169 - Proposal of a Process and Tool to Utilize Bottom-up Recommendations in the Formulation of Management Objectives for Independent Administrative Institutions

Abstract Information: This study aims to design the communications using a bottom-up recommendation approach between the Ministry and IAI regarding IAI’s strategy in formulating management goals. It proposes a strategy formation process tool that utilizes suggestions of awareness by IAIs to achieve this goal.
(Methods)
The methodology was constructed by the combination of Balanced Scorecard (BSC) and Issue Selling methods. NEDO adopts to demonstrate the methodology. The semi-structured interviews were conducted with the comparison between the past management goal formulation processes and the strategy map construction using the proposed tool.
(Results)
The results of the verification through individual work and interviews with NEDO officials indicated positive feedback on the practical applicability of the BSC as a prerequisite formal communication process and the tailoring of the BSC to IAIs. On the other hand, there was variation in the level of understanding and perception of the part that clarifies IAIs’ awareness of its stakeholders and value.
Furthermore, as a result of the validation through interviews with external experts, the point of communicating the strategy mainly from the stakeholder's perspective was evaluated as a good suit for IAIs like NEDO, which has clear policy stakeholders. On the other hand, the issues were pointed out where applying IAIs stakeholders who don’t have clear identification, such as academic research.
(Conclusion)
Through these case studies, this study has gained the prospect that the Ministry and IAIs can design the communication on strategies by utilizing IAIs' insights of stakeholders.

Relevance Statement: Independent administrative institutions (IAIs) are institutions that implement policies planned and formulated by the Ministry in Japan. As with the Government Performance and Results Modernization Act (GPRAMA) in the U.S., Japanese IAIs are required to use strategic goals, plans, and evaluations for organizational management. The management goals of IAIs, which are established by the Ministry under the law are essential for the implementation. Communication between the Ministry and IAIs and grasping IAIs' insights are required for formulating the goals. Unfortunately, no specific process has been established. In reality, the problem is that the Ministry and IAIs could not communicate regarding IAIs' strategy such as prioritizing and reviewing inherently necessary work. Instead, they discussed the process ends up playing games in setting numerical targets or transcribing targets into action plans which is not the essence.

Our proposal is unique because it integrates the top-down planning strategies coming from the Ministry, with the policy planning perspective, and the bottom-up emergent strategies coming from IAIs, with the policy implementation perspective. Not only the integration but also IAI proposes the perspective based on policy stakeholders is original. To realize this function, we designed a strategy map of the IAIs version of the Balanced Scorecard (BSC) as a communication tool for strategy formation. In addition, the construction process incorporates the behavioral theory of Issue Selling, in which repeated recommendations based on insights about IAIs' stakeholders are sublimated into a strategy while encouraging changes in the perception of the Ministry, and IAIs' learning. In designing the process, we considered practical application as a formal communication process, an important element of issue selling, by incorporating the requirements of the IAIs system into a structured and actual business process description using a systems engineering approach.

New Energy and Industrial Technology Development Organization (NEDO) is one of Japan's largest public research and development management organizations. It works with the government to implement economic and industrial policies. To contribute to the resolution of social issues, NEDO formulates technology strategies and project plans and, as part of its project management, establishes project implementation frameworks by combining the capabilities of industry, academia, and government. NEDO also promotes technology development by carrying out, evaluating, and allocating funding to promising projects to accelerate the practical application of project results.

The results of the case studies and interviews qualitatively showed that this method is effective in shaping and proposing strategic goals by NEDO officials. It is important to obtain insights on strategic stakeholders (e.g., researchers) from R&D evaluation results to formulate a strategy and story.
The theoretical relevance of an iterative process of dialogue between NEDO and the supervising ministries to improve strategic goals and organizational management to achieve them was also demonstrated.