Monday, April 25, 2005

Arlington, Virginia

Mr. Lawrence: Good morning and welcome to The Business of Government Hour. I'm Paul Lawrence, partner-in-charge of The IBM Center for the Business of Government. We created this Center in 1998 to encourage discussion and research to new approaches to improving government effectiveness.

Mr. Zerhouni: Good morning, how are you Paul?

Mr. Lawrence: Great, and joining us in our conversation also from IBM is Tony Hess, good morning Tony.

Mr. Zerhouni: Sure, the National Institutes of Health are the primary biomedical research agency for the country. And they have existed actually for quite a while, 116 years. And I'm the 15th director of the NIH and the NIH represents a conglomeration of about 27 institutes and centers each specializing in one area or another of biomedical research. We employ about 28,000 employees and we have a budget of about $28.8 billion. And the thing that is interesting about this is that we fund research across the entire United States. We have about 212,000 scientists funded by NIH at over 2800 institutions across the United States universities, medical schools, laboratories, research institutes, and that's what we do.

Mr. Lawrence: In terms of the listeners what institutes would come at the top of the mind if they were to think about the NIH?

Mr. Zerhouni: Most people understand that we are fighting diseases, so most institutes that are well known are the institutes that are in the frontline of fighting cancer, so the National Cancer Institute is well known. The National Heart and Lung and Blood Institute, the National Institute of Allergy and Infectious diseases, these are the institutes that tend to be well known. But we have others that are not as well known, but are very critical. The National Library of Medicine provides all of the medical information needed for both research and medical practice. We have the National Center for Research Resources; they play a very critical role in making sure that we have the right technologies for doing biomedical research. So it's a complex organization, it's not a simple agency if you will.

Mr. Lawrence: Now, speaking of complexity, how is the budget allocated amongst the institutes?

Mr. Zerhouni: Ten percent of our budget, about $2.7 billion is dedicated to what we do ourselves, within the government laboratories that are located within the NIH. We have about 6000 scientists working on things that only the government can really do well. For example, developing new vaccines and ensuring the safety of the blood supply and discovering new ways, for example, of treating cancer. So we have about 10 percent of our budget in what we call intramural research. And 85 percent of our budget is in what we call extramural research.

We spend about 4 percent of our budget on management. And all of the support services that we need. So when you look at the agency, that's really the combination of things. Now, in the institute's priority settings and funding levels have been determined in part by history. For example, the war on Cancer in 1971, that was declared by the then president, Nixon, increased the budget of the National Cancer Institute. So the National Cancer Institute has a budget of almost $5 billion. And over time history determines what increases in budgets, for example, I launched what I called the trans-NIH plan for obesity research, because of the public health importance of obesity and we've dedicated a large amount of dollars and increased that by 10 percent, just last year. So that you can see how priorities are made according to public health demand.

Cancer, for example, rising or infectious diseases now or diabetes, second is scientific opportunity. So when we know that something may work and is mature in the laboratory, then we put a lot of money in trying to translate that into real drugs or medicine or preventive approaches. So that's what happens, it's a dynamic process. But all of it is driven by a combination of scientific peer review, problematic priorities, public health needs and more importantly, scientific opportunity. Because there's no sense spending money on something you don't understand, so you need to do that.

Mr. Hess: Can you tell us a little bit about your role and responsibilities as a director of the NIH?

Mr. Zerhouni: Right, so I'm a presidential appointee, nominated by the President and confirmed by the senate and my role is essentially to be the overall director for all of the institutes. And my primary role is clearly a strategic one. Where does the agency need to go, how do we organize and manage the agency in a way that's most effective? How do we communicate with the many constituencies. A lot of my job is communications; communications with Congress, communications with the Senate, the House, the various committees, communications inside the administration with other agencies of the government and more importantly is communications with the patient advocacy community, the university community and so on.

So, I would say, a lot of my job is communications, 25 percent, perhaps 25 percent is strategic planning and strategic visioning, so that you bring people on board, and 50 percent is truly management of the agency and appropriate allocation of resources. And one thing that I consider the most important part of my job is recruiting the best and brightest people I can recruit. So, since I've become director, I've recruited eight new directors of institutes since 2002 and I consider that the most important job for the NIH director, to get the best.

Mr. Hess: Quite a range of skills, perhaps you could tell us a little bit about some of the positions you had prior to becoming the director?

Mr. Zerhouni: Being the NIH director is unique; I mean there is no job like it. Prior to that I was the executive dean of the Johns Hopkins School of Medicine and I was also chair of a large department called the Department of Radiology and Radiological Sciences, and before that I was basically in the laboratories. My work has been focused essentially on developing modern medical imaging technologies. My CAT scanners and MRI scanners -- that's my area of research. So I have an interesting combination, I understand biology and engineering as well, and I have quantitative sciences and biological sciences background.

The experience that helped me the most was managing a large medical school. But I also had private activities in terms of launching companies based on some of my inventions; I've had several patents. So, I gain a lot of insight in what happens, really, when you want to go from basic discovery to making something happen and I bring that perspective I think as a director.

Mr. Lawrence: What drove you to public service?

Mr. Zerhouni: Well, personal factors I think, more than anything else. First of all, I'm an immigrant. I came to this country when I was 24 years of age and I have to say that only in America could someone like me, you know, become professor at Johns Hopkins, and chair and dean and so I thought it was time to pay back. And when the call came, I knew the challenges. I knew it was going to be a very tough job. But you know, you only get called once in your lifetime and I think it's important to do it, so. And if there was one agency in the world that I would do it for is really NIH. I mean, NIH if you think about it in medicine, we've funded and trained over a 105 Nobel Prizes. All of my contribution to science have come through the support and understanding of scientists and administrators at NIH. So to me, it was like a step up, because I think there is nothing like NIH really.

Mr. Lawrence: When you are referring to your management experience, you said it helped that you had been chair or led a department, what did you mean by that?

Mr. Zerhouni: Well, I think when you are a scientist you tend to in fact ignore or even not pay a lot of attention on management issues. You think that because you have such a logical mind that basically if you just say what you think loud enough, people will line up and believe in what you say and just do what you say. And I think that is a very common misunderstanding about the need to align people and the need to really win the intellectual debate first and foremost before just thinking you own the truth.

I think management experience at the level of being a chair in the Department of Radiology at Hopkins is actually quite large as over -- it had over 800 employees and over a 100 physicians and scientists working. And I have to say, you have to make all the mistakes to be made early on before you take on something like the NIH and I think that's what I mean by prior experience. I knew how not to get burnt, I guess, I didn't know maybe how to do the job, but I think I knew how the difficulties that you have. So being a chair I think, is a very good stepping stone to do something.

Mr. Lawrence: I don't know if this is true, but I perceive it to be true, which is probably per-capita you have more advanced degrees than any other organizations in government. Are there additional complexities dealing with such a highly educated team?

Mr. Zerhouni: What it requires you to do is to come up with very different models of governance, very different models of decision making and when you have a workforce that is a knowledge based workforce, the only way you can truly lead is by bringing knowledge to the forefront. Having an open environment where you share the information. My experience with this myriad of highly intelligent people is that if you do not bring intellectual horsepower on the table in facts, then you really can't lead that organization. Organizations like this need to be convinced, and 95 percent of the time if you bring data, they're data driven, people will converge towards an optimal solution. That is different than any other organization that I've worked with before.

Mr. Lawrence: That's an interesting point about that, the data and the converging; NIH has a new public access policy, what is it and why is it important, we'll ask Dr. Elias Zerhouni, NIH director to take us through this when The Business of government Hour continues.

Mr. Lawrence: Welcome back to The Business of Government Hour, I'm Paul Lawrence, and this morning's conversation is with Dr. Elias Zerhouni, director of the National Institutes of Health and joining us in our conversation is Tony Hess. Dr. Zerhouni, what are some of the major initiatives going on at NIH right now?

Mr. Zerhouni: Well, many, one thing that is really important for an organization as complex as NIH is to always have a strategic framework. And one of the things that I learned very quickly is that NIH is so complex that you can spend a lot of your time handling the urgent and the crisis and not handling the important. So the way we run about is very early in my tenure, within six weeks of my arrival there, I organized a series of meetings; both with the outside community, the scientific community and the scientific community at NIH, everyone came to the table and I said, you know, the first thing we have to do is we need to know where we're going in this early part of the 21st century and we call that the road map for medical research process.

And within a year, we came up with a major initiative called the roadmap for medical research in the 21st century which is the first trans-NIH, cross cutting, cross institute vision about where medical research, biomedical and behavioral research need to go and how you get there. So that was my first initiative, and then every year we picked a topic that we think requires an in depth look. So the second year, that was '03-'04, we picked obesity as I told you and we came up last summer with our trans-NIH obesity research plan and this year we're working on the -- what we call the neuroscience blue print.

And the neuroscience blue print is the realization that if you combine the burden of mental health, behavioral problems and neurological diseases, you're talking about $500 billion a year of impact. Compare that to diabetes, a 119 billions; obesity about the same amount. So we realize that at the frontier of research right now there are two major obstacles. One is at the molecular level; we do not understand the complexity of how genes and proteins are interacting with each other. That's what we call the systems approach to biology. And that's what I've been promoting and pushing and trying to get people to organize themselves and introducing the teams to address those problems. But the second major challenge of this century is understanding how our mind works and how our brain works. It's probably another order of magnitude more complex. And that's when we came up those concepts of trying to define what mysteries we need to go after to understand the behavior and behaviors that lead to a lot of disease burden.

I mean, if you removed smoking, alcohol abuse, drug abuse, and mental would reduce the disease burden by 50 percent in our country, so it's a huge challenge.

Mr. Lawrence: Let me shift gears a little bit and ask you about NIH's public access policy. Could you tell us about the goals and the procedures of this policy?

Mr. Zerhouni: Right, so the public access policy came again from a -- the sense, the way we conduct science is changing rapidly because of information technologies. You know, we have -- one of our institutes is the National Library of Medicine. And since the '60s the National Library of Medicine has played an enormous role in bringing together the entire scientific literature related to medical research. And one of the things that we've become quite aware of is that researchers now use the information available in public databases as a tool, not just as a repository of what they did in the past and it's an active tool. So the one thing that we said was needed was to -- for us to be present in making sure that we had open public rapid easy access to complex medical information.

Now, when you look at the world today, most of what's transmitted is transmitted in print. There isn't really the capability to research the concepts that are in papers across multiple papers. You don't have the single database where that is archived. NIH for example funds 60,000 odd scientific articles a year, but you couldn't go to any one place and say, okay, let me analyze what the portfolio of this research is. How do I know that what I'm paying for is generating knowledge that is worth paying for? So those are the goals of the public access policy. One, create an archive that can tell the U.S. public, the tax payers, what it is that they are getting for their money in terms of scientific output, publications. Two for the agency to be able to do what I just said, how do you manage your portfolio, how do you know if you're not over invested in one area and under invested in another, if you don't know what's coming out of your --of your processes, you see. That's a management radar if you will, you need, if you want to guide an agency today, this is not what it used to be. You couldn't really comprehend medical research today, nor do you need to go without tools like this. And the third is public access. Because I think the public needs to have a look, and not just the scientific public, but the patient constituencies, parents. 58 percent of Americans who have Internet go to their doctors with Internet derived information. Can you imagine --58 percent today?

There are 93 million Americans who have an Internet connection, who search the net for relevant high quality medical information. I think it's an opportunity, I think for federal agencies to show leadership here. And that's what the public access policy was; it was a precedent setting. Never before had any federal agency said, you know what, it is important to us not just to generate the knowledge, but to make sure that it is accessible.

Mr. Lawrence: Tell us about some of the management challenges then of rolling this policy out?

Mr. Zerhouni: The management challenges are, you know, it's a changing culture first and foremost, that's important, I think you need to really educate the scientists and the scientific societies and all the publishing world and so on. One of the things that you need when you roll out such a thing is to make sure that you have champions within the organization that know what they're doing and are committed to the goal. I think we have that, the National Library of Medicine is one of the most, of all the government sites is one that's most sought after in terms of contact from the public to get medical information.

The second is, how do you adjust the policy in a dynamic way, so you don't really have stakeholders that are left behind or don't understand and that is the most tricky aspect of managing a large agency for a project like this. So what we did is, I established an implementation group which is made up of multiple stakeholders. They will oversee the development, implementation of the policy and we'll adjust it accordingly. That's one of the things that's most difficult in managing in government today, it's almost like you know, people have this traditional concept of first aim and then shoot, as if it was a final thing. Well, sometimes you may want to start something and then steer towards the goal and that is what I think is happening here is that we first, you know, frame the debate and understand the vision and then set energy in motion if you will and you may not have all the answers from the get go, but if you put a dynamic and adoptive process in place, I think people will follow you, I think they'll follow the lead. As long as they trust that they can be at the table and in the public access domain, you know, you have publishers who are very worried about their revenue source. You have scientific societies who rely -- that rely on their publication revenues and so we have to do it carefully, but I think with clearly the golden mind of having easier exchange of scientific information accomplished in this century.

Mr. Lawrence: Well, tell us more about the relationship then between NIH and the private industry sources who were previously sort of working with this information?

Mr. Zerhouni: Clearly NIH funds the research that makes that possible. So, if you looked at the cost of a publication, the cost of the publication is really the end point of a long process, which we funded when the research was conceived and then realized and so on. On the other hand there is a very important role that is very critical for the private sector and that's to accomplish what I call, independent peer review. You don't want a government agency to start passing judgment of what's good science or bad science. And I view the private sector in the publishing world and the scientific societies as critical quality control elements if you will of the research we fund and the research that gets published. And that's very important and that role I want to preserve, I want to make sure that they're not -- that the peer review system is not affected.

So we're going to watch carefully this and we're going to have formal evaluations of that going on so that we make sure that we titrate our policy to preserve that -- the private domain, I think, which is to really have innovation and create revenues that are sufficient to support the mission of publishing.

Mr. Lawrence: That's an interesting point. How important is inter-institute collaboration? We'll ask Dr. Elias Zerhouni about this when our conservation about management continues on The Business of Government Hour.

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and this morning's conversation is with Dr. Elias Zerhouni, Director of the National Institutes of Health. Joining us in our conversation is Tony Hess. Dr. Zerhouni, earlier you've talked about the institutions and the centers of NIH. Could you talk to us about some of the challenges of managing these 27 institutes and centers?

Mr. Zerhouni: The real question that you always have in government management and also a large organization management that recurs is a common theme. How do you coordinate? How do you make sure you have the synergies? This is almost like a mantra. Anybody who comes and reviews one organization within 30 seconds is going to say, "How do you integrate all of these decisions?" From my standpoint, I think the best of both worlds is when you have both decentralization which allows innovation, autonomy, creativity, but at the same time synergy in what I call the common areas.

So my job at NIH over the past three years has been to develop a culture of decision-making that looks at corporate decisions jointly. So I reorganize, for example, the way decisions are made at NIH. We have now a small steering committee of nine directors that I chair and the directors are rotating in their service on this committee and they're in charge for making the decisions that need to be made across institutes from the managerial standpoint.

The other point that, I think, is important to raise is the issue of scientific coordination, scientific integration. Today, science has converged, I mean, in 2003 we completed the decoding of the human genome and we found 25,000 genes thereabouts and it's interesting because the cellular processes, the molecular processes that affected cancer cells, lo, and behold, are very similar to what affects a heart cell or a neuron. So science is converging, which means that you also have to have more convergence in the missions and all -- in the activities of very, very large institutes and a high number of institutes. The other degree of difficulty is that the institutes are not of the same size so that you can go from National Cancer Institute that is relatively large and very competent in its ability to fight the war of cancer and has enough organizational mass, if you will, to address a lot of these problems, to institutes that are a tenth of that size which require a lot more sharing of resources, lot more synergy. So you also have this issue as director of NIH of being able to manage different populations of institutes and different missions.

But the story is always the same, whether you are a secretary of a major department or you're the President of the United States. It's always the issue of how do you get synergy and communication and coordination across disparate units without falling into the tub-down centralization approach, which tends to, in my view, make the organization not as nimble, or as creative, as responsive as is has been. So my tendency is to favor relative autonomy except in the areas where there is clear need both programmatically or managerially for common decision-making.

Mr. Hess: In that context of coordination, I note that the NIH will be creating a new office, the Office of Portfolio Analysis and Strategic Initiatives some time this fall. Can you tell us a little bit about the goals of this office and how it will help you with the obstruction of --

Mr. Zerhouni: Right, Tony, so you picked it up. I didn't know you would know about this office because it's not in existence yet, we're proposing it. But it's in response to your preceding question. Remember what I said about how do you manage a knowledge organization like NIH, with everybody with a Ph.D. in the 98th percentile and it is like, Lake Woebegone there. They're not -- everybody's above average, it's not their -- it's not above average, everybody's exceptional. So -- and the way you do it is you need to have common tools to understand what the portfolio is and as organizations grow in size and become more complex what you also realize is that different tools have evolved over time to try to understand what is it you do in your portfolios. So the Office of Portfolio Analysis is an effort to, in fact, share across all institutes common matrix, common standards to report on our research activities and what grants do we have in what fields and so on. So that's -- the goal of the office is to create a tool set for truly understanding our portfolio, public access being part of that tool set.

The second is that it's a place where what I described about common decision-making in areas of common interests can be planned, prepared, analyzed, and integrated. So that's -- those are the two functions of that office.

Mr. Lawrence: From time to time elements of Congress are thinking about making structural and administrative changes at NIH. Can you tell us some of the reasons behind this thinking?

Mr. Zerhouni: Well, typically, what you will hear from members of Congress, especially in an agency that has had an increase in budgets as NIH has, how do I know I'm doing the best job I can make? I mean, they are very good stewards of public funds and they have the oversight duty that Congress has. So many times I have to go over how do we make these decisions, how do we know that our priorities are right. And in addition to that they will also get input from the various disease constituencies, disease patient groups, who feel that there is not enough spent on their disease or that disease. And therefore, the response, if you will, is how can we organize NIH better, how can make it go better.

So over the years you've had two tendencies, one is what I call the structural portfolio analysis where what you do, "Gee, I don't see enough attention paid to pediatric diseases. Well, let's create a structure that's specific to that." That's what I call structural portfolio management. Others have also tried to push for what I would call functional integration. Don't change the structure, but change the processes. And those two things tend to be discussed. So OPASI, the Office of Portfolio Analysis and Strategic Initiative, is what I would call a functional integration tool, it's not a structural one. Others are talking about, "Wait a minute, 27 institutes too many, can't we really have a better structural organization." The two go together and more importantly is the quality of the culture within the organization and the leadership that you choose and how you stimulate that integration that serves the end goal. But Congress is very committed, if you will, to be responsive to the various stakeholders that influence the agency's performance. Especially, in an agency where decisions on grants are really made by independent peer review and they are made in such a way that the chances of any scientist getting a grant from NIH are less than 25 percent nowadays.

So it's very competitive and there is always that sense that we're not spending enough on disease X or disease Y. So that's what I think you see and there is no doubt that Congress is concerned about the complexity of the agency and wants to see, perhaps, structural changes made so that they will assure themselves that things are coordinated from the structural point of view.

Mr. Lawrence: How do you think about transparency and accountability at NIH?

Mr. Zerhouni: Oh, I think NIH is -- I have to tell you, I'm amazed, actually, at how transparent NIH is. A lot of the criticism we get from time is generated from our own databases, you know. We have our grants on the Internet. We have our -- all of our advisory councils are open to the public. We have 21,000 non-government experts who come and advises NIH every year, whether it is on strategic plans or on workshops for state-of-the-art review of a particular area of medicine on peer review panels. You'd be amazed. We report our results very openly. Our funding is open to inspection to the public. Now what we get criticized for is that sometimes you report something and they say, "Wait a minute, you reported this as cancer research and then you're counting it as pediatric research. Why, yes, cancer research in children." So there is that confusion sometimes that frustrates some people but it's very transparent. And I believe transparency and candor are instruments of leadership.

Mr. Lawrence: How do you go about educating the public then in terms of a future need or area of research, especially, when things can be so complex?

Mr. Zerhouni: Well, three ways. One, we have a very powerful, very effective education outreach mission that we have fulfilled for years. All of the campaigns, for example, in heart disease, as you know, mortality from heart disease has dropped by 60 percent. Primarily, due to the discoveries that high blood pressure is detrimental, high cholesterol, and all those -- the steps we've taken. We've reduced smoking by 50 percent in this country, and a lot of it comes from this outreach -- you know, we have a cancer prevention and control program at NIH that has been operating for almost 30 years and is really the -- I would say, the absolute gold standard for intervention as in outreach. So NIH does that at all time.

In addition to that, with -- in collaboration with CDC, we do track health indicators throughout the country every two years we have a survey and we can find out exactly what is going on in terms of public health in -- throughout the country.

So those are the two things, we can inform about the risk of smoking, let's say, or today, high cholesterol diets and so on. At the same times we can measure the effect of all these policies. So reducing blood pressure, for example, through various interventions has reduced the incidence of stroke by 50 percent in our country. These are the results that people don't really appreciate. The drop from coronary heart disease is absolutely remarkable. This is the country that has made the most progress over the past 30 years and that's just due to medical interventions.

You'll see the same thing actually, in terms of disability for seniors. The disability rate for seniors has dropped by 30 percent. In other words, our senior population is 30 percent less disabled than it was 20 years ago. So today, for example, if you had looked at the way we treated seniors in 1982 by today you would have had 10 million disabled seniors. Right now you have less than seven million. So it tells you something about the effectiveness of outreach and education. But it's a never-ending story and I don't feel like we're doing as good a job as we could using the modern tools that we have. So it's a constant effort.

Mr. Lawrence: That's interesting and it's a fascinating statistic about the less disabled elderly. What does the future hold for NIH? We'll ask its director, Dr. Elias Zerhouni for his perspective when The Business of Government Hour continues.

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence in this morning's conversation with Dr. Elias Zerhouni, director of the National Institutes of Health, and joining us in our conversation is Tony Hess. Well, Dr. Zerhouni, how do you envision NIH 5 to 10 years from now?

Mr. Zerhouni: Well, I think it's clear that in the next 5-10 years, you are going to see a complete change in the way we make medical discoveries -- clearly, because we have just completed the human genome in 2003 and the rate at which these discoveries are occurring, where we are now discovering the fundamental code that is disturbed in any one disease. In 2003, I can tell you the second most important discovery that was ranked by Science Magazine worldwide, was the -- the first discoveries that we made in NIH of the genes responsible for mental health conditions like schizophrenia or many depressive illnesses.

Last year, we discovered a gene that we had discarded three years ago in diabetes and all of a sudden, because of the better tools that we have, now we understand that. A month ago, we discovered the gene that seemed to be very, very important in the development of what we call age macular degeneration, which is loss of vision in older people. It is one of the most important rising causes of disability in seniors, loss of vision due to age related macular degeneration, and lo behold, it was a gene that had to do with a protein in the blood, nothing to do with the eye itself. And that is opening up a completely different world of research. So you are going to see, I think, in 5-10 years a better understanding of what we call complex diseases, where things are interacting with each other.

Second, a completely new paradigm of medicine is going to emerge, whereby we are going to know much better, your personal risk factors and what we need to do years before any disease strikes you or me or a patient. That's the hope. For example, we are actively searching for a way to delay the onset of Alzheimer's disease. We know that if we can delay it by five years, we will save 50 percent of the cost of Alzheimer's disease. So I think you are going to see a NIH where -- where our understanding of the complexity of disease through this systems approach, based on our finalization of the human genome, is going to completely change the way research is done and -- and more importantly, how medicine is practiced.

Mr. Lawrence: Earlier, you talked about the importance of recruiting top talent in your organization. Could you talk to us a little bit about that? I'm especially interested as to sort of how you deal with some of the constraints or maybe the perception of constraints people have about joining government service.

Mr. Zerhouni: That's a very good question. I consider it the number one job of a manager-leader in any one of our government organizations, because I used to say, when I compare my recruiting efforts as NIH director compared to what I used to do when I was executive dean at John Hopkins, I say -- you know, recruiting as a NIH director is almost like fighting with one hand behind your back, because of the constraints that government service brings.

So you have to be able to identify people who are motivated by the notion that you give them something absolutely unique. Why did I go to NIH myself? The reason is because you can have a -- an influence on your field or discipline that is unparalleled. So you give up on your personal rewards, if you will, but at the end, I always tell my potential recruits, I say think about it.

On your last day, when you will look back and you say, I had the chance to serve the country for several years and in a capacity that is unique, which is that of been an institute director at NIH, what would you say? And that's what I try to portray, I really show the qualitative differences, not the quantitative differences, and the empowerment that you have as a government scientist and a government leader in science, that you can then view over time, as an unique opportunity for contribution.

So, that's how I combine the two. But it is hard, because you know, Washington has become an expensive area to move to, our compensation systems are quite rigid in the government. To attract people who are at the top of their field, you need to compete with universities and so on. And I do -- I compete very aggressively, the one thing that we can offer is a research environment that is just unparalleled in the world and the ability to influence a discipline that is just unparalleled around the world. And those are the two things you have to combine, but I spend an enormous time -- amount of time in recruitment. For example, one strategy that I use that people find funny is that I would go personally and visit the candidates in their own laboratory, at their own universities.

And you would be amazed how effective that is to find out if there is a cultural match and a managerial spirit that will fit within the government agency. That's important too; you don't want to mismatch an individual to a position.

Mr. Hess: What advice can you give to government executives who face the challenge of collaboration within their own complex organizations?

Mr. Zerhouni: That's a very tough question. First and foremost, I think that credibility and trust are the two things you have to build. You -- you cannot get collaboration if people don't trust you and don't think you are credible. And it's interesting when I say that, you know, in my experience, both at Hopkins, my previous department, my previous activities, the fact that collaboration requires commitment on both parties, it requires also that you build a huge amount of credibility and trust. It's based on that.

You can have all the organization charts you want, all the workshops and meetings and staff meetings. If there isn't that, you will have a problem. So that relates then to how you use your leadership position. The one thing that I find very, very important is -- is my definition of leadership as the heart, spine and brains. I am a doctor you know, remember, and the hardest people have to feel they have a passion for what you do, and that you are honest. And that's why I say candor is an instrument of leadership, because candor generates trust. And the second is, spine; they have to know that they can trust you. If things get rough -- that you will honor your -- your side of the bargain.

And credibility comes from people thinking that, yeah he is above average too, at least in an agency like NIH. So -- so there is a little bit of all of that combined. But collaboration also comes from, like I said, sharing information and raw data. People are data driven in the knowledge organization.

Mr. Hess: Also in the context of collaboration, how a great role do you see the private industry working with the NIH in the future is, and do you see this on the increase, you know, in terms of the number of partnerships with -- between the public and the private sector?

Mr. Zerhouni: I think it's going to have to increase. If you look at funding for medical research, in 1991, NIH was a co-equal with industry. In 1970, NIH funded 80 percent of all medical research and the industry, very little. And since 1991, industry is funding more and more research and development in -- in bio-medicine at an increasing rate.

So even though NIH's budget doubled, the investments in the private sector have more than tripled. And the reason is very simple, the -- it is quite difficult to understand biology to the point where you can be effective. And NIH is not going to be able to duplicate what the pharmaceutical sector, the bio-tech sector does.

So we need to find ways of improving, increasing the ability of partnering between the public government academia and the private sector. But we need to do this, while being very careful about not losing public trust. And that's the issue of managing relationships in a way that's transparent and fully disclosed, so there is no sense that anybody is been taken advantage of. So I think -- I think those are the characteristics that I see in the future, more public-private partnership driven by more transparent and more -- perhaps more demanding ethical rules.

Mr. Lawrence: Normally our last question in this show asks about advice you'd give to someone interested in a career in public service and I think you gave us a pretty good insight based on how you described how you recruit. But let me ask you to focus on that word "career," do you think that's something especially around science that people would seek to have in government or do you think moving across the sectors, as you have described, is something that might become more traditional?

Mr. Zerhouni: Well, first of all, I can only take myself as an example, and I moved from one area of science to another, I move from one role to another. I think a career in public service requires, in my view, a proactive development strategies and it is very important that we develop what I -- what I call leadership development strategies.

What I did when I was at Hopkins, I -- I used that same strategy to bring young investigators, young scientists, young faculty members to a -- to a development program and then we placed them in different positions, different places in the university so they can accumulate experience. So a career in public service, to me, should be managed in the same way. If you think a career in public service is to stay in some place 25 years, then get a retirement package, that's just not going to be the way of the future.

So I think we need to really do this aggressively. We have an aging workforce that's going to retire, a large percentage of which is going to retire soon. We need to give a lot more experiential opportunities, I think, for our career service employees. And everybody who comes to government service should -- should be able to have that open mind.

But we have to come up with a way where in fact, doing that is rewarding, not -- not punishing.

Mr. Lawrence: That's a good last point. Mr. Zerhouni, Tony and I want to thank you for joining us this morning and being with us today.

Mr. Zerhouni: Tony, Paul, thank you for the -- the job you are doing and I enjoyed this very much. Thanks. One thing that I would like to say, if you don't mind is, NIH is very complex and we have a great website called www.nih.gov and anyone who is interested in some of the things I said is welcome to come.

Mr. Lawrence: Thank you. This has been The Business of Government Hour featuring a conversation with Dr. Elias Zerhouni, director of National Institutes of Health.