There’s nothing quite like the scent of money to bring out the corporate games players and political opportunists, but if a company isn’t careful, these games players can foul up a perfectly sound SR&ED program. Unfortunately, the very nature of the SR&ED program makes this scenario more possible.
One phenomenon that seems to be unique to large organizations is the person I like to call a “SR&ED Vulture”. (You could just as easily call them SR&ED Sharks, for that matter.) These are usually a highly-placed or highly-connected manager (Director, VP, …you name it) – who sees the evidence of real promise in the corporate SR&ED program, and proceeds to make a play for control of the program.
There’s nothing like controlling the cash cow to impart a little clout.
Now, making their play may be as overt as “muscling in” or playing “reorganization or re-alignment games”, and it can be surprisingly easy to accomplish. After all, these are people with friends and contacts in high places, so you can expect them to possess influence, already. Moreover, there are factors about any SR&ED program that make it more vulnerable to games playing.
SR&ED is a hybrid program in any large organization, requiring a complex cooperation and integration between the taxation team (that files the actual tax claims), the Finance and Accounting teams (which control all of the accounting and reporting functions), and the technology, systems, engineering and product development areas, for example, where all of the eligible technical work, and the assessment functions, properly reside. And then there’s the Human Resources area, which typically serves as a “gatekeeper” to preserve control of anything the HR folks see as belonging in their domain, such information about employee salaries, qualifications, privacy, etc. Locate the SR&ED program in any one of these domains, and a smart political operator can make some kind of a case for locating it elsewhere, under his or her own control. SR&ED is too frequently seen as an “orphan” within any of these specific domains (particularly in the immature stages) lacking a proper parent to say “this child is mine” – i.e., that there are good and sufficient strategic reasons to be involved in raising and nurturing it – which makes the SR&ED program surprisingly easy to uproot and relocate.
All too often, those responsible for SR&ED don’t really know what to do with it, and feel uncomfortable about the alignment between a SR&ED team and their core mission.
That is, until the real money starts to flow.
To be continued...
Bruce Madole