The Policy Entrepreneur: Simon Maxwell (Part 2)

7 September 2011
SERIES Think tanks governance and management 19 items

Simon Maxwell, former director of the Overseas Development Institute, is now a Senior Research Associate of the ODI, he chairs the Climate Change and Development Knowledge Network and leads the European Development Cooperation Strengthening Programme. He is also currently Chair the World Economic Forum’s Global Agenda Council on Humanitarian Assistance. Other engagements include being a Trustee of the Fair Trade Foundation, a Member of the Policy Advisory Council of the Institute of Public Policy Research and Specialist Adviser to the House of Commons International Development Select Committee. But most crucially for onthinktanks, Simon led a significant drive of change within ODI during his tenure as Director.

In this conversation, Simon Maxwell (SM) and I (EM) continue our discussion the current work and future prospects of think tanks. Simon offers excellent advice to think tank directors and policy entrepreneurs.

In the first part of our conversation, Simon and I talked about the role of think-tanks, their global reach, and their independence. In this second part, I was curious to know more about some of the management workings.

Enrique Mendizabal: ODI changed a great deal during the eleven years you were Director. How do you think you did?

Simon Maxwell: You know, I always say that think-tank Directors are doomed to fail, because the job description is so wide. How can you be the world’s best researcher, best communicator, best fund-raiser, best leader of change, and best manager, all at once? Of course, you can’t – though Alison Evans, who succeeded me at ODI, is doing a brilliant job. The area most think-tank directors are least well-equipped to take on is the management – one reason why we started a project in the European Association of Development Institutes on ‘Planning for the Future and Managing Change in Research Institutes and Think-Tanks’. Directors of institutions around Europe contributed some great stories about their own journeys. For me, it was really important that the Board was enthusiastic and strongly supportive – but that’s an issue in itself.

EM: Tell me more about Boards

SM: First of all, it’s important to recognise that good corporate governance requires that the Board own the institution’s strategy. Sometimes, the staff, including the Director, who after all reports to the Board, think they own the institution, and can do whatever they like. They don’t and can’t. What they can do is help shape the Board’s thinking, which is power of a kind. And, of course, the staff do most of the work on the strategy, working through the analysis and presenting drafts to the Board.

EM: So there is a clear need for an open conversation between both. How can you manage this?

SM: It’s quite hard to manage the conversation with the Board. We tried various options, including open meetings, task forces, workshops, and e-mail discussion.

EM: And what about your relationship with the Board?

SM: In some cases, too, the Director can shape the membership of the Board. When I arrived at ODI, there were no very clear procedures for rotating membership, but eventually we introduced term limits (three times three years), and that gave us the opportunity to think about the types of people we wanted and the competences. Every year, I would draw up a table for discussion with the Chair and the Nominations Committee, summarising the membership status of Board members in our different categories: academic, think-tank, NGO, business, politics, media, finance, HR. Then we would look at gaps to fill, and try to come up with some names, being careful as we did so to pay attention to gender, age and ethnic issues. I was lucky. I had three strong and committed Chairs (Lord Simon Cairns, Baroness Margaret Jay and Lord Adair Turner), and very high calibre Board members. Observing other Boards, I do notice that they work in very different ways. Some, for example, are very much managed by the founders of the think-tank. NGOs often ask far more of their Boards than we did, in terms of time at least, with many more Board sub-Committees. CGIAR Boards seem to meet for days at a time, the best part of a week, I think. Our Board met four times a year for a couple of hours and we had few sub-Committees. When I needed help, I would sometimes suggest a task-force. We had one, for example, on our public affairs programme. We also experimented with different ways for the Board to learn about our work and engage with staff. We would often ask specialist Board members to chair public meetings, or respond to staff presentations. We also had a lunch before every Board meeting, for selected staff to mingle with the Board. Chief Executives are often surprised at how much time they have to spend dealing with Board matters. There is good guidance available, for example the CGIAR guidelines on Centre Governance and materials from the UK Association of Chief Executives of Voluntary Organisations. Don’t forget that every Board should evaluate its own performance at least once a year.

EM: ODI has a Board and a Council. Can you explain the difference?

SM: The board (about 12 people) are the legal trustees under UK law; the Council is a wider group of up to 40, whose main formal job is to elect the trustees, but who also play an important role as advisers and supporters. The Council were originally all trustees, and we had no Board, but we all felt the group was too big, so reorganized.

EM: Back to management. What have you learned about managing change? Besides having the Board on your side (or behind you), what else is needed?

SM: Change is not straightforward, and I don’t pretend that I was good at managing it. It helped a lot that ODI was growing (by 15% a year on average every year that I was there), and that staff turnover was quite high, typically 15-25%, which is about normal for organisations of that kind in London. That meant we could try new things and bring in new people, allowing new programmes to grow without having to cut others.

Managing change without growth and staff rotation is much harder. If you look at ODI today, there are many long-standing and successful areas of work, like agriculture, aid or trade. However, many of the programmes are ‘new’, certainly in terms of ODI’s 50-year history: poverty, politics, social policy, private sector development, climate change, water, some aspects of the work on food and agriculture, some elements of the humanitarian work. All those developed because entrepreneurs who wanted to be programme builders in the think-tank space emerged.

As a Director, entrepreneurs are your most precious resource. I used to suggest that people in the first decade or so of their careers would mostly be developing their specialist expertise and learning how to operate in a think-tank environment. Ten years in, however, we would want our best people to be developing a ‘brand’, leading a programme, supervising younger staff, raising money, and influencing policy. With that experience under their belts, they would move to be Programme Managers, perhaps leading a collection of smaller programmes.

EM: People are certainly important. This is by far one of the top concerns of think tanks in developing countries. How to you find, incentivise and develop them?

SM: ODI is a well-known and popular place to work, but the salaries were not high and the work pressures not trivial. Some people were put off joining – and some who did join were burned out – by the fact that every researcher had to meet a personal financial target (equivalent to about twice gross salary costs), and charge out close to 200 days a year. This was in marked contrast to UK universities, where staff were able to double-earn for several months a year. Furthermore, the range of skills we expected was very broad – not everyone can produce great research and do great TV interviews.

We eventually settled on a strategy of ‘growing our own’ young researchers, recruiting youngish people and helping them to adjust to our work pattern. Some left, but some went on to be among our best senior researchers. The average age fell, to the early thirties, I think, by the time I left, which is young, but not as young as some of the other London think-tanks, whose average age seems closer to mid-20s. That’s partly because international development tends to require more international experience, and the quasi-consultancy world in which ODI operates more substantive weight. Most ODI researchers, for example, had spent several years working abroad, a number of them as ODI Fellows, seconded to national developing country governments for two years.

A word of caution, though. A strategy based on developing younger staff does place a premium on having enough more experienced people to manage and mentor. Sometimes, this was a challenge for us, especially as we grew into new areas. At one point, we invested substantially in leadership (not management) training, for me and some other senior staff, with follow-up coaching, to help us all do better at shaping the Institute and supporting its staff.

EM: And how about incentives? Many think tanks are beginning to develop performance appraisal systems and are interested to find out more about how to link these processes to incentives.

SM: Another interesting and difficult one. I could never make my mind up about performance-related pay. We were encouraged in that direction by some of the business types on our Board, but quite a lot of the staff didn’t like it at all. It’s difficult to decide whether performance pay should be individually-based or team-based, and there are real problems defining targets and setting unambiguous performance-based rewards in the multi-faceted think-tank world. I did come across one research institute that scored research and dissemination products, but felt that was too difficult for us. Instead, senior staff reviewed the performance of all their colleagues, and a Board sub-Committee reviewed the senior staff. We tried to have a pragmatic mix of promotions, bonuses and additional increments.

People sometimes said cynically that all I cared about was the financial targets, but that absolutely was not true. Raising the money was necessary but not sufficient. I was much more concerned with intangibles like the quality of research and dissemination. What is useful is to have an annual objective-setting session, and to monitor progress – and to make sure that the objectives cover all areas of the work, and not just research (or financial targets!). Of course, circumstances and plans change, so annual objectives are a sign-post not a blueprint. Then, it is important to celebrate success. That’s one reason why we were always pleased to receive mentions in ministerial speeches, or win awards, or rank highly in Jim McGann’s annual survey of think-tanks.

EM: Really? The Jim McGann index? Surely being mentioned in ministerial speeches and being invited to Davos and other key policy spaces matters more than a global think tank rating. This is an interesting issue though. Many think tanks I’ve talked to are in two minds about this. They do not think that the index is particularly accurate but still feel compelled to try to be mentioned. What matters when it comes to measuring your influence? How to do you know, for instance, that, after 11 years of hard work, ODI is as or more influential than it was when you took charge?

SM: On Jim McGann, what Directors say when they get together is that of course they celebrate when they rank highly, and complain about the methodology when they don’t. ODI ranked highly, so there you are. Personally, I think Jim has done us all a great service just by mapping and tracking the think-tank world; and that the methodology would be much better if there were more money for detailed review of programmes and outputs. In the UK, the Prospect think-tank awards call for submissions and then a panel review them: that is a more satisfactory process, but hard to do on a global scale.

As to measuring influence, and without commenting on whether we were more or less influential over time: as you know, we used a variety of methods to try and see inside this particular ‘black box’, including ‘stories of change’, a selection of which now appear on the ODI website. As with much evaluation, attribution is hard. But we were able to claim at least a role in the development and dissemination of some important ideas, like Aid-for-Trade, Good Humanitarian Donorship, and Sustainable Livelihoods. A lot of our project work was designed to shape practical change. Ingie Hovland, remember, wrote a good review of how to evaluate the work of think-tanks.

EM: I have to ask about finance. Individual targets sounds like a terrible burden. Could you not raise money centrally?

SM: I wish I could have raised the money we needed. I tried, and hired advisers to help, but it isn’t my forte and the environment was never particularly conducive – unlike what we’re told about the US, where Foundations, businesses and philanthropists are more willing to fund policy work. In my experience, funders don’t want to give money to institutions, they want to solve global problems, buying a ‘product’ if you like, so that means constructing projects – which is sort of consultancy. The financial targets were indeed tough on people, and became tougher over time. We did have some sweeteners, though. If people hired research associates from outside, or younger people, they mostly kept the overhead as a contribution to their own targets. That meant that core researchers could reduce their own charge-out time substantially by making good use of others – of course, with attendant management costs and also risks with regard to quality. Some people liked that, some didn’t. In later years, we began to move towards team targets, with some problems of moral hazard to be dealt with. And we also discussed whether targets should be adjusted according to ability to earn – with international economists, for example, being asked to contribute more than, say, rural sociologists. Lots of potential moral hazard problems there, too, and an approach that requires a high degree of trust.

EM: Let me got back to products -which, in a way, is what Jim McGann has done particularly well. I have the impression that funders find it easier to fund an organisation when they see it is developing its own ideas and ‘technologies’: an indicator; a global report on, for example, investment, trade or corruption; stand-alone training or capacity development initiatives; etc. But I found it difficult to see how ODI, with limited innovation funds and a fairly busy consultancy driven agenda, could find the funds and time to do it. In a way, now that I am out I’ve found it much easier (to develop and so have you (The European Development Cooperation Strengthening Programme). What would a think tank need  to do to develop a marketable product?

SM: I think this is partly about entrepreneurship again, having people whose passion is to change the world. It’s also about putting the policy process at the heart of think-tank planning. One of my old saws was to say that everyone interested in a particular topic had to ask themselves five questions: ‘Who is making What DecisionWhen are they making it, What Product do you need to influence the decision, and When do you need it?’ Sometimes the product is a book, sometimes it is taking someone out for lunch. Almost always, the intervention is needed much earlier in the policy process than you think. The core competence of the think-tank is to find the right balance between books and lunches – and that particular skill is highly marketable.

EM: Do you miss it?

SM: Yes, and No. It’s great that ODI is doing so well. I’m really busy, with the Climate and Development Knowledge Network and my European project. I have time for my own website and have signed up to Twitter since our last conversation (only 42 followers as of this morning, but I’m hoping for a million, like Justin Bieber or President Obama). Plus, I’m still an Associate of ODI.