Perron era marked by full emergence of institutes as the National Research Council works to increase knowledge generation and wealth creation

 

- Ottawa, Ontario

Pierre Perron

Dr. Pierre Perron arrived in 1989 at a volatile time for the National Research Council of Canada (NRC) and Canada. The NRC's transition from scientific divisions to institutes was underway, and the technological booms of telecommunications, biotechnology and materials science were promising to transform societies and economies worldwide. The concept of innovation was becoming increasingly pervasive amongst policy makers, politicians and industry leaders.

1989 is now recognized as the year the World Wide Web was unveiled, sparking research into a wide range of underlying technologies, many of which found the NRC at the forefront. But it was also a time of fiscal austerity, compelling the NRC under its new president to simultaneously seek areas to reduce or re-allocate precious funding while re-inventing the organization to confront and exploit the challenges of a rapidly changing world.

With an economy largely dependent on natural resource extraction, Canada was running the danger of falling behind competing nations in the race to embrace the knowledge economy, a monumental task that required all legs of the innovation stool – business, academia and government – to be aligned with a common purpose.

Perron came prepared to assume the NRC presidency, equipped with considerable experience in the federal and provincial public service and possessing a firm grasp on the multi-faceted task he was spearheading. With degrees in metallurgy and metallurgical engineering, his career began as a research officer at the Chalk River Nuclear Laboratories of Atomic Energy of Canada Ltd. Perron also worked in increasingly senior roles at Hydro Québec, the Centre de recherche industrielle du Québec and the Quebec government's department of energy and resources before moving to Ottawa to join the federal government in 1985. He took up the posting of Associate Deputy Minister at the Department of Energy, Mines and Resources – a position he held for 4 years - before being tagged for the NRC presidency, replacing chemist J. Larkin Kerwin who occupied the post between 1980 and 1989.

Perron was appointed in 1989 and labelled a "performance-oriented" president whose previous role at former Department of Energy, Mines and Resources included dulling the impact of the previous National Energy Program. At the NRC, Perron was tasked with reshaping the bureaucracy to get a better handle on the organization's costs at the activity level, coupled with greater accountability to the needs of business.

A source from the Department of Energy, Mines and Resources at the time portrayed Perron as "a very hard-working and very intelligent individual" who is "extremely good at defending programs".  "If he believes in something, he will fight and fight well, but he has to be convinced first," said this official. "And when Perron champions something, he usually gets his way".

Another Department of Energy, Mines and Resources official noted Perron's experience in dealing with government bureaucracy – a critical attribute given the pressure the NRC was beginning to experience from those who felt that Ottawa was spending too much on intramural research and development (R&D).

The NRC's realignment had begun earlier in 1989 under Executive Vice-President Dr. Ross Pottie, with execution falling to Dr. Clive Willis and Dr. Earl Dudgeon, Vice-Presidents of Science and Engineering respectively, encompassing more than half of the NRC's science and engineering resources. New programs began to appear driven by the need to enhance national economic performance, with vice presidents given new discretionary power over millions in cash reserves. Greater coordination was also imposed on areas of activities such as biotechnology, where inter-divisional, mission-oriented projects supplanted the confinement of autonomous units that comprised the program. The divisional structure still lingered but that was about to change with the arrival of Perron.

The NRC was also grappling with the balance between revenue-generating activities and securing income from other sources versus maintenance of the agency's intellectual base.

"In all of this client orientation, you have to be careful you don't burn the furniture to heat the house," said Dr. Keith Glegg, the NRC's Vice-President of Technology Transfer, in a 1989 interview with Research Money. "If you want to sustain the programs, you have to keep the intellectual innards lively."

One of the first tasks undertaken by the new president was a concerted effort to spread the NRC's activities and facilities geographically. Prior to his appointment, the NRC was slowly shedding its Ottawa-heavy presence under the guidance of Kerwin, moving beyond a couple of regional labs in Halifax and Saskatoon to include facilities in Winnipeg (aerospace), Boucherville (industrial materials) and a large wave tank in Newfoundland (marine vehicle testing).

The dispersion occurred despite a relatively flat budget during Perron's tenure, standing at $437.8 million in 1989 (down from $485 million the previous year) and growing slowly to $476.5 million by 1993.

"We were very much still based in a period where economics was capital and manpower. That was what you had to work with and then there was something called technology which was an invariable parameter which enhanced the value you could gain from capital and manpower," said Willis, a 27-year veteran of the NRC who began as a chemist in 1971 and rose to become Vice-President of Research under Perron. "At the end of the Kerwin years and the beginning of the Perron years, we understood what innovation was and we were an innovation organization … We were taking knowledge and working to develop that knowledge so that it was applicable … We were creating knowledge pertinent to the private sector—and the academic sector where necessary—to help the private sector. We were very much involved in this whole concept of innovation."

The urgency of developing and adopting new technologies was presented forcefully in a 1991 Perron speech to The Empire Club of Canada (Perron was ill and his address was delivered by Pottie). In the speech, Pottie described Canada's current economic prosperity as a "fool's paradise" driven by a resource-based economy with little attention being paid to technology and innovation.

"Unless this country spends more on developing its brainpower, unless it invests more in primary research, and unless it takes its destiny into its own hands by supporting the kind of intellectual capital that will provide growth for developed nations, Canada will keep moving closer to economic catastrophe," warned Pottie. "Our country, through its governments, has failed to identify priorities, has not made the tough choices of where we should concentrate our strength. Instead, in the absence of a national consensus, we have tried to give even treatment to all of our efforts—to winners and losers alike."

A year earlier, Pottie explained the NRC's intention of "moving from an internally generated process to externally generated process, both in the selection and delivery of our initiatives." The comments accompanied the release of a new NRC strategy document which underscored "the NRC's growing appetite for collaboration, not only with the private sector but also with provincial agencies or research and science and technology (S&T) funding" (Research Money, March 21, 1990).

The NRC's next 5-year plan came with a proposed $250 million hike in the NRC's budget, calling for greater funding for the Industrial Research Assistance Program (IRAP), dramatically shrinking the vice-presidential suite, a new NRC presence in Alberta and New Brunswick, and expanded activity in Halifax, Saskatoon, Montreal, and Victoria.

Included in the plan was an $82 million proposal to implement 6 regional initiatives aimed at spreading the NRC's resources outside of the National Capital Region. The regional package included:

  • transferring the Herzberg Institute for Astrophysics from Ottawa to a new facility at the University of Victoria
  • relocating a group of surface characterization specialists from the Ottawa-based Chemistry Division to the New Brunswick Research and Productivity Council which has a strong base of complementary expertise in metallurgy
  • moving polymer experts from the Chemistry Division to a new Centre for Plastics Processing Technology at the Industrial Materials Research Institute in Boucherville QC
  • augmenting the mandate of the Atlantic Research Laboratory to transform the Halifax unit into a major National Marine Biosciences Centre serving clients on both the Atlantic and Pacific coasts
  • expanding the Plant Biotechnology Institute in Saskatoon through the addition of a revenue-generating industrial incubator facility
  • creating a "substantial" NRC lab in Calgary that would be geared specifically to the Alberta economy

The new strategic plan was ambitious and put the NRC on a collision course with Ottawa and its relentless determination to control the escalating federal debt as well as the NRC's recent habit of overspending its annual allotment.

Just 2 months after his arrival in July 1989, Perron cut 4 vice-president positions and made his views on budgetary overspending crystal clear. "The fact that there was a shortfall during the last 3 years is intolerable … I don't have the patience to run an organization that way," Perron told Research Money (September 27, 1989).

At the time, the NRC was negotiating with the Treasury Board to retain 100% of its earnings from contracts, contributions, joint projects and royalties, up from the current 20%. Perron said that while such an arrangement may relieve some budgetary pressure, he wouldn't become obsessed with revenue generation and retention.

"We must maximize revenues wherever possible, but this will not be a panacea for the problems the NRC has faced over the last few years," he said. "I don't believe the measure of the NRC's success is the amount of money it can bring in. Rather, the true yardstick for success is the influence the NRC has on new partnerships and levering."

Completing the shift to institutes

Within this environment, Perron quickly took action on what is perhaps his best-remembered achievement: the completion of the NRC's transformation to the institute model, which was described as a "sea change in the NRC's structure" by Dr. Bruce Doern, a Carleton University-based public policy researcher and author of the book, The National Research Council in the Innovation Policy Era (University of Toronto Press, 2002).

Doern wrote that Perron used "revenue targets as the main surrogates for performance" whereby "an institute with extensive facilities might have a higher revenue target because it was inherently in the testing and service business".

The new institutes were conceived to be relatively autonomous and interdisciplinary, with the NRC essentially acting as a de facto holding company. Clustered around key technologies—many of interest to industry—they were provided with business-led advisory boards and were required to submit annual reports and business plans that reported on performance and revenue targets. The changes were encouraged by the federal government and applauded by the National Advisory Board on Science and Technology, an industry-heavy advisory body initiated by the government, known for pushing to make government labs more industry focused.

For decades, the NRC has used a variety of external advisory groups and associate committees to support the planning and assessment of its research activities. In September 1990, Council decided on a more systematic approach to external feedback on the plans and priorities of the Institutes and Programs. Advisory Boards were created for each NRC Institute or major program and are composed of scientists, engineers and business leaders from across and outside Canada. These Boards provide a systematic approach for involving the NRC's stakeholders in planning and managing its activities.

NRC Annual Report 1990-1991

"It became total. He did it because he wanted the label on the door to mean something (and) have the institutes manage themselves," says Willis "We (the NRC executive) were there for strategic guidance to the president and for administrative and logistics advice to the institutes. In many ways I was there to help them. They weren't there to help me in any way and that was a massive change."

Management of large organizations is an attribute often associated with the Perron era, hence the strengthening of the director general position, the requirement for institute-specific business plans and an insistence that each institute conduct enough basic research to assist in collaborative initiatives with the private sector and other government departments and agencies.

"He knew what he was doing. He was supposed to take the NRC from sort of a bit of a wishy-washy thing, trying to do the right thing and hammer management into it," says Willis. "He wasn't as imperious as he sounded. He taught a lot about management. He taught us how to manage—he wanted the human resource activity to be managed much more carefully."

The institute model was not readily embraced by NRC scientists who were understandably comfortable with the divisional model and fearful that the shift would mean a curtailment of their research activities, much of which was internally generated. Dr. Danial Wayner, a 33-year veteran of the NRC who was a group leader at the newly created Steacie Institute for Molecular Sciences at the time, recalls the transition as a time of turmoil.

"The change to the institute model was a fundamental change from having research defined by an activity—chemistry, physics, and biology—to an attempt, not completely successful, to define research in terms of an outcome," said Wayner. "Perron came in with a very difficult hand to play. He had been told clearly by the government that changes had to be made, there were budget cuts that were associated and priorities had to be set in an organization that was not used to setting priorities. Changes in structure had to be made in order to move the NRC in a new direction … There was great resistance and a certain amount of resentment because research lives were being disrupted."

Celebrated attosecond researcher and NRC scientist Dr. Paul Corkum also recalls the confusion generated by the introduction of the institute model and associated changes. Research groups were being dismantled and reconfigured, resulting in the departures of several key scientists.

"Perron was also a time of great turmoil and I was affected to a certain extent, probably in a positive way although I didn't necessarily see it that way at the time," said Corkum. "I was in this group doing laser fusion that was seen in the forefront of everything. Then Perron came along and began to dismantle it … I'm sure the devastation to that big group opened a hole through which I could then grow a new group, so in some ways I benefitted."

Management style

Perron's management style was considered by many to be blunt and imperious, which added to the pushback against the changes brought forth by budget cuts and the emergence of institutes. The changes were mainly opposed by the older researchers used to the academic management style the NRC employed under Drs. William Schneider and Larkin Kerwin. In 1990 and 1991, a program review prompted 140 NRC staff to leave and the positions of 6 vice-presidents were eliminated. Doern wrote that Perron "considered it a good thing that some 'old style' scientists and science managers were deciding to leave" as they were unlikely to embrace the changes he envisioned or had "run out of steam as active researchers". Yet Perron is credited with bringing in the NRC's first robust human resource management system which emphasized performance evaluation, resulting in dramatic changes in management-staff relations that earned him the ire of the Professional Institute of the Public Service of Canada (PIPSC).

In a 1994 PIPSC report, employees described the values associated with the NRC's culture as "bureaucratic, procedure-oriented, cost-conscious, control oriented, conservative, passive, risk averse, and authoritarian". For Willis, the pushback against the new institute structure and increased emphasis on industry relevance was understandable yet justified.

"The older staff felt they had a right to undertake research and a lot of the discussion on that with the staff fell to me. Sure, (scientists) have a right to do research but the government has a right to define preferred areas of that research and they don't have to fund it. You've got to come to a compromise. We've given the institutes this freedom to spend some of their money and you spend some of your time doing so-called skunkworks ... Researchers weren't going to do the same thing after the cuts they were doing before the cuts. We didn't fire that many people but we changed their research projects. That was part of this consolidation and focussing," said Willis. "It wasn't deliberately done, it was done because we had to react to program cuts under Kerwin and during Perron's time. The older staff felt they had a right to undertake research … But you're still working as part of the team, the integrated research program.  That didn't go down well with many of the older researchers from the Schneider times. But interestingly enough, the younger researchers found it exhilarating. The fact that you came here and you worked with companies and industry and international on occasion, it was exhilarating. The younger people reacted very positively."

Perron instituted further structural change in 1992 with a revamp of the NRC's engineering laboratories, with a 5-year plan starting in April 1993, that called for the reduction in public good activities in favour of boosting collaborative "wealth creation" R&D with industry. The engineering labs, by definition, had closer ties to industry than other more research-heavy elements of the organization and were seen as a natural focus on boosting revenue generation and industry interaction.

"We are going to be a lot more aggressive in marketing our technology and expertise to industry," says Joe Ploegg, Vice-President of the Engineering Sector. "In the past, we have never gone out actively to see who we should work with. We always waited for the client to come to us." (Research Money, September 30, 1992).

The plan proposed splitting the NRC's 4 engineering-focused institutes into 10 institutes. This involved the dismantling of the Institutes of Mechanical Engineering into 3 institutes in the areas of manufacturing, machinery mechatronics and environmental engineering under the leadership of Willis. With a focus on resources, manufacturing, transportation and construction, the framework of the engineering labs was intended to lessen the barriers between institutes to offer industry a wider pool of multidisciplinary talent.

The shift had an impact on how the NRC promoted staff, with changes to criteria for moving up and being rewarded within the organization.

"He tidied it up but didn't change it that much. He just wanted it to be done more … One of the things we wanted to recognize (was) outreach ... You didn't count only the number of papers and the number of citations. You looked at the product," said Willis. "That did two things, the engineering got much more recognition because they were much more linked to the outside in an overt way."

Winnipeg's Canadian Institute for Industrial Technology becomes the Institute for Biodiagnostics

The structural shift brought another evolution: aligning the institutes to the current and future needs of industry. One high-profile change was the conversion of the Winnipeg-based Canadian Institute for Industrial Technology to the Institute for Biodiagnostics (IBD). The new institute included more than two dozen R&D professionals relocating from the imaging research unit of the Ottawa-based Institute for Biological Sciences, under the direction of Winnipeg native Dr. Ian Smith, who was the director general. The change was aided by an atypical cash injection of $7 million from Western Economic Diversification, which covered approximately one-third the cost of IBD's creation.

"Pierre Perron – he was very keen on the industry thing. I had a really good relationship with him about where we should be going. We really cruised during that period. Very very healthy," said Smith, adding that the IBD was attracting the participation of companies such as Siemens and General Electric. "Pierre Perron was a classic bureaucrat. He would come into our lab and say 'how many square feet?, which companies are you working with?' He was pushing on the (industry) pedal."

The NRC's relationship with the federal government

While Perron is widely remembered as helping to align the NRC's activities and aspirations with the government's S&T priorities, it was Willis who was responsible during this time for much of the day-to-day liaison between Industry and the NRC. William Wiengard served as Minister of State (Science and Technology) within the Department of Industry, Science and Technology (which succeeded the Department of Industry, Trade and Commerce in 1990) during Perron's presidency. Willis described the organization's relationship with government as "very open and very strong", despite its competitive nature. He says while Industry Canada was very supportive of the NRC, often that support didn't extend to granting the NRC the funding increases it requested.

Funding and focus challenges at IRAP

During Perron's tenure, including the years immediately preceding and following his appointment, IRAP's budget increased from $66.8 million in 1986 to $76.1 million in 1994. Under program review, however, IRAP's budget was frozen, and even cut, dropping to a low of $64.5 million in 1990 and remaining below $70 million for 1991, 1992 and 1993.

The decrease occurred despite Glegg's success in expanding IRAP beyond small companies to include larger projects and international ventures that included the Technology Inflow Program (TIP), deployed to help smaller Canadian firms purchase the rights to use foreign technology. Glegg, who served as the NRC's Vice-President of Technology from 1977 to 1990, was considered a key architect of IRAP and its program-based management system.

"The person who kept us all honest was Keith Glegg. He was really a high-level management person who understood the collaborative value to that. He was IRAP," said Willis.

Yet Perron isn't remembered as a key supporter of IRAP, according to Dr. Denys Cooper, which may help to explain the program's budgetary stagnation. Cooper joined IRAP in 1973 as an Industrial Technology Advisor and was appointed a director of IRAP's technology transfer operations in 1989. According to Cooper, Perron resisted using NRC funds to support IRAP and wasn't a fan of the program's international activity.

"I got involved with the TIP to support technology coming into Canada. That was a super program involving DFAIT (Department of Foreign Affairs and International Trade) as well as the science counsellors and technology development officers in different countries," said Cooper. "Then Perron said we shouldn't be involved in that sort of nonsense so we got rid of the TIP component but we carried on anyway, he never knew. (Dr. Arthur) Carty was very much international so was very supportive of that process."

Perron responds to IRAP concerns

Midway through Perron's tenure, IRAP was the focus of criticism from its advisory board following the release of the program's strategic plan. It called for an additional $80 million over 3 years and withdrawal from supporting larger projects (the so-called IRAP-R stream) by capping project funding at $350,000. IRAP's resources were stretched further as it was tasked with funding other government initiatives such as the Green Plan's $100 million allotment for new environmental technology.

IRAP was the focus of an inquiry by the House of Commons Standing Committee on Industry, Science and Technology, which heard scathing criticism of its strategic plan from two IRAP advisory board members. Appearing before the committee, they said they were not adequately consulted on the strategic plan during its development and asserted that the plan threatened to dismantle the network IRAP had developed with technology and services residing in other federal labs. (Research Money, October 30, 1991)

In testimony before the House Committee, Perron denied the advisory board was not properly consulted, defended the strategic plan and rejected calls that IRAP be removed from the NRC.

Such an idea was "nonsensical", Perron said in an interview in 1991. "I do not see how we could hold true to our mission of serving the needs of Canadians coast to coast if we were to deprive ourselves of such an instrument."

The highly controversial strategic plan and the testimony of the two board members before the House Committee pushed things to a head, prompting Perron to take the "draconian" measure of suspending all 10 IRAP board members, with the governing council assuming responsibility for IRAP guidance until a new board was assembled. One IRAP advisor said that the working rapport between the board and senior management was so poor that, if the members hadn't been suspended, they likely would have resigned out of frustration. (Research Money, December 18, 1991)

Perron also moved to stifle criticism over IRAP's perceived lack of representation at the senior management level following the departure of Glegg, whose responsibilities included IRAP. Perron responded by creating the position of Vice-President of IRAP, and installed Dr. Clifford Baronet, the NRC's Vice-President of Engineering who also oversaw IRAP after Glegg's departure.

A budget windfall for IRAP

A small budget increase of less than 1% in 1992 prompted IRAP to expand its financial and technical impact by exploring new deals with technology transfer and R&D funding agencies such as the Atlantic Canada Opportunities Agency, Société de développement industriel du Québec and British Columbia's Ministry of Advanced Education, Training and Technology.

At the time, its annual budget was approximately $85 million (including flow-through funds from other sources). The House of Commons Committee had recommended a dramatic increase to $220 million by 1998. The NRC was advocating for a $125 million budget and expressed concerns that it may not be able to accommodate a $220 million budget without a major expansion of its roster of Industrial Technology Advisors and the delivery of initiatives on behalf of other government departments and agencies. 

In 1993, the government finally responded to IRAP's funding increase requests, bolstered by an outpouring of support from clients, industry groups and even the government's own National Advisory Board on Science and Technology advisory body. A 5-year, $83.3 million boost allowed IRAP to expand its industrial technology advisor roster by 75 to 225, two thirds of whom would work with member organizations in the IRAP network. (Research Money, December 16, 1992)

Why Perron left

Despite the strong linkages between the president and the federal government "downtown", Perron was increasingly frustrated by what he viewed as budgetary intransigence and a failure by politicians and the bureaucracy to fully appreciate the NRC's contributions to the Canadian economy and knowledge economy.

Perron announced his intention to step down as president in a 4-page letter to staff in August 1993, 10 months before his term was due to expire. In the letter, he urged the government to "act expeditiously" to name his successor, preferably "in time to finalize the next long-range plan and steer it through the government's decision-making system".

The decision to resign came as Perron was informed that the NRC would not be exempted from across-the-board cuts to government operations. As a result, the NRC's operations shrank by as much as 15% between 1995 and 2000. (Research Money, September 8, 1993)

In addition, he had been instructed to reallocate some of the agency's money to other federal science priorities such as the Sudbury Neutrino Observatory where start-up costs were higher than originally projected. Clearly frustrated, he made his displeasure known in the staff letter:

Our government should not weaken its already anaemic support of R&D through retrenchment and cutbacks … Such action can only be self-defeating, it would further weaken our national infrastructure and jeopardize Canada's long-term competitiveness … Governments at all levels and the private sector must move hand-in-hand to more than double our national effort in R&D over the next decade if we are to have a fighting chance to maintain our position as a leading economic power. Unfortunately, the overwhelming preoccupation with the rate of growth and the size of our national debt often clouds these important considerations. In order to deal with the fiscal realities, the tendency is to focus on short-term savings, while losing sight of the long-term negative impact of such a decision.

Perron letter to staff, August 1993

"He lasted 5 years and he wanted out. When he got to the end he wanted out," said Willis. "He knew politicians and he got on well with the politicians. He could talk to them. His first few years at the NRC he made a very big change and finished the change to what we had started off under the Kerwin years.

Although Perron's tenure was relatively brief, his impact is widely considered to be significant. He steered the NRC through the fiscal realities of the day and restructured the organization to meet the challenges faced by Canada at the dawn of the digital age and emergence of biotechnology and materials science. As a consummate bureaucrat with a scientific background, his accomplishments, while not universally accepted within the NRC, are now seen to have set the stage for the current NRC's integration into—and contributions to—the larger federal S&T ecosystem.

Upon his departure from the NRC, Perron retired to the Quebec City suburb of Cap-Rouge.