Australian Science #2 A Silicon Valley Venture Capitalist Comes To Town

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CSIRO Image: Earth Receiving Satellite Dish in Tasmania

Australia’s premier public applied science institution, the CSIRO, is appointing a new CEO, Dr. Larry Marshall. He seems an impressive man with an impressive resume. An Australian Physicist (excellent) that has become a serial entrepreneur (fantastic, a true hero of capitalism) and venture capitalist (the angels and the predators of capitalism) based in Palo Alto, Silicon Valley (ahhh!). Kind of begs the question why he has come back to a public institution in Australia? Well he did and he has history with CSIRO (or at least it’s associated enterprises) as a cadet and understands the position is ‘kind of like being handed a national treasure’. Good start. There is a stated and clear intention to be more commercial. Fair enough, especially given the governments view of the relationship between science and business. In fact, on the surface he appears to be  a poster boy for what the government believes and wants. At Dr. Marshall’s first public interview since accepting the position he made clear some of his personal worldview. Scientists need to, and indeed have an obligation to be entrepreneurs. In short, they have an obligation to be more like him. It seems he is not only to be their CEO, he is to be the role model for our scientists. Of course, he is not saying the CSIRO scientists are failures and haven’t met their obligations, though I’m guessing a few of them will think this is exactly what they heard. I’m also sure he doesn’t mean the scientists should all leave Australia and start businesses in other countries that have more entrepreneurial cultures. What we can be thankful for is that he is not a colorless grey suit.

Context Drives Behavior

Dr. Marshall  took himself off to the entrepreneurial, venture, technology startup capital of the Western World. That is very adventurous! He with time became an entrepreneur. Entrepreneurial organizations are driven by a need for survival, to find the right product, by opportunities to get a hold or traction with a potential customer or market, to adapt and grow. Drama is a part of the neurotic energy of the entrepreneurial enterprise. There is almost a love/hate relationship with the make or break moments. For the entrepreneur finding and maintaining capital and potential personal wealth in the company can be a challenge but it is possible. That is where venture capital comes in. Regardless, wealth is often a significant incentive for the entrepreneur. Dr. Marshall had the character and insight to take opportunities in that environment. Champion, we love an Aussie go-getter and as long as there is a little misery somewhere ‘Australian Story’ should be giving him a call shortly.

Now let us consider the organizational environment within CSIRO: It has been subject to some deep budget cuts and staff losses, it is Government owned, has Ministerial oversight, is bureaucratic,has little or no direct access to venture capital and business entrepreneurs, is built on professionals, technocrats and service providers. An informed guess would be that the neurotic energy of the bureaucracy is driven by following: control and procedures, job descriptions, rules and systems while for the scientist/technocrat it is proficiency, doing good quality work and the paranoia that douche-bag management or IT types who don’t know anything about their work will interfere. They feel this way because douche bag management and IT types periodically interfere with their work  – even when it is unnecessary. At the head of this is the CSIRO Chairman, Simon McKeon, a lawyer, a banker, a professional company director and philanthropist who has won Australian of the Year. Very impressive indeed. The CSIRO has been undergoing a restructuring along operational lines and will end the year 2014 with about 11% (700) less staff than it began 2013. See CSIRO restructure notes. Results of a staff survey show confidence in management and the vision for the future are about 1/3 or half the international benchmark level. It seems there is a lot of scope for improvement and that has got to be a good thing if you are just starting.

Considering the business environment there are many ways for CSIRO to engage with business and practical research and development. Start-ups might not be the easiest and that might not be just the fault of non-entrepreneurial scientists. Banks within Australia aren’t fond of startups especially technology startups. They would on average prefer to support another restaurant as long as there is security against somebody’s home. And at least some venture capitalists in Australia besides being hard to impress and relatively few in number seem to be keener to strip the entrepreneur of their capital stake even as success looms. The Government doesn’t usually give a capital stake to their employees no matter what their contribution. After all, the scientists and technocrats are treated as employees.  My point seems obvious, the CSIRO is not in the middle of a Silicon Valley culture.

It can easily be understood how Dr. Marshall is an attractive choice, particularly for a Government that wants business at the forefront of science and the CSIRO is certainly about applied science. If it wasn’t for the ‘rigorous process and procedures’ that I’m sure were followed by the people on the appointment board, I would suggest Dr. Marshall is almost a little too immediately attractive in the current climate. It is as if somebody smeared honey on a bait and the panel couldn’t resist the temptation. The honey was so tasty and intoxicating, the Board might even have overlooked a ‘few’ potential weaknesses. Regardless, an existing institution is not a startup and changing cultures to be healthy can be difficult, particularly when the broader environment and culture is not very conducive to the change nor to new ventures.

So can Dr. Marshall get this new entrepreneurial applied science culture up and running? I am certain that at this point the Doctor has the necessary hubris. However it is just possible he will be another Solomon Trujillo leaving an Australian ‘national treasure’ just a little less shiny. And mentioning Solomon, it makes me wonder who ‘outside’ the CSIRO will be enriched by the experience?

Note:  The Australian Skeptics are already watching closely. They have awarded Dr. Marshall the very non-prestigious annual Bent Spoon Award for the “perpetrator of the most preposterous piece of paranormal or pseudo-scientific piffle”. He mentioned water divining, a topic in the pseudo-scientific piffle category, as if it were a possible topic of further research and application. He will need to choose his topics more carefully in the future. However, I’m sure the good folks at the CSIRO won’t be feeling the same way about Dr. Marshall as The Skeptics.

Peter O’Reilly ©

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