving greater financial transparency, we think that attempting to achieve full-cost recovery pricing for both civil service and facilities use in NASA has had unintended negative consequences for aeronautics R&D activities.


Recommendation 6-A: NASA should modify full-cost pricing for ARMD facilities use, with charges more closely aligned with marginal costs.

41  

See the 2004 NASA Cost Estimation Handbook, available at http://ceh.nasa.gov/webhelpfiles/Cost_Estimating_Handbook_NASA_2004.htm

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

Many ARMD research facilities have two characteristics that make full-cost recovery problematic. First, the facilities have significant long-term value from the standpoint of national security and economic competitiveness; this value should be reflected in public support rather than private user charges. Second, significant fractions of the total costs are essentially independent of short-term facility usage levels. For example, in our interviews at Langley we were told by administrators that the annual cost of operating Langley’s transonic wind tunnel, in which virtually every U.S. aircraft has been tested, is mostly a fixed cost independent of how many tests are run in it; this may also be true of NASA’s other operational wind tunnels.

Under NASA’s full-cost accounting principles, however, prices are based on short-term (i.e., annual) facility usage levels and thus are sensitive to how many tests are run, even in places where operating costs may not vary in that manner. As a result, prices do not reflect the real impact of individual managerial decisions on costs, skewing the incentive signals. We see in this practice significant risk to the long-term financial viability of critical national aeronautics research infrastructure.

Full-cost pricing for ARMD facilities entails charging users the direct operating costs of their activities (e.g., materials, test components, support personnel, power) plus some prorated fraction indirect expenses (e.g., general maintenance, facilities upgrades, technician training, general administrative overhead). The latter is based on the fraction represented by the user in the total hours that the facility is used that year. When facilities run near capacity and have many users, each user appropriately absorbs a small fraction of the fixed overhead, maintenance, and equipment upgrade expenses. However, for a facility that in a particular year is used only occasionally, users who might account for only small fractions of total available capacity but large fractions of actual use in that year must absorb essentially all the costs for unused capacity. This can lead to less utilization as fixed costs are spread over fewer and fewer users, as has been the case with NASA’s wind tunnels—in short, a “death spiral.” Reportedly, fees increased on average 30-35 percent from 2003 to 2005, and, in one particular case, “utilization hours for the 20-Foot Vertical Spin Tunnel dropped 71 percent between 2003 and 2004, from 855 hours to 248 hours.”42

42  

D. Schleck, “NASA Windtunnel Feed Under Review,” Hampton Roads Daily Press, June 12, 2005.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

At our workshops some aerospace industry representatives corroborated their increasing reluctance to use NASA facilities. Gulfstream qualified all four of its most recent aircraft in either France or the United Kingdom, not in the United States,43 despite the fact that the federal government is the company’s largest customer. Similarly, Boeing is going to Toulouse for Dreamliner 787 testing. Both firms report that NASA facilities are not competitive under full-cost charging. The result is that U.S. firms are supporting European infrastructure while reducing facility usage rates in the United States. This raises charges to other users, contributing to a further drop in utilization.

This pricing policy applies equally to internal NASA users, leading to somewhat arbitrary cross-program subsidization. In ARMD this is particularly burdensome for air traffic management research, which tends not to be fixed capital intensive but rather relies on people and on rapidly advancing information technologies. In some of our interviews, project managers suggested that ATM projects end up paying high overhead to support facilities used mainly for non-ATM research. To make matters worse, Congress prohibits NASA from charging administrative overhead expenses on directly funded earmarked projects,44 a growing fraction of ARMD discretionary budgets, shrinking the base on which overhead expenses might be spread. This, in turn, has the effect of encouraging project managers to use contractor facilities and staff rather than civil service personnel whenever possible.

A former NASA official pointed to DOD’s experience with full-cost recovery. He referred to a 1969-1972 failed experiment by the Air Force Arnold Engineering and Development Center. For that period DOD charged users full average costs, including all overhead and equipment capacity, while DOD funded none itself. This led to an unsustainable steep decline in revenue,45 leading DOD to reverse the policy. Since then, DOD has funded more than 50 percent of AEDC’s total annual costs, sharing the burden with users in order to retain an important national strategic asset and insulate it from short-term variations in usage.

Not only does full-cost pricing endanger particular facilities, but it also risks undermining relationships with external partners and internal research

43  

Testimony of Dick Johnson, Gulfstream, to the committee January 18, 2005.

44  

See NASA’s FY05 Initial Operating Plan, p. 3. Available at http://www.nasa.gov/pdf/107781main_FY_05_op_plan.pdf.

45  

For more details see P. S. Anton et al., 2004, p. 61.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

competencies. Our interviews with ARMD program managers suggest that some cooperative programs have been “one of the victims” of full-cost pricing, with repercussions for the competence of NASA employees. Because a customer has to put up all the funding to use a facility, substantive research collaboration with external partners potentially suffers: “government people become data generators and technicians for operating facilities to a greater extent and experts in the field to a lesser extent.” This could result in the hollowing out of internal leading edge research competencies, with ARMD centers becoming simply a for-hire infrastructure with a high fixed cost.

Other external reviewers have expressed similar reservations about NASA’s approach. The 2004 RAND study on NASA’s wind tunnel and propulsion test facilities concluded that the full-cost pricing approach was “creating real risks to the United States’ competitive aeronautics advantage”46 by undermining the financial health of those facilities already underutilized—about one-third of the facilities in all. RAND found that “with declining usage and full cost recovery accounting, these facilities run the risk of financial collapse.”47 As examples, the report cited two Ames facilities that “are unique and needed in the United States [but] have already been mothballed and slated for closure as a result.”48 The National Academies’ Review of NASA’s Aerospace Technology Enterprise also expressed concern about “unintended consequences” of full cost pricing—disincentives to use facilities to demonstrate new technologies, underutilization, and eventual closing of critical infrastructure.

The first task of NASA administrators, the administration, and Congress is to decide which aeronautics research facilities have unique, long-term national strategic and economic value. Once this is done, prices can be set to make optimal use of this capital investment. Marginal cost pricing is likely to be appropriate up to the point that a test facility is fully utilized. Anything that covers marginal costs produces revenue to help defray fixed costs without discouraging use of the facility. Full-cost pricing prices to restrict use. This is not an appropriate policy when facilities are underutilized.

46  

Anton et al., 2004, p. xiii.

47  

Anton et al., 2004, p. xx.

48  

Anton et al., 2004, p. xxii.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

Recommendation 6-B: AMRD should work with OMB and Congress to establish separate centrally funded budget lines for national infrastructure and facilities maintenance.


The RAND study pointed to this solution: “[Wind tunnel and propulsion test] facility operations are not funded directly by specific line items in the NASA budget…. [W]hen a needed facility is closed because of a lack of funding, there is a disconnect between current funding and prudent engineering need, indicating that the commercial and federal budget processes may be out of step with the full cost associated with research and design of a particular vehicle class and indicating a lack of addressing long-term costs and benefits.”49

Without changes in accounting practices, much of the nation’s aeronautics research infrastructure is in jeopardy. Indeed, NASA’s current budget projections anticipate closing many of these facilities. We think NASA has erred in equating full-cost accounting with full-cost pricing. The two concepts are conceptually and practically distinct. Cost accounting information may be used not only for fee setting but also for accountability and performance measurement, budgeting, and managerial control. Average cost–based pricing is not considered best practice in industry50 and is particularly problematic in circumstances of large fixed costs and high public value. NASA should centrally bear the fixed overhead costs incurred to maintain strategically important facilities. Users can be expected to bear the additional costs associated with their incremental use of facilities, but not full costs. In a shared-cost model, users should not pay for unused capacity.

It appears to us that NASA is too narrowly interpreting the legislative requirements regarding full-cost accounting.51 Federal standards do allow flexibility in implementation. In the case of aeronautics R&D, there are broad

49  

Anton et al., 2004, p. xvi.

50  

See, for example, E. Mansfield et al., “Pricing Techniques,” in Managerial Economics, 5th ed. (New York: Norton, 2002). On the shift away from cost-based prices, see R. Tang, “Transfer Pricing in the 1990s,” Management Accounting 73(8), pp. 22-26.

51  

The most important related federal standards are the Statement of Federal Financial Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Concepts and Standards for the Federal Government. Available at http://www.fasab.gov/pdffiles/sffas-4.pdf. SFFAS No. 6, Accounting for Property, Plant, and Equipment. Available at http://www.fasab.gov/pdffiles/sffas-6.pdf.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

benefits to the nation above and beyond the benefits to specific users, and sharing costs for such public purposes is even within NASA’s own standards for full-cost recovery.52 These require full-cost charges only when special benefits accrue to users, not when there is general public value. We encourage a more liberal interpretation of these full-cost recovery requirements.

There are some recent hopeful signs that ARMD administrators are aware of the potential problems of full-cost recovery. The ARMD associate administrator’s briefing53 on the FY 2006 budget defends the full-cost initiative but acknowledges the need for flexibility: “Full cost accounting is necessary to understand the return on taxpayer investment … [but] NASA is developing innovative ways to maintain flexibility in human resources and institutions…. One component of this new management approach may be a direct ARMD investment in key facilities to ensure longer-term facility sustainability.” In another initiative, NASA’s new administrator, Michael Griffin, has directed a group of headquarters officials to study how to “better manage NASA research facilities in a full-cost environment.”54 We hope that these deliberations embrace the principle of central funding of shared fixed costs and incremental pricing for internal and external users.

Another candidate for centralized budgeting is contingency funds, outside specific projects, enabling more flexible responses to unforeseen research contingencies. Rigid project silos with inflexible milestones that do not tolerate failure or changes of direction are a recipe for narrow, short-term research agendas.


Recommendation 6-C: Because midstream changes are the nature of leading edge R&D, ARMD should achieve greater budget and milestone flexibility through centrally funded pools and contingency accounts.


ARMD project managers told the committee they have no official contingency budgets, centrally funded or otherwise. Some report that they

52  

NASA, Review, Approval, and Imposition of User Charges, Policy Directive NPD 9080.1F, October 14, 2004. Available at http://nodis3.gsfc.nasa.gov.

53  

Dr. J. Victor Lebacqz, associate administrator for aeronautics research, National Aeronautics and Space Administration, “Appropriations Subcommittee Staff Briefing,” March 8, 2005.

54  

Schleck, 2005.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

occasionally manage to create ad hoc contingency accounts, but that this is dependent on individual managers and does not enable cross-program conversations about relative priorities. Explicit contingency funds to which project managers could apply would make these decisions more transparent and more likely to be in alignment with the overall mission. Another option is an agency-wide central pool to carry civil servants whose projects are cancelled. This would not yield short-term resource savings overall, but it would increase flexibility and better align managerial incentives at the project level.

Two principal challenges in dealing with the inevitable uncertainties in leading edge research are the rigidity of the annual appropriations process and the constraints imposed by overreliance on project budgets. The short-term planning needed to accommodate annual budget cycles and the associated fluctuations in priorities are especially challenging for long-term research. Neither project managers nor top NASA administrators can change major project milestones without OMB approval. The perception expressed to us by ARMD management at Langley, for example, was that anything they defined as a contingency would get cut by OMB. Moreover, civil service regulations severely restrict midstream staffing changes.

In the past, NASA aeronautics had a systems technology program and a base research and technology program. The former was composed of projects conceived, funded, and operated as projects, with funding terminated in some cases. The basic R&D work was longer term and continuously supported. One center official observed that today all activities are funded in five-year chunks with a beginning and an end, making it difficult to take a long-range point of view. “Now that there’s no more R&T base, there’s a bias in favor of [finite outcomes] and therefore against experiment and innovation.”

One approach begun as a small pilot program is the Working Capital Fund (WCF). The legislative authority for this new formal structure enables more budget flexibility for capital and personnel, not tied to direct annual appropriations.55 NASA is able to establish WCFs for internal business-like entities with customers for products and services. Funds received from customers can then be expended as needed, without regard to fiscal year limitation.56 NASA began a pilot WCF in FY 2005 with an informa-

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

tion technology procurement group, called Science and Engineering Workstation Procurement, that acquires computers and related equipment on a transfer fee basis for programs throughout NASA. Because the WCF legislation extends to services, consideration should be given to extending the idea to aeronautics wind tunnel facilities and to R&D services more broadly. Annual budget cycles would apply to the procurement projects, but management of the provision of services would have considerably more discretion and enable longer term planning.


Recommendation 6-D: ARMD should explore establishing WCF structures for wind tunnels and aeronautics R&D services.


Earlier we described the increasing incidence of congressionally directed projects, most of which are unfunded, that is, they are mandated with the expectation that NASA will perform the tasks within the agency’s current budget. The managers we spoke to complained not about their value—“most are good things to do”—but about their disruptive effective on planning. We suggest that every effort be made to align these activities with established programs. This may be most feasible with projects that reflect congressional concern that some important public good objective is being neglected in NASA’s planned activities. However, some earmarked projects bear little relationship to NASA’s mission. In those cases, a separate budget account should be created for managing them.


Recommendation 6-E: ARMD should negotiate with congressional sponsors and earmark recipients to align mandated activities better with established programs and should assign the projects to a separate budget account and management area.


The immediate effect of a separate budget for congressionally directed projects would be to reduce the apparent size of the balance of the ARMD budget and seemingly narrow the discretion of associated program managers. However, real discretion over the balance of the program would increase. In 1995 approximately one-quarter of DARPA’s $2.5 billion budget was earmarked.57 The director ceded control and responsibility for the ear-

57  

Comments by David Whelan, Boeing Skunk Works, at the committee’s workshop, January 18, 2005.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

marked projects to the military services, reducing DARPA’s budget to $1.9 billion. But the transfer significantly improved budget flexibility and stability, resulting in a healthier technical management environment. NASA should consider following this model.

ORGANIZATION OF NASA AERONAUTICS R&D

As noted in the preface to this report, the administration’s policy preference is to shrink ARMD’s resources and portfolio on the assumption that a prominent government role in aeronautics R&D is no longer justified. The majority view in the technical, industrial, and academic communities appears to be the opposite: national technology needs in aeronautics are broad, compelling, and inadequately served by ARMD’s declining resources. If the first course prevails, ARMD’s subordinate role in NASA is appropriate. Its job will be to conduct fewer projects more efficiently while managing the contraction of three research centers. Eventually, lacking unique robust technical capabilities, it will go out of business. However, in the event that stakeholders mobilize effectively in support of an expansionist program, other forms of organization may be worth considering.

The President’s 2004 Commission on Implementation of United States Space Exploration Policy (the Aldridge Commission), which among other things recommended a restructuring of NASA’s research centers, considered the option of removing the aeronautics R&D program from NASA altogether. The principal reason the commission gave for rejecting that alternative was ARMD’s involvement in addressing planetary atmospheric transportation as an eventual component of space exploration. In other words, space program needs dictated the conclusion, not the direct needs of aeronautics, even though an independent organization might be able to contract with NASA to support the Mars mission.

Another way to elevate the importance of the aeronautics portfolio and provide some protection from the demands of the space program is an agency-within-an-agency arrangement. In this case, too, NASA’s space program could contract with NASA’s aeronautics program for planetary aircraft work, but it would be more difficult to divert aeronautics resources to space activities. The Defense Department and the military services could similarly directly contract for aeronautics R&D services. DARPA has operated along these lines since its creation in 1958, reporting directly to the secretary of defense and operating independently of the other military R&D establishments. In a fee-for-service manner, DARPA subcontracts for most

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
×

support services and infrastructure. Intelsat is a related example, in which bonds issued against user-fee revenue streams help pay for long-term technology and infrastructure.

Another precedent, closer in time and related in function, is the Air Traffic Organization (ATO), established within the FAA in February 2004 with its own chief operating officer and 36,000 employees.58 ATO organizationally combines responsibility for air traffic operations, equipment acquisition, and research, separate from FAA’s regulatory role.

The committee is not recommending either reorganization. That would be premature as well as beyond our mandate and competence. Rather we are underscoring our belief that the implications of the current policy divide are far-reaching—for NASA, for innovation, and for the nation’s aviation sector. Until the divide is bridged, our management advice, although we hope useful, is a secondary priority.

58  

See the May 20, 2005 FAA organizational chart, available at http://www.faa.gov/aba/html_pm/mi/files_doc/HQ-ORG.DOC.

Suggested Citation:"2 Innovation Facilitators and Accelerators for Aeronautics." National Research Council. 2006. Aeronautics Innovation: NASA's Challenges and Opportunities. Washington, DC: The National Academies Press. doi: 10.17226/11645.
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