Research and Technology Organizations (RTOs) are under growing pressure to stay abreast of rapidly evolving business or national science and technology priorities and to demonstrate greater impact. They therefore undergo continual strategic and operational change to adapt, but in some cases, transformation programs can underperform. Often this is because there is no real incentive to behave differently due to problems with how performance is measured and reported, and how incentives are created and aligned. Based on good practices gathered from our work with more than 60 RTOs and corporate innovation centers over the last decade, we present our approach to using steering key performance indicators (KPIs) to drive transformation.
The two main types of Key Performance Indicator
RTOs undergo continual transformation to deliver against changing national science priorities and the evolving needs of their customers and other stakeholders. As a result, they continually need to find ways to drive change and measure performance – and KPIs are an important tool to enable this.
KPIs typically comprise a mixture of measures of inputs and activity and, the outputs and impact of research. They can be used for two purposes – Reporting and Steering.
RTOs use Reporting KPIs to demonstrate their performance to the complex array of stakeholders that fund and govern them. Usually this involves demonstrating that money is being spent wisely on good-quality science, and that impactful results are being achieved (Figure 1). Common KPIs include metrics associated with science quality, such as the number of researchers recruited in the last year and the number of highimpact journal articles published. Financial performance is also tracked through metrics, such as revenues from patent royalties and income from commercial customers.