Notable aspects of this literature are a tendency to:

• stress the links between innovation potential and approaches to risk management within the public sector (issues that are also important in the private sector);
• focus on ‘success cases’ aimed at demonstrating the basic case that the public sector is in fact innovative;
• highlight the importance of entrepreneurial leadership and ‘innovating championing’ in forcing through innovations;
• under-play instances of failure — the reasons for these problems emerging and the wider implications; and
• avoid more detailed prescriptions over how best to achieve innovation within current country-specific contexts.

The overall conclusions reached on the broader context to the literature on public sector innovation are that:

1. The literature on public sector innovation has established the (important) basic points and principles pertinent to facilitating public sector innovation;

2. The literature also articulates areas of commonality and difference with private sector innovation; and

3. The literature does not currently articulate the sort of comprehensive ‘better practice’ principles and guidelines necessary to form the basis for a Better Practice Guide: in terms of the details of decision making parameters and processes, appropriate and prudent risk management procedures etc.

The following sections of this literature review seek to extract useful insights from the literature that relate to specific aspects of public sector innovation.

Defining innovation in the public sector

Currie at el. 2008 define innovativeness in a public sector context as the quest for creative, unusual or novel solutions to problems and needs, including new services, new organisational forms and process improvements. They go on to associate innovativeness with risk-taking and ‘pro-activity’. Risk-taking involves the willingness to take moderate risk in committing resources to address opportunities. Pro-activity ensures that entrepreneurship functions by anticipating and preventing problems before they occur, exhibiting perseverance, adaptability, and assuming responsibility for failure (Currie, Humphreys, Ucbasaran and McManus 2008).

Mulgan and Albury (2003) define innovation as ‘new ideas that work’:

Successful innovation is the creation and implementation of new processes, products, services and methods of delivery which result in significant improvements in outcomes efficiency, effectiveness or quality.

These innovations can be:

• incremental: relatively minor changes to existing services or processes;
• radical: new service, product or delivery method, but dynamics of the sector remains unchanged; or
• systemic or transformational: major innovations often driven by the emergence of new technologies, which transform sectors, giving rise to new workforce structures, new types of organisation, new relationships between organisations and step-change in overall performance.

Windrum (2008) suggests a possible taxonomy of public sector innovation, comprising:

1. service innovation (the introduction of a new service or an improvement to the quality of an existing service);

2. service delivery innovation (new or altered ways of supplying public services);

3. administrative and organisational innovation (changes in organisational structures and routines);

4. conceptual innovation (the development of new views and challenge existing assumptions);

5. policy innovation (changes to thinking or behavioural intentions); and

6. systemic innovation (new or improved ways of interacting with other organisations and sources of knowledge).

He stresses that whilst the first three of these categories have already been explored in relation to private sector innovation, the remaining categories are new and relate in a more distinctive manner to public sector innovation.

As Mulgan and Albury point out, cost of public services tends to rise faster than the rest of the economy. This is because of lack of competition within the public sector and also because gains in labour efficiency lag behind gains in capital efficiency. As a result, in order to avoid public service costs increasing faster than those in the rest of the economy, innovation to increase efficiency must occur. The alternative solution is to address the pressure to contain costs governments by cutting direct costs (mainly by reducing the wage bill) and restructuring the work and operations of the public sector (Mulgan and Albury 2003).

In this context, the OECD notes that there has also been greater specialisation in the provision of ‘individualised’ services to citizens; the demands for improved accountability and transparency etc. (OECD 2004).

Mulgan and Albury also stress the following impediments to public sector innovation:

• Delivery pressures and administrative burdens: In general, within the public sector the majority of service managers and professionals have little time to dedicate to thinking about doing things differently or innovations in delivery service that might be more time and cost effective. Rather, the overwhelming proportion of their time is spent responding to the day-to-day pressures of running their organisations, delivering services and reporting to senior management, agencies and inspectorates.
• Short-term budgets and planning horizons: Often the inability to think outside of day-to-day pressures on how things could be improved is exacerbated by short-term budgets and planning horizons. When faced with a requirement of for example, 2 or 3% efficiency gains a year, the need to innovate is seen as less necessary and more as an ‘optional extra’, given the time scale than being faced with a call to produce 20% efficiency gains over five years.
• Poor rewards and incentives to innovate: Whilst governments across the world have sought to strengthen incentives in the private sector for innovativeness, e.g. through trademark protection, employee share option schemes, and the corporate tax regime, including R&D tax credits; an active incentives drive for innovation has yet to be established in the public sector. Rather, the tradition of higher penalties for failed innovations than rewards for successful ones remains within the civil service. Furthermore, the basic people management systems, for example the core competencies for recruitment, development and performance assessment within public and civil services, do not sufficiently recognise or value innovativeness.
• Culture of risk aversion: Within the public sector there is an obligation to provide acceptable standards in key services, maintain continuity for the public, and account to tax payers through local authorities and Parliament. These primary concerns of accountability, standards and continuity induce a culture of risk aversion that impedes innovation. Whilst existing services may only function at an ‘acceptable’ level, as opposed to demonstrating high efficiency and performance, they nonetheless will receive less critical attention from the media, Parliament, National Audit Office and Public Accounts Committee, than a new program that has the potential to offer far greater value. In addition, high risk, high reward innovations are usually treated the same as low risk, low reward projects. The former may, however, mean extremely public failure for those involved, which itself acts as a disincentive for public service workers to engage in such innovations.
• Poor skills in active risk or change management: It is suggested that there are three necessary conditions for innovation to flourish — opportunity, motivation and skills. Within the public sector it is often the case that, whilst opportunity and motivation may be present, there is a relative paucity of skills in change and risk management. A relative dearth of requisite skills can, in turn, severely hinder and potentially terminally threaten the innovation process.
• Reluctance to close down failing programs or organisations: Although private sector companies typically need to innovate in order to survive, it is extremely unlikely that public sector organisations will cease to exist as a consequence of not being innovative. Paradoxically, within public services higher standards are set for new programs than for old ones, and historically established failing functions are rarely closed down. In contrast, innovations that have shown problems at the testing stage will be abandoned, although perseverance with the new service or process may still result in high value benefits.
• Technologies available but constraining cultural or organisational arrangements: Innovation emerges in the context of technological and organisational factors, with systematic innovation requiring that organisations align their culture, systems, management methods and processes. Within the public sector innovation is often impeded or thwarted because there is a resistance or failure to embed innovation within the organisational fabric.
• Complementary insights are provided by Stanford Borins, who sought to stimulate a culture of public sector innovation by highlighting successes captured in survey work, see (Borins 2001). His survey of 300 government reformers worldwide generated the following generic lessons as regards impediments:
• Barriers that arise from within the bureaucracy/organisation: These were identified as hostile or sceptical attitudes; turf fights; difficulty in co-coordinating organisations; logistical problems; difficulty in maintaining the enthusiasm of program staff; difficulty in introducing new technology; union opposition; middle management resistance; and public sector opposition to entrepreneurial action.
• As Koch and Hauknes (2005) elaborate, a number of barriers within the public service may be related to the size and complexity of a large-scale organisational entity composed of ‘multiple-tiered interlinked systems; high staff numbers; a large range of professional, semi-professional and ancillary occupations; and a diversity of organisational arrangements and service processes’. Such factors can lead to a ‘lack of clear agreement with respect to perceived problems, approaches and solutions, and communication (particularly knowledge management) difficulties’. Hence, such large-scale organisations ‘may be prone to the development of internal barriers’ or even ‘silo mentalities’ ‘wherein parallel systems maintain their own organisational norms, beliefs and practices with little communication with each other’.
• Public sector organisations may also have ‘entrenched practices and procedures’ which have worked well in the past and lead to an attitude that ‘if it isn’t broke, don’t fix it’ or ‘an unwillingness to accept novel ideas from outside the immediate organisational peer group’.
• And with a possible lack of dialogue between different parts of the public system, horizontally or vertically, innovation and its dissemination may be hindered. For instance, different medical professions ‘may be unwilling to accept the ideas of others, even if both share similar professional status (for example, surgeons and anaesthetists), whilst the problem may be exacerbated between members of (perceived) hierarchically separated professional levels (for example, gynaecologists and midwives, or doctors and ambulance staff)’ (Koch and Hauknes 2005).
• Obstacles that arise primarily in the political environment: These include inadequate funding/resources; legislative or regulatory constraints; and political opposition.
• Barriers that exist in the external environment: These were cited by survey respondents to comprise: public doubts about the effectiveness of programs; difficulty in reaching the program’s target group; opposition by those affected in the private sector, including entities that would experience increased competition; and general public opposition or scepticism.
• As Koch and Hauknes note, public resistance to innovation may become evident if there is ‘no discernible change to the service or “product” from the public user’s perspective’, with opposition magnified by various factors such as age, ethnic background, personal wealth, and access to information and communications technologies (Koch and Hauknes 2005).

Contemporary developments in public sector settings

It is clear from public sector literature that there is currently a significant increase in government activity associated with fostering public sector innovation.

The UK’s 2008 innovation White Paper Innovation Nation has a major emphasis on public sector innovation (Chapter 8) — which is now framed as a key imperative for the UK. The White Paper states that:

The Government is uniquely placed to drive innovation in public services, through allocating resources and structuring incentives. Major forces such as attitudes to risk, budgeting, audit, performance measurement and recruitment must be aligned to support innovation. Together, and with effective leadership, these will progressively overcome existing cultural and incentive barriers. Those responsible for public service delivery must also learn the lessons of open innovation and adopt innovative solutions from the private and third sectors.

The NAO will conduct an audit-orientated study on innovation in the public sector. NESTA will establish a Public Services Innovation Laboratory to develop and trial the most radical and compelling innovations in public services. DIUS will establish a Whitehall Innovation Hub to disseminate learning from this and other sources to improve understanding of innovation at the highest levels of Government. DIUS will also convene a network of senior Whitehall innovators (DIUS 2008).

The general view is that the UK public service is quite innovative — certainly more than popular perception. This is due in part to the increasing involvement of private and third sector involvement. Front line delivery bodies are seen as a ‘rich source of innovations in public services’. However the current UK stance recognises that more needs to be done: the major forces that govern the public services (such as policy, budget requirements, guidance and legislation, and performance reporting) are not designed to create the incentives, signals and spaces for innovation and often create barriers and a heightened aversion to risk.

As a result, the current UK public sector innovation agenda is seeking to achieve a step-change in innovation performance, requiring simultaneous action on five levels:

1. creating the conditions for innovation by aligning the major forces of the public sector to be pro-innovation;

2. promoting the importance of innovation and of the tools that help it flourish within the highest levels of the public sector;

3. supporting and disseminating successful innovations that are already underway but go unnoticed;

4. drawing on all sources of innovation by engaging users and front line workers and looking at innovation systems from outside of the service; and

5. realising the potential of innovation as an enabling force in driving related policy initiatives and change programs.

It is worth noting that, in line with the 2008 innovation White Paper, the UK NAO has published a new report on Innovation across Central Government. In addition, the National Endowment for Science, Technology and the Arts (NESTA) is also now active in the public sector innovation area (following a specific recommendation in the 2008 innovation White Paper). NESTA is developing an Innovation Index — a process that requires a comprehensive literature review. Findings currently made available stress that the literature is in its infancy and therefore the quality relatively low (NESTA 2008).

Defining the pre-conditions for public sector innovation

According to Geoff Mulgan (2007: 18), ‘Human beings are rational and without licence from the top, few people in hierarchical organisations will be willing to take risks. Political and official leaders can establish a culture in which innovation is seen as natural. In some cases the cultures then become embedded at least for a time’.

Though ‘the successful fruition of an innovative idea requires that many people come together throughout the innovation journey’, it has also been noted that ‘innovation champions’ can be critical at the stage at which an idea is turned into a viable prototype for testing. Innovation champions are those individuals who are willing to invest resources and organisational capacity for designing, implementing and evaluating an innovation (IDeA Literature Review 2009).

Leadership does not always need to be attributed to the role played by one individual, as a minority coalition can advocate and influence public sector change. For example, though it was Steve Kelman who led the initiative to reform the US Federal government’s procurement system, around 18% of the employees were already active advocates of the reform even before its launch. In time, this minority influenced a second group to support the initiative with their ranks increasing to around 40% soon after the initiative was launched (Eggers and Singh 2009: 26).

Others, however, highlight the need for a ‘collective or distributive model of leadership’. The individual model does not appear to account for significant variety and complexity in organisational contexts. An exclusive focus on individualised leadership also misses the opportunity to use the potential of staff both individually and collectively. Identifying and enabling emergent collective leadership approaches allows for the development of leadership appropriate to the context, and which can develop beyond the restrictions of universally prescribed models. Emergent approaches also allow staff and teams working together to develop their own sense of meaning rather than allow it to be imposed or assumed by others more powerful in the organisational hierarchy (Lawler 2007).

Enabling collective relationships to develop, with clearly identified outcomes, such as improved professional skills and service delivery, can counteract the potential alienation between staff and their employing organisations, which can result from the increasingly contract-driven nature of organisational relationships (Lawler 2007).

Mulgan notes that there are four horizons of effective leadership. The first concerns leaving a legacy for future generations such as policies towards CO<₂ levels and pensions. The second horizon refers to a long plan (3–20+ years) where radical innovation is necessary and likely. The third horizon concerns medium terms policies (1–3 years) which encourages incremental innovation, efficiency and performance. The fourth horizon is short term policies (days, weeks, months) for issues such as fire fighting (Mulgan 2007: 14).

And as Koch and Hauknes (2005) suggest, public service leaders share some of the ‘same personal qualities as are attributed to entrepreneurs’. They try to promote a view about how society should work to help ‘people achieve their aspirations and secure their quality of life’, and they must offer expertise to help counter the reality that politicians are unlikely to understand new technological potentials in a particular area or possess ‘deep insight into all policy areas’. With civil servants having professional education and qualification in their specialised field, they may often need to lead to counter the reality that politicians often do not have the same background nor opportunities to explore policy areas in depth. As a result, public servants may argue that a proposed policy will not work, or try to influence the decision making process with ‘their knowledge of how the policy should be best be framed’.

The degree of entrepreneurship within public leadership differs between nations and at different times in regard to the context of the day. As noted by Bernier and Hafsi (2007:492):

When the environment is resource tight, turbulent, or both, the risk for individual entrepreneurs is often perceived to be excessive, and the type of entrepreneurship that emerges if of a different nature.

Or as Heilmann (2008:5) puts it:

Experimentation can innovate policy only as long as the dynamism of growth expectations is intact and newly emerging interest groups feel comfortable in a fluid policy environment. As soon as expectations and interests begin to shift in defence of the status quo or in favour of redistribution, experimentation becomes subject to increasing limitations from both the demand and the supply side: interest groups and citizens come to ask for universal and irreversible regulation; domestic and transnational economic actors come to demand equal legal protection; and policymakers come to see experiments as a political risk that can be avoided by legislative incrementalism. A hardening of political and legal constraints on policy experiments is the result. In most political economies, this mechanism works against extensive experimentation, despite the many obvious advantages it would entail for institutional adaptation.

How much resources are needed to aid innovation within the public sector is a matter for debate. Normally around 3–4% of public spending is thought to be around the right amount in R&D, compared to 20–30% typical for a biotechnology company (Mulgan 2007; NAO 2009).

Another pre-condition for public sector innovation is the acceptance that there is a role for what Jason Potts calls ‘good waste’ in the sense of the inevitable consequences of experimentation. An over-zealous emphasis on demonstrated efficiency at all costs will lead to an avoidance of risk-taking experimentation that will in turn limit the scope for innovation. This will constrain the potential for long-term improvements in policy and service delivery (Potts 2009).

Risk-taking and innovation: Lessons from the private sector

An appetite for risk is critical to achieving innovation. Achieving the sort of major breakthrough innovations that create major new firms and even industries can involve taking abnormally high investment risks in order to generate the (usually remote) possibility of making abnormally high returns. When this process is particularly successful the result is, in statistical terms, an ‘outlier’ — a rare event that deviates from the norm (Hartmann and Myers 2001).

One of the problems faced in public policies toward innovation is a tendency to ‘scale-up’ from these rare statistical outliers and assume that the overall level of very successful innovative activity can be increased by generating a much larger number of outcomes that are in statistical terms unpredictable ‘lightening strikes’ (see Matthews 2007).

Businesses tend to avoid basing their innovation strategies on seeking to achieve rare ‘outlier’ outcomes in preference to a more balanced approach based upon seeking incremental improvements. They recognise that innovation takes place across the spectrum of the risk-reward relationship, effective innovation strategies involve a mix of lower risk–lower reward and higher risk–higher reward investments.

Consequently, the appetite for innovation focused risk-taking in the private sector stems from the way in which the risk-reward relationship is managed in the same manner as any investment portfolio.

The main lesson for public sector innovation is that developing the necessary appetite for risk-taking may require that a public sector version of the risk-reward relationship is developed. Risks, of different types and different degrees, are worth taking because they can be set against the rewards that it may be possible to achieve. However, as Matthews has stressed, the distinctive role of the public sector in handling the uncertainties and risks that markets cannot cope with means that the risk-reward relationship is both more complex (involving the avoidance of punishments as well as reaping rewards) and more severe in downside terms. Whereas a failed attempt to innovate in the private sector may only put that business at risk, the failure of the public sector to innovate in response to a crisis of other major challenge may put a whole industry or economy at risk (as the global financial crisis has illustrated), see Matthews (2009).

This means that the public sector requires more sophisticated and complex risk-management methods than the private sector in order to address areas of innovation for which the consequences of failure are severe (such as in the national security domain). When the consequences of failure are closer to those in the private sector (e.g. they tend to be internal to the project itself) then the utility of private sector approaches to risk management is far greater.

To summarise on the risk dimension:

• an appetite for risk-taking related to innovation in the public sector will be assisted by stressing the importance of the risk-reward relationship (why risks are worth taking in a public sector context);
• it is useful to recognise that innovation in the public sector will tend to require a broad spectrum of activity across this risk-reward relationship, from low risk–low reward objectives through to higher risk–higher reward objectives; and
• public sector innovation will be facilitated by developing a version of the risk-reward relationship that is sensitive to the distinctive aspects of what the public sector does (especially as regards the fact that governments handle the uncertainties and risks that the private sector cannot handle).

Selecting a model of the public sector innovation process

The UK Strategy Unit’s work on public sector innovation advocated the following model of the innovation process.

Source: Mulgan and Albury 2003.

This model is broadly similar to the generic Shewart-Deming learning cycle used in private sector management (and that has its roots in statistical process control approaches developed in the US in the 1930s). This sort of approach had a major impact on improving quality in manufacturing processes in the post-World War II era (particularly in Japan) by establishing a continual iterative learning process aimed at improving predictability in operations and in product performance when in-service.[2]

As popularised by Edwards Deming, this learning cycle involves the following stages in an experimental cycle. Note: in subsequent industrial applications the ‘act’ stage is sometimes treated rather differently as an ‘adjust’ stage.

Stage in the cycle	Description of activities (in a process control context)
Plan	Establish the objectives and processes necessary to deliver results in accordance with expected outputs
Do	Implement the new processes
Check	Measure the new processes and compare the results against the expected results in order to ascertain differences
Act	Analyse the differences in order to determine their cause

The Deming model is more generically applicable to currently established public sector approaches, not least because this approach has influenced public sector management thinking. It is therefore preferable to consider ways of integrating the Mulgan-Albury characterisation of the public sector innovation cycle with the Deming cycle. This will be a task for the BPG itself because no such model can be readily identified in the existing literature.

It is, however, important to note that framing a generic model in terms of ‘plan’, ‘do’, ‘check’ and ‘adjust’ in an innovation context aligns more closely with existing public sector appraisal and evaluation procedures (where reviews and evaluations perform the ‘check’ and ‘adjust’ functions by making recommendations aimed at improving performance in the future).

For a more comprehensive conceptual explanation of public sector innovation, we suggest the following four themes that build upon a chart put forward by the UK’s National Audit Office (2009:5).

Implementing successful innovations depends upon clear drivers, strong incentives, good ideas, an absence of barriers to their implementation, and means for learning and replicating success

 

Source: National Audit Office.

Step One: Promoting public innovation within the public sector

As argued by South Africa’s Centre for Policy Innovation (CPSI 2008), strategic public service leadership is crucial to capacity building to foster innovation in the Public Sector. Strategic leadership must encourage responsible risk-taking and be open to ideas from members of the team. If an innovation is based on a leader solely and is not institutionalised, the innovation may die when leadership changes. Therefore, an effective public sector leader will promote ‘an organisational environment that values a sense of ownership among all employees as this empowers them to take proactive measures’.

Though referring to its own South African experience, it is recommended that strategic public sector leadership ‘should also ensure diversity of staff in terms of background because innovation depends on the ability to see things differently’ (CPSI 2008).

Eggers and Singh also argue that a dynamic public sector workplace must also put in place measures that acknowledge and implement the ideas of employees, or else employees may ‘get the signal that their ideas are not being heard’ (Eggers and Singh 2009: 38). The authors note that cultivating innovation is an evolutionary process which takes time, involves trial and error, experimentation without undue risk, and the need to adapt to change (Eggers and Singh 2009: 45).

Covey also argues that APS leaders must ensure that adequate time and resources are set aside in order to deal with important (but not urgent) issues given that innovative approaches can have multi-dimensional benefits (Covey 2004).

Another paper by Behm, Bennington and Cummane notes that traditional evaluation of the quality of policy services, which has tended to rely on definitions and process practices determined by the service provider rather than customer definitions of value, needs to give way to a model of policy service provision that provides guidance for the development and evaluation of policy services in order to lead to greater customer satisfaction. This finding was based on a study of ministers, ex-ministers, department secretaries and key advisers, who were asked what the ideal characteristics of policy services were and what would create value (Behm, Bennington and Cummane 2000).

As stipulated by the NAO (2009:8), departments:

… need to develop plans which set out their own priorities and the means by which innovation will be facilitated, including how they will use management information, horizon scanning and customer feedback to identify specific areas for innovation. The priorities for innovation vary between sectors which will therefore need specific approaches. Departments need to decide where their priorities lie, for instance increasing productivity, devising innovative solutions to new problems, or improving customer experience, and where they need to strengthen the support for innovation. Leaders should clearly communicate their plans to staff and suppliers throughout the delivery chains.

The NAO (2009) urges central government leaders to move beyond supporting individual cases of innovation to allow and promote innovation. Even if government organisations ‘have a portfolio of innovations at any one time’, not all of which are expected to succeed, leaders must promote a view that makes it clear that it is acceptable for a project to fail, as long as lessons are learned from any failure which must be brought to a quick halt. Therefore, departments should find ways to encourage frontline staff to play an active role in innovation, including reward schemes and better budgeting outcomes to provide time, resources and expert support for the development of ideas (NAO 2009).

As Koch and Hauknes (2005:45) highlight:

public health system are often characterised by their high levels of professional expertise, exhibiting a high level for creativity and problem solving, thus providing an environment in which innovation should both be generated and accepted. This is frequently demonstrated by the presence of entrepreneurs or ‘innovation champions’ who drive forward the process of innovation and its implementation and diffusion. Moreover, medical and health professionals are generally driven by a strong desire to improve the well-being and quality of life of the patients in their care, which may further prompt the search for new solutions and approaches.

As Koch and Hauknes (2005:45) suggest, along with the need for adequate resources, there is a need for:

actual structures and systems designed to promote, stimulate or disseminate innovation (e.g. staff suggestion boxes, staff fora, stakeholder feedback mechanisms, networking activities, competence building, encouragement of alternative thinking, etc.). These may operate either from the top-down or from the bottom-up. Both mechanisms may also monitor external sources, such as practice in other public service systems either domestically or abroad for transferable examples of innovations.

Though frontline public servants are in a good position to understand how service delivery might be improved, the 2007 UK Innovation Survey found that only half of respondents from central government organisations agreed that ‘my organisation provides incentives for individuals to generate ideas for innovative products, services and processes’. Discussion with frontline staff, particularly amongst teachers and civil servants, indicated that many ‘could not justify spending time developing new ideas at the expense of their day to day duties’ (NAO 2009).

The CPSI (2008) has suggested a number of strategies to test public service leadership (see box).

 

 

The CPSI (2008) also has a tool for assessing innovation leanings at a departmental level. The questionnaire in the following box can assist managers to measure the level and extent of the innovation in an organisation.

 

The NAO also recently carried out a survey of 27 central government organisations inquiring about a list of 24 factors which help or hinder innovation within their organisation (NAO 2009: 46).

Finally, the CPSI (2008) urges departments to share information and innovation experiences as a powerful tool to inspire other public entities in their service delivery endeavours.

Step Two: Working with various actors within civil society to help develop the best policy ideas

There is now a general consensus that better policy outcomes are more likely to evolve from a policy framework that seeks to incorporate the many ideas put forward from interaction by a variety of actors within a civil society. As Eggers and Singh (2009: 21) remind us, ideas can die fast, but especially ‘when only a single person or committee at the top of an agency decides which ideas move forward’.

By encouraging input from a variety of actors, this supports De Bono’s (2000) emphasis on a six thinking hats process which looks at the effects of a decision from a number of different perspectives to allow factors such as necessary emotion and skepticism to be brought into what would otherwise be purely rational decision, and to enhance opportunity for creativity and provide opportunities to sport issues that one might not otherwise notice (De Bono 2000).

As suggested by the following chart in Koch and Hauknes (2005:36) which highlights the complexity of civil society with its many interactions:

In order to learn and innovate, the actors must interact with other actors, this being people, organisations or various sources of information. Their ability to innovate is dependent on their ability to find such relevant competences, understand them and make use of them…The better the actors are at developing networks that can help them get access to relevant competences and partners that can help them in their learning processes, the greater are the chances that their innovation processes will succeed.

The public innovation systems as seen from the perspective of the policy maker

Source: Koch and Hauknes 2005: 33

 

As the next chart in Koch and Hauknes (2005) indicates, any bid for effective public sector innovation is further complicated by a variety of information and expertise coming from a number of sources.

Simplified model of innovation process sources of knowledge and competences.
The learning and innovation process relies on an efficient flow of knowledge

Source: Koch and Huaknes 2005:38.

Therefore, as elaborated upon by the NAO (2009), there is a need for central government organisations to do more to develop ideas from interaction with suppliers and service users. Departments need to explore what solutions suppliers may have to offer to policy problems, and commission for outcomes rather than procure predetermined products.

In the case of citizens, the NAO (2009) notes the need to explicitly involve them in service design, learn from customers’ experience of services, and apply a government standard for customer service excellence to measure progress against it. In March 2008 the UK Cabinet Office launched Customer Service Excellence, a government standard which includes ‘a self-assessment tool to allow organisations to measure how customer focused they are and identify areas for improvement’.

There is also a need to ensure that new ideas are not alien to an existing culture, although there may well be a need to change. For instance, Africa proves that merely copying ideas from the developed world often fails if not adapted to the local context. Any government must align innovation ‘with the goals and capabilities of the local jurisdiction and also overcome legal, institutional, and ideological hurdles’ (Eggers and Singh (2009: 58). For instance, a Chicago South Shore Bank program ran into resistance in communities that preferred local credit unions (Eggers and Singh 2009: 51).

Nevertheless, the CPSI (2008) stresses the need to promote awareness and involvement amongst citizens to promote the process of innovation. It argues that ‘citizens or beneficiaries of change must have a feeling of ownership and roles to play because they are the main recipients of reforms’. But to ensure such an important link between the public sector and community participation, the CPSI stresses the need for citizen centric services which are compatible in line with previously identified values, simple so services are easy to understand for potential beneficiaries, and highly visible to enhance public awareness.

The NAO (2009) urges greater openness to identify opportunities from outside the public service, including new technology, ideas tried elsewhere or opportunities for partnership. For instance, the Department for Work and Pensions has adopted the concept of lean processing which was initially developed by the automotive industry as a means of eliminating waste from the production cycle. With the department visiting several organisations who use lean processing, including HM Revenue & Customs, Rolls Royce and Unipart, it was able to both learn new efficient processes which delivered 15–30% efficiency savings and helped secure £37 million of departmental funding. This was despite initial concern by some within the department that associated efficiency gains with job cuts (NAO 2009: 29).

Another example of efficiency gains from an association with the private sector is demonstrated by the Prison Service’s procurement of prison mattresses. With the Prison Service spending around £2 million per annum on buying about 60,000 mattresses each year and disposing 40–50,000 annually with the majority of which go to landfill, it encouraged private sector solutions. After the Prison Service published a call for competition from private sector proposals to deal with the issue incorporating requirements such as comfort and fire retardancy, and the procurement process itself taking 18 months as opposed to the Prison Service’s standard 8–12 months, two solutions have been developed by different suppliers with trials indicating that either solution ‘is expected to reduce the requirement for landfill from the equivalent of over 30 double-decker buses to virtually nil’ (NAO 2009: 27).

The advent and promotion of new technology has also been utilised by government departments. For instance, the UK’s border control system promoted the use of IRIS which results in registered passengers being processed more efficiently at UK airport borders by photographing individuals’ irises and comparing them with the record held on a database, thus meaning less interaction with Border Force Officers. After initial pilot studies at busy periods at two terminals at Heathrow, the IRIS project has now been installed at 10 sites (five terminals at Heathrow, two at Gatwick, Birmingham and two at Manchester) (NAO 2009: 28).

The CPSI (2008) has also suggested the need to recognise problems associated with intellectual property rights. Though noting the need for future legislation that would govern protection of copyright and intellectual property, the CPSI argues that ‘innovations developed in the course of public sector processes must be made available for use by third parties under conditions which will promote their effective development and application (including, where appropriate, securing formal intellectual property protection).

There are many different ways that demonstrate how public sector innovation can be enhanced by greater interaction with a variety of players to encourage and incorporate ideas and information.

In regard to learning from interaction with the private sector, diverse groups of US government and private sector experts have gathered during the summer of the past three years for four weeks in classified locations to tackle difficult intelligence challenges. The annual Summer Hard Problem (SHARP) program, sponsored by the federal US Office of the Deputy Director of National Intelligence for Analysis, in 2009 focused on two issues: potential intelligence uses for computer-based virtual worlds such as Second Life, and how to slow the global growth of extremism. The program, which fosters interaction between government officials and outside experts including authorities on anthropology, social psychology, insurgency, and Islamic thought, identifies novel approaches which enhance national security. This approach mirrors the approach taken by a long-running and highly successful project by the National Security Agency which enlists top mathematicians to work on sophisticated encryption issues (Eggers and Singh 2009: 44).

There are also lessons to be learned from local expertise. For instance, the US Department of the Interior adopted a new approach to land management known as ‘cooperative conservation’ by seeking solutions by combining local understanding with scientific knowledge. One outcome was that the endangered short-tailed albatrosses were less likely to be caught on the fishermen’s hooks in the waters off Alaska after innovation encouraged and devised weighted fishing lines which sunk the hooks well below the water surface so they could not snag the birds (Eggers and Singh 2009: 35–36).

The benefit of greater employee input has also been promoted, an idea long established in the private sector. For example, Southwest Airlines employees spent 10 hours a week for six months evaluating changes in the company’s aircraft operations. After meetings which included members of the airline’s in-flight, ground, maintenance, and dispatch operations, 109 ideas were generated in regard to high-impact changes with one director from the schedule-planning division successfully challenging assumptions held by the maintenance and dispatch personnel for 30 years (Eggers and Singh 2009: 29).

In the public sector, there are many examples of greater employee involvement in terms of innovative ideas which improve a department’s performance. For instance, the US Transportation Security Administration launch of an Idea Factory in April 2007 provided a secure intranet site that allows employees to submit ideas to improve the operation of the agency. By February 2009, employees had submitted 7,837 ideas and 69,712 comments with 39 ideas implemented (Eggers and Singh (2009: 9). Further, the In-House R&D Network at the Bureau of Motor Equipment of the New York City Department of Sanitation permits worksite committees of mechanics to adopt proposals and implement changes, as long as there is agreement of the facility manager. The Bureau helps work out the business case for each project, encourages coordination with other government agencies if required, and seeks approval for bigger projects through New York’s budget process. Innovations generated include a patented device which shuts down the engine to protect it from burnout when the oil in a truck drops too low (Eggers and Singh (2009: 35).

The public sector can also benefit from the knowledge and input of employees via the use of new technology. For instance, the Central Intelligence Agency (CIA) has used a wiki (like Wikipedia where information is added by anyone with or without security settings) to develop its Intellipedia to allow employees across a number of security agencies to engage in open discussions on topics of concern to them. In addition to wikis, organisations may use peer-to-peer networking sites (which allow users to share files and data through high-speed connections). Currently the US military is experimenting with such peer-to-peer networking to allow ground troops ‘to interact and collaborate instantaneously, without being bogged down by organisational and technical protocols and hierarchies’. The use of peer-to-peer communication among ground soldiers may help overcome the problems evident in Kosovo and Afghanistan when disparate computer systems blocked communication between the Army, Navy, and Air Force (Eggers and Singh 2009: 37).

Important information to help the public sector may also be generated from a mere examination of online sources. For example, a paper by two Wharton professors used the number of documents discussing corruption and other social issues on an Internet search to rank cities and states for their levels of corruption and other social phenomena. This method may help intelligence and law enforcement agencies (Eggers and Singh 2009: 89). Such information may help decide the allocation of resources and attention needed to address issues in different locations.

There is also an ongoing need for leaders to learn from greater interaction with upfront services, as again demonstrated by the example set by the private sector. For example, in Tesco, the UK’s largest supermarket chain, each year the top 2,000 executives spend a week on the shop floor at the checkout counter or in a warehouse stacking shelves in order to get feedback from colleagues and customers, then collate all the information, and send it to the relevant division heads (Eggers and Singh 2009: 35).

Step Three: Creating a public sector structure that can evaluate and promote innovation

As Eggers and Singh suggest, ideas need time to develop as premature rejection of them will hamper the idea generation process and each has to be nurtured to explore its full potential ‘before it is subjected to rigorous risk assessment and other forms of evaluation’ (Eggers and Singh 2009: 20–21).

But in the end, some criteria need to be established to determine which ideas are given assistance.

The first need, given the task of balancing risk-taking with some financial scrutiny, is to ensure that any appointment to an innovative public sector board is more daring than traditional public officials such as auditors who are primarily concerned with not wasting public funds.

Once a board is elected to particular organisations, the question becomes just which ideas are worth pursuing and what is the best way for the public sector to select the ideas ‘that are big, bold, and transformative, while also being feasible and workable?’ (Eggers and Singh 2009: 21).

There are many national examples to how public sector innovation projects are judged or assisted. Singapore has the Enterprise Challenge (TEC), an initiative driven from the Prime Minister’s Office to fund untried and untested ideas or an existing idea to be implemented in a different field or in a different manner which can create new value or substantial improve the public and society.

Introduced in 2000, the TEC has a number of steps before an innovative proposal is supported. First, any potential innovator has to complete an online application at TEC’s websites. Once submitted, the TEC secretariat works closely with the innovators ‘to nurture their proposals, bringing out their uniqueness and value propositions to the public service’. Only then are the more promising proposals sent to the TEC panel for evaluation. The TEC panel comprises CEOs, academics and leaders from both public and private sectors. One panel member noted that the decision-making process is rigorous with gem ideas judged by the value of the innovation in terms of public benefit, ‘the scale of the project, the budget required and the proposed framework to make the innovation a reality’ (The Straits Times 2005).

Successful examples that received full or partial government assistance have been:

A) The development of the Singapore Civil Defence Force’s proposal for the ‘Water-mist gun’, now used by fire-fighters, which releases ‘a fine, high-pressured spray of mist that effectively puts out fires, uses far less water, causes much less damage to property’ and thus cuts manpower costs and deployment time as it needs to be operated by just two men (The Straits Times 2005).

B) Assistance given to two young, engineering graduate students at Nanyang Technological University who needed a million dollars to fund a project to turn toxic industrial waste materials into safe and re-usable bricks, pavers and aggregates.

C) In 2007, a project was given assistance to help conduct research trials and develop a DNA kit for the market from the work of forensic scientist Simon Lim (who helped identify tsunami victims in Thailand) and research partner Tan Wai Fun that would help identify badly decomposed bodies previously difficult to make conclusive judgments using the available DNA technology.

D) A nine-member team from Tan Tock Seng Hospital, the National Neuroscience Institute and the Institute for Infocomm Research, was assisted to help develop what was believed to be the first project to integrate a brain-computer interface and robotics into a stroke rehabilitation system that would hopefully allow for improved reorganisation of neural circuitry to enhance brain repair and functional recovery. The project, which aims to shorten the recovery period of stroke victims through sensors detecting the brain signals and ordering a robotic shell around the arm to move it to complete the arm action, was given assistance through a trial for 12 months tested on around 60 patients.

Since 2000, the TEC has invested around $32 million into 86 projects (The Straits Times 2007).

In the US, a number of approaches to aid public sector innovation have been demonstrated. In New York City, when Mayor Michael Bloomberg wanted to transform the city’s underperforming public school system, he used partnerships with the private sector to launch innovative pilot programs and sidestep organisational obstacles. By using funds from private organisations to test ideas before spending public money on a citywide rollout, the Empowerment Schools program was established with schools signing performance agreements committing them to high levels of student achievement in return for schools receiving greater local autonomy over their operations. The Fund for Public Schools, a nonprofit fund that attracts private financing for diverse school reforms, represents a strategy where a government collaborates with individuals and businesses interested in improving education. In New York City, the city government even encouraged Joel Greenblatt, a successful hedge fund manager, to create a charter school called the Harlem Success Academy with a model that demands strict accountability and measurable results, although cost cutting was also achieved by classes being taught by non-union teachers (Eggers and Singh 2009: 66–68).

New York’s Center for Technology in Government (CTG) also allows state and local agencies to experiment with computer-based processes before making big investments. For example, the state’s Office of Children and Family Services recently conducted a pilot study in two counties to evaluate whether portable information technology (IT) platforms, such as wireless laptops, could improve child protective service investigations while reducing costs. After a detailed assessment based on surveys, interviews, and analysis of data from the central case management database, the pilot study showed that mobile devices indeed improved performance. However, analysis also revealed a need to account for individual work preferences and organisational support which then led to a second phase of larger-scale trials before full deployment.

Such pilot studies, established within a concept known as ‘safe havens’, gives employees time to develop emerging ideas while protecting them from short-term budget constraints and premature criticism.

Safe haven pilot studies also provide an approach which can work as motivators for ‘renegade’ thinkers — those independent visionaries looking to achieve positive results. They provide an opportunity for talented individuals to work in small teams with little bureaucracy and paperwork to promote innovative ideas. Known as ‘skunk teams’, a term that originated in 1943 at the Lockheed Aircraft Corporation where a small group delivered the prototype XP-80 fighter plane in 143 days (seven days ahead of schedule), there has been recent government examples. For instance, the Technology Strategy Board within the UK Department for Business Enterprise and Regulatory Reform established a small group of people from diverse backgrounds (business, government, and academia) in order to translate knowledge into innovation, set priorities for research and funding, and devise the government’s strategy to help the UK become a global leader in innovation and technology. Already, it has set up the Low Impact Buildings Innovation Platform that brings together key players from industry, academia, and government to reduce carbon emissions from buildings which are responsible for 45% of total UK carbon emissions (Eggers and Singh 2009: 42–43).

With public scrutiny and media cynicism making it dangerous for public employees to launch a new initiative, except a kind that is virtually guaranteed to succeed, rewards should also be adopted to encourage public sector innovation. This may take the form of governments providing financial rewards (bonuses and performance pay) or the offering of awards and recognition to innovators (Eggers and Singh 2009: 38).

In the UK, a Show Us a Better Way website and competition was launched in July 2008 to encourage individuals to submit innovative ideas as to how government could make its data available to citizens in a more useful way to ‘improve health, education, justice or society at large’. After more than 450 entries were received, the winning entries were announced in November 2008 to share a prize fund of £80,000. The overall winner, ‘Can I Recycle It?’, promoted a concept that allowed people to enter their postcode into a website in order to find out which materials could and could not be recycled in their local area. Other ideas to receive assistance included a website which would link information on cycle lanes to a route planner with information on local road works and weather conditions, a plan to plot the catchment areas of local schools on a map, and another which would show the location of the nearest postbox (NAO 2009: 24).

In the US, the Ash Institute for Democratic Governance and Innovation awards, made in conjunction with the Harvard Kennedy School, also recognise and promote excellence and creativity in the public sector by awarding innovative proposals each year (Ash Institute 2008).

Step Four: Evaluating the success of public sector innovation to ensure its sustainability and success

As the NAO (2009) indicates, successful public innovation requires considerable resources. This is evident by the UK’s Department of Health looking to invest £120 million over the next two years specifically to enhance innovation activity.

So evaluating the viability of innovative public sector innovation proposals is absolutely crucial to uphold any call for public resources at any time, particularly in these difficult economic times.

Hence, the NAO (2009) highlights how ‘piloting and testing can identify the risks, allow lessons to be learnt and permit unsuccessful innovation to be stopped early’.

There is also a need for a government to measure the impact of public sector innovation. This is despite even the UK’s Department for Innovation, Universities and Skills currently having no means yet for measuring the impact of its policies or other central government initiatives on innovation. NAO (2009) proposes a national audit model by suggesting that:

To measure progress in the shorter term, and as a stepping stone to a comprehensive measure, DIUS should develop these sources into a tool to track departmental innovation, including progress against all the recommendations below, with results to be reported in the Annual Innovation Report. Projects supported by departmental innovation budgets should have measures in place to determine that their benefits have been realised.

 

Previous: Framing the Major Issues

Next: Examples of Public Service Innovation