Module 06 Innovation

Module 6

Innovation for the Public Sector of

the 21st Century

PRESENTER

Innovation as embedded

process

Innovation does not happen in a vacuum. It is tied to individual and organizational elements that affect the capacity of an organization to develop innovative processes and

outputs.

Innovation as group activity

Innovation is seldom if ever the work of a

lone individual.

Innovation is most often found to be the result

of a group approach where the team, as

opposed to the individual, is key.

It is a very rare occasion where an ‘island’ is

the source of an innovative process.

Innovation: ideas, people and

processes

Innovation is about doing things differently

and/or doing different things.

It is not necessary to develop a working cold

fusion reactor to be innovative: sometimes

reworking how a policy is delivered can change

millions of lives for the better.

People, their ideas and the processes through

which they are implemented form innovation.

People Process Ideas

Generating Innovation

Many organizations look at leaders to create innovation.

This provides both benefits and challenges;

In the West the figure of the leader is often equated to

a solitary individual, leading with a top-down

approach.

Leadership is unevenly distributed both within and

among organizations.

The focus is not on innovation but on leadership.

Innovation Leadership

In the private sector the recently

developed theory of Innovation

Leadership, has received a lot of attention.

The theory models three dynamic and

iterative stages leading to innovation:

Idea Generation

Evaluation

Implementation

Idea

Generation

Evaluation Implementation

Building Innovative Teams

In a very real way creating innovation is

about building innovative teams

Therefore, hiring and having on your

team people with innovation-friendly

characteristics and skills is very

important.

So is creating an innovative

environment.

Types of Innovation

Value-added Innovation: it is about

revising and changing already existing

products/processes. It does not require a

large amount of risk taking.

Exploratory Innovation: it is about truly

new ideas. It is premised on a risk taking

approach and on the flexible and very

diverse structures when ‘contamination’

among ideas is key.

The environment in which innovation

emerges is very complex, with variables

affecting the ultimate output that include:

Levels of encouragement towards innovation

Degree of autonomy

Available resources

Creativity levels of the workforce

Characteristics of the leadership

Will innovation training fail?

As innovation becomes increasingly a

buzzword, training for innovation becomes

more common.

That training tends to focus on building

leaders and often tends to fail:

You are focused on training leaders to

lead people, rather than training leaders to

build and lead systems (Doss 2013)

The Innovation Syllogism

Henry Doss argues that we should focus on

systems and culture rather than on

individuals for innovation:

1. Innovation is a product of culture (not individuals).

2. Culture is an emergent factor of systems (not

individuals).

3. Therefore, systems drive innovation (not

individuals).

The Characteristics of Innovative

Cultures

So, when we attempt to foster

innovation we would be well advised

to remember that innovative cultures:

Exhibit very high levels of trust;

Exhibit very high levels of

diversity;

Encourage risk and understand

failure.

Critical vs. Creative thinking CRITICAL THINKING

(Vertical)

CREATIVE THINKING

(Lateral)

One answer

Begin with one

problem, numerous

data

Brainstorming processes, free association,

etc.

Begin with one

Generate

problem or

numerous

question

possibilities

Mathematical

processes

Logical

thinking

processes

Brainstorming

processes, free

association,

etc.

Contaminate your thinking…

In Borrowed Brilliance, David Murray claims, …the farther away from your subject you borrow materials from, the more creative your solution becomes

Murray is fond of saying: First you copy. Then you create.

The key is freshness of perception and a willingness to tinker with our mind sets—the way we ‘normally’ see things.

Innovation in the

Public Sector

The devolution of responsibilities, client-

centered approaches, and strong focus on

satisfaction- and result-based

assessments typical of the most recent

phase of New Public Management

increasingly make public managers

answerable for crafting rather than just

implementing policy choices

The most efficient way to answer the

seemingly conflicting demands of better

client-centred approaches and shrinking

budgets is to foster innovative problem-

solving within the public administration by

triggering untapped capabilities through

innovation ecologies and the spread of

institutional entrepreneurship

Future Administrative Priorities

Decentralization and devolution of the public sector;

Emergence of network/collaborative government practices built on participatory and consultative processes;

Increased customer-orientation in public sector governance

Citizens expectations are moving from a notion of being “engaged by” government to “participating with” government.

Insight #1;

Need for Leadership Capacity and driving Change Management in an era of fiscal

challenges

90% of survey respondents stated that Building

Leadership capacity is an important HR priority

#1 priority for each of the four countries in

scope

Notably higher in NZ (96%) and lower in UAE

(82%)

UAE looks more like building supports,

continuous improvement

• Room for improvement in coaching and

leadership development tools

A close second priority in importance rating is

Driving Change Management (82%)

#2 priority for Can/Aus/NZ, #4 for UAE

Perhaps related to demographics – large

majority is C/A/NZ is 40+ (>80%) whereas only

~47% is over 40 years old in UAE

Driving Innovation also achieves more that 80%

rating as an important priority

22

0%

20%

40%

60%

80%

100%

Buildingleadershipcapacity

Drivingchange

management

Drivinginnovation

Buildinghuman

resourcecapability at all

levels

Developingsuccession

planning

Enhancingattitudes

and values ofstaff

Implementingorganizationalrestructuring

Very important

Important

Moderately important

Of little importance

Unimportant

Implications for Public Sector Leaders:

• What ability do government have to hire the “right” staff

• What training and leadership development is required

• Can HR capability be enhanced despite fiscal constraints

• Need to work on identifying future managers / leaders

Personnel development and human resources issues

Source: Public Sector Executive Survey, Question 5 Over the next 2 years, how

important will be the demand for the following personnel development and human

resources issues for your organization?, n=1,503

Given other immediate priorities,

government is not fully prepared to

build the next generation of leaders

Resistance and Need

The public sector is often depicted as

being inherently resilient to innovation.

Nonetheless, increasingly internal and

external trends are forcing the public

sector to innovate.

The question is how this innovation will

take shape, not if it will take shape

Innovation vs. optimization

Both concepts are applied to organizational design but they are partially incompatible.

Often, optimization is premised on very specific end goals and follows a set of very well defined mission statements and practices.

Innovation responds to a more open-ended process, where there is the recognition that the problem at hand requires a deeper change than a simple adjustment in process flow.

Optimization and innovation should be

thought of as laying on a continuum that

goes from very small process adjustments

to truly radical changes.

Optimization Innovation

Policy Innovation in a

nutshell

Policy Innovation should be thought of as

having three facets:

invention

diffusion

evaluation

Together they determine the scope and

reach of policy innovation.

1. Invention: or the emergence of new policy elements. This is generally very rare: incremental evolution or mixes of new and old policies are the norm (Kingdon 1995).

2. Diffusion: representing the entry into wide use of these policy elements. Adopting policies that someone else has developed is a very important source of novelty (Walker 1969).

3. Evaluation: which refers to the projected and/or real effects through which a policy will change the lives of a certain group (Jordan and Huitema forthcoming).

the actual difference between the old and new policy,

the effect upon target groups and policy actors, and finally

how policy affects other forms of problem solving and control to modify the environment in which the issue exists and encourage the ‘reduction’ of the problem at hand to more manageable terms.

Risk

Management

Resilience

Innovation

Risk Categories

Manage Risk at all Levels

Program

Field

Corporate Strategic Decisions

Decisions transferring

Strategy into Action

Decisions needed for

Implementation

Managing Risk in Organizations

A robust process for managing

organizational risk involves three steps: Step I - Clarify your goals and critical stakeholders.

Step II - Before deciding how to proceed with activities:

identify, prioritize and act on uncertainties.

Step III - Review and communicate uncertainties.

Risk

Identification

Risk

Assessment

Risk

Response

Risk Assessment

Scan the environment

Capture both cause

and effect

Involve stakeholders

Determine risk

ownership

Horizon scanning

Assess risk

Create Risk Matrix

Assess Vulnerabilities

Determine levels of

tolerability

Risk Matrix

Define your Risk Tolerability

Low

Likelihood

Medium

Likelihood

High

Likelihood

Minor

Impact

Moderate

Impact

Significant

Impact

Prioritizes and communicate

Communicate risk

appropriately and

focus on the priorities

that most affect your

program.

Act on your Risk

Tolerate: accept the risk by keeping activities

unchanged. This option may be applied when exposure

is tolerable, control is impossible or cost of control

exceeds potential benefit. It may be supplemented by

contingency planning for handling the potential impact.

Treat: adjust (add or revise) relevant activities;

Transfer: share the risk by involving stakeholders.

Transferring risk works especially well for financial risks

or risks to assets, e.g. by taking conventional insurance

or paying a third party to take the risk. This option is not

possible for reputational risks. The relationship with the

third party needs to be carefully managed.

Terminate: avoid or cancel the activities that give rise to

the risk by terminating the activity that gives rise to the

risk, especially when the cost/benefit relationship is in

jeopardy

CLASS EXERCISE BEGINS

BELOW – PLEASE PRINT THE

FOLLOWING PAGES AS A

BOOKLET FOR EACH

PARTICIPANT AND DELETE

FROM SLIDE DECK

THANKS

Exercise: Prepare a risk analysis

for an innovation program

1. The Permanent Secretary has given

your unit the responsibility to create a

policy innovation unit.

As part of the exercise you are to prepare

a risk management strategy.

Use the next 15 minutes to individuate

the key corporate, program and field

risks.

Program

Field

Corporate

Now, we shall try to assess one or more

our risks in a class conversation. Bear in

mind our risk categories

And risk matrix

Description of Risk Type of Risk

Likelihood of

risk

Impact of

Risk

As a final exercise let’s pick one risk and

attempt to design a risk mitigation strategy

Risk Inherent

Assessment

Controls

in place

Residual

Assessment

Further action

planned

Risk

owner

Impact Likelihood Impact Likelihood

Risk Inherent

Assessment

Controls

in place

Residual

Assessment

Further action

planned

Risk

owner

Impact Likelihood Impact Likelihood