Risk Management and betting on oneself

Apr 21 2014 Published by under [Education&Careers]

One of the aspects of this job that I find the most stressful is budgeting. I have discussed why budget issues are not very straight-forward in a lab with multiple support streams and projecting years ahead is tied up into that vortex. The current funding climate only exacerbates the issue because of the volatility of funding and the fact that most budgets get cut from the start.

This leaves many PIs asking a simple question for a complex situation: When do I bet on myself?

Fact: Most grant budgets (at least IME for NSF) provide less money than the total cost of the project. A lab can make up the difference in a variety of ways, some of which include finding supplemental streams of cash (e.g. grad fellowships) and others amount to borrowing from Peter to pay Pauline.

In the latter situation, one finds oneself over-spending now to take advantage of opportunities, with the hope that there will be money down the road to make up for the shortfall being created. It's a significant risk with real consequences if there's no reinforcements coming. At the same time, it is exceptionally difficult to make the types of jumps one's research program needs to make in order to stay at the front edge, while playing it safe with the budget. There's new technology, new techniques, new findings, all of which lead you to explore your system in ways you could never have budgeted in when submitting the proposal.

With funding rates in the single digits, the decisions that involve a significant outlay of money for a potentially important piece of the research puzzle are the one that keep PIs up at night. So far, my lab has managed to not have any spectacular failings on big investments and has been able to find those financial safety nets when they were needed. But it doesn't make me feel any better about it when faced with a new costly opportunity. It's a delicate balance with a significant risk of getting burned.

4 responses so far

  • Jim Woodgett says:

    This is a crucial insight. We are constantly faced with assessing whether to make an investment and funding has never been tighter. We (at the Institute I am based) have given some latitude to researchers carrying short term deficits for good reason - it's better to look forward and get ahead of the curve. But this is changing as "future investment" deficits can be difficult to tell apart from "running out of money". In a way, we're playing a card game but with increasingly limited stakes - against other players with deeper pockets. Luck plays an ever increasing role, there's no room for error but with the table stakes of science, you can't afford not to take risks either.

  • JaneB says:

    It's a terrifying analysis, isn't it? And with everyone's jobs on the line... I'm sure it's one of the reasons I've let grant applying (and person numbers) slide downwards in my research lately, I've had stress-related health problems and this is just about the biggest source of stress out there! (Especially since our university got rid of TAs and other casual streams of funding... gah!)

  • ANON says:

    I agree completely. I passed on several grant submissions recently because they were just too tiny to offset the risk. If they got funded I would have had to stretch my lab to meet the needs of those projects and the risk was too great for the tiny money involved. It is just a matter of time before I stumble, and then the whole thing collapses.

    The thing that drives me insane is that my institution chooses to support some labs and not others, and the decision has everything to do with 'good ol' boy' network and nothing to do with impact to the whole, money, etc (things you would normally think such decisions should be based on).

  • Comradde PhysioProffe says:

    If you're too conservative, you'll just gradually die the death of a thousand small cuts, while simultaneously bored to tears. And if you're pre-tenure, you might not even make it, because you haven't ever developed an independent reputation. Better to burn bright, have fun, and let the chips fall where they may.

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