Callaghan Innovation has 'weak' management, fuzzy strategy more than 3 years in

Hemi Rolleston, interim chief executive of Callaghan Innovations.

A review of the government's flagship agency for commercialising innovation has found Callaghan Innovation has "weak" management, and is "struggling internally" to complete a strategy guiding how it offers services to companies with high-value, high-tech commercial ideas.

Three and a half years after its creation from the Crown Research Institute, IRL, Callaghan appears to be "caught mid-stream between two very different operating models", the Performance Improvement Framework (PIF) review by former public sector leader Paula Rebstock says. Compared to the needs of an organisation intended to bridge the gap between its mission as a "customer-driven, integrator" of commercialisation assistance to high value manufacturing and services (HVMS), its "earlier hierarchical leadership models managing the production and delivery of products and services are no longer suitable to deliver Callaghan Innovation's vision, mission and strategy."

"A number of external critical friends questioned whether Callaghan Innovation had grasped the implications of its customer-driven, integrator role for the way it leads and the people it recruits."

The PIF report was published in December, five months after the resignation of the agency's inaugural chief executive, Mary Quin, an expatriate New Zealander lured home after a high-flying career in high-tech product development, corporate management and experience with businesses creating opportunities for indigenous people in Alaska. A replacement CEO is still being sought.

Callaghan's Maori enterprise unit was singled out for praise, with the review finding innovative Maori businesses increasingly turning to the organisation.

However, it had still to complete a strategy identified in an internal review in 2015 to guide its change in focus.

"Callaghan Innovation will not be able to operate below the highest level of business planning until its strategy is complete," the review says. "The role of integrator in the innovation system is widely seen as critical to New Zealand's success. However, Callaghan Innovation is seen as only partially meeting its mission."

It was only able to assist firms in the "very early stage phase", leading the PIF review to question "whether its workforce has the required depth and breadth of experience and whether its current model sufficiently addresses its full potential client base across the likely trajectory path from start-up to IPO (public capital-raising)."

The report suggests at several points that greater integration with elements of New Zealand Trade and Enterprise's operations would be worth considering.

However, the report also finds an organisation aware of the challenges it faces and likely to benefit from work it's undertaking with the Productivity Commission and the economic consultancy MOTU "on how to measure the impact of interventions such as grants on innovation and R&D".

Settling on its "intervention logic and impact measures" is a critical need.

"Having been formed from a partial start-up and a partial merger, it is not surprising that the formative period has been focused on institution-building. Looking forward ... its current performance challenge is to accelerate its pace of execution, delivering on its full mission and demonstrating impact" in New Zealand's "busy and complex" innovation eco-system, which firms habitually found "hard to navigate".

"External stakeholders and partners do not see Callaghan Innovation consistently, strongly and visibly leading the innovation eco-system."

BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation