Friday, September 30, 2011

What is Leadership?

By Keith McDowell

The recent televised debates by candidates for the Republican presidential nomination bring to mind expressions from a bygone era such as “gadzooks” and “ye gods!” “Holy Toledo, Batman” is much too modern. Who would have thought that a return to the nineteenth century would be embraced with such fervor by those who want to lead the nation, especially in the current environment of global competition? No taxes, no regulations, no EPA, no infrastructure investment, no social nets, no health coverage – in short, no federal government. It’s every man for himself with government restricted to local communities and states. Oops, this sounds more like a feudal society. Maybe the nineteenth century is also much too modern for the candidates. And, shucks, I’m told those folks in the nineteenth century actually invested in public financed infrastructure!

Of course, we have the latest anointed white knight in shining armor destined to save the Republican party, Governor Chris Christie. Unfortunately for most of us, his management style on the surface appears to be that of the school yard bully. It’s “in-your-face” and “none-of-your-business” on steroids. I’m sure that style will work well for a president on the international scene, especially for those who believe in the George W. Bush “bring-it-on” Texas version of being a bully around the globe. The New Jersey version should be even better – cement boots instead of cowboy boots.

For those of us who enjoy political satire ala Saturday Night Live, the current crop of Republican candidates and the behavior of the supporting cast – otherwise known as an audience, couldn’t possibly get any better … unless, of course, Donald Trump and Sarah Palin decide to joint the fray. But as humorous as the political spoofing can be, the performance of most of the candidates is deeply troubling, not to mention some of the crazy notions they espouse. Do any of these candidates really posses the necessary leadership skills and the basic understanding of how the modern competitive world functions to serve as president?

The concept of leadership has always been difficult to define and characterize. What works? What doesn’t? Is it dependent on the time and the circumstances? Is it situational? Does it depend on the desired outcomes and the metrics used to measure the outcomes? Can it be learned or does it reside in one’s genes? There are many questions to be asked and many points of view.

Like many who have served in positions of responsibility, I’ve been asked on a number of occasions to address the issue of leadership, often at leadership academies or training programs for rising managers and administrators. Over time, I’ve thought about my own particular brand, especially as regards the all important activity of making decisions. Three decades of management experience, both at universities and a national laboratory,   have taught me that there are four basic principles to be obeyed that cover just about all scenarios. These principles are as follows:

  • Be number one, otherwise you won’t be – or more explicitly, always function with the highest level of professionalism using the highest possible standards.
  • Get it right to start with; it takes less time.
  • You get there one step at a time.
  • You have to spend money to get money.

Simple? Yes! Effective? These principles worked for me.

Leadership can also be dissected by revealing lessons learned. Here are mine.

  • People get things done, not plans, processes and technology, and people make mistakes – stand behind your people.
  • Never admonish/discipline/criticize an employee in public.
  • Find out what the rest of the story is.
  • Deal immediately with personnel problems – the hardest part is telling people news or evaluations they don’t want to hear.  Saying no is hard.
  • Deal immediately and professionally with a problem.  Auditors love it.
  • It is better not to pass your personnel problems along to someone else by moving an employee.
  • Activity is not the same thing as productivity. 
  • Let the people who work for you do their jobs and constantly congratulate and thank them when they do.
  • Be informed, but don’t micromanage.
  • Keep your stories simple, straightforward, and honest – you rapidly become too busy to keep up with different versions of the story.
  • Decisions:  do your homework, get the best synthesis from staff and others, but make the decision in a timely manner recognizing you often won’t have all the data needed.
  • Encourage open and frank debate in your staff meetings.  Use a better idea than yours when someone gives it to you.
  • Pick a target, get moving toward it, and do mid-course corrections as needed – but avoid ready, fire, aim.
  • Email rage is real.
  • Periodically assess your accomplishments.
  • “Go to where the future is going to be, not where it is now.” (Revision of Wayne Gretzky and the hockey puck aphorism.)
  • Have fun!

Ultimately, leadership is all about moving an organization or nation forward while avoiding unnecessary collateral damage. It’s about maximizing the greater good while protecting the individual. And for the economy, it’s about saving the middle class in order to protect the consumer base. Business and industry without customers is a certain path to decline and decay in America.

Leadership at the federal level also means investment in building an innovation ecosystem and infrastructure second to none. Just say no – the mantra of the Tea Party movement – is not acceptable. We can debate the specifics of the ecosystem, but failure to build one or strengthen our current one is not an option unless we plan to concede defeat in the global marketplace.  So, why is the United States moving forward at a snail’s pace – other than blaming our dysfunctional Congress? My answer has remained the same for well over a decade. The only thing holding us back is ourselves.

Tuesday, September 20, 2011

Anatomy of a University Incubator


Keith McDowell

University incubators for startup companies are popping up all around the United States with many pundits and bloggers suggesting that we have unsustainable bubbles, both in number of incubators and number of companies being incubated. We’ve saturated the market goes the litany. Maybe so, but I doubt it.

More relevant to many in the commercialization of university research community is the issue of how one creates a university incubator. What are the steps and, in particular, how much does it cost and how does one pay for it? Having personally created two such incubators and having watched the creation of numerous others, I have a simple message to relay: there is no bottom line and no single formula for creation, let alone success. Indeed, even teasing out the costs of forming and sustaining an incubator is difficult and often inextricably tied to other activities. Two examples prove my case.

The University of Texas at Brownsville paid approximately $3 million for a defunct 600,000 square-foot shopping mall and converted part of that space into an incubator. Obviously, the mall was purchased to expand university space, not to build an incubator. On the other hand, The University of Texas at Arlington (UTA) worked with the Arlington Chamber of Commerce and obtained a grant for approximately $1.8 million from the Economic Development Administration of the U.S. Department of Commerce to purchase a building next to the campus specifically to be used as a university incubator. The university provided matching funds of several hundred thousand dollars as part of the grant fully expecting to move the Office of Sponsored Projects from expensive rental space into the facility, thereby converting a recurring cost into a one-time cost and a long-term cost savings. So how much was spent in these two cases on the incubator and over what time period? Only an accountant wearing a green eyeshade and using a sharpened pencil would attempt to answer that question.

Having dispelled the notion of a simple formula, I hasten to point out that there are key factors that play into the creation and maintenance of university incubators. Such factors are best understood not in the aggregate, but by appeal to case studies of individual incubators and how these studies can inform both the general practice of university incubation and the specific instance of creating an incubator. In that spirit, I review in this article the anatomy of a single incubator: the Bama Technology Incubator.

The story begins with Robert E. Witt, former President of UTA and currently President of The University of Alabama (UA). Visionary in his leadership, Witt recognized in the late 1990s the need for a new model on how universities engaged economic development in their local communities. The incubator at UTA was a direct result. Upon assuming the presidency of UA in the spring of 2003, Witt determined that a similar effort was required in Alabama and I happily joined his transformational team in November of 2003 as the first vice president for research at UA.

The situation at UA in 2003 was similar to many universities at the time. There was an associate vice provost for research and a sponsored projects office with a director reporting to him. Grant accounting reported to the business office. Technology transfer was sporadic and commercialization of university research mostly didn’t exist. No one was to blame. Such activity simply wasn’t a part of the general culture of academe at the time, although the commercialization tsunami was rapidly taking hold and about to burst onto the American scene. Witt took the most important step needed to transform UA. He created a new budget line of approximately $2 million for my office and challenged everyone to get the job done to the highest standards. Second best was unacceptable to Witt.

We needed a team of the very best people who understood the integrated and symbiotic nature of research, research administration, technology transfer, commercialization of university research, and – yes! – innovation. Dr. Marianne Woods, a national leader in research administration and subsequently a member of the COGR Board, was the first onboard in the spring of 2004 as an associate vice president for research. Under her leadership, grant accounting was brought into the Office of Sponsored Programs under a new director, Cindy Hope. Cindy is nationally known for her knowledge and training programs in grant accounting through NCURA. In today’s marketplace, such seasoned leadership requires a minimum salary of $200,000 while going as high as $250,000 or more in some cases.

With respect to the creation of an incubator, UA had a most unusual advantage in 2004. It was called the AIME building. A 50,000-square-foot facility completed in the year 2000 and paid for by a $9.3 million grant from the Department of Energy, AIME housed the Alabama Institute for Manufacturing Excellence. The building was multi-purpose with space and utilities for wet labs (several labs not yet built out), a large high-bay facility, a giant projection screen capability, state-of-the-art IT infrastructure, classrooms, conference rooms, and an administrative wing. It was the perfect facility for an incubator. And, furthermore, the original AIME program had died away quickly leaving the facility with no identifiable occupant in 2004 other than general usage by various colleges. Witt rectified that situation and permitted its use as an incubator.

But there was much more to the equation than merely creating an incubator in the AIME building. After much brainstorming, the concept for an innovation center coupled to the incubator emerged. Although “proof of concept” was an essential ingredient of such a center, the UA team recognized that the full panoply of functionality for the commercialization of university research would be required in order to take UA research from the lab to the marketplace, particularly as a startup company. We would need a UA Office for Techology Transfer, the Bama Technology Incubator, and the new innovation center, all reporting to the Office of Research.

As part of the brainstorming, we listed all possible functions and activities that might be required across the spectrum including entrepreneurship and the engagement of students, both for training as entrepreneurs and as innovators. The new innovation center was named the Alabama Innovation and Mentoring of Entrepreneurs (AIME) Center. [As a humorous side note, we chose to keep the acronym AIME. What can I say? The letters were chiseled in stone on the front of the building!] Rather than enumerate herein all the functionalities reviewed and exactly how they were broken out among the four entities, I defer to two annual reports at the end of the creation period for the details – OTT 2007 Annual Report and AIME annual report for 2007 – and the websites hyperlinked above for the four offices. An Alabama news release also contains useful information. I’ve also addressed the issue of innovation centers in a previous article.

With respect to staffing levels for the new UA infrastructure, the Office of Technology Transfer has a director, a licensing specialist, and an administrative assistant. AIME has a director, a staff research engineer, a staff research scientist, and an administrative assistant. Postdoctoral fellowships are also offered by AIME. The AIME director serves as the director of BTI since AIME and BTI are integrated into the AIME building. Although AIME sponsors and pays for “proof of concept,” developmental, and innovative research directed toward university intellectual property (IP), partially with revenue return from all university IP, a principal source of funding is direct industrial funding with support from a number of international companies. Such funding requires flexible IP policies and a willingness to negotiate and build trust relationships with industry.  Startup companies located in BTI also pay a rental fee, although as always with university incubators, the deal structure can be very complex and involve equity in the company.

An important ingredient in forming the UA model and in coalescing the team dynamics was the incorporation of one of the UA attorneys onto the team by paying for one-half of their salary. The attorney was involved at all times in the decision-making and made a real member of the “commercialization team.”

The UA model didn’t stop with people and infrastructure. Activities such as the formation of an online research magazine and the creation of the Alabama Launchpad in collaboration with the Economic Development Partnership of Alabama took place. Alabama venture capital and angel investors were brought on board. Every conceivable function or activity that could be used to accelerate the commercialization of university research was reviewed and added as appropriate.

In summary, the Bama Technology Incubator was created as part of an integrated whole built from existing infrastructure and facilities. How much did it cost to create it? How much does it cost to maintain it? These questions are not easily answered when one understands the full commercialization structure at UA or the history of the program. For example, how does one separate out the cost of AIME from BTI? Should one divide the energy costs for the AIME building among all the users including the colleges that use the classrooms? When student entrepreneurs work with the startup companies in BTI, is that a cost for BTI or part of the general education budget? These are all difficult questions, but ones that must addressed by a university when forming an incubator. Of course, each case is different and that’s my essential point. How many universities have an AIME building sitting and waiting to be used as an incubator?

But there are some lessons to be drawn from the BTI story. First, visionary leadership at the top from people such as President Robert E. Witt is critical. Second, always shoot for the highest standards and always hire the best people, no matter the costs. The return on that investment is almost incalculable. Third, it helps to have a budget line, but more important is to have a flexible budget line. Fourth, rigid IP policies and, more broadly, rigid policies to manage the incubator are problematic in the modern age of reduced funding for universities. One can’t engage industry easily with such policies. And fifth, university incubators divorced from the bigger picture of innovation are dead on arrival from my perspective.

The anatomy of BTI is only one story and likely not one widely realized in other situations. But it is one of many stories that need to be told as we attempt as a society to understand the role of university incubators in the age of global competition.

Saturday, September 10, 2011

Ignorance: the Bane of Innovation

By Keith McDowell

EVACUATE! The dreaded message popped up on the computer screen only moments before the power went out, forcing my son to grab a computer gone dead and head for his car. The computer marked the final item in our attempts on the 4th of September to take valued possessions with us as we fled the firestorm growing by the second and rampaging near the entrance to the Steiner Ranch subdivision in Austin, Texas. We had no choice but to obey the order. Being trapped by a raging wildfire potentially blocking the only way out, other than a swim across Lake Austin, wasn’t the most innovative idea on how to spend a Labor Day weekend. Ultimately, Mother Nature did her worst as winds gusting at better than forty miles per hour drove the flames to destroy 23 homes and seriously damage 3 others. We were lucky. Many were not.

Fire has always played a major role in the daily lives of people – both as a source of energy and as a destroyer of property. Coupled with earth, air, and water, it served for centuries as one of the four elements comprising a theory of the universe. Yet, one has to wonder if early caveman thought of the concept of fire as “just a theory” as he watched wildfires consume the savannah that provided his essential needs.

Even today, the power of the four mystical elements captures our attention in movies and books such as The Fifth Element and Angels and Demons. Dan Brown in particular drove home the classic struggle between reason and faith as the Illuminati plotted against the Catholic Church. Of course, obeisance to such ancient thinking is all in jest since humankind has long since left the 15th century behind and passed through the Renaissance and the Age of Enlightenment and Reason. We now live in the information age with science, technology, engineering, and math coupled to data-driven analysis from economics, sociology, history, psychology and many other fields paving the path for an era of innovation and enlightened leadership as America competes in a rational global society … or do we?

Global warming driven by human factors is “just a theory” according to Texas Governor Rick Perry, the current leading contender for the GOP presidential nomination. Facts and data don’t matter to him. After all, they’ve been manipulated by scientists to attract research grants. The fact that June, July, and August in Texas were the hottest months ever for any state in the United States with respect to average temperature as well as breaking records for the most days hotter than a hundred degrees is just an inconvenient fluctuation. The fact that Texas is on fire with a land mass larger than the State of Connecticut having been burned this year is just an aberration. The fact that the drought in Texas has cost farmers more than $5 billion is simply an act of God and one that we should pray about at a mass meeting in Houston. Yes, we all understand that local weather is not the same as climate change, but they are linked and Texas as well as the rest of the Nation is clearly displaying this year the pattern of large-scale weather deviations predicted by global warming. And then we have evolution – also “just a theory” according to Perry.

But Perry is not alone in his anti-science stance and views. Indeed, according to Paul Krugman in his article Republicans Against Science from The New York Times, such anti-science, anti-intellectual, and anti-knowledge views are pervasive in the core right wing of the GOP – a core made up of cold-war warriors and neo-conservatives still searching for “commies” on every corner including our research universities, evangelicals confused and misled about faith versus reason, pro-life advocates who support selective government intervention matching up to their particular religious beliefs, tea-party members supporting no taxes and no government, and right-wing pundits who claim to be Americans but actually support anarchy and “just say no” to anything progressive. When and why did it become so fashionable for “deniers” of science or data-driven knowledge to take center stage?

John Atcheson is his excellent review entitled A Review of the Must-Read “Inquisition of Climate Science provides us with one answer speaking specifically about global warming: “the reason deniers rail against the science is because they hate the solution: government intervention in the marketplace.” Personally, I believe the answer is much more deep-seated and much more than one driven by economics. It’s a visceral dislike of those “uppity” intellectuals – likely to be liberals, socialists, atheists, and non-believers according to the mantra – and a dislike of new ideas and change – hence, the anti-intellectual and anti-knowledge flavor of the denier movement. While sometimes rooted in religion, the denier movement is not fundamentally a battle between faith and reason. Instead, it is exploitation of religion and people of faith by the deniers for political and economic gain. President Jimmy Carter in his book Our Endangered Values: America’s Moral Crisis spoke eloquently to this point.

But just as surely as the biosphere of Planet Earth including humankind will continue to evolve and just as surely as the effects of global warming will be manifested in more dramatic weather events – including firestorms and drought in Texas, the inexorable march of scientific observation, experiment, and data collection as well as scholarly activity in other fields will reveal new truth and new knowledge. As James Lawrence Powell stated in his book, The Inquisition of Climate Science:

Most professions can be no better than their individual practitioners, but Science is far better than scientists. It is the best system we have for getting beyond human frailty and folly to the truth.

Sadly, the “deniers” haven’t stopped with simple denial of truth or proven knowledge through claims of it’s “just a theory” and other such gimmicks. They’ve adapted the trappings of science and created “scientific theories” such as “intelligent design” as a counterpoint to the theory of evolution. Governor Perry takes great pride in claiming that intelligent design is taught to students in Texas in just this manner. [His claim is false!] Don’t get me wrong! If anyone wants to believe that God (the intelligent designer) created the universe as a matter of faith, so bit it. But, it’s not science and it’s not proven truth. Even one of the most conservative of religions and the slowest to change, Catholicism, doesn’t normally advocate denial of scientific knowledge and facts discovered in the modern world.

Of course, when bogus or easily disproved theories don’t win the day, “deniers” take the ultimate step. They attack our educational institutions and our teachers and researchers. Quoting from an article entitled Attacks on Science Education Intensify by Chris Mooney, they “accuse ‘liberal’ teachers of forcing ‘beliefs’ upon a captive audience of impressionable children.” The Mooney article is a summary of a report appearing in Science magazine “on the state of affairs out there in this place called America, and it’s ugly.” How ugly? He’s what Jeffrey Barke says about our classroom teachers and global warming:

Most teachers are left to center, and if we leave it to teachers to impose their liberal views, then it would make for an unbalanced lesson. Some people believe that global warming is a crock of crap, and others are zealots.

Is this an enlightened America ripe for innovation? And how about the Americans for Prosperity Foundation who want to end “frivolous” research projects at our modern research universities? Of course, they’ll use their own version of common sense and a gut feeling to decide what is frivolous.

As Mooney points out in his article, the deniers want to educate – and I use this word with tongue in cheek – a new generation of politically dysfunctional citizens unable to compromise or find a real solution for America with respect to global competition. The “whatever” generation is about to be replaced by the “don’t think; just shout!” generation.

Do we really want to return to the Dark Ages in America and dim the light bulb of innovation? Are we really prepared to kill the goose that lays the golden eggs? As Atcheson states in his article:

If we don’t reassert the primacy of the scientific method and the knowledge that it creates, we will soon be a country with the best 15th century alchemists and healers – and the kind of economy that implies.

When I was growing up in North Carolina in the 1940s and 1950s, we had a word to describe the behavior of “deniers” and the state of affairs that we now find ourselves embroiled in. It was the one thing that all parents tried to overcome in their children through education. It was the other “i” word. It was called ignorance.