5 conditions for unleashing innovation in the public sector

Summer_2013_Cover_small_1_170_223I am very interested in the increasing trend of using Social Innovation within Governments worldwide. Lately I have even been able to participate and experience how different public sectors institutions are using innovative approaches, methodologies and processes to tackle the increasing social needs. I find fascinating how more and more public sector innovators are improving government by replicating the market conditions that have long fostered breakthrough innovation in the private sector.

In this sense, I want to share with you a new article  published in the Standford Social Innovation Review by Nikhil R. Sahni,Maxwell Wessel and Clayton M. Christensen (best known for his book The Innovator’s Dilemma), focusing on how to transform government by unleashing breakthrough innovations.

In it the authors observe that:

“Throughout the United States and much of the developed world, governments are on the brink of crisis. They need answers to a paradoxical challenge—how to spur economic growth while simultaneously reducing spending. This can be done only when we find novel solutions to the real problems that we have relied on government to solve”…

“Many citizens believe that the public sector is incapable of such innovation because of the absence of competitive forces, lack of incentives for employees, and excessive red tape. And ordinary citizens are not alone in their concern. Government leaders and employees are quick to point toward systemic problems such as outmoded human resources systems, a budgeting process that rewards extraordinary performance by reducing future resources, and burdensome request for proposal (RFP) systems as explanations for their lack of change.”

Yet incremental innovation will not change much. Instead, the authors argue to unleash “breakthrough innovation —the kind that leverage new technologies and business models to drive down costs, increase accessibility, and improve services”. The paper tries to provide guidance, based upon research they’ve conducted, on how to empower public leaders to provide those breakthrough innovation.

The Five conditions to innovate

 The authors, referencing their previous work  Seeing What’s Next, suggest the importance of having the following five conditions present :

“Ability to experiment | Any organization that wishes to adapt to its changing environment needs a system for experimenting with new technologies and delivery models. Without the ability to develop experimental infrastructure, fundamentally new and different approaches rarely emerge…

Ability to sunset outdated infrastructure | If an experiment is successful, a new challenge is revealed—namely, phasing out the old product or service….

Existence of feedback loops | Once the experimental infrastructure is in place, it should be no surprise that strong feedback loops between the citizens and public servants are required to motivate investment into and adoption of the right innovations…

Existence of incentives for product or service improvement | Armed with the knowledge of what customers want, suppliers can improve their offerings. They must also, however, have the motivation to make improvements…

Existence of budget constraints for end users | In any transaction, customer behavior is affected by budget constraints. Budgets force prioritization….”

While the authors solely focus on “service delivery”, the authors do acknowledge the need for additional “best practices” given the societal impact of the services at hand. These practices include for instance:

“Invest in constituent alignment | Nothing breaks down barriers better than making sure that the people affected by an innovation are aware of and in agreement with the change…

Validate with data | The best case against the status quo is one grounded in scientific research. When the benefits of new services are speculative—even if supported by pundits and academics—it is easy for stakeholders to resist change. Innovators should know what they are testing for and experiment in such a way that makes their achievement irrefutable.”

Despite the focus on these “best practices” little attention is paid to engaging citizens throughout the innovation process using crowd-sourcing or open innovation practices. Nor does the article reflect on how to use big data or behavioral economics to change the way government “governs”.