Information and Incentives

In January, I discussed the notion of transforming organizational silos in academia to collaborative networks that can address large-scale research problems.  At the moment, I am sitting in a meeting at the University of Illinois that is, in part, focused on this possibility.  People are discussing the difficulties that they have encountered in pursuing this transformation.

Most of the difficulties can be attributed to the problems associated with incentivizing the silos to contribute to the networks.  Typically, faculty members have appointments and tenure lines in one or more of the academic silos – colleges, schools, and departments.  The silos often see their faculty members’ participation in collaborative networks as threatening their control of agendas and gain of potential rewards in terms of recognition and budget.

Some of these perceptions are certainly warranted, but there are mechanisms for ameliorating these difficulties.  First, the flow of budgets, overhead funds, and other rewards needs to be much more transparent than typical in most universities.  Somewhat simplistically, if all the stakeholders can track the flow of financial, physical, and human resources, and form expectations accordingly, then perceptions will be based on reality rather than rumor.

Once this flow is made explicit, one is in a position to change the flow to create the incentives needed to align the stakeholders in both the silos and the networks.  Succinctly, the silos need to be treated like shareholders in the networks and gain financial returns, and associated non-financial returns, due to their participation and support of the networks.

For this to work, the networks have to be capable of securing resources that the silos could not have otherwise secured.  In other words, the formation of collaborative networks needs to result in “new” money.  To the extent that “old” money needs to be diverted to seed the formation and startup of the networks, the case needs to be made that the likely returns of new money will dwarf the investments of old money.

So, the bottom line is information and incentives.  The organizational system needs to be transparent so that all stakeholders understand how things really work.  This understanding then needs to enable aligning incentives so that everyone can see how the investments they are being asked to make are likely to yields returns in which they will share.

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