News headlines are often based on statements made by politicians about the need for public sector innovation if we are to reduce public spending, improve public services and/or transform our welfare societies to address changing demographics. The same media also publish articles and reports highlighting that the public sector is lagging behind the private sector in terms of transforming ideas into innovations. This apparent divide in the mindset towards innovation between the public and the private sectors raises the question of whether we are pursuing the wrong path. Are we right to assume that a sector subject to the influence of politicians and thus popular opinion, can foster a culture that is truly innovative?
I do not question the abilities of the people working in the public sector; I want only to spark debate among the readers of InnovationManagement about what we might expect if the current innovation context remains unchanged, or what could or should be expected were the innovation context to change.
Innovation leadership lacks vision and clear objectives
I attended a recent conference on user-driven innovation in the public sector; a cross-border initiative of the Nordic countries. The conference agenda revolved around showcasing of success stories from Denmark, Sweden and Norway.
One takeaway from the conference was that in spite of presenting a success story, the innovation objective of the project was still unclear based on the presentations formulated to meet some political objective. How can creative, enthusiastic people – read public sector employees – sustain their enthusiasm and creativity levels if the innovation objective is primarily serving a political aim? Let me be more specific.
During the current financial crisis many countries experienced massive layoffs and spiralling unemployment rates. This made it political suicide publicly to pursue, sponsor and implement innovations (e.g. new processes) aimed at reducing public sector employment. Contrast this with the fact that the same countries are experiencing dramatic shifts in their demographics, and within the next decade at most, this will radically reduce the size of the total workforce threatening the public fiscal budget and tax revenues. This gloomy situation requires political attention today, if the transition period as people leave the job market, is to be smooth and gradual from a society perspective.
From a societal perspective only the addressing long-term challenges makes sense as an innovation objective, whereas the cyclical hiccups are likely to be resolved through market forces as the global economy picks up. The shift in demographics is a perfect platform for a visionary politician to launch a programme of reform for the public sector; however, if budget allocations are based upon popular opinion, which changes as the news media changes focus, the cyclical issues are likely to receive proportionally larger funding than the latter, which will be difficult to promote political momentum.
Innovation management within a culture of ‘no mistakes allowed’
One hallmark of most Danish public sector institutions is the commitment to a culture of no mistakes allowed, nulfejlskultur in Danish, which essentially wipes out the incentives for civil servants to experiment. During a conference held in 2008, this culture is seen as one of the four barriers to public sector innovation in a conference, the other three being knowledge management and dissemination, lack of cross-sector collaboration, and lack of competencies.
Readers of InnovationManagement will know that innovation involves experimentation and making mistakes. The trick is demonstrate rapid learning from these mistakes. If a ‘no mistakes allowed’ culture predominates, then there can be no experimentation without putting one’s career at risk. And if knowledge management and dissemination or lack thereof is a barrier to innovation within the sector, how can mistakes be turned into learning, and then value?
When ideas management begins to resemble budgeting
The writer has participated in an innovation management process in a public sector institution, aimed originally at collecting and qualifying ideas from all parts of the organisation, but which developed into a study on how to instil trust and create transparency about the organization of a new ideas management process designed to reduce the internal politics governing departments that perceived ideas management as being similar to the annual budgeting process. The root cause of this lies usually in the way that most public institutions are organised into ministries, departments and institutions, each responsible for only a small part of the puzzle, but publicly liable for the finished puzzle. The second barrier identified above, of lack of cross sector collaboration.
If the ideas management process lacks transparency and trust, it can hardly be expected that the innovation management process will be embraced and used? Most companies have mechanisms for proposing new ideas and seeing their progression to maturity; however this does not apply to most of the public sector. Studies show that people are motivated by intrinsic factors, such as seeing one’s ideas taken up and developed. If the innovation management process is fragmented and lacks transparency, then it cannot be expected that ideas will flow within the sector: they are more likely to be buried or spun off as a private sector company.
For example, was talking to the CEO of a UK-based consultancy firm which assists public healthcare administrators collect and patent ideas conceived on healthcare premises. The biggest problem for this company is the lack of incentive for healthcare personnel to present their ideas to the administration rather than developing them externally – and selling them back to the healthcare system.
Taking control of the user-driven innovation process
In Denmark, and most Nordic countries, public sector innovation is frequently based on user-driven innovation projects. The object often is the beneficiary of the public services, e.g. the elderly. If the four barriers to public sector innovation are so strong and so difficult to break down in the near term, could a reversal of the user-driven innovation project be the solution? Should we be trying to apply anthropological methodologies to understanding how the sector works, and presenting our insights as the basis for public sector innovation? Should we be trying to take charge of the co-creation process, but from a civic perspective? Tell me what you think!
By Frode Lundsten, Contributing Editor, Denmark
Frode has more than 20 years of experience in helping companies to sustain or revitalize their growth. He has worked both in national and international contexts of business development and change management, where strategy implementation and applied innovation management has been the focus. Frode also has experience from publishing and media industry, both as a publisher and a columnist. Frode holds a MBA degree from Henley Management College, UK, where his dissertation focused on the adoption of open innovation in Danish companies. Frode is also founder and partner of Strategy2Tactics.dk.