Public sector innovation is critical to improving government services, diversifying economic development, enhancing transparency, and creating a deeper understanding of people and businesses. Therefore, it is also the important element of national competitiveness.
Modern governments are facing challenges in building innovative cultures in public institutions. According to PwC, most commonly observed obstacles to innovation include the lack of resources dedicated to innovation, hierarchical resistance to innovative ideas, risk-averse organizational culture and a lack of formal system for capturing and managing innovation.
So, what organizational capabilities are needed in order to deploy and govern the innovative activities effectively?
It is important to recognize that the innovation is not just about spontaneity or a momentary stroke of genius. It can and should be made into a repeatable achievement. In fact, in order to build a long term culture of sustained innovation, a structured process that promotes ideation and idea generation must be put into place.
Though “structure” and “ideation” seem like conflicting ideas, innovative organizations have been shown to conduct regular ideation sessions in order to foster continued growth[1].
Ideation, or idea management, is part of a long term innovation effort that, if facilitated intelligently, leads to successful new products or services. Even if only a small percentage of suggested concepts make it through the process, the payoff could be significant for the organization.
Speaking of percentages, it is important to recall that according to the U.S. Patent Office “less than 3% of patents ever make any money for the inventor.” This implies a failure rate of over 97%. So, it is not just about luring ingenious talent to an organization. In fact, as Thomas Edison once said “Genius is 1% inspiration and 99% perspiration.” Hence, aspiring organizations should focus on building the right internal capabilities to deliver the innovation.
So, where does the innovation take place?
Review of various research and surveys reveals that innovative organizations focus their efforts in order to achieve either (or combination) of the following:
- Organizational effectiveness: a measure of how well is the organization delivering on its mandate and for its stakeholders;
- Operational efficiency: a measure of how well is the organization using the resources at its disposal; and
- Resource optimization: a measure of how well does the organization optimize the cost of resources
The above-mentioned elements form the so-called “Innovation Epicenter” of an organization.
So, what is the Innovation Epicenter?
According to the Innovation Tree model[2], it is important to recognize that the Innovation Epicenter acts as Enhancer and not Enabler of the final Output of organizational efforts.
Therefore, to successfully innovate, organizations should focus their efforts on structuring Enablers and improving Enhancers as illustrated in the Innovation Tree model below (illustration by the author):
Below is a high level legend describing the Innovation Tree model:
- Outputs are produced by Enablers and boosted through Enhancers. Typically, in a public sector organization, Outputs include the product and services, program and initiatives as well as policies and regulations;
- Enhancers represent innovative practices adopted by an organization in implementing Enablers. This is achieved through greater organizational effectiveness, operational efficiency and resource optimization. If implemented successfully, Enhancers act as boosters to the Enablers translating them into innovative Outputs; and
- Enablers are important foundational elements of every organization. They must be structured in a clear and measurable format, including well-orchestrated strategy, operations, P&O, G&S, processes and technology.
Inside the Innovation Epicenter
In order to better understand the three elements that form the Innovation Epicenter of an organization, let’s look at practical examples:
Organizational Effectiveness: London 2012 as catalyst of ISO20121
The London Organizing Committee of the Olympic and Paralympic Games (LOCOG) identified the need for an effective sustainability management system as part of its bid to host the Olympic Games in 2012, which would help ensure that events, ranging from local celebrations to “mega events” such as the Olympic and Paralympic Games, leave behind a positive legacy in terms of economic, environmental and social benefits, with minimum material waste, energy consumption, or strain on local communities.
LOCOG’s Sustainability Team focused on establishing, implementing, maintaining and improving an event sustainability management system as a framework in order to identify the potentially negative impacts of events, removing or reducing them, and capitalizing on the more positive impacts through improved planning and processes.
ISO 20121 has been developed to help ensure that organizations in charge of major sporting events, ranging from local celebrations to “mega events” such as the Olympic and Paralympic Games, are effective in leaving behind a positive legacy in terms of economic, environmental and social benefits, with minimum material waste, energy consumption, or strain on local communities.
Operational Efficiency: Microsoft Language Quality Game
Hundreds of millions of people use Microsoft Windows and Office daily. These software systems were built by hundreds of developers, modified repeatedly over a period of years, and customized for every major language. Bugs and other errors are inevitable for such complex software systems and automated systems aren’t sufficient. The only way to ensure quality is for a vast number of people to review every feature, every usage case, and every dialog box.
Microsoft resolved the problem through gamification by pioneering the concept of software-quality games that turned the testing process into an engaging, enjoyable experience for thousands of Microsoft employees. Thousands of Microsoft employees around the world were invited to play Microsoft Language Quality Game throughreviewing Windows 7 in their spare time. They were awarded points for each suspicious bit of languages they found and ranked on a leaderboard (a public “high score list”) based on their success. Games scoring system tracked performance of individuals, teams and regions.
The Language Quality Game created a competitive dynamic for participating employees, who wanted to win and their team/region to win. 4,500 participants reviewed over half a million Windows 7 dialog boxes and logged 6,700 bug reports, resulting in hundreds of significant fixes. Not only did they do it above and beyond their work responsibilities, but a large number of them describe the process as enjoyable and even addicting.
Resource Optimization: Reducing the Energy Bill
Government and social facilities face increasing energy costs as well as the need to replace equipment that has exhausted its useful life. However, quite often, they lack the funds necessary to make the required improvements.
In order to find a solution, a government agency in Dubai partnered with a major international firm to improve energy saving capabilities of its infrastructure. To do so, the agency adopted an innovative method for purchasing energy-saving improvements in buildings with several distinguishing features:
- A single procurement is used to purchase a complete package of services and one contractor is accountable for design, purchase, and installation;
- The package of services includes financing of all project costs. No up-front money is needed;
- The performance contract is structured so that the total payments with the contract are always less than they would have been without;
- State of the art, energy efficient lighting, air-conditioning systems, energy management control systems, motor replacements, plumbing and variable-speed drives for pumps and fans are common improvements;
- Management and maintenance resources are included in the turnkey service;
- The risk of energy savings performance is transferred to the Energy Service Company (ESCO) because payments are contingent on actual savings achieved and the ESCO guarantees a certain amount of annual savings, paying the facility owner the difference if the savings are not achieved.
So, what is the key takeaway?
Examples of Long Zheng (Bing[3]) et al. highlight the importance of governing the innovation process. It is also clear that Enablers are foundational elements of every entity and, therefore, organizations must focus on governing and measuring them.
The key takeaway is that the innovation is not the final Output or end result of organizational efforts. It should rather be appreciated as the Enhancer of organizational capabilities (Enablers) that help organizations produce innovative Outputs on a regular basis.
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[1] Google may serve as a good example where staff members are allowed the opportunity to devote 20% of their workweek to a project of their choice
[2] The Innovation Tree model was developed by the author in order to identify the organizational elements that influence the innovation
[3] Source: http://www.geek.com/news/microsofts-bing-ignored-search-as-you-type-for-a-year-before-google-instant-1283761/
