Find out how involving key partners and other stakeholders in the strategy development process can result in stronger relationships, enhanced understanding of roles and a better plan – built on collective wisdom. The Centre for Eye Research Australia’s case study demonstrates what can be achieved.

In 2009, stepping into his first Executive role at the Centre for Eye Research Australia (CERA) leading international ophthalmologist Professor Jonathan Crowston sat in his office with CERA Chair, Tina McMeckan poring over recent Board papers. The rooms down the corridor were filled with talented researchers, working to tackle the major causes of eye disease that impact some 500,000 Australians and cost the Government over A$3 billion to Australian GDP.¹

Established in 1996 as an independent Medical Research Institute (MRI), CERA’s original vision was to “eliminate the major eye diseases that cause vision loss and blindness and reduce their impact in the community”.

To achieve this vision, CERA had been positioned as the leading eye research institute in Australia, which would bridge the gulf between a number of medical, academic and non-profit organisations operating in the field. These included: Royal Victorian Eye and Ear Hospital (the Hospital) the only Australian tertiary hospital in this field; Melbourne University Department of Ophthalmology (the University), the oldest in Australia; the College of Ophthalmologists; and three non-profit organisations that support blind and vision impaired people: Victorian Lions Foundation, Vision Australia ², and Christian Blind Mission (CBM) Australia

These six organisations became CERA’s founding members making direct and indirect contributions and each having a representative on the Board.

Since its inception, CERA had grown from these six founding members with approximately 20 researchers to an extended community of supporters including over 83 ³ staff who had made many important contributions to eye health in Australia.

By 2009 CERA had developed a national and international reputation for excellent research results measured by publication output and also increased its national competitive grant funding.

Figure 1 CERA’s research publication output

Figure 2 CERA’s annual income by source

CERA was on what we have characterised as a ‘virtuous cycle of growth’. That is, it was attracting great researchers which results in better scientific achievements and health outcomes. This in turn leads to more funding, and even better research outcomes and recognition, which attracts top research talent. And so the cycle continues to grow the organisation.

However, imminent external pressures jeopardised all of this. Proposed changes in Government policy would potentially threaten funding to smaller medical research organisations such as CERA.

There was greater competition for National Health and Medical Research Council (NHMRC) funding as a result of consolidation in the sector and technology costs were on the rise. Furthermore, funding was focused on research disciplines that CERA currently had little expertise in

Adding to these external pressures, two of CERA’s top researchers had left and relationships with the key strategic partners, the University – who provided both funding and a pipeline of talented researchers – and the Hospital – where it was physically located were untended and, therefore, weak.

CERA was at risk of breaking the “virtuous cycle”.

Seated in his office at the Hospital, Professor Crowston, in his first executive role, and McMeckan, in her second four-year term as Chair at CERA, knew that they needed to answer a number of questions. What scale of growth did CERA need to maintain funding? What were the options for growth? And what would it take organisationally to implement such a strategy effectively?

Acknowledging the challenge of answering these questions, Professor Crowston and McMeckan sought external help to better understand their options for growth and to develop a plan to achieve it.

From his experience working at some of the leading eye research institutes in the world, Professor Crowston knew that the planning process needed to engage many of those with a stake in the success of CERA:  the University, the Hospital, researchers, staff, supporters and leaders in related fields of medical research in Australia.

And this needed to be designed and managed well if it was going to produce better and more substantive ideas, and help build the relationships and legitimacy required. SVA Consulting’s approach to engaging stakeholders was a key factor in CERA’s choice.

The process – putting stakeholders front and centre

Like all organisations, CERA had a number of key external and internal stakeholders that were critical to ensuring its ongoing success.

CERA’s main internal stakeholders included its staff and Board. Its primary external stakeholders were the Hospital and the University.

The Hospital provided floor space for CERA to conduct its research and also provided access to patients for trials. In turn the Hospital was recognised as a leading tertiary hospital providing patients with access to some of the best ophthalmic clinicians in the world.

The University provided funding and a pipeline of talented researchers. In turn its association with CERA increased its local and international profile for ophthalmology research.

SVA Consulting knew that before answering CERA’s strategic questions about how to grow and reach sufficient scale, it was important to understand the issues and opportunities from the perspectives of the key stakeholders.

It was hoped that this process would aide stakeholders to understand the importance of CERA developing a solid plan – both for their own organisation’s mission and, importantly, the eye health of Australians.

Developing a stakeholder engagement process that was not superficial was critical. Professor Crowston had observed such processes usually led to frustrated expectations, power grabs, deeper conflicts and mistrust.

To avoid this, SVA Consulting and CERA established a strategic steering committee with representatives from the Board (including two members representing the Hospital and the University), CERA staff, McMeckan and Professor Crowston. The committee was tasked with guiding the process, ensuring the primary stakeholder group they represented was engaged and also making key decisions along the way.

With the strategic steering committee in place, a process was developed to report back to the group at four points in the development of the plan, following each of the steps below.

The first step was to engage stakeholders, through a series of one-on-one discussions, and gather a ‘fact base’ on CERA’s strengths, weaknesses, opportunities and threats from the perspectives of all stakeholders.

The second step was to interview a number of external parties, including leading MRIs locally and internationally to understand their journey and what contributed to their success.

The third step was to analyse this information, draw out the insights for CERA together with a hypothesis for its goals and growth plans.

The final step was to refine and test this hypothesis, re-engage with the key stakeholders i.e. CERA senior staff and the Board, the Hospital and the University and develop the plan for implementation.

Reflecting on the process Professor Crowston remarked that there was huge value in having a clear understanding not only of what was going to happen and when, but also knowing at what points key stakeholders (internal and external) were going to be involved. “It forces you to have a great deal of clarity about what is going to happen. This clarity breeds confidence in the people you need to bring along on the journey.”

“It forces you to have a great deal of clarity about what is going to happen. This clarity breeds confidence in the people you need to bring along on the journey”.

Step 1: Gathering the facts
SVA Consulting interviewed CERA’s Board and staff including researchers, research students and administrative staff to understand the current situation. The interviews highlighted a number of issues grouped into four main themes that if not addressed would continue to impact the internal environment at CERA, including;

• Strategic objectives: there was a strong view that the ultimate destination was clear but that there was less clarity about medium term goals, activities, targets and measurement.
• Links to the University: there were frustrations that neither CERA nor the University were leveraging their relationship to its full potential.
• Links with the Hospital: similarly, staff believed that the Hospital and CERA were not gaining maximum value of their partnership to benefit cross learning across research and Hospital staff, to improve economies in infrastructure and so on.
• Board structure: Board members believed that the current structure that included representatives from the six founding members should be reviewed and more closely aligned with what skills and networks the new strategy called for.

In addition, discussions with the University’s Medicine and Research departments and the Hospital’s senior management team highlighted that the value of their partnerships were not being maximised.

The relationship between the University and CERA at that stage was considered to be more administrative and less strategic. There was a mutual understanding of the value that each body brought to the other, however, the perception at CERA was that financial independence and the ability to enact changes more efficiently brought a significant advantage to the research institute.  In addition, the arrangement where most competitive grant funding was passed through the University, which took a clip, and then on to CERA created tensions between the parties and impacted communication.

Similarly, discussions with the Hospital revealed that their relationship had been tenuous over recent years. While the Hospital understood the importance of research to its mission to be a leading tertiary hospital, it did not have a clear understanding of the value CERA generated. This was particularly evident in regards to how it could improve its own funding opportunities and patient outcomes.

Furthermore, the University, the Hospital and CERA acknowledged that there was no clarity on what each party’s strategies were nor on the benefits that each party brought to the other.

Additionally, there wasn’t any formal framework that guided how the entities worked together. Very little about the historic arrangements was agreed in writing, in particular regarding shared infrastructure and resources.

Together, this information further confirmed how important it was for CERA to develop a clear plan that would guide staff, maximise Board input and lead on enhancing the value of their partnerships with the Hospital and University. “Through these consultations, we all became more aware of what we were not doing well, and how we had neglected these relationships and the potential they held,” said Professor Crowston.

“Through these consultations, we all became more aware of what we were not doing well, and how we had neglected these relationships and the potential they held…”

Step 2: Assessing growth options

It was clear there was momentum for change amongst all key stakeholders and all were keen to see CERA continue to grow. However, it was not clear firstly, how much growth was necessary and secondly, how this would happen.

To answer the first question SVA Consulting analysed the scale required of an MRI in terms of number of research staff and income. Data revealed that between 100 and 150 researchers with an annual income between $10 million and $20 million is the optimum scale.

The second and much harder question was to understand how CERA could and should grow. Discussions with external stakeholders, including local and international MRIs and funders, identified a range of options and their pro’s and con’s. One option was to grow via an acquisition or a merger. Interviewees cautioned that an acquisition could lose CERA its autonomy and independence, and dilute CERA’s research focus and profile.  They advised that CERA first focus on consolidating and strengthening its relationships with the University and the Hospital.

SVA Consulting also carried out discussions with a number of the leading international eye hospitals – John Hopkins and University of Utah Hospital in the US, and Moorefield’s Eye Hospital NHS Foundation Trust and the Institute of Ophthalmology in the UK. These players recommended a model that more strategically leveraged the value of the academic community, researchers and clinicians. Such models were gaining importance globally as ‘centres of excellence’ and demonstrated success both in attracting excellent talent and funding and achieving great research outcomes.

The information from these conversations was presented back to the stakeholders, in particular the University and Hospital and helped illustrate the value a closer and more strategic partnership between the three could deliver.

Step 3&4: Re-engaging the primary stakeholders on the hypothesis

Inspired by these conversations, extensive internal consultation followed. The outcome was a commitment by the strategic steering committee to build a closer collaboration between CERA, the Hospital and the University, akin to a “centre of excellence”. The committee also set clear objectives in relation to CERA’s research, culture, collaboration approach and infrastructure.

Having established this hypothesis, Professor Crowston and McMeckan met with the University and the Hospital to outline the ‘centre of excellence’ model and its benefits.

The response to these presentations was overwhelmingly positive. “At this point, we had come to see that working more closely would benefit all parties’ missions. However, we all saw many challenges. We weren’t sure how this would work on a practical level without a formal structure in place,” said McMeckan.

“At this point, we had come to see that working more closely would benefit all parties’ missions. However, we all saw many challenges. We weren’t sure how this would work on a practical level without a formal structure in place…”

These challenges included who and how to make decisions on shared resources and infrastructure; how would the Hospital and the University gain an understanding of CERA’s research strategy; and how to make decisions given they all had different boards to report back to.

Establishing the ‘Forum’ model  

To help overcome these challenges, SVA Consulting offered a number of models describing how the three parties could work more closely together. Professor Crowston presented the models to the Hospital and the University for discussion. One that resonated with all parties was to establish an ‘Ophthalmology Forum’ whose core focus would be to align the objectives of all three parties and strengthen communication. Members of the forum would include, the CEO of the Hospital, Professor Crowston as CERA’s CEO and the Dean of Medicine from Melbourne University.

The objectives of the forum would be to:

• Ensure that research and teaching were aligned
• Unify infrastructure support where possible to reduce duplication
• Collaborate on opportunities for research project funding
• Coordinate fundraising activities where possible.

Reflecting on this process Professor Crowston remarked, “There was huge value in this exercise. Together we were able to understand what about each model would work or wouldn’t from the perspective of each organisation. The effort that we put into this consultation really brought us together.

CERA and the Hospital also realised that to accommodate the growth they would need to work together to develop a business case to redevelop the Hospital precinct in the medium-term while in the short-term look to refurbish specific areas of the Hospital.

As Professor Crowston said, “It was very valuable to have spent this time focusing on how the relationship would work. We were able to assess very practical issues such as the infrastructure and to set in place agreements that would properly serve our relationship.

Fortifying the board   

A number of members of the CERA Board had served as an invaluable resource throughout the project. They had helped the steering committee and CERA senior management clarify the operating model, acted as a sounding board for key strategic decisions and provided guidance on governance models.

With so much organisational change underway, the board realised that it, too, would have to change. As McMeckan said, “The board has to become more dynamic to meet the challenges  as CERA moves and grows”.

A plan was outlined to assist the board to assess what skills and capabilities were needed and transition to a board structure that more closely aligned with CERA’s strategy. 

The results

In August 2012,  Professor Crowston, McMeckan and the CERA board met to review the progress made in the last three years.

CERA was ranked fifth among the world’s ophthalmology research entities  (based on publication output) behind much larger organisations including Moorfields and Harvard. It had a team of over 120 committed staff working on the major causes of blindness and vision impairment in Australia. Over the last decade, it had grown competitive grant funding by 25% compound annual growth rate (CAGR) and donations by 13% CAGR.

Commenting on the impact of the strategy planning process on CERA’s performance, McMeckan said, “The engagement of primary stakeholders through the planning process meant that CERA was able to execute the strategy with minimal road blocks. This has allowed CERA to continue on its virtuous cycle of growth.”

“The engagement of primary stakeholders through the planning process meant that CERA was able to execute the strategy with minimal road blocks”.

Supporting this growth, CERA’s strategic partnership with the Hospital and the University is now strong and seen, both locally and internationally, as an exemplary collaboration between an academic institute, a hospital and a research institute.

“The stakeholder involvement in the planning process provided the foundation for strengthening relationships,” said Professor Crowston. “It has also maximised the value of the relationships to all parties.”

“Our greatest strength now is the close link between education, research and clinical practice. Having exceptionally trained researchers that have regular patient contact allows us to translate research findings quickly and seamlessly into clinical practice,” said Professor Crowston.

“It’s what makes our partnership with the University and the Hospital so important and mutually rewarding. It’s a great environment for progressing research findings from the laboratory into clinical practice and a showcase for translational research for Australia.”

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