Natural Sciences and Engineering Research Council of Canada
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Modern Management Practices Assessment
Prepared by:
BDO Dunwoody & Associates Ltd.
Management Consultants
June 2, 2003
The following is an Introduction and Executive Summary of the Natural Sciences and Engineering Research Council of Canada's Modern Management Practices Capacity Assessment. For a complete printed copy please contact:
Chantal Chauvet
Administrative Assistant
Office of the Director General
Common Administrative Services Directorate
Tel.: (613) 995-3914
chantal.chauvet@nserc-crsng.gc.ca
Contents
- Background
- Overview of the Capacity Assessment Process
- Overview of the Capacity Check Tool
- Executive Summary
- Key Themes
- Summary of Management Capacity Self-Assessment
- Summary of Strengths and Opportunities
- List of Acronyms
Background
About Modern Comptrollership
Modern Comptrollership is a reform focused on the sound management of public resources and effective decision-making. It aims to provide managers with integrated financial and non-financial performance information, a sound approach to risk management, appropriate control systems, and a shared set of values and ethics.
Stemming from the 1997 Report of the Independent Review Panel on Modernization of Comptrollership in the Government of Canada (Panel Report) which set out a vision to modernize comptrollership across Government, the initiative is now part of the 
Results for Canadians framework and is being applied to all departments and agencies.
Traditional comptrollership focuses primarily on financial information. Modern comptrollership supports the effective stewardship of resources of all types throughout the federal government with greater attention to Results for Canadians. It is about working smarter for better results: better informed decisions, better public policies and better service delivery.
A major component of modern comptrollership is the recognition that program managers and corporate specialists need to work in partnership to replace complex rules and regulations which constrain flexibility, with simple, well-communicated and properly enforced principles and standards.
Overview of the Capacity Assessment Process
About the Capacity Assessment
The first step toward Modern Comptrollership is assessing the state of an organization’s management practices against a common standard. For this purpose, federal departments and agencies, and consultants working for them, use a detailed self-assessment tool entitled: "Modern Comptrollership Capacity Assessment".
The Capacity Assessment for NSERC was conducted by BDO Dunwoody & Associates Ltd. (BDO) and coordinated by the Integrated Management Practices (IMP) office within CASD shared by NSERC and SSHRC. The Capacity Assessment took place during the period of January to April 2003.
Following a review of NSERC’s organizational chart by BDO Dunwoody, and consultation with the IMP office, it was concluded that the Capacity Assessment would be conducted through five individual interviews and two focus groups.
Given the size and structure of NSERC, all senior managers and directors participated in the Capacity Assessment. This was essential because the organization only has one senior specialist (at the director level) responsible for each corporate function (e.g., planning, finance, human resources, communications).
Overview of the Capacity Check Tool
The use of the Capacity Check tool in the Capacity Assessment process is intended to:
- Assess the state of modern comptrollership practices within each organization against a common standard. Assess current management practices against recognized best practices and principles as outlined in the Report of the Independent Review Panel.
- Bring together all the elements of the management framework. The Capacity Check is intended to integrate the full range of capabilities necessary to implement Modern Comptrollership, including leadership, business planning, risk management, performance management, control systems, and accountability management.
- Compare against best practices. The Capacity Check is based on best practices of other leading organizations, and therefore provides an opportunity for organizations to assess where they stand relative to these best practices.
- Provide assurance to external clients/stakeholders of the soundness of comptrollership within the organization. The Capacity Check should help to clarify for external clients and stakeholders (e.g., central agencies, Parliamentarians) the management practices that are currently in place, and to provide some assurance that the overall management framework is in sound order.
- Be future oriented. It focuses on what capabilities must be in place in the future to respond to emerging client demands/changing environment.
Executive Summary
Key Themes
Themes
There are several themes of the Modern Management Reform that are particularly relevant to NSERC’s business – that particularly “speak to us”. This section highlights these. Additional details can be found in subsequent sections of this report.
The use of partnerships and the close relationship with clients and partners have been embedded into NSERC’s structures and processes since its creation. The existence and composition of the 22-member Council, which acts as NSERC’s Board of Directors, ensures the involvement of partners and clients in the strategic management of the Council and in the allocation of resources. NSERC’s business is to support research and research training; the way in which these are carried out is constantly evolving. This dictates that NSERC adapt its programs and financing arrangements to reflect these changes and to respond to them.
The nature of NSERC’s business and the increasing expectations of Parliament and of the public regarding accountability, integrity and value for money mean that the core principles of values, ethics and risk management, that have also been part of the way NSERC does business since its beginning, must be regularly reviewed and upgraded. In recent years, through a wide range of mechanisms, NSERC has significantly increased the level of formality of the guidelines, processes and controls that regulate these issues.
The principles and practices promoted under the theme of Motivated People are all very relevant to NSERC’s Employer of Choice strategy. Addressing the training needs of managers in the areas of modern management competencies, ensuring employees’ satisfaction and valuing their contributions, taking measures to maintain workload at a reasonable level, etc… are all areas where NSERC has taken significant steps, particularly in the last two years. These issues are especially relevant to NSERC because of its small size and of the vulnerabilities that this entails in the areas of expertise retention and succession planning.
The relationship between program managers and functional specialists has evolved greatly since the mid-1990s. The creation of CASD has played a major role in this evolution. It has meant that both organizations now have access to a much stronger capability and base of expertise on which to draw for strategic advice, leadership and innovation.
Opportunities
This section highlights three areas for improvement that were noted under many elements of this modern management Capacity Assessment. Subsequent sections of this report provide more information on these opportunities for improvement.
The first is training. This was identified as a priority during the 2001 survey of employees and was noted again several times during this self-assessment. Training in modern management competencies, skills gap analysis, career and succession planning are elements to be strengthened. NSERC now has a three-person team dedicated to analyzing training needs and to developing learning plans.
The sharing of knowledge, experience, lessons learned and best practices, across divisions, is another improvement opportunity that was identified under several elements. While some mechanisms exist to promote communications between divisions, more needs to be done.
While NSERC has strong processes for strategic planning and priority setting, improvements are needed to better integrate strategic directions into business plans, performance agreements and the allocation of operating resources.
Summary of Strengths and Opportunities
Strategic Leadership
Context for NSERC
In recent years at NSERC, many initiatives and priorities have been very much in line with the concepts of modern management. These have not, however, been focused around the government’s Modern Comptrollership (MC) agenda and have not utilized the language of the MC reform. Examples include NSERC’s Employer of Choice strategy, the “Lightening the Load” and eBusiness projects, and the adoption of the “Investing in People, Discovery and Innovation” philosophy which underpins strategic planning and integrated reporting. The “Lightening the Load” and eBusiness projects were both designed to review and improve service delivery mechanisms, Significant effort and resources have been committed to these initiatives.
Two features of NSERC are particularly important to note at the outset because they affect many of the themes discussed in the Capacity Assessment. The first is peer review. The practice of basing all decisions regarding the awarding of grants or scholarships on the results of a thorough assessment of detailed proposals, by experts in the field, is fundamental to NSERC’s values, risk management, stewardship, accountability and performance reporting.
The second feature is the long history of maintaining very strong ties with clients and partners. The participation of clients, partners and stakeholders is embedded in NSERC’s structures and processes. From the composition of the Council, the standing committees and the peer review committees, to the role of universities in the management of awards and control systems, partners and clients are an integral part of strategic planning, resource allocation, process improvement and performance monitoring.
NSERC must maintain a balance between providing leadership and innovation in its programs, to address client needs, and ensuring that its activities respond to government priorities and directions.
Strengths
The strengths of NSERC under this theme are:
- the close relationships that exist between program managers and functional authorities;
- the management of financial resources, particularly program budgets; and
- the management of relationships with partners and clients.
Senior managers in Finance, Human Resources, etc. are part of the management team and have a strong influence on decision-making and the establishment of priorities and policies. A large number of major projects were led by senior staff in these divisions. The development of a Memorandum of Understanding between NSERC, SSHRC and CIHR and Canadian universities was led by senior staff in the Corporate Secretariat and Finance. This MOU governs several aspects of the partnership between the granting agencies and universities for the management of grants: financial management, ethics review of research involving humans or animals, integrity in research, environmental assessment, etc. Similarly, the Human Resources division is leading a Classification Reform project that will result in the conversion of all positions to a new job classification system that will comply to the requirements of the Human Rights Commission.
On the resource management front, NSERC has strong systems to manage the allocation of financial resources. The allocation of program budgets is considered annually by the Council, in the context of strategic priorities and taking into account emerging needs and opportunities. A three-year operational plan is developed and program budgets are approved annually. Important reallocations have taken place in recent years, e.g., significant funds were added to support new researchers and the training of highly qualified personnel while resources for research tools and instruments have decreased. Within programs, reallocations also take place regarding the distribution of funds among disciplines or the identification of strategic areas.
Finally, relationships with partners, stakeholders and clients are a way of life at NSERC and everyone is involved in them on a daily basis. This is facilitated by the fact that stakeholders, partners and clients are often the same people! NSERC’s programs can only be delivered with the close partnership between NSERC and Canadian universities. The participation of client and partner researchers in the peer review of applications is the lifeline of the organization. Interactions with university administrators and researchers are frequent. They range from informal dialogue to resolve specific cases to formal meetings with associations, personnel exchanges and on-site visits organized to gather input on needs and priorities, obtain feedback on program delivery or monitor awards and the effectiveness of control systems.
The creation of CASD has had many benefits for both NSERC and SSHRC. The harmonization of processes and procedures and the sharing of best practices have had important benefits for the Councils and their clients.
Opportunities
While many elements are in place, at both the program planning and operations/business planning levels, NSERC should better integrate its planning process and improve the links between strategic planning, business planning, resource allocation and performance/results evaluation.
There is a need to consistently involve specialists at start of initiatives to help ensure that all the management and resource implications of such initiatives are well understood and are taken into account at the outset.
A recurring theme in this Capacity Assessment is the need to better share knowledge, best practices, lessons learned, client information, etc. across the Council.
Shared Values and Ethics
Context for NSERC
Values and ethics are important components of NSERC’s business at three levels. First, clear rules are needed to ensure ethics and integrity in the conduct of research supported by NSERC. These govern the use of human subjects, animals and hazardous substances in research, and the possible environmental impact of research. NSERC also has clear processes to identify and deal with possible breaches of integrity, misuse of funds or conflicts of interest.
Second, the processes for peer reviewing applications and making award recommendations must be free of conflict of interest, or perceptions of conflict of interest, on the part of all those involved in these processes. Recommendations must also be made in the absence of bias, discrimination or the infringement of the Official Languages Act or the Human Rights Act.
Finally, as stewards of the processes for selecting and monitoring awards, staff must themselves be very aware and knowledgeable about values and ethics and exemplify these in their work and in their interactions with clients and partners.
Strengths
On the first front, clear rules and controls are embedded in NSERC’s processes. Certifications must be in place regarding animal care, the approval of research protocols that involve the use of human subjects and the handling of hazardous substances, before funds are disbursed. A formal process is also in place to investigate possible breaches of integrity brought to NSERC’s attention. The corporate secretariat manages this process, which is formally under the stewardship of the Council’s Executive Committee. The creation of the Tri-Council Secretariat on Ethics in Research ensures that the Council remains at the forefront of policy development in this area.
Anyone who becomes a member of a standing committee of NSERC or who participates in the peer review of applications is made aware of NSERC’s Code of Ethics and Business Conduct and Conflict of Interest guidelines that apply to the activities in which he/she will be involved, and is required to confirm in writing his/her commitment to respect these. Program Officers and other staff are trained on these rules and guidelines and have a clear role in ensuring that they are respected.
Finally, NSERC has just adopted a Statement of Values which was formulated by staff and which captures the core values of the organization with respect to both the conduct of its business and the work environment at NSERC. Staff at all levels were involved in the development of many human resource policies that reflect NSERC’s values. The survey of employees carried out in 2001 showed that employees rated NSERC well above the norm for employers of choice on organizational values and behaviours.
Opportunities
The strong tradition of shared values and ethics must be maintained at NSERC. This can only happen through coaching, mentoring and the sharing of experiences. The importance of values and ethics must be emphasized when new employees join the Council; the Orientation Program for new employees must include a strong component on this topic.
Mature Risk Management
Context for NSERC
For the main aspects of NSERC’s business, i.e., the awarding of grants and scholarships, risks are mitigated in two ways. First, the peer review process ensures that only excellent research, with clear potential to advance knowledge or the application of knowledge, and which has been thoroughly scrutinized for the validity of its approach or methodology, is supported. Second, funds are disbursed to, and managed by, Canadian universities, under strict rules and controls regarding their use. The funds are used to support students and research assistants, buy research supplies and equipment, etc.
While research is inherently a risky business, NSERC’s goals to build research capacity and train highly qualified people are attained when people do research; they are not significantly affected if, on occasion, a research project is not successful.
NSERC has few material assets (mainly furniture and informatics equipment) and therefore incurs little risk on that front. There are some risks to security; on a few occasions, staff have been threatened by researchers angry about having been unsuccessful in obtaining grants. There are also some risks related to business interruption or the failure of major systems.
The risks that can most affect the achievement of NSERC’s mandate have to do with researchers with good ideas not having the opportunity to pursue them or not reaching their full potential because of a lack of funds. Internally, because of the small size of the organization, there are risks related to expertise retention and succession planning.
Strengths
Corporate risks have been identified and were used to establish priorities for the internal audit plan.
Robust controls (financial and non-financial) are built into NSERC’s systems and processes. These are monitored regularly and modified as needed.
NSERC has a security specialist; policies and procedures are in place to protect staff and assets. For information systems, recovery and business resumption plans are in place.
Opportunities
Plans to address the findings of recent audits in the areas of information management, security and business resumption should be completed.
Risk management training could be enhanced. The identification of risks and risk mitigation measures must be better integrated into the planning and management of large corporate projects.
Motivated People
Context for NSERC
Ninety-five percent (95%) of NSERC’s budget is put in the hands of researchers and students. NSERC’s success is therefore highly dependent on the motivation of these people and on the research environment that supports their work. In recent years, several initiatives (the Canada Research Chairs program, the Canada Graduate Scholarships, funding for the indirect costs of research, the creation of the Canada Foundation for Innovation, etc.) have clearly shown that the federal government links future prosperity with investments in research. In parallel, NSERC has received significant budget increases. These events have greatly contributed to the current high morale in the research community and to the retention and attraction of highly skilled people. This healthy climate is also highly dependent on researchers’ continued perception that NSERC understands their needs and pursues the right policies to promote and support research.
Internally, NSERC is a small organization with less than 300 full-time employees. Staff are NSERC’s main assets. Workload issues identified in the 2001 survey of employees have, or are being, addressed. Time for training and development is limited however. Managers are very focused on their program or functional responsibilities and managerial development tends to take a backseat.
NSERC is a non unionized separate employer. While this limits the mobility of its staff within the Public Service, it provides the organization with a lot of flexibility. NSERC has its own suite of human resource policies which have all been developed with input from staff.
The Staff Relations Advisory Committee (SRAC) was created many years ago as a forum for discussions between employees and management. Composed of representatives elected from every employee group, the Committee has been closely involved in the development of human resource policies and in decisions regarding NSERC’s work environment.
Strengths
The commitment of staff toward the goals of the organization and the fulfilling relationship of mutual respect and appreciation that staff enjoy with the research community are a great strength of NSERC.
Several measures have been put in place over the years to help staff balance work and life commitments, to facilitate internal communications, to foster employee development, to ensure staff input into decisions affecting them or their work, and to recognize the contributions of employees.
Even if the results of the extensive staff survey carried out two years ago were generally positive, NSERC put in place an extensive Action Plan to address the issues raised. The creation of an Executive Vice-President position with special responsibilities for employee matters, the hiring of two training officers and the creation of a team dedicated to training in the Human Resources division are tangible evidence of the priority management places on staff development and well-being.
Opportunities
While the workload situation has been improving, the lack of time for training remains an issue and NSERC must do more to identify and address training needs and ensure managerial succession.
The sharing of best practices and experience between divisions must be enhanced. As well, the impact of new initiatives on employees in all divisions must be assessed better at the outset.
Initiatives should be developed to address the vulnerability of NSERC with respect to expertise in specific functions. For example, opportunities could be sought to develop expertise in various functions, e.g., evaluation, audit, the development of Memoranda to Cabinet, etc. beyond the unit where responsibility for these functions resides. In addition, opportunities should be sought to develop a wider base of people who can not only innovate to meet the needs of today but also anticipate the needs of tomorrow.
Clear Accountability
Context for NSERC
As mentioned before, the small size of NSERC means that people in all parts of the organization know each other and work closely together. It also means that functional specialists must be knowledgeable about the whole range of issues within their function and that managers are often called upon to participate in specialized projects and must therefore develop a basic knowledge of every function in the organization.
All managers have a responsibility center; they must prepare a budget and manage the human and financial resources of their centre throughout the year. Managers must account for variances.
Organizational structures emphasize team work. Because specialized knowledge is often one person deep, it is an important part of many employees’ responsibilities to act as “back up” for a colleague. Some matrix management is in place, and most managers have both “line” responsibilities and lead responsibility for some aspect of policy development or for special projects. Again, because of its small size, there are few redundancies in the organization and roles and responsibilities are well defined.
Performance pay is in place for EXs and some senior professional staff. While the organization does not use performance agreements, performance is assessed against workplans which spell out both on-going operational objectives and key objectives for special projects or responsibilities.
Strengths
NSERC is particularly strong with respect to external reporting. In addition to all requirements being continuously met, the implementation of the Financial Information Strategy (FIS) and the Generally Accepted Accounting Practices (GAAP) and the re-design of financial statements have been cited as a best practice by the Treasury Board.
NSERC also regularly prepares reports intended for its clients and stakeholders. Facts and Figures reports annually on the results of competitions and on various statistics regarding grants and scholarships. Trends over 10 years are analyzed and results are presented by university, area of research, discipline, etc. Research Means Business is a compendium of Canadian firms that have been created to commercialize research advances and technologies developed in universities with NSERC support. It contains information about the size of the company, its products, markets, etc.
Opportunities
There is a need to strengthen the definition of roles and responsibilities for large corporate projects that involve several divisions. This aspect is linked to observations that lateral communications need to be strengthened, that specialists need to be involved more systematically at the beginning of new initiatives and that the impact of corporate projects or new initiatives on human resources must be better planned.
By adopting a more formalized and uniform approach, NSERC could also improve the process of setting performance objectives and evaluating the performance of managers.
Integrated Performance Information
Context for NSERC
Measuring performance for NSERC’s activities means assessing the outcomes and impacts of research and research training. This is a very active field of research in itself. NSERC strives to stay at the forefront of advances in this area and has developed performance indicators for its programs that make use of the latest concepts and methods. Important challenges remain however as the outcomes and impacts of research and training take a long time to develop and generally do not do so in a manner that easily links them to the initial investment.
Performance for specific research projects or programs is monitored annually with respect to the use of funds. Progress for large projects or awards is monitored periodically. For programs supported in partnership with other organizations, the performance of the partners is also monitored. Corrective action is taken when needed.
NSERC’s Awards Management Information System (NAMIS) is well integrated and linked to the financial systems. It allows for the monitoring of various aspects of program demand and results which are then used to make decisions on program budgets for example. NAMIS also allows for integrated reporting of performance information and results across all programs.
Service level arrangements mostly take the form of clear and well disseminated information on eligibility, application requirements, selection criteria, review methods and the timing and format of decisions. These were developed with input from clients. Information on staff responsibilities is available on the Web and there is a help line for those using on-line services.
Internally, service standards are in place for such things as informatics user services and translation. Some aspects of operations, e.g., referee response, turnaround time for applications, are monitored. The structure of accounts is such that cost or expenditure information can be obtained by activity and can be rolled up to the corporate level.
Financial information for both the operating budget and the grants budget is available on-line, timely and accurate.
Strengths
NSERC’s strengths under this theme are:
- measuring client satisfaction
- evaluative information
As mentioned previously, NSERC is in close contact with clients on an on-going basis and uses a wide variety of methods and fora, both formal and informal, to regularly gather information on client satisfaction. Clients have input into strategic and business planning and process improvements. A formal appeal process is in place for decisions on applications for grants and scholarships.
Program evaluation activities have increased in recent years and NSERC has increased the number of staff in the division. The methods used in program evaluation are diverse and state-of-the-art. They include bibliometric analyses, international benchmarking, etc. The results of program evaluations have been used to make important changes in the orientation of programs and in delivery processes. Evaluative studies are under the stewardship of the Program Evaluation Committee (PEC). PEC is a standing committee reporting to Council; it is composed of evaluation experts, clients and stakeholders.
Opportunities
NSERC should improve the links between planning, performance information and program evaluation. There are some feedback loops between these functions at the moment but these could be strengthened and better integrated into planning cycles.
Similarly, performance information for internal processes should be collected more consistently and compared to service standards and service level agreements. Managers could explore the potential benefits of using more performance information for decision-making. This may require that current systems become more user friendly and better integrated.
Finally, as part of maintaining its current strengths in the area of client relationship management, NSERC should consolidate and integrate the processes used for collecting information on client satisfaction.
Rigorous Stewardship
Context for NSERC
The stewardship context for NSERC is one where the right balance must be achieved between allocating funds properly and accounting for them, and taking appropriate risks to build capacity and stimulate breakthrough research.
For the former, clear processes and controls are in place to ensure that research is conducted within all applicable rules (ethics, animal care, environmental impact assessment, etc.) and that funds are used for the purposes intended and managed diligently. For the latter, the rules, and the way in which rules are applied, must permit some flexibility to take into account the unpredictability of research.
The Council operates its programs within clear and formally documented frameworks that are well known and understood by clients and staff. New tools, such as decision aids for peer review, are explored and shared. Business processes are re-visited regularly; for the larger programs, business process improvement is formalized and performed after each cycle with the input of clients and other users.
Internally, NSERC has responded to all recent changes and requirements in this area (Financial Information Strategy (FIS), Generally Accepted Accounting Principles (GAAP), lifecycle asset management, internal audit, Results-Based Management and Accountability Framework (RMAFs), etc.).
Strengths
The strengths of NSERC in this area are:
- Accounting practices
- Internal audit
The format of NSERC’s financial statements under FIS and the implementation of FIS and GAAP at NSERC have been praised by the Treasury Board and cited as Best Practices. Similarly, the internal audit frameworks and plans have received praise from the Treasury Board.
Managers have an understanding of accounting practices and have taken ownership of the frameworks and practices developed for them by the Finance division. Financial information is accurate, closely monitored and routinely used for planning and decision-making.
While expertise in internal audit is essentially one person thin, a very solid foundation has been laid for NSERC’s practices in this area and managers in all divisions have participated in the identification of risks and the prioritization of audit activities.
Opportunities
The main opportunities in this area relate to enhanced sharing of knowledge and best practices.
Externally, an important component of NSERC’s eBusiness project aims to provide researchers with better electronic tools to facilitate communications and collaboration. Outreach activities to enhance links between NSERC, universities and stakeholders, such as Parliamentarians, are also in the process of being strengthened.
Internally, improvements can also be made to sharing best practices and experiences across divisions and with new staff. Additional opportunities for staff to participate in exchanges with other organizations, widen their knowledge and stay current with research advances should be sought.