An Interview with Clemens Fuest and Stephanie Dittmer – Annual Report 2023

Is it necessary to set explicit organizational goals for a scientific institution? After all, don’t goals naturally emerge from the research being conducted?

CLEMENS FUEST Science is closely tied to freedom. Yet it’s essential that the “purpose” is clear. What would we lose if the ifo Institute didn’t exist? This is why we need clear objectives. However, this doesn’t mean dictating every scientist’s actions.

STEPHANIE DITTMER We also need these objectives to attract the best talent in the future. The market has undergone significant changes. We’ve invested heavily to recruit top-tier young professionals and have repositioned ourselves accordingly.

The core business of ifo is science. But what importance do the goals have for the non-scientific part of the organization?

STEPHANIE DITTMER In management and service functions, we also need to excite good people about working for us, as this “backstage area” must help attain the institute’s goals. It’s about enabling scientists to do their job as well as possible. To some extent, management and service areas also have their own goals, which are not directly related to science but rather pertain to overarching themes.

You initiated a strategic process when you both joined ifo. This approach is usually more familiar in the corporate world. Why use it in academia?

CLEMENS FUEST In science, just as in businesses, investments are made. This means doing things today that will hopefully have a positive impact in a few years. Therefore, defining goals can only be the first step. The next question is, what needs to be done to achieve these goals and how is it done, who implements it? It’s necessary to regularly check how far you have come with the implementation. This process is very important for being able to act with a plan.

What were the internal outcomes of this strategy process?

STEPHANIE DITTMER Numerous new topics have surfaced that we intend to explore further. For instance, diversity is a key area of focus for us. Often treated as a buzzword, we aim to define it in ifo-specific terms to make it meaningful. We’re examining our workforce’s composition regarding gender balance, geographical or social origins, among many other relevant factors, and envisioning our ideal future makeup. These discussions have significantly influenced the institute.

Regarding any strategy, indicators known as key performance indicators (KPIs) are essential for tracking progress. How does this apply in practice?

CLEMENS FUEST Some objectives are too complex for KPIs alone. For these, we prefer analyzing case studies to understand how to implement certain research strategies. For more straightforward topics, such as publication venues, research impact, or securing third-party funding, KPIs are more applicable.

STEPHANIE DITTMER Measuring progress on issues like gender balance is straightforward. We assess the number of female leaders in the scientific sector, for instance, a tangible metric. Where imbalances exist, we commit to adjustments, implementing a timely strategy with clear actions.

What role do the employees play in the strategy process?

CLEMENS FUEST The strategy process shouldn’t just be an event where top-down instructions are issued. At ifo, we foster a dialog where all groups are invited to contribute. These inputs are then integrated. The result is something everyone should support and understand. Naturally, opinions vary on whether to focus more on policy consulting, engaging in public debates, or striving for research excellence. In the end, these objectives are intertwined, but it’s crucial that our approach is inclusive.

During the strategy process, you also focused on the ifo Institute’s brand identity. How can ifo be viewed as a brand?

CLEMENS FUEST It makes sense, even in the non-commercial realm, because, like any brand, our greatest asset is our reputation. The ifo Institute should be synonymous with economic research, policy advice, data collection and processing, and providing reliable information to the public.

Do you see a discrepancy between this ideal perception and the external view of the ifo brand?

CLEMENS FUEST Two decades ago, ifo might have been perceived merely as a survey institute or part of a university. Today, we’ve advanced in communicating our brand identity. I think we’re now recognized for our high-caliber research and the production of dependable information. In economic policy discussions, particularly from those who disagree with us, there’s often criticism that we are too aligned with business interests.

And – is that accurate?

STEPHANIE DITTMER We aim for independence and transparency in our actions. Unfortunately, we’re in an era where facts are constantly challenged, and political debates have become more polarized. Clarifying the reasoning behind certain arguments, or the methodology behind findings, builds trust, at least among those interest groups open to differing viewpoints.

CLEMENS FUEST It’s permissible to take a clear stance, but when we make assessments, it’s crucial to clarify that these opinions reflect individual views. It’s vital to differentiate clearly between personal evaluations and objective facts. This distinction can be challenging: selecting and presenting specific facts, or omitting others, inherently implies a judgment.

At ifo, you lead together, with Mr. Fuest being much more publicly visible than Ms. Dittmer. Managing such a dynamic can be complex. How do you handle it?

STEPHANIE DITTMER To me, the cornerstone is mutual respect for each other’s work and understanding what drives us. We each have our responsibilities but communicate often. If opinions diverge, we discuss until consensus is reached. This approach has been highly effective for us. In many situations, it’s beneficial to have someone you can confide in and discuss matters with, so you don’t have to make decisions entirely on your own.

CLEMENS FUEST Essentially, we must understand each other and share a unified vision for the institute’s direction. This links back to our strategy process, which we’ve shaped together. If there was disagreement on fundamental aspects, challenges would be inevitable.

You both embody this leadership approach at the ifo Institute.What leadership style do you envision for the organization as a whole?

CLEMENS FUEST Research work today thrives on teamwork and minimal hierarchy, making leadership in modern scientific environments more about coordination and facilitation. Leaders should foster idea generation and integrate others’ ideas to facilitate complex projects. Regarding the research focus, this involves dialogs with division heads, postdocs, doctoral students, and advisors, including our Scientific Advisory Council and the Society for the Promotion of Economic Research (Freunde des ifo Instituts) e.V.

STEPHANIE DITTMER A command and control approach to leadership would not work in the academic world of today, and would soon face huge resistance. Leadership should be conviction-based, involving thorough discussions and information gathering within the institute before decision-making. We aim for transparency in our decisions and strive to present them convincingly. Leadership’s role is to moderate and coach, ensuring that everyone at the ifo Institute can succeed to their fullest potential.

The interview was conducted by Dr. Cornelia Geißler, Head of Communications.

Dr. Stephanie Dittmer: A member of the ifo Institute Executive Board since September 2017, Dr. Dittmer was previously Head of Strategy and the Initiative and Networking Fund at the Helmholtz Leadership Academy, Helmholtz Association of German Research Centres e.V.

Prof. Clemens Fuest: Before becoming president of the ifo Institute in April 2016, Prof. Fuest was president and Scientific Director of the ZEW – Leibniz Centre for European Economic Research and Professor of Economics at the University of Mannheim.