VISITING COMMITTEE
MINUTES OF DECEMBER 13-14, 2005 MEETING
Boulder, CO

ATTENDANCE

Visiting Committee Cassidy, John Floss, Gary Grubbe, Deborah Keck, Donald Saponas, Thomas Serum, James Spong, David Ehrlich, Gail Executive Director

NIST Senior Management Board Furlani, Cita* Gebbie, Katharine Hall, Dale* Hill, Jim* Jeffrey, Bill Kayser, Rich* Kilmer, Roger* Klausing, Tom May, Willie Phoha, Shashi* Semerjian, Hratch Shaffer, Shoron* Stanley, Marc*

NIST Staff Furlani, Cita* Gebbie, Katharine Hall, Dale* Hill, Jim* Jeffrey, Bill Kayser, Rich* Kilmer, Roger* Klausing, Tom May, Willie Phoha, Shashi* Semerjian, Hratch Shaffer, Shoron* Stanley, Marc* Steel, Eric

*Attended in Gaithersburg via teleconference

Welcome
Dr. April Schweighart, Outgoing VCAT Chair
Ms. Deborah Grubbe, new VCAT Chair

Dr. Schweighart called the meeting to order at 8:35 a.m. and turned the meeting over to Ms. Deborah Grubbe, the new VCAT Chair. After delivering a safety message about driving, Ms. Grubbe thanked Dr. Schweighart for her leadership. Dr. Jeffrey, the NIST Director, presented Dr. Schweighart with a crystal paperweight containing a silicon lattice "NIST" logo in grateful appreciation for her six years of hard work on the VCAT, including the last two years as the Chair. He also remarked that she was a tremendous influence on NIST's strategic planning process.

NIST Update and VCAT Agenda Review
Dr. William Jeffrey, NIST Director

Dr. Jeffrey noted that safety is an important issue for NIST and pointed out the emergency exits from the meeting room. The agenda includes the NIST Update; an overview of the strategic planning and priority-setting process for NIST, the Electronics and Electrical Engineering Laboratory (EEEL), the Physics Laboratory (PL), and the Time and Frequency Division; two laboratory tours; a vision for the U.S. Measurement System (USMS) project; the NIST Awards ceremony; and a VCAT Panel on Best Practices for Strategic Planning.

The NIST Update covered the reference to NIST in People's Magazine; a review of the high-level staff changes at the Department of Commerce (DoC) and NIST including Dr. Jeffrey's additional responsibilities as the Acting Under Secretary for Technology; and recognition of John Hall's 2005 Nobel Prize in Physics, the third Nobel Prize for NIST. The VCAT members will attend an award ceremony later in the afternoon to recognize the achievements of other Boulder staff. Dr. Jeffrey summarized six examples of how NIST has recently responded to national priorities in the following areas: hydrogen economy, climate changes, homeland security, healthcare, and Hurricane Katrina recovery efforts.

Dr. Jeffrey introduced the topic of changing the focus of the VCAT meetings by discussing the status of the Committee's detailed recommendations over the past two fiscal years that mask the key issues and input. In response to their specific budget recommendations, an overview of the federal budget process involving DoC, the White House, and Congress was provided. NIST has no direct control over the budget and Congress has to balance the budget with other priorities. Dr. Jeffrey also presented NIST's budget trend data. Following the budget overview, Dr. Jeffrey remarked how much time was used at the meeting to respond to this particular recommendation. He also noted that many of the VCAT's 75 recommendations are on-going or operational, and others have been requested for routine briefings. To help the VCAT and NIST be more useful to each other, Dr. Jeffrey described a new approach to change the focus of the VCAT to high-level topics, such as prioritizing NIST programs, science and technology performance metrics, strategic relationships, outreach, and NIST's role in the international arena. In earlier conversations with Dr. Jeffrey, Ms. Grubbe and Dr. Schweighart agreed that the VCAT should focus on a few high-level topics in more depth, including the related lessons learned from industry. For example, metrics would be helpful to justify NIST's existence to DoC, the Office of Management and Budget (OMB), and Congress but it is difficult to measure the impact of public good. NIST needs to show the impact of a dollar invested in NIST programs to the gross domestic product and welcomes the VCAT's insights on how to do this broadly. With only a few high-level recommendations each year, the VCAT could help NIST implement these and measure success. A new meeting format also was presented that highlighted the need for a more open and complete recording of the individual members' ideas as done in other Federal advisory committees. The December meeting is the first experiment with this new approach.

For more details, see Dr. Jeffrey's presentation

Discussion

FY06 Budget - When asked about the management responsibility and administrative costs related to the $138 million of Congressionally directed grants in the NIST budget for FY 2006, Dr. Jeffrey responded that NIST has to absorb these costs and has no say in how these funds are allocated. NIST must adhere to its judicial responsibilities and award the directed grants for the purpose and amount stated in its appropriation. In regard to the pending recession, Dr. Jeffrey indicated that it would be applied equally to all programs as stated in the language. Congress has the constitutional right to set different priorities than the executive branch.

Dr. Serum remarked that the overview of the budget process was informative and he now appreciates the extent of DoC's negotiations with the White House rather than Congress. Dr. Jeffrey pointed out that the biggest hurdle is OMB who cares about critical national needs not being met and NIST's capabilities to meet these needs.

Mr. Williams asked if NIST had a proactive approach to address the progressive decline of the Manufacturing Extension Partnership (MEP) and the Advanced Technology Program (ATP). Dr. Jeffrey responded that MEP was fully funded in FY 2006 and that the ATP funding covered current obligations while the program is in a smooth transition to phase out.

Priority-Setting - Dr. Spong remarked that the VCAT needs a long-term view on where NIST will be in 5 to 10 to 20 years. Dr. Jeffrey responded that part of prioritizing programs is to understand future trends where NIST needs to position itself, as demonstrated by the USMS project and the new NIST Center for Nanoscale Science and Technology.

New Approach for the VCAT - Some members expressed their concern over reporting just the dialogue or brainstorming of each individual and noted the benefit of shaping the Committee's deliberations in a private setting. Dr. Jeffrey emphasized the value of hearing each member's ideas that should not be lost just to reach a consensus. They asserted that they are not instantly visionary and that their private discussions are helpful. Although their message may sometimes be "watered down", a recording of all of their comments may not be the best way to achieve their diversity of thoughts. A process to find the middle of the road between full consensus and individual ideas should be developed. Ms. Grubbe indicated that the meeting minutes could probably be structured to highlight the salient points. Dr. Serum emphasized that the main difference between the VCAT and a National Research Council oversight committee is that the VCAT serves as an advisor to the NIST director. For the VCAT to be most effective in this context, the NIST director should provide very clear direction on how the VCAT can help NIST. Dr. Jeffrey stressed that the senior management welcomes debate among the members and an opportunity to flush out second-order issues. He urged the VCAT not to rubberstamp recommendations but to push back and provide alternatives, where appropriate.

The members noted that their recommendations could be more effective if they understood the audience for their annual report. Dr. Jeffrey responded that the report is provided to NIST and Congress and that NIST probably gives it more attention than Congress who receives many other reports and may not have time to read the details. He also remarked that the VCAT is valuable and he would like to maximize their utility. Dr. Jeffrey is firmly committed to working with the VCAT as effectively as possible.

The members agreed that their list of past recommendations should be reviewed more closely to ensure that the top-level strategic items go forward and the items for which NIST has no control be closed out. Ms. Grubbe proposed that the VCAT should concur with the items that go forward and those that should be reviewed by exception. In closing, the members agreed to go forward with Dr. Jeffrey's new approach for the VCAT and, if needed, make adjustments to the new meeting agenda.

NIST Strategy and Prioritization
Dr. William Jeffrey, NIST Director

This talk will set the stage for the following presentations on strategic planning in EEEL and PL. In his opening remarks, Dr. Jeffrey set the context for a government view of strategic planning as he described how the government's efforts differ from industry in regards to metrics, conflicting priorities from the Administration and Congress, and an integrated planning process. NIST has to balance its near-term needs with long-term priorities and position itself to respond to these priorities. This sometimes requires some guesses and judgment since the government does not have as much control over where the research ends up as the private sector.

Dr. Jeffrey described how the NIST mission statement, national priorities, and other drivers and opportunities are used for overall investment decisions. NIST's strategy and prioritization process begins with the legislative language that defines the bounds of what NIST is allowed to do. This language is then articulated in the mission statement that identifies NIST's unique niche. The mission statement allows NIST to identify the required top-level competencies and its customer base, primarily U.S. industry. Within these competencies, investments need to be prioritized based on many drivers and opportunities. The President sets the overarching national priorities: winning the global war on terrorism, defending the homeland, and national security. Research and development plays an important role in each of these priorities but the amount of investment has to be balanced with other constraints, such as reducing the budget deficit in half. The Executive Office of the President amplifies these priorities and coordinates their implementation policies. Each department and agency is then expected to use this guidance to implement the relevant policies and priorities. The R&D budget priorities provided in the Administration's FY 2007 annual guidance memo was shown with an example of the level of detail specified for homeland security. Dr. Jeffrey then summarized the many other drivers and opportunities that NIST uses to develop an investment strategy that balances near-term priorities with future needs. These include DoC priorities, Presidential and Congressional directives, interagency working groups, the voice of NIST's customers, and input from technical and advisory bodies. Each Operating Unit (OU) has its own methodology for making optimal investment decisions within their mission that reflects their unique customer base and their culture. These differences will be illustrated in EEEL's and PL's presentations.

Dr. Jeffrey then described the four specific NIST strategies for success in achieving the NIST mission. There are specific milestones and people assigned to each of these strategies. The first strategy recognizes the importance and rapid change of technology in the global economy. In the second strategy that deals with efficient domestic and global marketplace transactions, the term "standards" is purposely excluded because of its lack of understanding by many outsiders. The third strategy responds directly to requests from Congress and Administration while the forth strategy ensures that NIST's in-house operations are in order.

Dr. Jeffrey explained the purpose and outcomes of the OU program reviews, including the identification of core competencies and underfunded areas, recognition of a variety of prioritization mechanisms, and identification of challenges in the use of objective measures. It was suggested that each OU consider their programs and priorities within the context of the Heilmeier questions as shown on the slide. Any R&D organization should be able to answer these questions; however, the forth and fifth questions are the most difficult to answer. An idea may be brilliant but not necessarily aligned with NIST's mission or an idea may be brilliant and aligned with the NIST mission, but not have much impact beyond the technical researchers. These responses require some cynicism. To further align NIST strategy, the competence and initiative process was combined to form a new competence and FY 2008 initiative procedure with many benefits.

In closing, Dr. Jeffrey noted that EEEL and PL have a significant presence in Boulder and that he hopes the VCAT appreciates the diversity of planning and constraints among these OUs as they listen to their presentations. Lastly, he reviewed the questions and issues to be addressed by the VCAT panel on the second day of the meeting and noted that he looks forward to listening to the panel from Gaithersburg.

For more details, see Dr. Jeffrey's presentation.

Discussion

Core Competencies - Dr. Jeffrey was asked to provide more information about identifying core competencies. Since the budget has been tight over the past years, he wants to ensure that NIST can still provide the existing core competencies to meet the nation's current needs. NIST also must identify the emerging core competencies that are needed to respond to future needs of the nation, industry, or other agencies. This has to be a parallel process since NIST is still expected to meet its current customer base while growing core competencies for the future. The challenge is how to prioritize these needs and how to make the difficult decisions of where to reduce core competencies. These trade-offs may be needed to move forward.

Mr. Serum suggested that NIST should ask if the core competency still meets the NIST mission. Dr. Jeffrey replied that this is a requirement and NIST needs to be able to step back and say that a competency is no longer needed. He is looking forward to the panel's advice on how to change the skill set of an organization to match its new direction.

Heilmeier Questions - Mr. Saponas agreed that the fifth question was the most difficult and stated that there is a debate on whether the projected impact is really a driver in the U.S. economy. Dr. Jeffrey replied that essentially all of the OUs have mechanisms in place to perform economic studies to address this question. It may be easy to justify new programs but it is difficult to eliminate existing programs. However, NIST needs to make these tough decisions in order to be relevant in the future. These decisions are a work in progress.

Cross-OU Collaborations - Ms. Grubbe remarked that NIST's strategy seemed somewhat OU-focused and asked about cross-OU collaborations. Dr. Jeffrey responded that the competence program has encouraged cross-OU collaborations and is now being tied to top-level national priorities, such as climate change, nano, and hydrogen fuel. These areas by their very nature are cross OUs and will require collaborations. Each OU has a unique customer base from the top down via interagency working groups and bottom up via their customers.

National Priorities - Dr. Keck is concerned with how NIST in the long-run will be able to balance national priorities with Presidential priorities and asked for a pie chart of programs funded by national versus presidential priorities. Dr. Jeffrey acknowledged that NIST needs to do a better job identifying the nation's long-term needs and is looking to the USMS project and other sources for guidance. For example, what does the U.S. need to do now to ensure that it will be the most competitive in nano and how does this tie to measurement science? To produce a carbon nanotube with specific diameters requires that the properties be specified now which requires cross-OU collaborations. Since NIST does not control its own budget, there needs to be a compelling case why the Federal government needs to invest in nano versus Katrina-related activities or healthcare, for example, and a case for the NIST role in these areas.

Strategic Alignment - Dr. Serum noted that he heard some excellent information related to strategic alignment that will help NIST "run better." NIST has a unique position in all of government with its mission to promote innovation and industrial competitiveness. Therefore, when developing its 10 to 20 year strategy, NIST should identify which industry segments are of highest priority, what technologies contribute to these industry segments, and how NIST can make a difference in contributing to these. Dr. Jeffrey's response included a nano example. NIST is not trying to duplicate the NSF and DoE centers of excellence in nano that focus on nanodiscovery. Instead, NIST is trying to focus on the missing gap to fulfill industry's needs, specifically in measurement science. His expectation is that all of NIST's programs will be aligned with innovation and competitiveness as he announced recently at the NIST town hall meetings. Thomas Friedman has helped to make "competitiveness" a household word and policy makers are beginning to talk more about this topic. NIST is well-positioned and aligned to fulfill its mission and others need to be aware of its role.

As a follow-up question, Dr. Serum asked what the three most important industry sectors would be in twenty years. Dr. Jeffrey remarked that this was an excellent question and NIST has been trying to answer it. There has been much debate in the USMS discussions on how to select these industry segments.

Dr. Spong noted that he uses such tools as Venn diagrams to look at industry intersections to identify the important industry sectors. The problem is addressing the areas that need to be terminated along with their associated staff. Dr. Jeffrey responded that the OUs have been forced to make such strategic decisions over the past years as a result of tight budgets and he has been impressed with how the senior management has made these decisions. Strategic decisions must be continuous and done on a yearly basis.

Scenario Planning - Mr. Saponas described the value of scenario planning, referenced The Art of the Long View, and asked if NIST is engaged in this activity. Dr. Jeffrey replied that scenario planning has not been done at NIST but he has participated in this activity in regards to homeland security at a previous job. Ms. Grubbe added that the National Academies engaged in scenario planning in developing their report on the Engineer of 2020.

Budget - Mr. Floss asked if NIST is doing too much or too little now that the OUs are doing a better job at taking programs "off their plate." Dr. Jeffrey remarked that it is fair to say that NIST is stretched very thin. The FY 2006 budget shows a change in priorities between the President's request and the appropriation. NIST is doing the best it can and hopefully will do better in FY 2007 and FY 2008.

Dr. Keck requested to see pie charts that show the fraction of spending related to Congressional and Presidential directives related to the immediate time frame and the future. When he was a research director, funds would be wasted on a program that responded to current needs rather than future interests. Dr. Jeffrey responded that this analysis becomes objective in terms of identifying short-term versus long-term needs, such as hydrogen fuel and nanotechnology. It is easier to provide a pie chart on funded and unfunded mandates but the other view is more challenging.

Ms. Grubbe asked if Dr. Jeffrey or the Senior Management Board question whether NIST is the right organization to fulfill an outside request to respond to an emergency. Dr. Jeffrey replied that sometimes there is a choice. If NIST is named in statutory legislation, then there is no choice. If NIST knows about a request in advance of the legislation, then they may try to affect it before it is cast in stone. NIST was not directed to get involved with Hurricane Katrina efforts. Instead, NIST got involved because it believed that these activities were within its core mission and reprioritized internally to obtain the needed resources. This is an example of NIST responding to an immediate need with the resulting data having a long-term impact.

Strategic Planning in the Electronics and Electrical Engineering Laboratory (EEEL)
Dr. William Anderson, Director, EEEL

Dr. Anderson's presentation included a brief overview of EEEL; a description of the lab's challenges and opportunities for strategic planning; and an explanation of EEEL's commitment, approach and process, and lessons learned in strategic planning. With exceptional staff in Gaithersburg and Boulder, EEEL is the world leader in electromagnetic metrology, has the largest calibration income among the NIST labs, and, until a few days ago, managed the nanofabrication cleanrooms at both sites.

EEEL has several challenges and opportunities that drive its interest in strategic planning. These include EEEL's labor costs versus staff levels, the declining permanent staff, the decreasing metrology staff, a challenging other agency environment, the strength of EEEL's staff, and the steps taken to stay within the budget. For example, the erosion of staff and funding due to inadequate adjustments to base has resulted in a reduction of 70 staff in EEEL in the last 15 years. In spite of these challenges, EEEL's staff continues to be recognized with high honors from many external organizations. To stay within budget, the 2003 and 2005 reductions-in-force (RIF) eliminated 48 positions in EEEL comprised mostly of the technical staff.

EEEL is committed to strategic planning as a way for the staff to be aware of the direction of the lab and contribute to common goals that align projects with division, lab, and NIST objectives. In addition, a strategic plan positions EEEL for maximum impact and success. Strategic planning is a real challenge for the NIST labs as they strive to balance basic and applied research. Dr. Anderson showed a pyramid to illustrate how basic units, derived units, and standards and calibrations support applications for important customers and emphasized that all parts of the pyramid are affected when reductions are made at NIST.

Dr. Anderson introduced EEEL's approach and process for strategic planning by reviewing the ground rules and new charge from the NIST Director. He then reviewed the following elements of EEEL's strategic planning process in detail: 1) lab level guidance; 2) trends and forecasts from the Office of Law Enforcement Standards (OLES) and the Office of Microelectronics Programs (OMP); 3) strategic plans developed by the divisions based on the FY 2006 template; 4) EEEL's Program Review with a focus on identifying "EEEL's mandates" and "projects and risks" and a consensus on how to manage the EEEL's mandates for success; 5) progress reports from division chiefs on mandates and at-risk projects; and 6) EEEL's Strategic Plan.

Lastly, Dr. Anderson shared the following lessons learned to date: full staff engagement is critical; the discussions can be more important than the resulting documents; and EEEL needs to strike a balance between its core NMI function and providing needed measurement science and standards for maximum impact to industry.

For more details, see Dr. Anderson's presentation.

Discussion

Staff Reductions - Dr. Spong asked if the staff reductions were by choice or the inability to find the right people. Dr. Anderson responded that the declining budget dictated the staff reductions. Many of the losses represent unfilled vacancies from retirements as well as some RIFs.

Hot Topics - Dr. Saponas applauded the planning process and asked if EEEL had reached a conclusion about areas that are hot and those that are not hot. Dr. Anderson noted that he only has time to provide a few examples. Measurement services need to be streamlined and quantum-based standards are hot. Zener standards in support of josephson voltage are no longer being done in EEEL and the lab is essentially out of the high voltage area. This is an area where international cooperation is important and relations should be established with the NMIs so that the remaining customers in the U.S. can get these standards elsewhere. The reality is that there are no longer any high power voltage companies in the U.S. so EEEL decided to stop providing this support.

Approach and Process - Dr. Serum commented about the frequent reference to a bottoms-up process in EEEL and noted the importance of distinguishing between strategic planning and tactical planning. Dr. Anderson remarked that the process was bottoms-up in regards to fact finding from the researchers to support their case but the end result was a very good strategic plan from the top-down. Dr. Serum added that he had no issues with EEEL's process. He then asked about the impact of the decreasing staff in low frequency metrology from a strategic point of view. Dr. Jeffrey replied that EEEL's presentation focused on the process and that the lab is very committed to strategic planning to respond better in the future and for staff awareness.

Strategic Impacts - Dr. Cassidy asked about the strategic impact resulting from the decline in staff and budget. Dr. Anderson replied that some of EEEL's programs are now totally out of some industry segments and that he would need to talk to industry to assess the impact of these decisions. Some of these industries are coming back to EEEL and asking for help. Dr. Cassidy then asked about EEEL's process for projecting the current or future impact of strategic decisions. Dr. Anderson indicated that each division does a SWOT analysis with outside facilitators. EEEL's staff is heavily involved with roadmapping activities to obtain information about industry's needs for NIST's metrology over the next five to ten years. EEEL also relies on its intuition ("crystal ball") for some areas, like RFID.

Core Competencies - Dr. Cassidy asked about EEEL's core competencies. Dr. Anderson replied that EEEL is still in the process of identifying its core competencies. So far, they have identified traceable metrology, quantum-based standards, and nanofabrication. EEEL also has priority projects identified by the divisions for which the management team has agreed to fund as top priorities for the lab. The top priority projects represent those activities that absolutely define EEEL as credible and viable. These projects could represent exploratory areas that may start at the bottom and be at risk but then could easily and quickly move up to the top of the tier and be funded to respond to future needs.

Overview of the Strategic Planning Process in the Physics Laboratory (PL)
Dr. Katharine B. Gebbie, Director, PL

Dr. Gebbie's presentation included a review of the PL's mission and activities; a summary of the lab's customers, measurement services, partners, and core competencies; a description of the lab's programs for established and emerging technologies and their related planning process; monthly usage statistics for PL's websites; and examples of the lab's media recognition, staff external awards, and programs that attract the best and brightest scientists.

PL supports the NIST mission by advancing measurement science and providing measurement services for electronic, optical, and radiation technologies through five areas of emphasis. A great strength of the lab is that the programs are vertically integrated and address the immediate and future needs of industry. With interdisciplinary staff and resources not available elsewhere, PL operates in a climate of aggressive and high-quality research which provides the credibility for its measurement services. In addition, the high demand for measurement services provides a focus for the lab's research.

PL supports the measurement needs for established technologies in three program areas:
time and frequency, optical technology, and ionizing radiation. Dr. Gebbie described the strategic planning process for each of these three areas which is based on surveys of customer needs and other guidance from several organizations, including the Council for Optical Radiation Measurements (CORM) and the Council on Ionizing Radiation Measurements and Standards (CIRMS). The NIST response to these needs also was provided.

PL also supports the measurement needs for emerging technologies in three program areas: quantum information, biological physics, and nanoscale science. In contrast to the planning for the established technologies, PL has no structured planning process for programs related to the emerging technologies. Instead, this planning is based on an iterative, open door policy that promotes lots of discussions between the PL director and the managers. These discussions have had satisfactory results, such as the planning for the new nanotechnology center at NIST which will move out of PL. The lab also is using competence funding successfully to develop future programs as illustrated by the 1992 "Beyond Quantum Limits" competence initiative that paved the way for the quantum information program. Dr. Gebbie summarized the basis for conducting the three programs for emerging technologies with references to workshops, roadmaps, and notable quotes.

The impact of PL's programs can be illustrated by the number of cover stories in major scientific publications and articles in the press that highlight their significant discoveries. Last year, three Boulder projects were included in the list of top scientific discoveries in a single year. As another indication of the lab's world-class research, Dr. Gebbie acknowledged the PL recipients of several prestigious external awards, including Jan Hall who is currently in Stockholm receiving his Nobel Prize in Physics.

Lastly, Dr. Gebbie emphasized that a strategic plan should ensure that the organization attracts the best and brightest people from all segments of society. To meet this goal, PL established the very successful Summer Undergraduate Research Fellowship (SURF) program in 1993. The lab also hosted three expatriates from New Orleans in 2005.

For more details, see Dr. Gebbie's presentation.

Discussion

Industrial Competitiveness - Dr. Serum remarked that PL's programs are phenomenal for industry downstream and asked how much time PL spends in thinking about the challenge of industrial competitiveness and proactively brainstorming on how their programs could help make industry more competitive. There is a difference between working in areas that are interesting and possible versus being proactive in carrying out programs that support the NIST mission to promote industrial competitiveness. Dr. Gebbie replied that some areas, such as quantum computing, are just too far out in the future and difficult to predict. Strategic planning is a continuous process with the constant exchange of information. She greatly values the VCAT's suggestions and encouraged them to recommend the most important areas that PL should be addressing for the future based on the lab's expertise. This is an important role for the VCAT and she appreciates their help.

Priority-setting - Mr. Saponas asked how PL prioritizes their response to CORM and CIRMS. Dr. Gebbie believes that division chiefs need long-range predictable funding if they are to take ownership of their programs and planning. There is no process for moving around large amounts of money. A long time ago, PL ended the microtron racetrack project and lost 23 people. Money can be moved around through the competence program. Competence projects are funded from $500 thousand to $1 million per year and if successful after five years, funds can be moved from other areas to the proven competence project. Each division understands that they can be affected by this process. There are a lot of objections to this process.

Dr. Keck asked how CORM and CIRMS develop their recommendations. Dr. Gebbie replied that NIST is not involved with their processes. CORM conducts a survey and compiles a report from the responses. CIRMS priorities are based on their workshops held in eight specific areas rather than surveys. This process is done entirely independent of NIST although NIST originally set up CIRMS and then spun it off.

Ms. Grubbe asked if PL had ever conducted a systematic analysis on the different planning processes used for the established versus the emerging technologies to find out what other elements should be included. Dr. Gebbie replied that such an analysis was not done and it is difficult to have a structured planning process for the emerging technologies without an established constituency. Ms. Grubbe suggested that PL define the elements and then pose the questions to their constituency for help with decisions. Dr. Gebbie stated that she would be glad to discuss this topic further with Ms. Grubbe. Dr. Spong suggested that lessons learned be added to the process.

Implementation of Strategic Planning in the Time and Frequency Division
Dr. Thomas O'Brian, Chief, Time and Frequency Division, PL

Dr. O'Brian's presentation is an example of strategic planning at the division level and illustrates the diversity of programs at NIST. His presentation included a brief review of the Time and Frequency Division's mission and activities, the strategic planning processes, examples of strategic outcomes, and strategic planning challenges. The NIST Atomic Clock is at the core of the Time and Frequency Division. The SI second and the Coordinated Universal Time are infrastructural to all aspects of the economy and it is impossible to quantify their impact. The division serves a broad range of time and frequency customers and consults closely with key stakeholders to determine current and future needs for precision timing and frequency. A list of the division's broad range of customers, funding organizations, and collaborators for FY 2005 was distributed.

Dr. O'Brian discussed the division's short-term and long-term strategy for improving the SI second realization. The SI second is fundamental to the core of the entire U.S. and international measurement system. The NIST F-1 Cesium Fountain standard has a frequency uncertainty that is best in the world; however, the SI second realization should be improved based on the needs deployed in the field, as illustrated on several graphs. The current short-term strategy is to develop a second generation cesium fountain primary frequency standard, NIST-F2. In the long-term, optical primary frequency standards will be developed and the division is exploring several candidates simultaneously. The VCAT tour later today will feature the division's research on optical atomic clocks.

The division's strategic planning also relies on its customers. Dr. O'Brian described the 2001 customer survey on the division's time and frequency services and emphasized that the results led NIST to increase the power of WWVB to better serve radio-controlled timepieces. NIST serves approximately 30 million customers a day through radio controlled timepieces that rely on WWVB. These timepieces are not made at NIST. The survey also led NIST to improve its internet time service.

Examples of other strategic planning outcomes include the division's work in miniature atomic clocks, optical frequency standards, and quantum control. Having developed and demonstrated the technology for the first chip-scale atomic clock, the division is now actively collaborating with industry to make and commercialize this new device. The NIST-funded competence program for optical frequency combs was a great breakthrough and established the basis for the division's future development of optical frequency standards. Having achieved multiple world's bests and firsts in quantum computing in collaboration with other NIST researchers, the division is focusing on developing a new "logic clock" by applying the principles of quantum computing to frequency measurements.

Lastly, Dr. O'Brian described the division's challenges in strategic planning related to Boulder's aging facilities, budget trends and the long-term effect of increased dependence on other agency support, and the amount of "on-the-job" training associated with the large number of guest researchers and research associates. The division also is engaged with extensive community training and a successful SURF program that have resulted in new hires.

For more details, see Dr. O'Brian's presentation.

Discussion

Competitiveness - Ms. Grubbe asked how NIST views the competition for the SI second realization. Dr. O'Brian responded that NIST clearly leads the world in this area. The NMI and PTB do not have the broad range of expertise as the Time and Frequency division but are collaborators with NIST.

In further discussions about the need for improvements in the SI second, Dr. O'Brian indicated that there are lots of current needs that cannot be met with existing standards and that telecommunications is only one example where there is a strong need for improved standards. Dr. Cassidy remarked that the NIST mission addresses industrial competitiveness and not deep space. Dr. O'Brian stressed that a core mission of NIST is to maintain the SI unit to meet well-defined industry's needs. Based on history, customers can find a need for these improvements.

Dr. Keck remarked that the reference to the number of industries that have grown with NIST as a result of the SI second realization since the 1950's is a wonderful story and recommended that the chart be expanded to include the associated economic impact. Dr. O'Brian noted that this chart may not be an exhaustive list of industries and agreed with Dr. Keck's suggestion to expand the chart which would serve as a high-level picture to send to OMB.

Internet Time Service - In response to VCAT's questions, Dr. O'Brian noted that the number of daily hits could reflect repeated hits by the same customer and that this service could be accessed directly from the NIST website or set as a Microsoft default that references NIST.

Facilities - Dr. Serum asked whether the division has ever considered performing their precise measurements at the Advanced Measurement Laboratory (AML) in Gaithersburg. Dr. O'Brian acknowledged this possibility but noted that it would be a large undertaking to move the people and equipment. He also is concerned that the primary researchers would not be willing to move. Perhaps, NIST could revisit the plans from the mid-1990's to build an AML in Boulder.

Laboratory Tours

Optical Atomic Clocks - Improvements to the accuracy of atomic clocks are driven by needs for better positioning and navigation, higher performance telecommunications, more accurate measurement of many properties that depend directly or indirectly on time and frequency (such as length and electrical quantities), scientific research, and numerous other applications. To keep pace with demands for future accuracy, NIST conducts a research program to develop new kinds of atomic clocks based on optical vibrations in atoms (light). Using optical vibrations provides up to 100,000 times more "ticks per second" compared to the microwave vibrations used in NIST-F1 and most other atomic clocks, enabling optical clocks to potentially outperform current atomic clocks by a factor of 100 or more. NIST research includes optical clocks based on a single mercury ion (electrically charged atom), clocks based on clouds of laser-cooled atoms of calcium or ytterbium, and clocks using the principles of quantum computing. All these approaches have unique strengths and limitations, and each approach is likely to have practical applications for future atomic clocks. A crucial component of any optical clock is a way to directly count the optical vibrations ("ticks per second") - something that was not possible until the relatively recent perfection of laser frequency combs at NIST and other research organizations.

NIST's Role in Alternative Refrigerants and the Hydrogen Economy - The measurement and standards programs at NIST have long provided some of the technical information vital for commerce and innovation in the energy and environmental sectors. NIST's continuing efforts on alternative refrigerants form a portion of its research portfolio related to global climate change issues. NIST also plays a key technical role in interagency efforts related to the hydrogen economy by providing the basis for standards and calibrations required for commerce, as well as for safe and efficient design of the technologies and infrastructure. The Committee visited the NIST densimetry laboratory where measurement methods related to hydrogen systems and refrigerant fluids are being developed and key experiments are conducted. This work is being integrated with activities in the Department of Energy, the Department of Transportation, and the Environmental Protection Agency. Direct interactions with the private sector also have been a major component of this work.

High Speed Optical Detectors for Quantum Encryption/Information - Fast, accurate, and secure communication is one of the biggest challenges of digital communication technology. The ultimate systems will use quantum information science and technology to produce communications channels where information security is guaranteed by the laws of physics rather than by mathematical complexity as in traditional cryptography. A key component for these systems are receivers that can detect the arrival of single photons at high speed, high efficiency (few missed counts) and low dark counts (few false detections). The best single photon detectors in the world are made at the NIST laboratory in Boulder.

Vision for the NIST USMS Effort
Dr. Dennis Swyt, Director, USMS Project

Dr. Swyt was chief of the Precision Engineering Division in the Manufacturing Engineering Laboratory until September 2005 when Dr. Jeffrey assigned him the responsibility to rethink and lead the NIST USMS effort. His presentation described NIST's fundamentally different vision and approach to its assessment of the nation's measurement system since the June 2005 VCAT meeting and the status of meeting the objectives of the USMS effort. The specific topics covered the objective of the USMS effort; the logic and fit with NIST; the output and intended benefits of the assessment; the basic methodology of the assessment; the project organization, responsibilities, and funding; the plan and progress; and a conclusion.

In describing the objective of the USMS effort, Dr. Swyt provided his definition of an "assessment of the USMS." The primary objective of the NIST USMS effort is to produce and deliver to the NIST Director by June 2006 a credible distributable report on a needs-based assessment of the state of the USMS. He then presented several rational and defensible "logic" statements regarding technology and innovation that drives the USMS effort and report, including a quote by the U.S. Council on Competitiveness of the importance of innovation to the United States. The most widely used economist's definition of technological innovation is included in this logic. Dr. Swyt emphasized that a broad survey of industry measurement needs relative to technological innovation will result in inferences about the overall state and assessment of the USMS. There is no metric that corresponds to the health of the measurement system and a survey is a practical and useful mechanism. The focus of the NIST assessment of the USMS on measurement barriers to technological innovation fits the NIST's mission and its strategies for success.

While describing the output and intended benefits of the USMS assessment report, Dr. Swyt stressed that NIST does not assume that it is the provider of the problem solution. Instead, NIST will work with the stakeholders to facilitate the solution. NIST will also serve as a catalyst for the identification of other industry needs and other possible systemic problems that may be included in the version 2 of the assessment.

The basic methodology for the assessment was described with an emphasis on the economic model and examples of measurement problems as barriers to technological innovation. According to this model, the technological innovation is realized when the new technology is commercialized. This model serves as the basis for specifying the measurement needs. Dr. Swyt also reviewed the type of information to be compiled in a one-page document for each measurement need, the information sources and creators of the measurement needs, and the plan to authenticate each measurement need and finding by parties outside of NIST. The methodology also includes a broad survey of the overall space of measurement needs from different perspectives. The bases for the survey cover the semiconductor, automotive, and software sectors selected by NIST due to their importance; technologies in response to national needs; the SI units, and the disciplines associated with technical barriers that map to the NIST laboratories. The products for the different bases and their respective responsible party were provided. A total of 300-400 measurement needs are expected to be identified.

Dr. Swyt then summarized the responsibilities, organization, and funding of the centralized activity of the USMS effort and noted the project's milestones and timeline. In his closing remarks, Dr. Swyt acknowledged the contributions from Dr. Jeffrey, Rich Kayser, the OU Directors, and the NIST staff in meeting the objectives of the new vision for the USMS effort.

For more details, see Dr. Swyt's presentation.

Discussion

Definition of USMS - Dr. Serum remarked that a specific definition for the USMS was needed. Dr. Sywt responded that the "USMS" is the acronym for the Nation's measurement system and is comprised of all individuals and organizations that either make measurements, use the measurement results, or contribute to the validity of the measurements where measurements are used for economic purposes. The system is complex and distributed rather than hierarchical. Everyone depends on the operability of the system every day and no one is in charge of it. However, NIST, as the nation's measurement laboratory, has a special role in the USMS. The real issue is to how to asses the state of the USMS.

Definition of "technological innovation" - Dr. Spong questioned whether a new technology can exist if there is no new application yet. Dr. Swyt responded "practically no", but in the case of the laser, it was diffused by its introduction into the marketplace. The economic model for technological innovation provides some rigor.

Economic Model of Measurement Problems as Barriers to Technological Innovation - Dr. Serum noted that there is a dramatic difference between having a technology commercially available versus having it sold and that this difference is recognized by those involved with pioneering new innovative technologies. Dr. Swyt reminded the group that the USMS effort defines technological innovation as the introduction into the marketplace of new technology.

Dr. Cassidy remarked that the economic model is inconsistent with the NIST mission because the model starts with research rather than industrial competitiveness. Dr. Swyt replied that this model is independent of NIST and does not specify NIST's role in this model. This model could represent a company or serve as a macroeconomic model for research as a whole. NIST is the interface between the research and production. This is a good consensus model for R&D and shows where the public good lies and the potential role for government. Other people from industry have disagreed with this model and have argued that innovation does not occur in the marketing phase. This model is useful for NIST as it raises the question of public policy in regard to the role of NIST in technological innovation. Dr. Jeffrey added that innovation can occur during research, production, and marketing but technology innovation is "realized" at the final point. Dr. Keck stated that Corning used the whole process as technology innovation. According to Dr. Swyt, technology innovation is a term of art. Mr. Floss suggested that the argument could be softened if there is agreement that technology innovation can be realized further upstream. Dr. Serum indicated that technology innovation must be realized by industry before it can make a difference. Dr. Swyt noted that the technological innovation does not make any difference to the end user who cannot access it.

Ms. Grubbe noted that a company can have a product that is commercially available and can be sold but it has spent so much money on its research, production, and marketing that it may not be competitive at the end of the process.

Methodology - Mr. Saponas remarked that the challenge for NIST is defining the scope of the USMS effort. He is more concerned with the level of measurement needs to be identified and the methodology for scaling down these needs.

Use of Report - Dr. Spong asked how the report will be used once it is widely distributed. Dr. Swyt reiterated the intended benefits of the assessment report which will include an action plan to facilitate solutions among stakeholders. In addition, the report will be highly influential to NIST's program planning and can become a formal part of its strategic plan.

Chemical Imaging - Dr. Serum suggested that NIST examine a recent NRC report that identifies the needs for chemical imaging. Dr. Swyt requested that this report be sent to him.

Environmental Monitoring - NIST Deputy Director Hratch Semerjian noted that the USMS effort is creating a lot of excitement. For example, an EPA conference coordinator contacted him about a future conference to address EPA's monitoring issues.

Selection of Industry Sectors - Ms. Grubbe asked how the measurement needs in other industry sectors will be covered. Dr. Swyt responded that each of the three industry sectors to be studied has been assigned a full-time analyst and other people will be responsible for a particular technology. Other areas will manifest themselves. NIST already has a relationship with the three sectors selected for the initial assessment and other sectors will be studied subsequently. Ms. Grubbe suggested that NIST reexamine how the questions are asked; if not, NIST will only receive input on what people request. The USMS effort should begin with customer's needs and then focus on how to do the survey. She stressed the importance of asking the right questions for the survey and suggested that NIST seek expert help in developing the appropriate questions. In her opinion, this is a worthwhile task that should be done at the beginning of the process by trained staff and that this methodology would stand up better. Dr. Swyt noted that this was an interesting suggestion and will talk more about this topic off-line. In discussions with other industry people, they quickly tell him their measurement problems and they realize they need to get to the rest of the story.

Dr. May added that resources was the limiting factor in studying only three sectors. Dr. Swyt noted that he had informed the NIST management that the cost of each sector's full-time analyst plus overhead would be about $300 to $400 million for a total estimated cost of $1 million for the three sectors. More details regarding the cost of the entire USMS effort was included in Dr. Swyt's presentation.

Mr. Saponas noted that the most radical changes are occurring in the health care industry with an "unbelievable" rate of scientific discovery and where physics is being applied to biology. This is an area with significant measurement problems and where the nation has a future competitiveness problem. Dr. Keck remarked that industry should be in a position to do its own measurements but will require NIST's help during some point in the innovation process. Mr. Saponas remarked that there is a difference between the measurement process and measurement standards.

Dr. Serum remarked that the VCAT would not select these three sectors. He asked if these sectors were chosen because there is a lot of experience in these areas or to demonstrate a methodology that could be engrained in the process as an experiment of how to do the assessment. Hopefully, these sectors were selected to demonstrate a methodology, and if this is the case, then these areas are "ok" as a start. It is dangerous if NIST centers itself around selecting areas where they have experience since they will be leading the interrogation into measurement needs for many years to come. Dr. Swyt responded that the most technological dynamic areas are in the medical field and that NIST has set up a way to look at the measurement system from different points of views. NIST has a good chance of identifying the health care needs. For example, the Biosystems and Health Strategic Working Group could pick up on these needs such as measurements for biomedical imaging. NIST will be looking at this area but is not calling it a sector. Workshop participants also do not refer to this area as a sector. Other areas will "pop up."

VCAT Panel on Best Practices for Strategic Planning: Lessons Learned from Managing Organizations with Multiple Business Units and Customer Bases
Ms. Deborah Grubbe, Moderator

Ms. Grubbe reviewed the questions posed by NIST which will be addressed by the three panelists. These questions cover the selection and prioritization of investment opportunities across diverse technologies and the implementation of strategic plans, including personnel issues. They also were asked to describe other opportunities, as opposed to in-house research, for NIST to best achieve its mission. A question and answer session will follow the presentations.

John F. Cassidy's Presentation

Dr. Cassidy remarked that he was thrilled to have the opportunity to address strategic planning questions that he has thought about for 30 years. In Dr. Cassidy's experience, such companies as General Motors and United Technologies have struggled with these same strategic planning issues. Strategic planning is not an easy process but the payoff is incredibly important. Dr. Cassidy changed his presentation significantly based on the information provided at yesterday's meeting on NIST's strategic planning activities. He provided his reactions to yesterday's presentations and described the areas where NIST has a good start and the areas that are a work in progress. He also described how recent trends in healthcare and biological science and engineering, as well as globilization require more attention from NIST consistent with its mission. Based on his experience, he offered three characteristics related to the "DNA" of technical organizations, emphasized the importance of responding to the needs of the future, and noted several items to consider during the planning stages. In regards to selecting and prioritizing investment opportunities, Dr. Cassidy stressed the need for an organization to be guided by its uniqueness and mission as it strives to shape the future proactively with one strategy and one process. He also provided three ideas for responding to the need for new personnel skills, including the redirection, retraining, and turnover of current personnel. According to Dr. Cassidy, there are other opportunities for NIST to best achieve its mission, such as being involved with a broader set of partners and embracing a "hybrid" business model in which significant research is done external to NIST. In closing, Dr. Cassidy identified two issues for NIST's leadership regarding resource allocation and the Institute's role in the industrial competitiveness agenda.

The information below supplements Dr. Cassidy's presentation.

- NIST needs to drive toward the same planning process for existing and emerging competencies and initiatives. This balance is difficult to achieve.
- Measurements will be fundamental for addressing the technological changes related to healthcare and biological science and engineering.
- In the area of healthcare standards, the Germans have worked with China to their advantage and to the disadvantage of the United States. The U.S. must be connected to China in many other markets. For example, China has the largest air conditioning and elevator market in the world.
- Dr. Cassidy recalled that when he was in industry, he had to make strategic choices for the future with resources that diminished by more than 50 percent.
- NIST does have connections with other organizations but needs to expand these connections to a broader set of partners.
- Dr. Cassidy dislikes outsourcing but this can be important if handled strategically.
- NIST should share some of its capabilities around the world, including China and Europe.
- Dr. Cassidy noted that the issue he raised dealing with resource allocation is the toughest for NIST leadership to address.
- In regards to his second issue, Dr. Cassidy asked that if the NIST mission is to promote industrial competitiveness, then how proactive should NIST be in participating in and formulating the industrial competitiveness agenda and what are the constraints?
- In closing, Dr. Cassidy provided his email address to entertain debate and answer questions about his presentation.

Mr. Thomas Saponas' Presentation

Mr. Saponas remarked that NIST is one of his favorite government organizations and he is pleased to participate in this panel. Mr. Saponas is familiar with the challenges associated with setting priorities in a complex organization. He spent his entire career at Hewlett-Packard (HP) Company which later became Agilent Technologies. For most of his career, he focused on R&D and then assumed responsibilities for managing divisions that produced products. During the last four years of his career, he was the chief technology officer at Agilent with responsibility for the central research lab. Some aspects of this lab were similar to NIST, such as having very diverse technologies and problems with measuring long-term results.

Mr. Saponas described how the market opportunity and a technological breakthrough yield success. He emphasized the importance of continuous market trend analyses and technology scans as a basis for selecting investment opportunities. In regards to prioritization, he stressed that major market trends cannot be ignored even if the skills and resources do not align. Change, although tough, is an opportunity even when personnel skills no longer match the strategic direction of the organization. He warned managers against being too comfortable by only improving on past work. In closing, Mr. Saponas remarked that just because your current customers love you, this does not mean that you are not on the path of becoming irrelevant. Furthermore, change must take place at NIST to focus more on health care because this is an important area.

The information below supplements Mr. Saponas' presentation.

- Selecting Investment Opportunities - Organizations are always looking for a big win. For example, the personal computer resulted from a technical breakthrough rather than a market opportunity. Many technical organizations do not understand the market. Technology is always searching for a market and organizations can always find someone who wants exactly what you have. NIST has lots of customers but the technology needs to benefit all of us. Scenario planning is important for technological breakthroughs. In this process, long-range plans are defined based on scenarios and assumptions. Keep addressing these plans and surprise technological breakthroughs can occur, such as in the case of high temperature superconductivity. This must be a continual process since assumptions change over time.

- Prioritizing Investment Opportunities - Market trends are the most important factor in prioritization. For example, in the health care area, applying physics to measurements in bio and biochemistry has never been done before. This capability would probably lead to another 50-100 years of breakthroughs, and will be as revolutionary as the electronics explosion in the previous century. Less than a year prior to his death, Dave Packard told Dr. Saponas that he would have liked to live again because the discovery in biochemistry is more exciting than electronics. The increasing market trend in biochemistry cannot be ignored as an aging population is everywhere in the industrial and the U.S. is in a position to be a leader in this area.

- The toughest challenge is change and radical changes create new opportunities and industries, such as transistors in the past. Organizations need to move on when plateaus are reached; this is essential for NIST. NIST is trying to lead but must recognize that the market trends are more important than the current market size of certain areas. Improving on past work by remaining in the most comfortable place can result in many failures. This is human nature and takes a conscious effort to avoid.

- Skills - Mr. Saponas shared an anecdote about HP's success in moving world-class software people with skills in UNIX to Windows. Although these individuals were scared about moving, they reached the state-of-the-art in Windows within only three months because they were fast learners. Within a year, they became world-class experts in Windows and made an even larger contribution than those individuals who had been working in the field for a longer time. This anecdote illustrates how the best people are capable of change even though they and their managers may not believe it at first. It is important that the management team believes that there best people can change and must act as a safety net.

- Education - A management team must educate their workforce about market trends so that they can believe in management's tough decisions that are driving change. The technical staff may want to keep working on the last significant digit because that is what they are good at doing and it takes lots of effort to educate the team on why major program shifts are needed.

Mr. Gary Floss' Presentation, 'Strategic Challenges, Strategic Objectives, "Setting the Table"

Mr. Floss remarked that he will share his "burnt fingers" from key learnings while employed at Control Data and from consulting in a variety of organizations. He also has over seven years of experience teaching a course on strategic quality management to future leaders as well as 15 years of experience with the National Baldrige Quality process where he saw companies practice these management techniques. He stressed that the gray line between where NIST stops and autonomy takes over in strategic planning is very important. Mr. Floss defined strategic challenges and strategic objectives according to the Baldrige National Quality performance excellence criteria and noted their importance in the strategic planning process using example planning grids for two of NIST's challenges. These example grids are intended for comments about the planning process rather than comments aimed at what NIST should do. Mr. Floss views planning as a work-in-process at NIST and encouraged NIST to quickly define the processes to address strategic challenges. He also noted the importance of developing key metrics of success for the strategic objectives in order to manage what you measure. Consistent with the Baldrige criteria, strategic planning also requires quantitative goals with specific action plans, including interim goals for measuring progress. Lastly, Mr. Floss described an example strategy development and deployment model as a systematic approach to planning with information streams along the vertical axis. The four stages of this model cover external and internal assessment, vision and strategy, deployment, and results/oversight.

The information below supplements Mr. Floss' presentation.

- Strategic Objectives - Objectives should be raised to the highest level of the organization. It is important to ask how the key strategic objectives are being addressed within NIST and are the resources and people in the right place to improve the probability of success in meeting these objectives?

- Key Metrics - The VCAT has talked extensively about the importance of metrics. Developing metrics is very difficult but can be achieved through an iterative cycle whereby creative people can make progress. If metrics are not present, then the response to trends in the planning cycle is objective. The What You Measure Is What You Manage (WYMIWYM) acronym reflects where the leaders will ask questions and where the organization will focus. The VCAT has been interested in the NIST Balanced Scorecard with stoplights as a sense of continuity for NIST to assess its progress.

- Goals - Goals must be measurable. For example, responses to surveys could suffice but the challenge is how to get performance trends over time. The VCAT requires some clarity from NIST on its short-term versus long-term goals by year(s).

- Strategy Development and Deployment Model - A whole host of information data streams are needed to move to a world-class organization. For example, the USMS input on measurement needs better informs the strategic planning process. External and internal assessments, including a SWOT analysis, is needed to identify the "vital few" objectives at the top of the organization to provide a great platform for the autonomous organizations. It is important to move from the top of the organization back down to the autonomous organizations for reactions and development of quantifiable goals with linkages to key indicators. The autonomous organizations can develop their own corresponding objectives. Resource issues may arise at this stage. During the deployment stage in world-class organizations, the process needs to go up and down twice from the top of the organization to the autonomous organization. In stage 4, performance results need to be checked over time and adjustments made in the cycle, where needed. The challenge is to establish a plan and keep it intact during the operational year.

Panel Q&A Session

The italicized name at the beginning of each comment indicates that the person is a member of the VCAT. Disclaimer: These minutes are not a verbatim transcript of the speaker's questions or comments but rather an interpretation of their main points. The questions and comments of the NIST staff and the VCAT members reflect their individual views, not necessarily the views of the Institute or the VCAT, respectively.
Q: Mr. Heyman - He noted that there were some commonalities in each of the speaker's recommendations that he had heard before from them and others inside and outside of NIST. He asked each speaker to identify the single thing that that they would do to put NIST in a better position to meet their expectations and advice, if they were the NIST director.

Dr. Cassidy - Healthcare and the international arena need more attention. NIST should do something really bold internationally with China. Some economists believe that the U.S. future can be secured if an economic alliance was built between the U.S. and China. NIST should take the leadership role in this area and engage in collaborations and other relationships with China. Measurements and standards are needed to conduct both business and technology on the international scene.

Mr. Saponas - Management team development is necessary before taking on grand challenges. The hardest thing for a management team to do is to start functioning as a team instead of defending stovepipes. This requires trust and is necessary for major decision-making. Both Boeing and Hewlett Packard, at some level, had the management team rate or vote on the highest and lowest priorities. This process does not take long and this voting should be done with your gut, rather than based on a lot of background research.

Mr. Floss - Can NIST identify a burning platform that could be used as a rallying cry for the entire U.S. to address in areas where corporate stops and autonomy takes over? Identifying such a platform is a small part of the longer planning process. Metrics also are needed.

Q: Dr. Semerjian - He expanded on Mr. Saponas' statement about organizations becoming irrelevant even if they are loved by all of their customers. This means that just because an organization is satisfying its customers today, there is no guarantee that the organization will be relevant in the future. This is well put but isn't it a lot easier to identify current customer satisfaction and more difficult to figure out the future?

Mr. Saponas - Customer satisfaction is a useful operational tool but is not a way to make major decisions in following technological trends. If you look at technological trends, some customers may go out of business. Some large companies ultimately will go out of business and if NIST follows them, then NIST may go out of business as well. Customer satisfaction data will help you relate to your customers but will not help you make major decisions.

Mr. Floss - Do not be complacent. Complacency is a warning signal. If an organization just keeps doing the same things, then it will not reach the next level.

Q: Dr. Hertz - All three speakers discussed strategic challenges and ways to deal with the pressures of change. But, a piece of every organization carries on a certain core of continuing services to on-going customers. In your strategic planning efforts, how did you balance these activities in planning documents and in the percentage of resources to be allocated?

Dr. Cassidy - Gravity is a certain fundamental process. The short-term will take care of itself; this is not strategy. The real value of strategy is to think about what will be different in the future and what decisions need to be made today in order to make a difference in the future. Strategically, the future must be at the top of the list.

Mr. Saponas - An enormous amount of energy is required for change to take place. The morale of people doing other things or old activities is a tough issue. You must look at all of the factors involved in managing an organization related to those people who are not working in areas identified by the Director. Managing requires change. If you want the inmates in charge of the prison, then they will keep doing what they are doing.

Mr. Floss - His comments relate to the far left column of his last slide on strategy development and deployment. One of the data streams should be a base level internal assessment of strengths and weaknesses followed by a SWOT analysis where the key decision process needs to take place. Keep the strengths, acknowledge what needs to be continued, and start to recognize that something new needs to be created. The hardest task is to stop an activity. Taking things off the plate is very difficult but extremely important for an organization to stay viable.

Ms. Grubbe - The hardest task is for an organization is to let an existing customer base know that they can no longer provide them services. Offer them alternatives, walk away, and focus these resources in other places. Although difficult, this is done every day.

Q: Dr. Hall - He agrees with the assertion that NIST is not unique and can learn from industry; but NIST is different. NIST reports to a government without a clear idea on the technological environment. How does each speaker compare their past environment with NIST?

Dr. Cassidy - His experience is no different than NIST. UTC did not have a marketing department. Everyone operates in a low signal to noise ratio. Knowing the fundamental mission will help you reach better decisions and solutions.

Dr. Saponas - No founding fathers expected Congress to be leaders in technological change and that is the reason that NIST has partners. The reality is that it is NIST's job to look at major technological trends and decide how to lead the nation to be successful in competing in a world economy. The VCAT, as long as he has been on it, and the original 2010 planning team discussed the move to health care as an important revolutionary change which has been reported each year by the VCAT. The VCAT also noted that NIST needs the resources to do this. It is very difficult to move people in this area this year. NIST can move faster and in this way, NIST is different than industry.

Mr. Floss - NIST is not really different than industry. "Disruptive interruption" is like "unfunded mandates" and is not really different.

Q. NIST Staff Member to Mr. Floss - Expand on the time scale for an organization's planning process

Mr. Floss - The vertical left block on his slide assumes that all the appropriate date arrives at that same time and that there is an owner who steps forward to bring clarity on the data stream. The planning process should take place in about 90 to 120 days. The desired objective is to reach closure on deploying the strategic plan at the beginning of the operating year and resolve it quarterly.

Q. Dr. Semerjian to Dr. Cassidy - What are the specific challenges for addressing global markets and global companies, particularly in regard to how NIST can be more bold with China? What is the NIST role?

Dr. Cassidy - UTC already has a billion dollars in manufacturing sales in China. Political issues must be managed carefully since China will be a dominant world player over the next 100 years. The question is how can we help them? Pick one of the standards and work together with China to help them establish a better infrastructure that will help serve them, the U.S., and the rest of the world.

Q. Dr. Semerjian - Sometimes, we fail by simply asking what we are going to get out of this rather than what this is going to do for China. This is a more complicated and valid question.

Dr. Cassidy - A former colleague from an unidentified company shared the following anecdote with him "The best partnership is when we get everything and they get nothing." Unfortunately, lots of us sometimes fall in that trap. The key is to come to an understanding that there actually is a win-win situation for both countries to move forward. The world is actually a fairly small stage. Sometimes, our elbows may be bumping into each other so figuring out how to this a little better would benefit all of us.

Q. Dr. Kayser - He asked Dr. Cassidy to follow-up on his observation that one issue faced by NIST is how deeply resources should be allocated in the organization and at what level. How should NIST handle both the level and depth for allocating resources?

Dr. Cassidy - Today's correct answer will not be correct tomorrow. It is clear that it is really a bad idea if you do nothing. It also is a bad idea if you run a command central from a corner office. This is a balancing act that falls on the senior management team but ultimately is owned by the entire organization. He does not have the answer in his pocket.

Mr. Saponas -He explicitly proposed as a first step that some prioritization by done be just gut-level voting by the senior management team. He would pick a resolution to select about 50 items to prioritize. If more than 50 items are selected, then there is no prayer to understanding them. If only done at the OU level, then you create at the table just winners and losers and people are not as nearly as objective. You need to get down to a resolution where within the entity there are reasonable sized programs to discuss. Trying to allocate to every last researcher clearly will not get you there. Look at the size of NIST; it probably has activities at the level of an aggregate of ten-scientist pieces or similar. This is just a ballpark number that may be able to get NIST down to 50 items.

Mr. Floss - Prioritization to the vital few particularly at the top of the organization needs a key measure that these projects should be fully funded. Your best people should do everything they can think of to create a probability of success. This is an important piece of the pie. You cannot make all of the projects a part of the vital whole. The principle of a "vital few" is important.

Q. Dr. Hertz - Each of you have been part of many strategic planning processes. In each of your experiences, what is the biggest blunder that you have made in strategic planning that you would not repeat and would encourage NIST to avoid?

Dr. Cassidy - The biggest mistake is complexity. If 2 decimal points work, then 6 is better. The only way to solve this is to pick less, so guard against making things too complicated. If his non-technical wife could not understand his five-minute project description, then he knew that he had not captured it well enough to be useful.

Mr. Saponas - His mistake too often was that you ultimately have to have a clarity of mission and strategy that is stated in a very small number of words. He agrees with Dr. Cassidy's comments. The mistake made too often is that you have to do the egalitarian thing and make sure the mission is inclusive of everything that is done. When you speak of broad strategic moves and that you want people to understand them, you try to make the mission statement inclusive. It then gets so watered down that the message keeps getting lost because people are saying that they can keep doing what they are doing because it is ok. Having clarity with a small number of words is difficult because we want everyone to feel good. One of the best ways to make everyone feel good is to think that the whole organization is being successful, too.

Mr. Floss - The biggest mistake is to treat planning as an activity rather than a process without a feedback loop to assess progress. An organization will forget what is learned the first time in the cycle.

Dr. Spong - He struggled with not making the hard decisions. An organization can identify the needs, gaps, and opportunities but does not close the loop between what you want to do and the resources available, either people or funding. Even without enough resources or the right people, organizations will start the work anyways but do not achieve anything through the year. An organization must make the hard decision not to start the project if there are not enough people or resources. This is reality and the area where he has stumbled.

Ms. Grubbe - She reflected on an earlier statement that if a lab is faced with another reduction-in-force, the lab will know where to cut. If there are activities less valuable than others, then stop these now. Use this is an opportunity to train people to do new and exciting work. This is a warning bell to each of the NIST senior leaders who have these types of activities or thought processes.

Dr. Spong - He views this as malicious obedience. If you cut my budget, then I will stop doing a particular activity even if the boss wants it. Hard decisions are required to cut programs. The plans to cut programs must be real. Dr. Semerjian called this the "Washington Monument".

Dr. Serum - In an organization where individuals finds themselves in an environment where their skill sets no longer match the current need, it is very important to make clear in the planning process that the individual is responsible for his/her growth and the organization will provide the environment for that growth to occur. He found that when employees viewed the organization as responsible for their growth, they did not achieve that growth. It is quite important to articulate this concept up front and that it be understood up front.

Ms. Grubbe - An organization is responsible for the environment for individuals to grow but the individual is responsible to themselves and to others for their own skill set. This is a good point.

Q. Mr. Stanley - As a philosophical question, do you believe that the current NIST structure is capable of implementing your suggestions? He clarified the current structure as a stovepipe OU structure resistance to change and basically enjoys malicious obstruction.

Mr. Saponas - Mr. Stanley's description is related more to an organization's culture than to the structure. He has never been in an organization that does not have the tendency to act like this. This is everywhere in industry. The toughest challenge is to manage the white space on the organization chart. The OU directors need to build trust in each other. When major strategic decisions are made, some organizations change. More cross-domain type of work is needed to see success in the future for breakthroughs. Biologists really work well with chemists and this is where breakthroughs can happen. There are some structural changes that may help. Everyone struggles with culture. Personally, he has had bad experiences with matrix organizations because of their complexities. However, other organizations have had matrix organizations for their entire existence.

Mr. Floss - NIST is capable of implementing these suggestions but the Institute needs to decide that it is capable. He believes in the axiom, "Form follows action." If the senior management team decides there is a burning platform or about two to five major challenges from the outset that the Institute is facing and sets the objectives in response to this platform, then the organization should decide if the structure should be examined and if it should look different. He agrees with Mr. Sapanos. In his experience, the size of a company does not matter. Even with a small company, the functional silo creeps in all the time regardless of how good the people are with one another. Many people grew up in a model where we organized in the vertical direction and all of the issues are in the white space between an organization. The culture point that Mr. Saponas makes is something we have to address ourselves and this starts at the top. The big boss has to decide we are in this together and these are the top few items that require concentration. If an organization is not successful with the top items, then the whole organization is not successful.

Dr. Cassidy - This is not a philosophical question, but rather a fundamental management question. A historical problem in the U.S. is to reorganize when in doubt. This causes entities of organizations to focus on the wrong things. He would not change the structure of NIST. Instead, managers should cause the current structure to be more connected to the reality of the world and its trends. He has faith in NIST and that its people will be able to respond in a useful way and move the agenda forward.

Q. Mr. Stanley - He noted that even with advisory councils, strategic retreats, and strategic working groups, he has not seen many changes at NIST. Does this reflect the organization, its leadership, or both?

Dr. Schweighart - As a senior VCAT member for the past six years, she has seen five directors in this time period. It is very hard not to implement a strategy when the top person keeps changing. NIST needs a continuity of management. Part of the problem is that the different directors have had different ideas and there has been more time with acting directors than directors over the past six years. It is not always the organization that is responsible for change; rather the key is the management. Dell, Inc. in Austin led by Michael Dell and Kevin Rollins made the organization function together across the board even though it was organized as stovepipes. A person could not be a top executive at Dell and succeed on their own without helping others in the company. The company either succeeds as a whole or fails as a whole. If the person only cares about their organization and does not look at the bigger picture, than he/she does not succeed in mid or top management. Dell hired management consultants who described this in detail in an article in the Austin American-Statesman. It is not the organization, but how you manage the organization that is important. Managers react to how they are measured.

Dr. Spong - Yes, this reflects on the leadership. Michael Bell set up the culture with the expectation for the organization's senior leaders. It is all about the leaders.

Mr. Floss - Many leaders suffer because they cannot see the organization in process terms. Many managers at NIST have described a lack of a systematic process at NIST. He has attended offsites where the managers believe they can concur with the plan, but it is not implemented once they get back on the ranch. They failed to close the loop and did not ask the right questions. The offsites tended to be disruptive and embedded in the crisis of the day. They did not address the macroprocess and how the organization is being run.

Dr. Serum - In his experience, the complexity of the planning process has caused most organizations not to succeed in strategic planning. In its simplest form, strategic planning should let the organization know where it is going and how to get there. Every competent organization must do strategic planning. No organization with any credibility can say they do not know where they are going or how to get there. Attitudes about the formality and process cause it to fail and others to reject it. A famous person said, "If you don't know where you're going, any path will get you there." This is important to remember in strategic planning.

Q. Mr. Heyman to Dr. Cassidy - Please expand on your comment that the strategic planning process should be uniform or similar across the board. Should the same high level assumptions or requirements be literally identical for each lab? Dr. Gebbie asked for an explanation, if the answer is yes.

Dr. Cassidy - The fundamental point is that the organization must be successful so a common process is needed. He is not suggesting that 70 pages of directions be given to each organization; instead provide the fundamental principles in some commonality with guidance on how to report the results. It is most confusing when different organizations report different findings and charts. A common framework for communication and semantics is needed. It is very important that some words mean the same as much as possible throughout the organization. Also needed is agreement on basic fundamentals. For example, what are the assumptions, the mission, why are we doing this, how is it being used, and when will it be used? The ultimate goal is when everyone in the organization believes they are on the same boat and they know how they fit. In his experience, Pratt and Whitney, who was faced with some very difficult business situations, did the best job. Everyone knew how they fit in the overall scheme - they may not fit in the same and they may have different roles that change over time. This is the sanity check.

Mr. Floss - Every complex organization such as NIST has to decide where commonalities stop as one moves from the top of the organization and down where autonomy takes over. There should be a common enough planning process to carefully communicate certain words. Definitions in a glossary must be communicated. Do not waste time creating a different language inside the OUs. The planning process should be common to address the vital set of key objectives that the organization is completely aligned around and that no OU should sacrifice progress against top-level objectives as a trade-off for something that is high on their priority list. This is a very strong statement but he has seen suboptimization occur in other places where autonomous organizations succeed and the whole organization is not succeeding. Avoid this trade-off in the planning process. If the big boss reviews the entire organization's program, he/she should not have to change their language to review the autonomous pieces. This is a waste of time.

Q. Dr. Gebbie - Some panel members mentioned the need for NIST to have a clear concise mission statement and a common culture. She has been involved with NIST for a long time, and, in her opinion, NIST does not have a clear mission statement at the moment and almost everyone is aware of it and buys in to it, but NIST does have a common culture. Does the panel have a different opinion?

Dr. Serum - He stated that NIST does have a clear mission statement to promote innovation and to improve industrial competitiveness. He feels that people do not ask themselves often enough whether their programs fulfill this mission.

Dr. Spong - Based on yesterday's presentations, he could not tell if a common strategic planning process was being exercised.

Ms. Grubbe - The panel has said a lot of good points that will make NIST think a lot. Does the panel feel the people at NIST understand the mission?

Dr. Serum - He observed that the mission statement is quite well understood but too many people in the organization have said that their activity does not fit the mission. They should spend more time understanding how their activity fits in the mission. This will lead to greater alignment in the organization and to the integration of the functions and prioritization of the activities. Industrial competitiveness and technological innovation are simple concepts and people should constantly ask if their activities support this and how. If not, they do not understand the marketplace enough and should learn about it.

Dr. Cassidy - He nor did others on the panel communicate that they either saw or imagined they should see a common culture. In fact, he did not use the term "culture" in his presentation. He believes there is strength in diversity and NIST is unique because it is diverse. The question is how to meld these differences in a useful way for sustainability and contributions in the future. NIST will have to struggle with this and how the various pieces fit together. He is glad to see the top view of the importance of the mission, as presented by NIST, and he congratulates NIST on this driving factor. Over decades, he has seen in other organizations where people misuse the mission statement so as to essentially allow themselves to proceed in a way that is actually independent or in conflict with the true essence of the mission statement. They use the mission statement as a justification to proceed in a way that is not really consistent or supportive of the mission. He use to always challenge himself to make sure that he was really on board with the mission statement, and if so, how could he tell. What was different about decisions he was making or ways he was thinking? This does not require you to dissolve into one common culture; this would be absolutely wrong. The world keeps changing and the question is how to stay ahead of that game.

Mr. Floss - He observed that people at NIST are well grounded in the mission statement. He sees the issue as prioritization. While on lab tours, he sees that the people are proud that they feel a sense of their customer needs and responses. The VCAT enjoys these visits. But, it is not clear when rolled to the top that NIST is prioritized properly and staffed and resourced properly to maximize the probability of success for the entire organization without "bureaucratizing" the autonomy of the OUs and compromising the organization. This leads him to the notion of long-term and short-term goals and the vision of where the organization wants to be in three to five to eight to ten years out from now. He does not see this projectory well formed yet. On the subject of culture, he believes in the following axiom by a wise philosopher, "The culture of an organization lives in its language." Therefore, the dialogue that we say to each other and the questions that we ask start to guide the organization's behavior. NIST can make progress in this area without compromising creativity or innovation. Do not give up. This gets back to the gray line where the top of the pyramid stops and autonomy takes over an organization. This is difficult but keep on trying.

Closing Remarks:

Ms. Grubbe - She can tell by the facial expressions that the VCAT is engaged in some deep thinking. Thinking is good; however, resolve and action are even better. Other duties prevented Dr. Jeffrey from participating in today's panel. Since Dr. Jeffrey selected this topic for the VCAT panel, he obviously feels it is very important. She hopes that everyone will be able to provide him feedback that will likely be all over the map; this is a normal part of the process. The reality is that the VCAT really believes that NIST is very special and has a very special role to play. Personally, NIST should spend a little more time worrying about the future in a way to begin to really let go of the past and move effectively to the future. The world is moving faster than what we see. The next two weeks may be a time for deep reflection for all of us as we think about the past year and what will occur in 2006 as we experience comradery with family and others. She offers everyone a good and healthy season and a safe holiday. Anyone on the panel will be happy to offer additional answers and guidance to the questions discussed today.

Mr. Heyman noted that portions of the panel were taped for Dr. Jeffrey.

Dr. Semerjian thanked all the VCAT members for a very stimulating discussion and thanked April Schweighart for her long service and leadership on the VCAT. He appreciated her dedication very much and wished her well. He also wished the other members a safe and happy holiday season.

The meeting was adjourned 11:59 a.m.

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