By Eoin Galligan
The university research sector has experienced major change over the last 10 or so years. Key funding programmes such as Horizon 2020, changed the traditional outcomes of research, with new vocabulary such as ‘impact’ and start-ups (van den Akker and Spaapen, 2017). Stakeholders even began to question the purpose of universities. I work within the boundary between research and industry, creating university-industry partnerships. Working alongside early-career researchers, I propose that a toolkit of strategy skills – re-framed for the research environment – could help to increase understanding of these new outcomes and increase the performance of universities. Such skills are often taught to commercial, not-for-profit or government managers but rarely introduced to researchers. In this article, I introduce these skills and hope to persuade you that their application is valuable.
Before I begin, I believe it is helpful to reflect on two key issues. First, it is important to consider that many strategy concepts have been successfully re-designed for the government and not-for-profit sectors. These tools are taught to managers to improve the quality of their judgement and improve performance. Second, although my proposed activity can be applied by one individual researcher, I would hope that the real ‘value’ is found by applying these concepts within a team. A key limitation of university research is its focus on individual performance. This neglects to develop the management skills and judgement of early-career researchers. The team could be formed by members of a research group or by a virtual team formed of postdocs connected by collaborative work. Creating a team encourages us to move beyond subjective opinion and develop a criticality to our perception, using both evidence and business concepts to create a strategic analysis.
What is Strategy?
Michael Porter, a professor at Harvard Business School defines strategy by differentiating it from day to day operations (Porter, 1996). Operations describes the internal functioning of an organisation on a daily basis. In turn, “operational effectiveness” means performing these activities better than rivals do. For example, a commercial manager will try to sell more products or reduce costs. Strategic thinking considers the performance of organisational systems and activities in their entirety to the environment. An operations manager is very busy working to perfect operations, based on how the business model was set up. However, a strategic manager does not focus on operations, but assesses the environment, the business model, sector trends and stakeholders. This strategic analysis is then used to design new systems to achieve a competitive advantage that competitors do not possess.
Where does a manager (or researcher) start?
A good place to begin is to evaluate key strategic issues. These can be defined as “developments, events and trends having the potential to impact an organization’s (current) strategy” (Dutton and Duncan, 1987). The benefit of analysing activity that occurs outside your team is that it will often impact your career. An example of a strategic issue within the research field is the trend of research funders changing criteria within research funding to describe societal needs. Many issues may be challenging for the team. However, it is important to continuously evaluate them so that everyone can respond with a reflective, rational approach. If such issues affect everyone’s career, the analysis should be beneficial for everyone.
The second step is to examine the external world. Here, I use two frameworks: a stakeholder analysis and the PEST model. Stakeholders are the individuals or groups who depend on your organisation to achieve their goals and who also affect your attempts to achieve your goals (Johnson, Scholes, and Whittington, 2006). Examples of stakeholders are your department colleagues, your management, funding organisations, competitor research groups and industry. This analysis seeks to identify the stakeholders of your team and classify them according to how they affect you and understand their power. It is important to reflect that some stakeholders will seek to control you because that is their job. The analysis involves desk research and direct communication (phone or online interviews) with stakeholders to obtain evidence on their perception of key strategic issues. The benefit of this interview and analysis work is that it provides evidence for a research group to understand key stakeholders, their interests, their vocabulary and the key outputs and outcomes that they demand. In strategy work, subjective opinion does not help. However, evidence-based analysis encourages everyone to listen to our critical perspective on issues.
The PEST framework develops this analysis further. This outlines 4 variables for an analysis of an organisation’s ‘environment’: political factors, sociological factors, economic factors and technological factors. For example, a political analysis would assess the latest policy related to research funding in your country or in Horizon Europe. The sociological analysis assesses cultural norms at your institution. How is gender equality managed? Is academic entrepreneurship causing challenges between colleagues? As with the stakeholder analysis, the PEST framework encourages us to identify the important components of how we assess the external world, outside our research group.
Once the environment is understood, a company would proceed to examine the structure of their market. For example, within the travel sector, low-cost airlines entered the market and caused major disruption to the industry. Michael Porter argues that the structure of an industry is a product of key forces whose collective strength determines the ‘ultimate profit potential in the industry’. Obviously, we must adapt his concept for a research group within the research sector, where profit is not the focus. Universities (and researchers) have entered a new world, where they exist in a form of competitive ‘market’. Porter argues that an organisation’s ability to manage these forces – to overcome weaknesses exposed by these forces or to take advantage of opportunities offered by the alignment of these forces – determines the attractiveness and competitiveness of the industry and the organisation’s ability to perform. I adapt each of the components of Porter’s model below:
Threat of new entrants:
This describes the barriers to new researchers entering the research field. Importantly, new entrants within research are potential collaborators as well as competitors. For a company, economies of scale is a considerable barrier. A new company may need considerable investments to be competitive. Obviously, a new researcher needs to be competitive in the funding landscape. But imagine one institution has a deep culture of industry collaboration and that early-career researchers are incentivised to work closely with companies. As they create research groups, these ‘new entrants’ hold a competitive advantage to their peers that is not dependent on scientific knowledge – but on the value of knowledge and networks that industry collaboration provides. Further, these individuals would satisfy a funding organisation’s desire to see greater industry collaboration.
For a company, the buyer has power depending on the level of competition. Lots of competition creates pressure for a company to compete. Obviously, publications are the important example where research output is “bought”. The peer review process assesses the research excellence of the work, approving publication. In addition, funding organisations demand (i.e. ‘buy’) the research quality of a researcher during a grant application process.
However, the sector is changing and new buyers have appeared. Industry and seed venture capital investors review the scientific literature to identify key researchers to work with. This enables them to target researchers that allow their company to acquire knowledge or create start-up companies with innovative intellectual property. These relationships bring new types of funding and knowledge, typically unavailable for researchers. For example, a researcher could work with the investor to create a start-up company that then collaborates with her lab and funds postdoctoral researchers. These postdocs conduct activity for the company – but remain as university staff researchers.
For a company, the threat of substitute products or services increases as the market size increases and as competitors change attributes such as price or their business model. It can be difficult to precisely define a substitute. For example, if I am hungry, a range of restaurants compete for my business. On the other hand, if I wish to buy a car, I am unlikely to buy a truck. For research breakthroughs, there is certainly no substitute. However, if a company wishes to collaborate with academia, there are many universities competing for their attention, creating many substitutes. As discussed, industry sets key criteria for academic collaborators. These criteria would determine if they substitute one research group over another. Considering some funding organisations demand researchers to apply with companies, understanding such criteria would be a competitive advantage. Typically, companies seek universities with an entrepreneurial culture and researchers that can switch between discovery research and development research that is much more embedded within a team.
Companies act as a supplier to many of us as the consumer. For example, if I buy an iPhone, Apple controls my future online activity via its ‘world’ of apps, highlighting its power. For researchers, the suppliers are dominated by the funding organisations that enable research activity to begin. Researchers do not have a broad choice of funders and competition is intense. A notable trend is the increase of corporate sponsored research where a company defines a specific research task. This positions industry as a supplier of knowledge and funding – but typically only to an elite group of institutions. Here, Porter’s framework encourages us to consider a key trend where industry is becoming both a supplier and buyer for a research group.
The internal view: the internal “resources” of a research team
Previously, I covered how strategy work assesses the ‘external environment’ of the organisation. I now apply a concept called the ‘resource-based view’ (RBV) of a company as developed by Grant (1991). This proposes that a company achieves competitive advantage based on its internal resources and capabilities. As before, we re-frame this and examine how resources and capabilities enable a research team to become competitive. Importantly, this RBV perspective can be seen as a critique of Porter’s external approach. It links competitive advantage to an internal focus but also argues that a manager needs skills on how to apply and combine resources that create capabilities which create the competitive advantage.
First, a team should run a ‘resource audit’. This creates a list of everything that can be regarded as a ‘resource’. Traditional examples are: specialised equipment, unique knowledge of a specific aspect of the research field or highly experienced individuals such as postdocs or research technicians. Some new resources examples may be challenging: the group’s working culture, industry contacts, venture capital contacts or relationships with university entrepreneurs. A resource can be defined as the productive assets that the group owns and controls. This includes tangible resources (equipment and samples), intangible resources (reputation and culture) and human resources (skills and motivation).
Second, the team needs to consider how such assets can be combined to create capabilities. This may sound obvious – but is it? How many research teams proactively consider culture as a resource? Is historic networking with industry considered as a resource? Could industry relationships be blended with the team’s research infrastructure to create competitive grant applications? Therefore, the third step is to consider how its resources and capabilities define the group’s ‘competitive advantage’. This could mean how resources and capabilities increase the probability of achieving breakthroughs, creating industry relationships, accessing research infrastructure and achieving funding.
After these steps, the team is ready to devise its strategy based on the RBV approach. In parallel, it can consider a ‘resource gaps’ analysis. This considers what resources & capabilities it needs to invest in to remain competitive. Do other research groups have access to specific knowledge or industry networks? And how should the group learn about such information?
How will such frameworks help us?
Using business concepts within an academic setting can be challenging. As I mentioned previously, these concepts have been applied across the public sector and the not-for-profit sector. Managers have received this type of training to improve critical thinking, applying the concepts to their real-world practice. The concepts help to structure our thinking, but they do have some limitations.
My goal here has been to introduce PhDs and Postdocs to a toolkit of strategy frameworks that enables effective communication of their research group’s strategy. This demands critical thinking on key issues and the use of academic and strategic language to create a persuasive argument. It prevents subjective bias or groupthink becoming the core of an organisation’s strategy. Just as the scientific method governs research to achieve excellence, we need to apply comparative principles to decision-making within strategy.
These concepts are the beginning of our strategic thinking. When applying the Five Forces framework, we do so with evidence from our research sector to create a meaningful, evidence-based analysis of the forces a research group is facing. With the RBV approach, we use evidence of the resources and capabilities of our own and competitor research groups. Combining these concepts encourages a continuous process to aim towards a competitive advantage for early-career researchers. A final question to ask is if these concepts could help any other individuals within the university sector? Are university presidents and faculty deans at risk of using subjective bias or groupthink? I leave this as a question for us to reflect on.
Dutton, J., Ducan R., (1987) “The influence of the strategic planning process on strategic change”, Strategic Management Journal, Volume 8, Issue2, March/April 1987
Grant, R.M. (1991) ‘The resource-based theory of competitive advantage: implications for strategy formulation’, Management Review, vol. 33, no. 3, pp. 114–35.
Johnson, G., Scholes, K. and Whittington, R. (2006) Exploring Corporate Strategy: Text and Cases, Harlow, FT Prentice Hall.
Porter, M. E. (1996) ‘What is strategy?’, Harvard Business Review, November–December, pp. 61–78.
Van den Akker and Spaapen (2017), “Productive interactions: societal impact of academic research in the knowledge society”, LERU position paper, Accessed online March 2018