In her State of the University address in October 2009, then-U-M president Mary Sue Coleman proposed doubling the university’s annual research spending by 2017, to $2 billion. “It would require a tremendous effort,” she said. “But isn’t that a grand goal worth pursuing?”

Coleman’s aspirations seemed possible at the time: Michigan’s research spending had been growing rapidly for decades. But as 2017 looms, the U-M is slipping backwards, with Coleman’s goal long abandoned.

Total research expenditures peaked in fiscal 2013 at $1.3 billion, then fell slightly in 2014 and 2015. Research funding at the medical school, nearly half the total, dropped 6.7 percent over those two years. And grants to the U-M from the National Institutes of Health (NIH) have barely budged since Coleman proposed her “grand goal.”

Congress’s failure in recent years to adequately fund the NIH is a big part of the problem, but the U-M has also lost “NIH market share” to other institutions, according to a faculty report released a year ago. That report in part blamed cultural factors, including “a high tolerance for mediocrity” and “not enough done by the institution to retain its rising stars.”

Medical school leaders don’t all share that view. “We have extraordinary faculty, we have extraordinary staff, and we have extraordinary … PhDs and graduate students,” says Carol Bradford, appointed in April to the new position of executive vice dean for academic affairs at the medical school. As for faculty departures, “We work hard to retain the brightest and best here. But there is just natural turnover in an academic center, with recruitments to leadership positions [elsewhere], and that really does happen in all academic centers.”

The U-M medical school has long nurtured young researchers only to see them leave, but now it’s not just coast powerhouses like Harvard, Penn, Johns Hopkins and the University of California system snapping them up. In 2011, prominent stem cell researcher Sean Morrison left for the University of Texas-Southwestern (UTSW) in Dallas. More recently, respected pharmacology researcher Richard Neubig joined Michigan State in 2013, prostate cancer geneticist Kathy Cooney left in 2014 to head internal medicine at the University of Utah, and prostate cancer doctor and researcher Maha Hussain went to Northwestern this August. (All three declined to be interviewed.) “Over the last 10-15 years, we have lost so many outstanding researchers to other institutions,” emails U-M pathologist Greg Dressler. “In part because of the lack of institutional support and de-emphasis on basic science and discovery research.”

Pharmacologist Roger Sunahara left last year for the University of California-San Diego, even after the U-M matched that school’s offer. “A lot of the people who have left or are leaving the University of Michigan are all sort of mid-career, but they’ve been quite successful,” he notes. “They’re all at the same age, within five to ten years.” Why does the medical school lose so many prominent mid-career scientists? “That’s a very complicated question,” says Sunahara.

Internal medicine professor Jim Shayman, a member of the advisory panel on the biosciences that issued last year’s research report, says members were concerned that some units weren’t “spending the time to do a deep dive into the importance of the questions that were being asked, or the impact of the discoveries.” Instead, administrators focused on “easily determined metrics, in terms of numbers of publications, total grant dollars, [and] indirect cost recovery,” grant money that goes to university administration.

Tenure decisions at the medical school, says Sunahara, can show the same shortsightedness. He agrees that mediocrity is tolerated, and adds that he saw tenure committees reject deserving scientists when their publishing metrics–the number of articles and the stature of journals accepting them–fell short. “They just don’t recognize the impact of the work, and the risk of the work,” Sunahara says.

Former medical school dean Jim Woolliscroft, for his part, says that researchers here have been shortchanging themselves by seeking smaller grants than their peers at other institutions, although that is now changing. Sunahara says the problem goes deeper. “It’s thinking small,” he says. “It’s a cultural problem.”

In institutions where risk-taking is encouraged and supported, Sunahara says, researchers ask for big grants to address big scientific questions. “The scientists at the University of Michigan are outstanding … but there’s this sort of culture of, ‘Maybe I shouldn’t take that risk because I don’t know if it’s going to pan out, and then what are we going to do?'” Medical school department chairs must constantly fight for funding from administrators here, he says, and these conflicts discourage rank and file researchers.

Faculty are also acutely aware that two of the med school’s venerable basic science departments–biological chemistry and cell & developmental biology (formerly anatomy)–have been without permanent chairs since 2013. Human genetics also has had a long vacancy. (Chair Sally Camper stepped down last December but had expressed her desire to leave much earlier.) Pharmacology also went chairless for an extended period until Lori Isom was appointed this year. “Very little was occurring in the way of recruitments to these departments, while at the same time, through normal attrition or through retirement or loss of faculty through recruitment elsewhere, these departments were contracting,” says Shayman.

Searches for the chairs of the four departments were frozen, first by Jim Woolliscroft, and then, Woolliscroft says, by president Mark Schlissel after he took over from Coleman in July 2014. (Schlissel later restarted the pharmacology search.)

Woolliscroft says he saw the vacancies as an opportunity to explore reorganizing the medical school, and the biosciences in general. Biochemistry research, for example, goes on across the medical school (both in basic science and clinical departments), in LS&A, at the Life Sciences Institute, and in the pharmacy and dental schools. Similarly, with the universal adoption of molecular genetics (the study of genes and their regulation at the DNA level), most basic science researchers now could join any of several medical school departments. “As science has changed, training has changed, does it make sense to have [departmental] structures that are 100 years old, or eighty years old?” Woolliscroft asks.

But a faculty committee appointed to look at reorganization couldn’t agree on how to do it. At that point, Woolliscroft says, he would have authorized chair searches, but Schlissel personally extended the freeze. “It doesn’t help anybody to just have vacancies there,” says Woolliscroft. “That said, I certainly supported [Schlissel’s decision] if he was going to be thinking about how to reorganize.”

The U-M did not make Schlissel available for an interview, so it’s unknown whether he looked at restructuring the med school. But searches for chairs for all three departments are finally underway–within the historic structures. “I don’t have a clue as to why there wasn’t any change,” says Woolliscroft.

When Woolliscroft stepped down at the end of last year, though, Schlissel did merge two top positions: Marschall Runge, who arrived last year from the University of North Carolina, now holds the dual titles of health system CEO and medical school dean. And according to several faculty, Schlissel is actively recruiting a “biosciences czar” to eliminate redundancies, target high-profile scientists to recruit, foster collaborations, and create new scientific initiatives. The president “is looking across the country at people who … are highly accomplished, have … impeccable reputations as thought leaders in the biological sciences, that would come in and have an immediate impact,” says Shayman.

Meanwhile, Runge is overseeing the search for the department chairs. Shayman, who was on the search committee for biological chemistry, wants to see “real change agents” take over the neglected departments, starting with biochemistry. “Based on the list we provided Marschall Runge, he will demonstrate very quickly how strong a leader he is, based on his ability to bring one of these individuals on board–it’s really a great list.

“On the academic side I think he [�xADRunge] has yet to prove himself,” adds Shayman. “I think he’ll have ample opportunity to do so over the next year with these recruitments.”

Could the new chairs, and a future biosciences czar, turn things around? “There’s a great deal of resistance to any type of change,” says Woolliscroft, who says the czar would need to be politically adept. “I think it could work. But there’s nothing that says it will work.”

Chemical biologist Michael Marletta, a former U-M faculty member now at U-C Berkeley, also sees challenges. At U-M, “power is typically in the hands of deans, and so this czar, so to speak, is going to have to interface with all the existing power figures,” he says, “and somehow work out and coordinate better activities in the same discipline that are spread over various units.” On the plus side, “my understanding is that the czar is actually going to have money. That always helps to get people’s attention.”

Marletta and Schlissel are close friends from Schlissel’s time at Berkeley. (Schlissel was dean of biological sciences there.) Marletta thinks that reorganization is far less critical than leadership, and he considers Schlissel an exceptional leader, intelligent and decisive. “Mark is first of all very smart, he’s straightforward, and he’s honest,” Marletta says. He “wouldn’t want to alienate a key audience to get something done, but once he decides what needs to be done, he’s sort of full steam ahead.” And Schlissel’s scientific credentials are impeccable: “He has a great deal of respect, especially in the sciences, in the outside world,” says Marletta.

The biosciences at Michigan are at “a very crucial juncture,” says Marletta. Besides the medical school chairs and Schlissel’s biosciences czar, Runge is recruiting a “chief scientific officer,” a title borrowed from the biotechnology industry. “So they’re thinking about what kind of leaders [to have], and how to divide up responsibilities,” says Marletta.

Michigan has a big hill to climb, though. “We would like to be an institution where we can point to individual faculty or the scientific groups that are doing very high-profile, high-impact, creative discovery science,” says Shayman. The U-M is not now such an institution, even though much excellent research takes place here. The absence of Nobel Prize winners in particular has always rankled U-M’s administration. UTSW, a much smaller school, has five living Nobel Prize winners, all in the biosciences.

What’s the Texas school’s secret? Sunahara, who was a UTSW postdoc, says the department where he worked had thirteen endowed chairs for only twenty-two faculty. That freed the scientists to spend less time chasing grants and more time on their own research. “People just want to do great research and they want to worry about other issues–rather than worrying about money they’re worrying more about the science, worrying more about education,” Sunahara says. In contrast, the vast majority of basic scientists in the medical school rely entirely on “soft money”–temporary grants–for survival. When they see better opportunities elsewhere, as Sunahara did, the administration may react with counter-offers. But once people start looking for an exit, he says, it’s often too late to keep them.

At Michigan, “what’s most damaging is that it’s in the culture,” says Sunahara. “Young assistant professors come in that are extremely talented, and … they use the University of Michigan as a stepping-stone. And I think it’s very sad, because [the university] can change that.”

More is at stake than simply prestige, because productive, high-profile labs attract more talented graduate students and postdocs (who do the actual lab work) and star junior faculty in a self-reinforcing positive loop. This financially benefits the university as a whole, through indirect cost recovery: for every dollar in federal research grants won by its investigators, the university gets an additional 55 cents. That money pays for the facilities and administrative support.

“Indirects” may be especially important now that the U-M has added so many new research buildings during an era of grant scarcity. Under Coleman, the university put almost one million square feet of new research and education space into use, and bought another two million square feet from Pfizer to create the North Campus Research Complex.

Former NIH director Harold Varmus, speaking here at Mark Schlissel’s 2014 inaugural, pointed out that indirect cost recovery creates a perverse incentive to build. “Someone wants to be a five-crane president rather than a one-crane president,” he said. “How do you keep institutions from growing inappropriately, trying to be the ‘best,’ without ending up with a fiscal hole too big to fill?”

The U-M may have dug itself such a hole. If Coleman’s $2 billion research spending target had been met, the university would now be collecting at least $200 million more each year in indirects–money that would have helped pay for the facilities the U-M built and bought. The medical center’s new leadership needs highly productive researchers to help cover those costs.

The first test will be the basic science chair hires. “Things can turn around very quickly,” says Shayman. “So there is a lot of reason to be optimistic.”

Sunahara too is hopeful–he calls Schlissel a “game changer”–but says it will take longer. Changing a vast research enterprise’s direction, like turning an ocean liner, is a gradual process.

“Culture you can’t just change in a year,” Sunahara says. “Culture is going to take a generation or two of scientists, of young professors to come in and think, ‘Oh I’m going to build my career and have my career at the University of Michigan.'”