bill eggers - innovation in government

Innovation State: Why Innovative Government Doesn’t Have To Be A Contradiction

Bill Eggers, Director, Deloitte Services LP

Copyright © 2008 Deloitte Development LLC. All rights reserved.

• The problem: Getting through to the right person when you had a problem

• The innovation: 311

• How it works: Operates 24/7, including weekends, in multiple languages. Calls answered in a matter of seconds. Citizens call in with diverse requests: pot hole repairs, bulk-trash pickup, or graffiti clean up. All requests tracked, increasing accountability and transparency

• Results: The inventory at Chicago’s impoundment lot was cut by half as citizens found an easy way to locate their towed cars

• Innovation replicated in dozens of cities around the world

311: A one-stop center for non-emergency services


Few public sector organizations produce a steady stream of innovations

Public agencies approach

innovation in terms of one-

off change

Public agencies approach

innovation in terms of one-

off change

Public agencies approach innovation in terms of one-off change, using the “big bang” approach instead of a series of new approaches that make up a broader process.

Public agencies approach innovation in terms of one-off change, using the “big bang” approach instead of a series of new approaches that make up a broader process.

Only a handful of organizations appear on the winners list more than once

Only a handful of organizations appear on the winners list more than once

UK National Audit Office canvassed 126 organizations for innovations

Harvard Innovations in American Government Awards

“Innovation experts have told us that no public service has yet succeeded in establishing a genuine culture of innovation across the organization.”

-Jessica McDonald, Deputy Minister to the Premier and Cabinet Secretary,

Province of British Columbia..


Why sustained innovation matters

Perception: The private sector gives us digital video recorders and iPods; the public sector creates tax forms and motor vehicle registration queues.

Call for innovation

Call for innovation

The current economic crisis

Manage risks: buck stops with public sector

Global issues: climate change, terrorism, rising fuel prices etc.

Rising expectations

The current economic crisis

Manage risks: buck stops with public sector

Global issues: climate change, terrorism, rising fuel prices etc.

Rising expectations

Revenue slowdown

Aging population: Loss of revenue & experienced

employees

Unexpected events

Revenue slowdown

Aging population: Loss of revenue & experienced

employees

Unexpected events

Do more...Do more... ...with less...with less

Urgent and provocative challenges

Urgent and provocative challenges

Ability to meet challenges compromised

Ability to meet challenges compromised


Tap all sources of service innovation

Government Organization

External PartnersExternal Partners

Citizens/customersCitizens/customersEmployeesEmployees

Internal PartnersInternal Partners

Participative and responsive government

Joined-up and reinvented government

Non-bureaucratic, outcome-focused government

Partnered and networked government


Who is your primary source of innovation?

• Employees• Private sector firms / suppliers• Nonprofits• Other government agencies• Citizens


The Innovation Strategies

Q. How can public sector alter the internal environment to overcome the hurdles to innovation?

Q. Why are some innovations replicated with speed and ease, while others flounder?

Replicate Cultivate

Q. Can you extend partnership to “buy” innovations from the best in class providers?

Partner

Q. How can you connect with the best ideas, engage citizens, and establish new delivery mechanisms?

Open SourceNetwork

Q. How can you energize large groups of people from diverse disciplines to enable flexible, customized solutions?


#1: Cultivate

Tap into Tacit Knowledge

Develop Emerging Ideas

Drive Organizational

Change

Engaged Employees

Motivators

Two-way communication

Ownership of ideas

Gainsharing, awards, bonus etc.

Accept mistakes

Enablers

Safe havens

Skunk works

Prediction markets

Tools for collaboration


Safe Havens

How do safe havens help?• Ensure that emerging ideas get the time

to develop, protected from short-term budget constraints and premature criticism

• Permit low-risk experimentation• Motivate “renegade” thinkers -- not people

seeking to undermine authority, but independent visionaries looking to achieve results.

Create New Organizational Structure

Safe havens are separate units kept close to mainstream activities but away from the line organization.

Skunk Works

Havens of creativity within an organization.

Intrapreneurs

Employees who act as entrepreneurs within an

organization


Tap into diverse knowledge in the fieldTSA Idea Factory

At TSA, instead of transforming the structure, Kip Hawley used collaborative technologies to transcend it.

TSA IdeaFactory• Collects input• Best ideas “rise to

the top”

Vision/Leadership

Data/Feedback

Ownership

Innovation


#2: Replication

Mechanisms to Identify innovation

Adapt to local context

Collaborate

Core Group of employees

Internal partners

External partners

External partners

"I've been stealing everyone's ideas for 15 years and put them all together. People are desperate for non-conventional answers."

- Stephen Goldsmith, Former Mayor of Indianapolis


#3: Partner

Seek new solutionsSeek new solutions

Test new approachesTest new approaches

Benefit from cross- border diffusion

Benefit from cross- border diffusion

Overcome internal

constraints

Overcome internal

constraints

Types of Partnership

Public-Private

Public– Public

Public-Nonprofit


Partners help gain funds and mitigate risks

Empowerment schools program

• Schools sign performance agreements committing them to high levels of student achievement.

• In return for this commitment,

schools receive greater local autonomy over their operations.

• Private funds used to test the idea before spending public money on a citywide rollout

• In the past, school officials might have rejected such a proposal because they deemed it too risky

“…Our private sector partners have helped us to fund innovative new programs that are giving our children exciting new opportunities to explore their talents and fulfill their potential.”

– New York City Mayor Michael R. Bloomberg

A nonprofit that attracts private financing for diverse school reforms


#4: Network

Citizens report a number of problems

External partners, citizens and employees can be engaged in selecting ideas Citizens know

what they want but may not be able to articulate it clearly

Citizen input is necessary if new ideas are to succeed

External partners

Middle and senior managers should not be insulated from citizen reactions

In-source ideas

Predict ideas worth pursuing

Build citizen networks Create a

learning organization

Look for solutions that meet unconscious needs of your customers

Engage the creativity and specialized skills of a range of providers


How to get printed images on a potato chip?


P&G Model of Using Global Networks for Innovation

DriversDrivers New StrategyNew Strategy ChallengesChallenges

Networked ModelNetworked Model

• Increasingly difficult to create organic growth of 4-6 %

• Growing competition

• Innovation success rate (percentage of products that met financial objectives) stagnant

• Growing interest in forming partnerships

• Acquire 50% of innovations from outside

• Identify promising ideas throughout the globe

• Apply own capabilities to create better and cheaper products

•Massive operational changes

• Reinvent the culture to “proudly found elsewhere” from “not invented here”

• Redefine the R&D organization – 7500 people inside plus 1.5 million outside with permeable boundary between them

P&G


#5: Open source

User Community

Local community

CitizensDevelopment Community

SpecialistsOpen source companiesOpen source project

Global community

Government organizations

Technology experts

Students

Government agency

NonprofitsPrivate companies


Open source education: Ontario e-learning

DriversDrivers TargetsTargets New StrategyNew Strategy

• With globalization reaching a crescendo, education will be the key to maintaining competitiveness and ensuring equity

• 75% of students achieve provincial standard in literacy and numeracy by 2008

• 85% graduate from high school by 2010-11

• Resources developed by teachers that can be customized to local needs

• Credit courses, technical helpdesk, sharing of classroom resources by teachers - all available free of cost

• It can serve small, rural and isolated schools that face shortage of educational resources and specialized teaching staff


Open Source policy developmentU.S. Patent and Trademark Office

Source: http://www.uspto.gov/web/patents/peerpriorartpilot/


The Innovation Process: One weak link in the chain can stump the flow of innovations

Idea GenerationIdea Generation DiffusionDiffusionConversionConversionSelectionSelection

Filter good ideas by creating an efficient sorting process

Convert ideas into products, services and practices

Manage stakeholders and disseminate ideas widely

Create systems to generate and maintain the flow of good ideas


Identify and rectify your pain points

Cultivate Replicate Partnership Network Open source

Generation In-house External Co-creation External External

Selection In-house In-house Co-creation Co-creation/ External

External

Conversion In-house In-house Co-creation Co-creation/ External

External

Diffusion In-house In-house Co-creation Co-creation/ External

External

What can you do to overcome your weakness?

Where do you falter most often?


Building an Innovation-Centered Organization

• Closed boundaries—government’s role is to own and directly provide services • Bricks-and-mortar infrastructure—throw more resources ata problem• Invent-it-yourself and centralized approach

Traditional Model: Hierarchical Government

• Some elements of partnership but government remains the primaryowner and provider of services• Improved collaboration across various departments

Intermediate Model: Joined-up, Partnered Government

New Models of Innovation: Networked, Open source Government

• Redefine role of government as an aggregator, manager and buyer of services • Identify promising ideas from anywhere • Use internal knowledge and skills to adapt ideas to the needs of your customers

Drivers• Plummeting costs of partnering• Growing number of problems that requirecross-sector response


Reconfigure Organizational Structure: Example of P&G

R&D

7,500 persons

1.5 million talented persons

NineSigma

InnoCentive

YourEncore

Yet2.com

Private Companies

Universities

Government Labs

Individuals

Retired Persons

ProprietaryNetworks

Technology Entrepreneurs

Suppliers

Open Networks

Permeable Boundaries

Strong Leadership Commitment


Pushing the Culture: British Columbia’s Innovation Action Plan

BarriersBarriers Steps takenSteps taken Future activitiesFuture activities

• Employees felt they had neither the permission nor the means to innovate

• Communication was another barrier, with employees saying they lacked sufficient information to propose transformative ideas

• A new brand statement : “Where Ideas Work”

• Core values identified: courage, curiosity, passion, accountability, service, and teamwork

• Senior executive investment: subject to bonuses and salary holdbacks of a minimum of 5 percent based on their demonstrated support for innovation and employee engagement

• Awards: annual employee innovation awards

• External recognition: the BC Public Service began aggressively seeking external awards to gain recognition

• “Innovation Sessions” where employee focus groups examine what they need to become more innovative

• Suggestions will be inventoried and turned into a comprehensive list of scalable ideas that will be implemented within a year

• Corporate values related to innovation—such as courage and curiosity—will be factored into every employee’s performance assessment


Innovation and Fear of Failure

• Any innovation carries risks • In general, bigger the change, higher the risk

Types of Risk• Organizational Risk: Costs of

introducing change could turn out to higher than the benefits

• Political Risk: Politicians and senior officials do not want to be seen to be backing the wrong horse

• Personal Risk: Failure could negatively impact the career of the person introducing the change; result in loss of jobs

• Risk of Counter-reinventions: Value of an innovation can be offset by new rules and regulations

Innovation

RiskUnacceptable situation

Value

No public manager wants to drink his morning cup of coffee reading a headline describing his latest screw-up in 12-point type.


Solution: Fail Small, Fail Fast

• Innovation is about experimentation.

• Experiments often fail.• These days, innovative

companies build failure into their systems of innovation.

• The idea is to fail quickly if you have to, learn from the experience and move on to the next big idea.

Alter the Risk-

Reward Ratio

If you’re trying to make ambitious decisions or investments, but you’re working in a “can’t-afford-to-fail” environment, you’re not going to create a high-performance organization.

IDEOIDEO

Invites employees to “have the guts to create a straw man” that others can criticize.

“Fail often to succeed sooner.”

Invites employees to “have the guts to create a straw man” that others can criticize.

“Fail often to succeed sooner.”

3M3M

Brings together “skunk works” teams to investigate the problems in a potential product.

If a product is found deficient, the team quickly disbands to work on another one.

Brings together “skunk works” teams to investigate the problems in a potential product.

If a product is found deficient, the team quickly disbands to work on another one.


What you can do right now

#1: Define what innovation is for youTesco: “Better for customers, simpler for staff, and cheaper for Tesco”

#2: Decide who takes responsibility for implementing ideasThe In-House R&D Network at the Bureau of Motor Equipment for New York City:

worksite committees of mechanics adopt proposals and implement changes within the scope of their operations

#3: Take steps to build competencyTo make partnering a “way of life at the Department,” the Department of Interior sends employees to work in locations that excel at collaboration

#4: Build on past success“Innovation exchange” program: London will offer its expertise in dealing with issues like congestion pricing and climate change. New York City will share its experience in improving access to services through 311 and other technology initiatives.


Just remember…

“People are very open minded about new things. As long as they are exactly like the old ones.”

- Charles Kettering


For Further Information…

Bill Eggers

Global Director, Deloitte Research-Public Sector

[email protected]

202-378-5292

mailto:[email protected]

mailto:[email protected]

Questions & Answers


A member firm ofDeloitte Touche Tohmatsu

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