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INNOVATION IN PUBLIC SERVICES Literature Review Introduction This literature review was undertaken as part of the Innovation in Public Services Project. This project is funded by the Local Government Association (LGA); the Improvement and Development Agency (IDeA); and the National School of Government (formerly the Centre for Management and Policy Studies). The project seeks to develop a process by which the lessons from innovation to date could be applied to four or five particular policy commitments. The aim is to both support delivery in those particular areas and develop a broader approach to innovation across public services. According to Mulgan and Albury (2003), whilst a substantial body of research has emerged in the past four decades on innovation in the private sector, a significant knowledge gap exists with regard to innovation within the public sector, where quality research on the subject is rather limited. The aim of this paper is to provide an overview of innovation in relation to the public sector, drawing on UK, European and American empirical and theoretical reports (1999 to current). In addition, it presents illustrative examples of public sector innovation, either UKbased or international, with a national or local focus. The paper is divided into two parts. Part I discusses the following: why innovation within public services and policy is important; the key concepts in understanding what innovation is, especially in view of the complexity of the subject; the main trends in public sector innovation; the methods, mechanisms and contexts that have been known to foster innovation in the public sector; the main barriers to innovation; and the lessons that the public sector can learn from the private sector with regard to successful innovation. Part II presents in detail five examples of public sector innovation, each highlighting a different focus, methods and mechanisms of implementation, success factors and lessons for innovation in public services. In particular, it presents examples of: innovations involving changes in characteristics and design of service products and production processes, e.g. NHS Direct; delivery innovation, e.g. Liverpool Congestion Charge; administrative and organisational innovation, e.g. NYPD Reform; conceptual innovation, e.g. Sure Start and London Congestion Charge.
PART I Theoretical Overview of Public Sector Innovation 1. Why innovate in the Public Sector?
The study and practice of innovation have traditionally been associated with the private sector, where the impetus to successfully innovate or apply new innovations generated in a given industry is significant, since effective innovation equates to organisational survival and strength. The primary motivators to innovate for commercial firms are to maintain or increase profits and thus to survive in a highly competitive global economy. There is powerful incentive then for private enterprises to innovate to cut costs, improve market share, and create better value or quality products and services. In contrast, innovation in public service organisations has not historically featured as a critical determinant of survival, no doubt due to the fact that, compared to the private sector, these operate under a very different set of pressures, interests, restrictions, and demands (see section 6). In general, the public sector is acknowledged as being a far more complex open system than the private sector. As such, innovation has not characteristically been given high priority in public services (Bhatta, 2003). To date, incentive to innovate for public sector organisations and their employees has been low and the risk associated with innovation high. It is thus not surprising that innovation in this sector has not had a high profile. Even so, government and public services can and do innovate in order to develop new solutions to old problems; more effectively use resources and meet needs; and refine strategies and tactics. It is just, as Mulgan and Albury (2003) explain, that innovation in the public sector is typically seen as “an optional extra or an added burden” (p.5), rather than as a core activity that is both necessary and of significant value, albeit a different type of value to that sought by the private sector. So the first question to address in this paper is why is it important for the public sector to engage in innovation? Donahue (2005) points out the obvious, but perhaps overlooked, truth that, since public organisations touch the interests of so many and are often entrusted with socially important tasks, innovation in this sector is crucial. Since such innovation enables new needs to be met, and old needs to be met more effectively, it can result in far greater value than the gains achieved in analogous improvements in corporate environments. Conversely, he suggests that failure to innovate or distorted innovation in public services entails a correspondingly large surrender of potential benefit for the public. That said, in the last twenty years there has been a growing realisation among policy makers that the public sector should learn how to innovate, if it were to respond adequately to a rapidly changing environment and citizen’s/business expectations. A variety of drivers lie behind the current push for public sector innovation, among which most prominent is the need to provide prompt, 2
improved and personalised public services to citizens. In other words, the public sector has recognised that it needs to cater more effectively to public needs and expectations by building public services around citizen’s requirements, as opposed to make them fit its own organisation and structure. As Mulgan and Albury (2003) stress the structures, practices, cultures and organisational modes of operation of the British public sector were formed at a time when the population was relatively homogenous, stratified by class and typically consisted of conventional households. In contrast, British society in the 21st Century is highly diverse, shows multiple stratification and entails a wide variety of living arrangements. Against this backdrop, the “one-size-fits-all” approach that informed the establishment of government and public services in the UK, is outdated with respect to the current needs of the British public. Furthermore, the last two decades have seen the growth of the importance of the customer as a result of, inter alia, altered and rising customer expectations in both private and public sector. This development, although its origins lie in the private sector who first embraced the principles of Total Quality Management (TQM), started in due course to affect public sector attitudes and responses, culminating in the quest for quality government (Karmack, 2003). Moreover, with the advent of 24/7 services provided by the private sector through ICTs, expectations of the public have changed even more. In the same vein, concerted efforts have been made to improve the delivery and outcomes of public services. Although some key public service areas manifest considerable progress, e.g. enhanced educational attainment, crime reduction, etc., there are others for which there is great scope for improvement, e.g. people/communities at risk of poverty and social exclusion, digital divide, etc. There is a strong belief among policy makers that, in order to address problems which in the past have proved intractable in these areas, innovative approaches to policy, practice, provision and delivery are required. Another key factor has been the drive to contain costs and improve efficiency both in the provision of public services and in the way the public sector operates. This has been even more pronounced in view of increasingly tighter budgetary/fiscal constraints. As Mulgan and Albury (2003) point out, cost of public services tends to rise faster than the rest of the economy because of lack of competition in the public sector and because gains in labour efficiency lag behind gains in capital efficiency. As a result, in order to avoid public service costs increasing ahead of the economy, innovation to increase efficiency must occur. Alternatively, to address the pressure to contain costs governments have tried to cut direct costs (mainly by reducing the wage bill) and restructuring the work and operations of the public sector. It would be wrong to regard the above factors as operating independently and/or with no reference to the wider context within which the public sector has been working in recent years. For example, linked to these developments has been the prevalence, over the last twenty years, of the New Public Management (NPM) and the reforms it has brought about in public administrations across the world. NPM, in turn, can itself associated with the global Government Reform Movement of 3
the 1980s (Stage I) and 1990s (Stage II) (Kamarck, 2003). In Stage I, the primary emphasis was on economic liberalization, deregulation and privatization of previously state-owned industries. Stage II has been characterized by a focus on administrative reform of core state functions and the building of appropriate state capacity, e.g. by ensuring that public servants have the requisite skills for today’s environment. In other words, states have been focusing less on privatisation and more on cutting down some of their bureaucracies and on modernising government with a view to making it more efficient and responsive to customer needs. The wide use of ICTs in this pursuit, though not itself new in public administration, has also been closely associated with these developments. Finally, one factor that is increasingly present in policy and practice innovation is the desire on the part of policy makers to capitalise on the full potential of ICTs, in terms of both efficiency gains and improved service provision and delivery. Although the current focus on e-Government (“Government on the Web”) and on-line public services appears novel, it is worth noting that the use of ICTs in and by Government is not a particularly new phenomenon. ICTs have been used by Government since the 1950s to cover a wide spectrum of relationships: internally and in government-citizen (G2C), government-business (G2B) and governmentgovernment (G2G) relationships1. However, since the 1990s what is new in the state’s approach towards e-Government is the strong belief among policy makers (and not only) that Internet and web-based technologies can transform the relationship between the state and the citizen/society, especially in view of the emergence of the “new” economy and information society. In general, the use of ICTs has been long presented in policy and practitioner circles as having the potential, through the organisational re-engineering it requires, to bring about a transformation of public service delivery and the citizen experience of using those services. Most recently, the potential of the internet and related digital technologies to transform service delivery has become a central focus for policymakers (McLoughlin et al, 2004). At present, e-Government is the broad term used to describe electronic/on-line public service provision aimed at enhancing their delivery by making them temporally and spatially more accessible to citizens – so-called ‘24x7 eGovernment’ (Kraemer and King, 2003). The core idea driving current developments is an image of the electronically-mediated delivery of more integrated (“joined-up”) services as part of “holistic government”. Such electronically-enabled delivery of public services is seen, not only as a means of transforming the experience of the citizen, but also the nature of professional and occupational, inter-organisational and intra-organisational relationships in public services, and as a basis for re-casting the relationship between the public and private sectors and, increasingly, the voluntary sector.
The focus of ICT use against a given governmental bureaucratic structure has changed over time. 1950s were characterised by the use of defence technologies. 1960s and 1970s saw the introduction of huge mainframe computers which carried out large-scale repetitive tasks. In late 1970s and 1980s the use of large databases and networks of personal computers (PCs) became the dominant paradigm.
In view of the above discussion, and building on the framework put forward by Mulgan and Albury (2003), the box below summarises the key factors driving public sector innovation. Why Innovate To respond more effectively to altered public needs and rising expectations [“one-size-fits-all” approach outdated] To contain costs and increase efficiency, esp. in view of tight budgetary constraints To improve delivery and outcomes of public services, including addressing areas where past policies have made little progress To capitalise on the full potential of ICTs 2. What is innovation?
Defining innovation for the purposes of this project has proved It is not possible here to describe the major theoretical frameworks that can be used in understanding innovation in the context of the public sector, rather readers with a particular interest in this are directed to the in-depth and rich working paper produced by Publin2 (March 2004), a research project funded under the EU Fifth Framework Programme for Research, Technological Development and Demonstration on Improving the Human Research Potential and the Socio-Economic Knowledge Base. Instead, it is simply noted that understanding innovation in the public sector can be supported through drawing upon five main theoretical frameworks, including innovation theory, organisational theory, studies of public policy, theories of learning, and New Public Management. 2.1 Definition(s) of innovation
According to Mulgan and Albury (2003) “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”. Mulgan and Albury’s definition appears straight forward and clear in its meaning, but as with most definitions of innovation masks the actual complexity of this subject area. Leadbeater (2003) observed that “The process of innovation is lengthy, interactive and social; many people with different talents, skills and
changes in governance The box below summarises the five main types of innovation that relate the provision and delivery of public services.g. strategies and rationales Service/Product. e. new or altered ways of delivering services or otherwise interacting with clients Process. A common typology applicable to both private sector and public sectors differentiates between three types of innovation (Baker. i.g. changes in governance
Types of Innovation
Various categorisations of innovation have been put forward by the existing literature. policies and organisational forms may be required for supporting innovation. changes in features and design of services/products Delivery. strategies and rationales that signify a departure from current reality.e. new or improved ways of interacting with other
2. Innovations in the area of strategy/policy refer to new missions. e. while delivery innovation involves new or altered ways of delivering services or otherwise interacting with clients. 2001). Process innovation itself came to prominence as a result of the quality and continuous improvement movements and refers to the way new internal procedures. Process. and Strategy/Business Concept innovation. e. Service/Product innovation results in changes in the features and design of services/products.
2.resources have to come together”. the complexity of innovation will most clearly emerge from the final three sections which point to the wide array of factors and the relationships between variables salient to innovation. In our reading. innovation in system interaction new or improved ways of interacting with other actors and knowledge bases. new internal procedures.3
Levels of Innovation
. e. policies and organisational forms
actors and knowledge bases. Product/Service.g.g. Finally.g. Whilst this part of the report focuses on providing a brief introduction to key concepts in understanding what innovation is. new missions. objectives. we have come across two other types of innovation relating to the delivery of public services and the wider system interaction. e. with no simple universal formula existing that can be applied to ensure successful innovation (Borins. Types of Innovation
Strategy/Policy. objectives. Four decades of studying innovation in the private sector and almost twenty years of interest in innovation in the public sector has shown that innovation is a multi-faceted phenomenon that emerges in the context of numerous intervening variables. 2002).
Incremental. However incremental innovations are critical to the pursuit of improvements in the public sector. The majority of innovations are incremental in nature. minor changes to existing services/processes Radical.
Radical: Less frequent are innovations that either involve the development
of new services or the introduction of fundamentally new ways of doing things in terms of organisational processes or service delivery.Another way of conceptualising innovation relates to its different levels which. organisational types. they can bring about a significant improvement in performance for the innovating organisation and alter the expectations of service users. As Mulgan and Albury (2003) explain innovation can be seen:
Incremental: here one can Innovations that represent minor changes to
existing services or processes. social and cultural arrangements. Discontinuous or disruptive innovations are those that cannot be used by customers in mainstream markets. i.e. in considering the impact of innovations some authors (more often writing about the private sector as opposed to the public sector) distinguish between “sustaining” and “discontinuous” (or “disruptive”) innovations (Christensen and Lærgreid. and inter-organisational relationships
In addition. They define a new performance trajectory by introducing new dimensions of performance compared to existing innovations. reflect its varying degrees of impact. and dramatically change relationships between organisations. new services or ways of “doing things” in relation to
the process or service delivery
Transformative/Systemic. in turn. Sustaining innovations are those that move an organisation along an established performance trajectory by introducing improved performance compared to existing services. new workforce structures. requiring fundamental changes in organisational. transform entire sectors.e. Typically such innovations take decades to have their full effect. Whilst such radical innovations do not alter the overall dynamics of a sector. Disruptive innovations either create new 7
. supporting the tailoring of services to individual and local needs and supporting value-for-money. because they contribute small but continuous improvements in services.e. 2001). Levels of Innovation (I) [Mulgan and Albury.
i. The most commonly accepted categorisation in this regard ranges from incremental. those that do not attract headlines and rarely change how organisations are structured or inter and intra organisational relations. systems or products. i. Sustaining innovations can be incremental or radical. to radical to transformative innovation.
Transformative/Systemic: Most rare are transformative innovations that give
rise to new workforce structures and new types of organisation.
. organisations move on an established trajectory by
improving performance of existing services/systems
Trends in Public Sector Innovation
Here we outline the main trends in public sector innovation that we have come across in the literature review. but they all seem to come under the OECD’s rubric of “distributed governance”.e. i. etc. voluntary sector involvement Horizontal Integration. the move towards greater specialisation in the provision of “individualised” services to citizens. (OECD. i. new services and processes. PPPs.e. In view of the plethora of different configurations that have emerged. etc. For example.markets by bringing new features to non-consumers or offer more convenience or lower prices to customers at the lower end of an existing market. breaking down departmental “silos” and
fostering cross-departmental co-operation and co-ordination
According to OECD estimates. The Box below presents the main trends to date in public sector innovation:
Trends of Public Sector Innovation
Organisational Structure.g. regional/local. The ensuing changes in the way government is structured and operates take many forms. agencification. e. e. in 2004 such arm’s length bodies in central government accounted for between 5-& and 75% of public expenditure and employment in many of OECD countries.
3. “distributed Governance” Partnerships. Levels of Innovation (II) [Christensen and Lærgreid. This increased focus on “agencification” and creation of regulatory bodies3 has been accompanied by a shift in the distribution of power and managerial autonomy from core ministries towards these new entities.g. e. 2004a). there is not commonly agreed classification of such bodies. the organisational and operational structure of the public sector has been one area where new arrangements have been introduced as a response to a variety of developments such as the drive to greater control and diversification of output (as opposed to measuring inputs/processes). ranging from altering the size of the cabinet and the number of government departments to creating bodies at arm’s length from core ministries and setting up independent regulatory agencies (IRAs).g. the demands for improved accountability and transparency. new performance trajectory by introducing
new performance dimensions. 2001]
providing on-line. introduction of private sector business
practices. etc. New Public Management.g. provision of “personalised”. bottom up/ad hoc approach national/regional/local levels
Performance-based management and budgeting. investing in customer relationship management and service-oriented architecture technology
Overall.Good Fiscal Management. e. e. e.
“e-enabled” services. e. focus on deregulation and simplification.g. building/strengthening capacity at Devolution and Decentralization.1
Methods and Mechanisms for Fostering Successful Innovations
4. e.g. e. seamless provision.g.
Openness to experimentation. one-stop shops.g. one could argue that the following patterns of public sector innovation have emerged and are prevalent across public administrations: Emergent patterns of Innovation
Provision of client-centred services.g. e.g.
Delivery of services through partnerships. e. focus on measuring performance. top down/systems Public Service Revitalization.g. market testing.g.
developing customer-centric systems
Regulatory Change. streamlining business processes. etc. e.g. budget reform. e. e.g.g. client-centred Systems and Process Improvements. shift from enforcement towards voluntary compliance Use of IT for both front and back office operations. local /regional partnerships.
etc. devolution of powers from central to
regional/local government and other agencies
Service Improvement. containment of deficits
it is the most neglected element in the innovation process.Mulgan and Albury (2003) propose a framework to help understand how to foster innovation. Replicating and scaling up.
. Although critical. arranged under the main elements they identified as central to the innovation process.
Incubating & Prototyping
Replication & Scaling Up Analysing & Learning
Below is a table that summarises Mulgan and Albury’s (2003) key findings concerning factors that contribute to the innovation process in the public sector.e.e. which clearly illustrates the non-linear nature of innovation. i. The diagram below by Mulgan and Albury depicts the process of innovation. i.e. the promotion of effective and timely diffusion of successful innovation.e.
Incubating and prototyping. evaluation of what works with a view to promoting continuous learning and improvement in public services. Analysing and learning. the mechanisms that are used to develop
supported. i. how ideas for innovation are stimulated and
ideas and manage associated risks. whilst stressing that the simplicity of the representation does not capture the complexity and serendipity of the innovation process in the real world. i. Their framework identifies four key elements that are integral to the innovation process (see Box below) Innovation Process [Mulgan and Albury. 2003]
new technologies. for example coming from contrasting disciplinary and professional perspectives.
2. and inspection and audit. Research indicates that half of all innovations is initiated by front line staff. Constant scanning horizons and margins
. Manifestos and political commitments Explanation Typically radical or systematic innovation (e. Furthermore change is often originated on the margins of society and from alternative nations. Intensive attention to the views of users. Organisations that have a pool of staff that are diverse in terms of background and ways of thinking. other countries. frontline staff and middle managers Generating Possibilities 3. are more likely to be innovative. Possibilities for innovation are generated when individuals and organisations observe and reflect on what others are doing. “Innovative thinking and action can flourish in conditions of heterogeneity and even constructive conflict” (Benington and Hartley. with manifestos and political commitments providing a broad framework that encourages the flow of new ideas. However. research findings. for example hospices pioneered new ways of looking after the terminally ill. Thus it is vital for organisations to have robust processes for listening to what users. other sectors.g. whilst the UK’s welfare to Work programme was adapted from he policies of the US and Scandinavia. Diversity of staff Exploiting difference and
4. 1999) Systematic scanning of other organisations. front-line and middle management staff say with regard to ways of working. can contribute significantly to identifying promising ideas. as significantly incremental innovation that promotes continual improvement in public services is mainly generated internally. the creation of the NHS) is driven by Ministers. middle managers and users.Table 1: Factors that foster innovation within the public sector Elements in the Innovation Process Factor that will foster innovation 1. services and how to improvement performance. public sector organisations should not simply depend upon politics as the primary driver of innovation.
Developing the capacity for Various formal creative techniques have been developed to support the generation creative thinking of the unexpected by suspending our reliance on normal judgement. linear and rational thinking and ‘proven’ knowledge. Breaking the rules Although a significant management challenge. and found to be less effective in cultures associated with traditional hierarchical organisations. developing a nonconformist organisational rule-breaking culture can provide an environment that allows innovation to flourish. rather than forwards from existing policies. competitive objectives can nonetheless effectively generate innovative thinking. the UK Education Act 2002 allows schools to apply to have a rule suspended if they can show a justifiable case that by suspending the rule they can improve results in some way. Competition Within the private sector competition with other firms is a key driver of innovation. 8. a greater variety of potential options are conceived. 2003). More commonly employed in the private sector. the establishment of formal ‘innovation units’ have been found in both the public and private sector to marginalise innovation. by separating it rather than mainstreaming it and inadvertently there is the tendency to bureaucratise and so smother the innovative process. However. 7. physical and organisational space for considering innovation is important. systematic inventive thinking (Goldenberg. and although typically less salient to the public sector environment.Generating Possibilities (continued)
5. role playing. imagined words. Working backwards from It has been found that when organisations work backwards from hoped for outcome goals outcomes. practices and institutions. Creating space Delivery pressures of day-to-day work demands typically crowd out the time for thinking about innovations that could actually address the pressures we work under. Methods include fiction. For example. some governments such as Denmark and Singapore have used the techniques effectively 6. 9. Time.
in traditionally non-innovative sectors and organisations effective innovation does need to be supported. and premature criticism. but to promote innovation. and often innovative ideas are threatened by bureaucratic procedures. At the most basic level an organisation should consider (i) is the innovation likely to succeed (compare with other examples. This may seem juxtaposed to the informality assumed to be a part of innovation. opposition from those with a vested interest. (ii) is there a clear plan for how to develop the innovative idea?. a culture of tolerance for ‘honourable’ failure must emerge. Therefore selection rules which look at the probability for success of an innovation can help safeguard against good realistic opportunities being lost. given that risks can never be eliminated.
. Perhaps only 1 in 100 ideas for innovation have the potential for successful realisation. and (iii) are the potential benefits of the innovation at least of equal weight to the costs of developing and implementing the innovation? Whilst in the private sector innovations entail economic and employment consequences. Furthermore. Probability Rules
11. for example care services have responsibility for vulnerable old people and children. hospitals are responsible for addressing life threatening and life determining conditions. Prototyping and Managing Risks
10. and check that the problem to be addressed by the innovation has been clearly formulated). in the public sector the risks of innovation are potentially far more significant for society as a whole and individuals. and the quality of education provided by schools impacts on individual’s long-term life chances. As such the public sector requires high quality risk management and safe spaces (see below) in which to test innovative processes and services. Risk Management
Organisational selection rules can provide useful guidelines to aid decisions concerning which ideas merit further exploration and support.Incubating. to achieve high levels of successful innovation in the public sector.
nonetheless innovation “champions” can be critical at the stage at which an idea is turned into a viable prototype for testing.12. implementing and evaluating an innovation.
. Innovation champions are those individuals who are willing to invest resources and organisational capacity for designing. Innovation Champions
Whilst it has already been stressed that the successful fruition of an innovative idea requires that many people come together throughout the innovation journey.
including Pilots. the New Deal model was initially implemented in a small number of areas which allowed for quick learning about potential difficulties ahead of wider national implementation. where a set of formally controlled experiments are run to test and compare different approaches. or when problems appear intractable from current or past policies.g. Safe spaces: Pilots. Education and Health Action Zones have been trialled in the UK. e.g. a criticism has been made that the timescales for development were too short and that insufficient monitoring meant that promising ideas for innovation could not be identified. where a clear link can be made between action and results. including effective time-scales. Whilst again heralded as providing a safe space for developing and testing innovative ways of working and delivering services. Pathfinders. Prototyping and Managing Risks (continued)
13.Incubating. Nevertheless. Least common of the safe space methods is the controlled experimentation approach.
. electronic curfews for offenders. a readiness to respond to pilot results. where the “zone” is deliberately designed to suspend some of the rules that normally constrain local agencies and managers. A problem for piloting that is specific to the public sector is the issue of universality of application both in terms of fairness (trialling internationally better new services “disadvantages” those not included in the pilot) and legislation. Pathfinders. where a service area is suffering overall from poor performance. including sufficient funds to scale-up. and sufficiently defined models of replication. In the last twenty years in the UK pilots have increasingly been used to test new ideas and policy proposals. Controlled Experimentation and “Zones”. Controlled experiments are most often selected when there is little or no evidence about the best way forward to address a problem. Controlled Experimentation and “Zones”
Various methods can be used to provide “safe spaces” for testing innovations and managing their risks within defined parameters. However. Employment. a review of UK pilot schemes demonstrates their value under appropriate circumstances. e. there are also limits to pilots which has prompted an increased use of “pathfinders”.
technology and infrastructure support and space in return for a high share of profits. However. early For innovations to be progressed from ideas to prototypes they require financial support. Interestingly. Involving end-users
Incubators for innovation provide advice and general support. Modelling
16. as is probably becoming clear the public sector and governments internationally are. Specific innovation funds and R&D budgets are more commonly being used as a mechanism in the public sector to address funding for early development. therefore modelling methods may be more appropriate in some scenarios. where they provide seed capital. The Singapore government. Incubators are more common in the private sector than in the public sector. finance and freedom from external pressure and rules. business advice. including the Invest-to-Save-Budget.14. The cost of developing working prototypes of innovation can be significant. for example. Funding development
17. A series of UK funds have been established to support innovation. increasingly employing methods to promote innovation that have previously been the remit of the commercial world. Incubators
15. created an incubator called “Enterprise Challenge” which provides funding and support for ideas that will create new value or improvements in the delivery of public services. The Performance and Innovation Unit report “Adding it up: Improving Analysis and Modelling in Central Government (January 2000) sets out how modelling can be used to test promising ideas at low cost. as they intensify their focus on how to successfully innovate. end user involvement in the design and development of prototypes significantly increases the likelihood of identifying and remedying weaknesses and problems of innovation implementation
. and the Departmental Challenge Fund initiatives Regardless of the method opted for in testing and developing innovative ideas. the Enterprise Challenge invites public involvement and entrepreneurialism in government affairs by being open to any individual organisation.
Scale and Innovative Innovation originates in all sizes of organisations. Furthermore. recognition particularly by peers has been and Teams found to be of more importance. 21. therefore recognition is essential 19. In contrast high degrees of radical innovation and systemic/transformative innovation occur in sectors which comprise an oligopoly – a small number of large organisations with a periphery of many small-scale providers and suppliers. and innovation occurs in highly differentiated organisational and local contexts. Beware ‘best practice’ It is true that one size rarely fits all . Incentives for Although direct monetary rewards to individuals is not effective in the public Organisations sector. Instead. Incremental innovation tends to occur in sectors where a multitude of relatively small organisations compete in a cost-pressurised environment for customers or users who have access to standardised comparative information. additional funding for organisations for successfully introducing. Change management Key skills and competencies in scaling up and spreading innovation mirror those of more general change management
.Replicating and Scaling Up
Replicating and Scaling Up (continued)
18. adopting or adapting innovations does increase motivation as this provides extra facilities and opportunities for staff and users 20. caution should be exercised about the universilisation of ‘best’ practice’ because standardisation reduces the ability of services and systems to innovate in order to meet future unforeseen and unforeseeable circumstances 22. but there is significant difference Capability between the nature of sectors that foster high levels of incremental innovation and those that foster high levels of radical or transformative innovation. Incentives for Individuals Monetary reward is a less powerful motivator for innovation in the public sector than it is in the private sector.public expectations are now that services will be tailored to personal and local needs. Pride in contributing to the creation of public value is the most powerful motivator to innovate in the public sector.
25. Specific measures need to be set in the areas of improvements in outcomes. Peer and user involvement Networks of peers play a critical role in learning from and supporting continuous improvement. Metrics for success
Source: Mulgan and Albury (2003)
Clear and transparent measurement systems and yardsticks for assessing the success of innovations are critical to evaluating what works and creating cultures of learning. 26.
. Real-time learning Real time learning through formative and summative evaluation is extremely important in order to avoid producing findings in a timescale that is not responsive to immediate delivery or political pressures (often a failing of innovations with medium or long-term outcome goals). Effective knowledge management systems are crucial. Requisite variety Nonaka (1995) describes how the internal diversity in skills and experiences of employees must match the variety and complexity of the environment in order to meet challenges posed by the myriad of contingencies. evaluate and learn about innovation more generally in order to support understanding of innovation across the public sector. 24. service responsiveness to individuals and localities. Equally user involvement adds significant value in developing and implementing successful innovations.Analysing and Learning
23. Double-loop learning Processes and mechanisms need to be in place to analyse. and reductions in costs against outputs and increases in productivity. 27.
New technologies provide new opportunities for transforming the manner in which agencies conduct their business. multi-faceted services that address the whole person. friendlier and more accessible. Of the 300 programmes covered by his study.
sector processes faster.
developing and implementing one’s innovation in the wider interconnected context of other organisations. so methods to streamline or circumvent them are preferable. or the Commonwealth Association for Public Administration and Management International Innovations Award Programme.2
Innovation Building Blocks
Borins (2001) undertook the largest empirical study of innovation in the public sector to date that also provides a cross-cultural perspective on innovation. (ii) developing 19
Involvement of private and/or voluntary sectors: The use of the private and/or voluntary sectors to achieve public purposes. Borins’s research is significant in that he has been able to provide an evidence-based analysis of what makes successful innovations in the public sector. whereby the innovation is targeted only at a single issue at a time. The overarching building block of “systems approach” as conceived by Borins encapsulates three practices employed by the successful innovation programmes studied. rather than opting for a compartmentalization of the individual’s needs. These include: (i) conducting a systemic analysis of how the problem in question interacts with other issues and programmes. inter alia. examples of process improvement include the development of new processes: (i) to distinguish the minority of complicated cases from the majority which are straightforward.4. entails: (i)
. Innovations here often involve applications of the Pareto rule. which states that 20% of cases are responsible for 80% of workload and vice versa. and (iii) focusing on integrated. activities and concerns. five shared primary characteristics emerged as the key building blocks and tools for change of successful innovation. surveying over 300 government innovation programmes around the world. (ii) to make a distinction between high and low value users.
Process improvement: This refers to innovations designed to make public
opening up the public sector to private sector competition. These government reformers have been recognized for their achievements either by the Innovations in American Government Programme. As such. these are outlined below:-
A systems approach: This refers to the practice of understanding. and (iii) to establish voluntary compliance and alternative dispute resolution. (ii) fostering inter-organisational co-ordination in designing and implementing the innovation. The latter starts with recognising that judicial processes are expensive and time-consuming.
Use of new information technology: Effectively harnessing new technology provides a catalyst for innovation programmes in providing improved public services and can significantly impact on the effectiveness of service delivery and organisational operations.
Sure Start (UK) Use of ICT. e. and Light’s (1998) work on innovative non-profits and small public sector organisations. Specifically.
An innovative culture must be supported from the top: Support from the
Increase the rewards for innovative individuals and teams: Rewarding developers of successful innovations is important in encouraging
. Building Blocks of Innovation [Borins. NHS Direct (UK) Involvement of Private/Voluntary Sector.g. e. e.
Empowerment of communities.partnerships that involve private sector delivery.3
Enablers to Innovation
Based on his unique study of innovators in the public sector and a review of literature about innovative private sector organisations. Furthermore. e. listening to their views and inviting them to play a role in implementation programmes. support can take the form of developing organisational priorities to guide innovation. granting the latitude for experimentation to take place. and protection for innovators from central agency constraints.g. NYPD (US) Process Improvement.g. Osbourne and Plastrik’s (2000) fieldbook for government re-inventors. and (iii) involving volunteers and voluntary sector organisations in services and user engagement. strengthens and promotes innovation in the public sector.g.g. 2001] A Systems Approach. Congestion Charge (UK) Empowerment of Users/Staff.
The following box summarises Borins’s five building blocks. recognition for innovators. e. Thomas Bennett College (UK)
4. These examples will be presented and elaborated further in the second part of this report. with illustrative examples of how each of them has been used in public policy both in the UK and overseas. users/citizens and staff: Successful
innovations are those that consult with communities and citizens with regard to improving public services and policy making. Borins provides the following prescriptions about supporting innovation in public sector organisations:top of an organisation is critical for innovation to thrive in that environment and to emerge at all levels. supporting staff empowerment by showing greater organisational tolerance for risk taking and encouraging front-line staff to take the initiative for change and develop ownership of new programmes.
Alternatively or in addition. Examples here would include the New Deal and ONE pilots as well as the Education.
Ensure diversity of staff in terms of background: Innovation depends on the
ability to see things differently. differences in the backgrounds and perspectives of an organisation’s members are likely to foster innovation. so that the main lessons drawn from a particular innovation are fed back to and inform policy and practice in an effective and timely way. through benchmarking.
To the above. therefore.
Scope for experimentation in essential for innovation: Organisations that
Innovation requires evaluation: There is also a need for robust evaluation of innovative policies and programmes for which appropriate metrics and approaches must be developed. pathfinders and “Zones” is an effective way of facilitating experimentation. which ever is opted for the message that innovators efforts are valued should be clearly communicated. To address this pressing problem. Creating “safe” places for testing ideas such as pilots. professional networks. Rewards may be financial or recognitionbased. Employment and Health Action Zones. central innovation funds within the public sector to support innovative ideas is required. One key aim here is to promote as much as possible both real-time and double-loop learning.
Innovative organisations are effective at looking to learn from the external environment.
Resource for innovation: Borins’s study found that the obstacle that
innovators overcome least frequently is inadequate resources – starkly showing that without the necessary resources innovation cannot occur.
seek to learn from their successes and failures and support their employees’ endeavours through lowering the cost to staff of “honourable” failures. one should add a number of other factors that we gleaned from the existing literature as being crucial in fostering innovation: that front-line staff and middle managers are the most frequent initiators of public management innovations. etc.innovation to be engaged in. evidence also indicates that these are also likely to exhibit greatest resistance to change. will promote successful innovation. 21
Attention to views of all relevant stakeholders: Evidence consistently shows
Learn about innovation by looking at what is being done externally:
Innovation is everyone’s responsibility: Organisations that wish to foster
innovation must encourage and draw upon the innovativeness that exists at all staff levels. Yet despite this. The Invest-to-Save Budget is a good example of such central funds. financial management reforms should be considered to create the possibility of enhanced internal funding for innovation within all agencies.
develop reflexive practitioners. this pegs the question of how public sector organizations can be made more supportive of such innovations internally. Project planning and risk management skills are also crucial at this stage. For example. Clearly. working practices. For example. cultures. Evidence suggests that although having innovation champions promoting and driving innovation is a key success factor.
Involvement of end-users at all stages: It is important to ensure that the
individuals but also on a much wider range of factors such as organizational design. It is also important to differentiate between innovation champions and units.thus hindering innovation. as Borins points out. both managers and staff tend in this case to expect the innovation unit to come up with. It is important to ensure that the relevant staff/managers have the necessary skills at each stage of the innovation cycle (Ling. etc. setting up separate innovation units is not conducive to greater and diffused innovation. 2005). Rather. the skills required included diplomacy and persuasion. Equally. in that one should provide leadership and vision. 2002). and see new ideas as opportunities and not as threats. e. at the first stage of generating ideas there is a need for enhancing one’s understanding of customers and suppliers using a variety of both applied science. the skills range required is rather different. structure and dynamics.
. modelling and “what if” scenario building as well as learning through listening and partnership working. At the stage where innovation is being diffused and lessons drawn and adopted. develop and implement innovation as a distinct activity from their own tasks and responsibilities. views of end-users are taken into account when developing and implementing an innovation. evidence does suggest that some individuals are more adept at introducing and supporting innovation (Howell et al. Innovation champions are usually individuals who view their role broadly and have a good of the issues that affect their organisation. have extensive strategic and relational knowledge and are able to enlist the support and involvement of key stakeholders. use systems theory to analyse complex changes. careful attention to user requirements at an early stage can also facilitate the easier acceptance and diffusion of innovation.. development and validation of prototypes contributes to the early identification and remedy of faults. such involvement in the design. expand one’s understanding of organisational culture. etc. creating conditions for incentivising uptake of successful innovation and assessment and evaluation to identify and measure success. use both internal and external to scout for ideas as well as formal and informal selling channels. When one manages innovation. structures.g. communication and marketing (including social marketing). build innovative clusters and networks. change and risk management skills. can convey belief in and enthusiasm about the proposed innovation.
Innovation Champions: Although innovation is contingent not only on
Ensuring full range of requisite skills is available.
Central Innovation Fund
Encouraging staff to innovate. promoting real-time and double-loop learning.g.g. including users. e.g.g.
Ensuring full range of requisite skills is available.
Barriers to Innovation
.g. learning from other innovators benchmarking. developing appropriate metrics. scanning of external environment managers
outlook. e. e. Ensuring diversity of staff. even if this results in some cases in “honourable failures” (Mulgan and Albury. in the design and development of prototypes for early identification and remedy of faults
creating “safe” places for testing. Innovation Champions. e. innovative culture
The box below summarises the key enablers to public sector innovation.g.g. as listed in the available literature: Enablers to Innovation
Support from the top.g. etc. learning from “honourable” failures. etc. perspectives. Yet one key element in the innovation process is the need to accept and manage risk by creating greater tolerance for risk taking and empowering staff to take initiative and think creatively.
5. rewarding innovation. e. networking. not Units Adequate resourcing. 2000).
Attention to views of ALL stakeholders. e.
Scope for experimentation. e.g. etc. change and risk Learning to accept and manage risk
Evaluation.Learning to accept and manage risk: Public sector has been historically averse to risk taking (NAO. e. allowing freedom/space to innovate and think creatively. etc. in terms of background. staff and middle Involvement of end-users at all stages.
Culture of risk aversion: Within the public sector there is an obligation to
are three necessary conditions for innovation to flourish – opportunity. and account to tax payers through local authorities and Parliament. In addition. Rather. parliament.g. agencies and inspectorates. whilst opportunity and motivation may be present. the tradition of higher penalties for failed innovations than rewards for successful ones remains within the civil service. the need to innovate is seen as less necessary and more as an “optional extra”. Furthermore. low reward projects. the overwhelming proportion of their time is spent responding to the day-today pressures of running their organisations. When faced with a requirement o for example. than a new programme that has the potential to offer far greater value. and the corporate tax regime. through trademark protection.
Delivery pressures and administrative burdens: In general. These primary concerns of accountability. Within the public sector it is often the case that. within the public
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. Rather. standards and continuity induce a culture of risk aversion which impedes and blocks innovation. maintain continuity for the public. 2 or 3% efficiency gains a year. an active incentives drive for innovation has yet to be established in the public sector. given the time scale than being faced with a call to produce 20% efficiency gains over five years. delivering services and reporting to senior management. The former may. for example the core competencies for recruitment. e. do not sufficiently recognise or value innovativeness. National Audit Office and Public Accounts Committee. Whilst existing services may only function at an “acceptable” level. including R&D tax credits. there is a relative 24
Poor skills in active risk or change management: It is suggested that there
. however. employee share option schemes. which itself acts as a disincentive for public service workers to engage in such innovations. mean extremely public failure for those involved. the basic people management systems. they nonetheless will receive less critical attention from the media. as opposed to demonstrating high efficiency and performance. high reward innovations are usually treated the same as low risk. high risk. provide acceptable standards in key services. These have been identified by Mulgan and Albury (2003) as amounting to: 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.There are a number of key barriers to innovation that are particularly prevalent in the public sector. development and performance assessment within public and civil services. motivation and skills.
Poor rewards and incentives to innovate: Whilst governments across the
world have sought to strengthen incentives in the private sector for innovativeness.
Crucially. However. with systematic innovation requiring that organisations align their culture. Paradoxically. management methods and processes.
Barriers that arise from within the bureaucracy/organisation: These were
These have been recognized for their achievements either by the Innovations in American Government Programme. difficulty in introducing new technology. Borins’s study found that reported obstacles to implementing innovations could be divided into three main classes: identified as hostile or sceptical attitudes. In contrast.
Mulgan and Albury’s list of key barriers to innovation focuses largely on the characteristics of the public sector which inhibit innovative thinking. difficulty in maintaining the enthusiasm of programme staff. and suggests that actually developing a culture of innovation in the public sector is about achieving and learning from successful cases of implementation of innovations. 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. in turn. Borins (2001) observes that thinking innovatively and designing an innovative programme is really only the beginning of the journey. difficulty in coordinating organisations. On this basis. turf fights. although perseverance with the new service or process may still result in high value benefits. more constructively. and historically established failing functions are rarely closed down. and public sector opposition to entrepreneurial action. innovations that have shown problems at the testing stage will be abandoned. Such relative dearth of requisite skills can. or the Commonwealth Association for Public Administration and Management International Innovations Award Programme
. and drawing upon his unique study (2001) which surveyed over 300 government reformers4 around the world. severely hinder and potentially terminally threaten the innovation process. Specifically.
Reluctance to close down failing programmes or organisations: Although
Technologies available but constraining cultural or organisational arrangements: Innovation emerges in the context of technological and
organisational factors. he also presents the lessons one can draw from such innovations concerning tactics for overcoming obstacles and recommendations when planning an implementation programme. within public services higher standards are set for new programmes than for old ones. systems. logistical problems. Borins provides empirical findings about obstacles that are met in implementing innovations in the public sector. which implies to some degree that the public sector is an infertile ground for innovation.paucity of skills in change and risk management. Within the public sector innovation is often impeded or thwarted because there is a resistance or failure to embed innovation within the organisational fabric. middle management resistance. union opposition.
He notes that many instances of obstructive attitudes were cited. Interestingly. the power dynamics and relations for a given professional group. opposition by those affected in the private sector. and general public opposition or scepticism. Borins’s study found that by far the largest number of obstacles arose within the public sector that is within the internal organisational and bureaucratic context. cultural. including entities that would experience increased competition. power structures and dynamics. and occupational patterns.inadequate funding /resources. organisational aspects Legislative or regulatory constraints Turf fights Co-ordination difficulties 26
Barriers that exist in the external environment: These were cited by survey
Obstacles that arise primarily in the political environment: These include
respondents to comprise: public doubts about the effectiveness of programmes. legislative or regulatory constraints. Borins suggests that this reflects the tendency for the innovation programmes to change existing operating procedures. and political opposition. difficulty in reaching the programme’s target group. The box below summarises the main barriers to public sector innovation that have been identified to date: Barriers to innovation Delivery pressures and administrative burdens Short-term budgets and planning horizons Union and middle management opposition Inadequate funding/resources Poor rewards and incentives to innovate Risk-averse culture Poor skills in change and risk management Reluctance to stop failing programmes Lack of alignment of technological. which underscores the sensitive nature of introducing innovations that alter the working practices and. particularly with regard to occupational groups. as importantly.
(iii) persevering and exerting continuous effort. aversion to risk taking questions of cultural receptivity. public understanding of multiple accountabilities. Others: This category includes a variety of responses such as (i) finding
additional resources. equity and access. balancing efficiency and the public interest. compensating losers. also investigated how these successful innovation programmes sought to overcome the obstacles experienced. (iv) gaining political support and building alliances. public sector and volunteer values. citizen focus vs. and social marketing. preserving purpose of the public service. digital divide questions about accountability. as stated. fiscal /political concerns. private sector/NPM vs.From the above discussion a number of issues emerge in relation to public sector innovation which are presented in the following box Issues related to Public Sector Innovation potential incompatibility of values. performance measurement Empirical research has highlighted various ways of overcoming such barriers with varying degrees of success. lack of incentives. with responses including:
Persuasion: Showing the benefits of an innovation. citizens vs.g. Borins identified three main classes of tactical approaches. For example. Borins’s US and Commonwealth survey of 300 commended government reformers.g.g. public interest vs. co-opting affected parties by engaging them in the governance of the innovation. e. e. capacity. systemic barriers. procedure focus concern over higher-order tasks. (v) having a clear vision and focusing on the most important aspects of the innovation. e.g. lack of opportunities to experiment. e. training those whose work would be affected. global and local issues.
Accommodation: Consulting with affected parties. modifying technology. establishing
demonstration projects. customers/clients limits on innovation. (ii) resolving logistical problems. sharing policy capability questions around fairness.g. and ensuring the programme was culturally and linguistically sensitive. system focus vs. e. transparency. (vi) changing legislation
consulting with affected parties.g. co-opting affected parties by engaging them in governance of innovation. i. and (viii) the least employed tactic. they either attempted to change the minds of programme opponents and sceptics. changing the manager responsible for the programme implementation (reported only 8 times out of a survey of 300 Programmes). e. Significantly. and social marketing Accommodation. The Box below lists the responses given within the context of this study. Overwhelmingly the change agents employed consensus building tactics as opposed to strong-arm methods to support the successful implementation of the innovation programmes. e. To this end. The study clearly shows that these successful innovators took objections seriously and sought to address concerns in a systematic way. training those whose work would be affected.or regulations. 28
. Finding additional resources Resolving logistical problems Gaining political support and building alliances Having a clear vision and focusing on most important aspects of the innovation Modifying technology Changing legislation or regulations Providing recognition for programme participants or supporters Borins also specifically asked the successful public sector innovators to indicate what the most important lessons were that they had learnt in implementing their programmes that they would recommend to would be innovators. (vii) providing recognition for programme participants or supporters. showing the benefits of an innovation. establishing demonstration projects.g. compensating losers.e. ensuring programme is culturally and linguistically sensitive. as opposed to the total number of responses that were classed as ‘other’. The box below lists the main approaches adopted by successful government reformers. or engage those who were disaffected in the actual design and implementation process in order to make them more comfortable with the innovation in question. the most commonly used approaches to overcoming obstacles were those of persuasion and accommodation combined. Fostering Innovation [Borins. 2001] Persuasion.
Lessons for public sector innovators Make the project exciting for staff Promote the programme and ensure positive media coverage Make sure that the programme objectives reflect and are in line with the organisation’s aims and objectives The project manager who is the primary change agent should be taskoriented Involve stakeholders as far as possible throughout the innovation stages Establish and maintain effective communication with all programme participants Secure support from senior management Have a clear mission and end goal Allow staff the freedom to innovate and tolerate mistakes Have a small implementation team who hold the decision-making power Think strategically and consider the wider implications of the programme Have a champion who feels ownership for the programme Be dedicated and persistent as innovation programmes are not easy Well managed documentation is tedious but essential Develop adequate control mechanisms and support governance structures with agreements Solicit regular feedback from programme participants and demonstrate early ongoing success Implement quickly to avoid losing focus and momentum Learn from mistakes as they occur and do not be afraid to change plans based on new information or in response to a changing environment Learn from other innovators Ensure that you have the necessary resources 6. by referring to the three key differences between the public and private sectors as identified by Hood and Rothstein (2000). whilst in the public sector the primary unit is more likely to be a complex open system such as urban renewal or criminal justice. it makes sense to ask what lessons can be learnt from the private sector for the public policy and service arena. Lessons from the Private Sector
Innovation has traditionally been the domain of the private sector. which are:
Primary Unit: Within the private sector the primary unit within which
innovation is assessed is the enterprise or cost centre. Given the longer history and greater proliferation of innovation in the commercial world compared to public sector organisations. providing useful insights and warnings about transferring ideas and practices from the private sector.
. Ling first highlights that it is important to recognize the different constraints that innovators face in the commercial environment. with public sector interest in and drive to innovate being low key in contrast. Ling (2002) specifically explores this theme.
Public Sector Private Sector . which are apparent from the differences outlined.
Value: In the private sector the ultimate driver of innovation is shareholder
Legislation: Whilst private enterprises have an obligation to operate in
accordance with the law.e.Ling (2002) Public Sector – Mulgan and Albury (2003) Generating ideas and finding new Generating possibilities market places Managing innovation Incubating and Prototyping (mechanisms to develop and manage innovations) Diffusion of successful innovation Replicating and Scaling-up (i. Table 2 lists Ling’s three elements. however. Ling in fact identifies three elements that mirror three of the four specified by Mulgan and Albury (2003) with regard to the public sector. Therefore. Table 3: Innovation-focused activities found in the private sector that may be of relevance to public sector innovators Element in the Innovation Focused Examples Innovation Process Activities Science based R&D “Ideas factories”.
Given the circumstances under which the public sector must innovate. Ling suggests that it is not surprising that within public services and policy-making fields innovation and its management is seen as more problematic than in the private sector. diffusion) In discussing the activities and techniques employed by private sector organisations to successfully innovate. legal constraints on public organisations and bodies (for example concerning freedom of information and natural justice) impose greater limits on the way that they can innovate. These are summarised in Table 3. which is an extremely straightforward objective to define when compared to the public sectors’ primary value objective which is to satisfy ‘public interests’. according to the three elements of the innovation process as detailed by Ling. and the corresponding elements as proposed by Mulgan and Albury. Ling draws out possible learning points for the public sector. innovation centres. In considering the key elements of the innovation process in the private sector. Ling argues that the innovation activities of the private sector cannot simply be transferred to the public sector. lessons can still be learnt for and applied to the public sector. Table 2: Elements of the innovation process – Private vs. laboratory experimentation Using experiences of lead Identifying early adopters customers and using their expertise as Generating Ideas a source of innovative thinking
authority Evaluation Marketing and communication Risk assessment and management
. focus groups. whole systems events Partnership and team working. diplomacy. communication skills Project planning Diplomacy. trials Knowledge management. creating innovation clusters such as the “Cambridge phenomenon” Understanding the consumption chain in order to identify new market opportunities and better ways to meet customers’ needs Reflexive practitioner capable of evaluating their practice and open to new practices Understanding shared myths in order to change the dominant narratives in an organisation Sharing visions and enthusing Team working.Using experiences of suppliers “What if” experimentation
Learning through partnerships and innovation clusters Identifying new market places
Leadership Collaboration Theoretical understanding of complex change processes Testing Communication Diffusion Providing resources at the right time and place to support innovation Overcoming resistance Identifying success Disseminating evidence of success Managing risks
Using suppliers as a source of innovative thinking Modelling. persuasion. systems theory. openness Systems theory Experimental. scenario thinking. simulations.
that in helping one understand how innovation occurs. It should be noted. 2002] Different skillsets required at each stage of innovation cycle Single successful innovation does not indicate all right processes are in place Heavy investment in understanding customer’s needs and suppliers experiences Effective publicity/dissemination of innovation
Whilst marketing own success (PR) and copying the success of others (for profit) is highly rewarded and thus common in the private sector.
The Box below outlines the main lessons from the private sector that can be of use to public sector innovators.Interestingly. also as “skills and competencies” and in fact diagrammatically maps these out according to “stages” of the innovation cycle. as such attempts to replicate based on shallow
learning run the risk of failure. however. possibly the equivalent would be the policy objective. whilst public services must identify the most appropriate source of co-ordination for innovation in their domain.
sector dissemination of innovation needs to be more effectively managed to ensure that lessons are learnt and more widely disseminated.
A single successful innovation does not indicate that all the right processes have been put in place.
Innovation in the private sector relies on heavy investment in understanding customer’s needs and suppliers’ experiences. Ling refers to most of the private sector innovation “activities” identified in the table above. but in
addition with these specialisations there is the need to coordinate – this is provided by the product line in the private sector. Ling’s concluding thoughts on lessons that can be learnt from the private sector are outlined below. they tend to concur with the main conclusions of Mulgan and Albury (2003) and Borins (2001):
Successful innovation demands a variety of competencies at all stages of the innovation cycle. In the public
sector there appears to be the risk that innovation is driven more by process than by public needs. Each competency requires space and time. public
. Lessons from the Private Sector [Ling.
http://www. examples from the private sector and abroad are also illustrated. and conceptual innovation. and lessons for innovation in public services in general. The introduction of the NHS Direct service is a classic example for a service innovation that relies on the use of modern technologies: the telephone and the computer. As such it is to be read in conjunction with the theoretical part of the literature review which explores general ideas and principles. Guiding questions for their examination are: methods and mechanisms of implementation. including the interaction with and dependencies of innovation in private. and the structure of incentives for these institutions to innovate.predominantly evaluations and government think-pieces . The Publin project. Where relevant and instructive. 1. The examples presented focus on national and local initiatives from the UK.PART II Examples of Innovation in Public Service Delivery Part II presents the results of a review of existing literature . administrative and organisational innovation.no/publin/presentation. The examples of innovation presented in this section are grouped under these headings. It focuses on providing examples from the past where innovative ideas have been introduced successfully and attempts to identify the mechanisms of delivery and lessons to be learnt. paying particular attention to “the wider social context in which the institutions are embedded. reasons for their success. delivery innovation. market-based organisations.step. The Box below describes the innovative features of NHS Direct and the lessons that can be learnt for other public sector innovations. use and adaptation of relevant technologies.
The Publin project carries out research on innovation in the public sector. identifies four types of innovation: innovations involving changes in characteristics and design of service products and production processes.html
.5 funded by the European Union’s 5th Framework Programme.on innovative public services.” The project runs until the end of 2006 when it will present its findings. Innovation involving Changes in Characteristics and Design of Service Products and Production Processes
This type of innovation involves the development.
the service had been extended to cover the whole of England and Wales. 2001. building strong relationships with their local communities. voluntary organisations representing potential groups of users) was consulted during the development of NHS Direct. Fast and easy communication between project managers and local implementers enabled lessons to be taken forward quickly as the projects
. “has been hailed almost universally as a shining example of innovative thinking in relation to the organisation of healthcare delivery”. According to the NAO (2002). Many sites have worked hard to build up appropriate links and to consult with key local stakeholders. 1998. as the NAO reports.a computerised decision support system assists nurses in advising callers on the appropriate course of action to take.
What methods and mechanisms were used?
Several evaluations of NHS Direct have been carried out (Munro et al. Some key contributors to the successful introduction of the service appear to have been: The combination of central guidance from the Department of Health with flexibility locally to adapt the scheme to local circumstances. NAO. 2002) These evaluations attest that the introduction of NHS Direct was highly successful. This ensured ministerial support and. By 2000. a concern with how to implement NHS Direct rather than whether to do so. seven days a week. It was established in March 1998 with the help of two pilot projects. this was crucial to the successful timely implementation of the service. Use of advanced technology . Stakeholder consultations: A wide range of stakeholders (GPs.
Why does it work?
The 2002 evaluation of NHS Direct by the National Audit Office gives some pointers as to the reasons why the service was implemented successfully: NHS Direct is tapping into a service gap (24 hour access to health care) that it was able to combine with a government modernisation agenda that aimed to improve access to services. NHS Direct is currently the world’s largest provider of telephone healthcare advice and.NHS Direct NHS Direct is a national nurse-led telephone and Internet-based helpline available to the public 24 hours a day. such as emergency services and NHS walk-in centres. both as regards set-up and user satisfaction. Integration of NHS Direct with local health care providers and other NHS services. as Green (2004) points out.
Delivery innovations involve new or altered ways of solving tasks. This was despite the tight schedule for implementation which meant that there was no formal way for lessons from previous ways to be passed on. Enabling efficient communication between programme / project managers and those implementing innovative services helps to share experience and lessons. The customer-orientated approach adopted by Liverpool City Council is an example of innovation in service delivery (see Box below)
. delivering services or otherwise interacting with clients for the purpose of supplying specific services.
Lessons for innovation in public services
Using “windows of opportunity” where government policy preferences coincide with sectoral reform initiatives or proposals. Developing new services to reflect user needs and lifestyles ensures user satisfaction.
The adoption of private sector principles (such as customer focus and costawareness) can foster a spirit of innovation. Liverpool CC is also working closely with Barclays Bank to provide basic bank accounts to the Community which reduces the Council’s costs of administering and issuing cheques. Liverpool CC also works with British Telecom in order to set up a call centre that is open 24 hours a day. Joined-up working: Liverpool CC works closely with both private organisations and government departments to provide better services and reduce costs. Finally. recently unemployed customers will be able to receive increased housing benefit payments more rapidly as the database will help to identify them much earlier. especially in cases where people’s circumstances have changed. where the Council believes it can learn from the private sector.
What methods and mechanisms were used?
Managerial changes: creation of “Team Liverpool”. Linking up with other providers can support the innovation agenda. a new and faster payment system has been introduced.
. Team Liverpool is also helping to meet a number of LPSA targets. Liverpool City Council has made a determined effort to focus away from bureaucratic processes and to concentrate on how the Council performs as a business. For instance. For instance.
Lessons for successful innovation in public services
A dedicated (cross-departmental or cross-services) team can support can provide the HR backup necessary for implementing innovations. This has involved a greater customer-orientation. a team of 30 individuals who are the driving force for delivering customer contact and change agendas. For instance. seven days a week throughout the year enabling customers to contact the council at their convenience. This initiative is designed to assist in the development of a more efficient service. This team is also placing strong emphasis on streamlining business processes. the Council has set up a database that can be accessed by both its own staff and the Department for Work and Pensions to access relevant information about a customer. Changes in service orientation: focus services towards customer convenience rather than what is convenient for the council.Liverpool City Council’s “Customer first” approach Within the framework of the local public service agreements (LPSAs).
The number of people that needed to be consulted over cross-cutting issues also posed difficulties. Local authorities felt that government departments were not sufficiently willing to take into account local circumstances that might affect the achievability of a target. It was felt that a “one-size-fits-all” approach was adopted by central government which did not recognise the unique contribution to the delivery of improved outcomes that could be made at local level. the evaluation of the LPSA pilots suggests that the scheme poses a number of challenges to innovation. A by now classic example of administrative and 37
.e. 2005). These reportedly arise from the fact that it is unusual for departments to deal with individual authorities on a one to one basis. The tone and quality of those pre-existing relationships influenced the conduct of the engagement in the LPSA. Overall.While the LPSA seems to have successfully provided a framework for innovating public service delivery in Liverpool. On occasion. the evaluation of the LPSAs found that the development and application of LPSAs was informed by the prevailing perceptions of the nature of central-local relations and mediated by the pre-existing relationship of the local authority service area and the relevant central government department. It was often difficult to find a person to take responsibility for a cross-cutting proposal. These mainly relate to the nature of the relationship between the central and the local level of governance. Local authorities surveyed regarded the lack of a mechanism (i. local authorities felt that they required freedoms that would have required legislative changes. The evaluation of the LPSA pilots also identifies cultural difficulties in the implementation of the pilot LPSAs.e. Administrative and Organisational Innovations
This type of innovation involves new or altered ways of organising activities within a supplier organisation. legislative change) or a refusal on the side of government departments to change policy as barriers to the granting of the freedoms and flexibilities they saw as necessary for the innovations envisaged under the PSA. Local authorities submitting proposals for joined-up LPSAs (i. 3. Only a small number of freedoms granted were viewed by local authorities as having helped significantly (Sullivan et al. The freedoms and flexibilities at the disposal of local authorities were not clearly defined. where cross-cutting targets were set affecting various government departments) reportedly anticipated difficulties in meeting a national target because it is not reflected in the priorities of the government department mainly responsible. or challenging for local authorities to fully understand (in part because they found themselves to be unaware of the freedoms they were already having).
organisational innovation in the public sector is the reform in the 1990s of the New York Police Department which significantly contributed to reducing crime in the city (see Box below).
street crime in New York had risen continuously to levels far exceeding those in other capitals in the developed world. and accountability. Bretton made changes to the internal organisation of the NYPD. he introduced a new system of management called Computerised Statistics (Compstat). Giuliani and Bretton cracked down on the “quality of life” social nuisances and “victimless crimes” such as fare dodging and graffiti spraying that may be the seedbeds of more serious offences.New York City police reforms in the 1990s Throughout the 1970s and 1980s. Shortly after coming to power.
What methods and mechanisms were used to implement the reform of the NYPD?
The reform of the NYPD initiated by Giuliani and famously implemented by the then Commissioner of Police. 2002). The idea was that focusing on these crimes creates a virtuous circle whereby public spaces are reclaimed by the “well-behaved”. As a result of these reforms. The information provided by Compstat was used to improve planning. Further. In addition to this “philosophical” change. the use of civil remedies to fight
. the reform of the New York Police Department is now seen as an example for dealing with crime in Britain and elsewhere. At the heart of the changes to the style of policing in New York in the 1990s lay the “Broken Windows” theory. evaluation. elected in 1994 due to public concerns about crime and safety. Giuliani and Bretton introduced a number of substantive changes to the NYPD. Bratton was appointed as Police Commissioner by Giuliani because of his firm belief that the police could reduce crime (Smith and Bretton. initiated a comprehensive reform of the New York police service. Arguably. This trend was reversed sharply in the course of the 1990s when Mayor Rudolph Giuliani. From these strategy sessions came the "zero tolerance" approach to law enforcement. Bill Bratton. The up-to-date and accurate information provided by Compstat was used as the basis for discussing crime control strategies with precinct commanders. At the core of Bretton’s reform agenda was using technology to improve efforts to fight crime. He started a regular series of meetings with commanders to discuss crime statistics and to encourage innovative responses. 2005). a sophisticated computer program that compiles crime statistics. coordination. which measures not only outcomes but allowed managing for improved outcomes by delivering daily and weekly figures on crime trends that were used to measure the success of precinct and city-wide policing. serious crime in New York has dropped by 70 per cent in the last 15 years (McMahon. Compstat was thus a crucial mechanism for linking the development of new policies with effective tactics to control crime. were innovative because they changed both the style of policing in New York and the way the NYPD was organised. Because of its success.
Decentralisation of provision brings services closer to the citizens and enables a faster reaction to changes on the ground. and managerial changes redefined the approach to policing. objectives. organizational. transforming the department from a reactive to a proactive force (Silverman. In addition. Adoption of modern management techniques such as accountability and rewarding success empowers people to work towards the new goals. As Silverman explains. Bratton made a number of personnel changes. public support was gained with the help of publication. Making use of modern technologies to provide up-to-date information can improve performance and thus contribute to the success of the innovation. 1999). Thus. Silverman (1999) argues that the dynamic interaction of specific strategic. and the reorganization of the NYPD to give greater authority to the precincts so that they could respond quicker to crime problems in their area.
Why did it work?
In his study on the Giuliani Reforms. and the crime reductions were highly publicized and garnered tremendous public support. strategies and rationales. slow-moving bureaucracy into a lively.
. quick-acting organization. worldviews. 4. Mayor Giuliani and the media seized on zero tolerance policing as the primary cause of the crime decline in New York. NYC had a political leader who supported the police reform which contributed to the success. but Silverman points out. Conceptual innovation Conceptual innovations are innovations that introduce new missions. and he promoted those who obtained crime reductions while forcing out those who were resistant to change. Precinct commanders were directly accountable to top executives for increases in crime in their neighbourhoods. much of the credit for the decline might be a result of the Compstat meetings and the reorganization of the NYPD. according to Silverman (1999) the adoption of technological advances and the implementation of modern management principles and strong leadership transformed a huge.crime. In Giuliani. previous police reforms failed because City Leaders did not support the process. Mayor Rudolph Guiliani supported these measures.
Lessons for successful innovation in public services
Political support for innovations is important for their success. Strong leadership is essential to initiate and see through innovative reforms.
can be characterised as such a conceptual innovation as it introduced new services for young children that bring together all relevant agencies in a locality.1
Sure Start Programme
The Sure Start Programme.
. described in the Box below.4.
its introduction was based on the view that current provision of services appeared. Sure Start local programmes represented a new way of doing things.
What methods and mechanisms are used to implement Sure Start?
The introduction of the programme was preceded by a programme of research. It emerged out of the 1997 comprehensive spending review.
Why does it work?
The national evaluation of the Sure Start programme has highlighted a number of factors that have made the implementation of Sure Start a success on the ground (Tunstill et al.The Sure Start Programme Sure Start is a cross-cutting programme for the unified delivery of childcare. Locally driven: based on consultation and involvement of parents and local communities. education and social services. education or health or "parenting". to be failing those in greatest need and that there was evidence that comprehensive early years' programmes could make a difference to children's lives. in many cases. Out of these activities came a set of principles that were to guide the implementation of the programme and highlight its innovative character: according to Glass (1999). and first local programmes were set up in 1998. both in the development of the policy and in its delivery. Involvement of service users: the programme involves parents as well as children. not just. These innovative methods and mechanisms with which the programme was implemented include: Multifaceted targets: target a number of factors. so that children have greater opportunity to flourish when they got to school. Parents are actively encouraged to participate in the running of a Sure Start programme on the ground. Sure Start aims to improve the health and well-being of families and young children under four. for example. early education and health and family support. Local people not from government departments were actively involved in designing the Sure Start local programmes Persistent funding: last long enough to make a real difference. According to Glass (1999). This meant the management of the Programme was shared between government departments and that implementation on the ground was to be a joint effort between the main statutory agencies . Insightful and enthusiastic managers can take
. 2005): Programme managers are crucial to the development and maintenance of partnership working. particularly those who are disadvantaged.health. consultations and expert workshops to determine the extent of the problem and the best approaches of addressing it.
in particular: Joined up and partnership working is challenging and time-consuming Working in multi-disciplinary teams is challenging and new to many professionals Working in areas where many other initiatives overlap exacerbates the issues around collaborative working
Lessons for successful innovation in public services
Involvement of service users in the design and management of public services can increase a sense of ownership and ensure activities are tailored to the needs of the locality. has implemented a ‘Community Workers’ scheme where workers are based in a geographically 43
. Flexibility in the delivery of services on the ground facilitates the adoption of creative solution. has found that Sure Start has succeeded in introducing new services locally. also found that the innovative elements of the Programme posed a number of challenges to implementers. Joined up working is much easier to achieve in programmes that have preexisting relationships with pro-active local agencies.
What challenges were faced?
While the innovative elements of the Programme – in particular the multi-agency approach . the home visitor acts as the key link between parents and the Sure Start local partnership. upon examining local programmes (Allnock et al. who were equally enthusiastic about the Sure Start way of working as the communities with whom they were working. 2005).strategic action to maximise implementation progress for their respective programmes. Tunstill et al. For instance. one local Sure Start programme. The national evaluation of Sure Start. Committed. These were. In this context.were much appreciated at the local level (Myers et al. Home visitors provides information about and access to all the services on offer in the area. Joint-up working between different agencies and / or government departments means that comprehensive services cutting across artificial administrative boundaries are created. both statutory and voluntary. For instance. in addition to providing funding to Homestart for volunteers to work with Sure Start families. 2004). resourceful staff from a range of agencies. some programmes have eschewed the centre-based drop-in approach and use home visiting as the main gateway to all their services.
Community workers will provide preventative help and support to families. This is a classic conceptual innovation as it takes the not-so-new concept of toll roads and uses it in the context of traffic management in a major capital.
4. with the aim to provide comprehensive coordinated and innovative services offering early intervention to children and their families (Allnock et al. 2005).
London Congestion Charge
A different example for conceptual innovation in public services is the London Congestion charge.strategic way to facilitate accessibility of services by families living across the patch. outlined in the Box below.
Ken Livingstone had included the introduction of a congestion charge in his election manifesto. This was part of a wider transport strategy which aimed at creating “a world class transport system that enhances business efficiency.uk/tfl/cclondon/cc_resolving_problems. the congestion charge is widely deemed to be successful.London Congestion Charge The London Congestion Charge was introduced in 2003 in order to reduce traffic congestion in central London. Supplementing the charging scheme with improved public transport provision: heavy investment into more buses to provide people with alternatives to car transport in central London. Moreover.”6 Cars entering a defined zone in inner London are liable to pay a £5 charge per day. o technologies such as SMS. the Internet.co. More specifically.tfl. supports greater economic prosperity and improves the quality of life for every resident and visitor to London.
Why does it work?
Arguably.shtml London Congestion Charge Environmental Success http://www. pay points in shops can be used to pay the charge. the application of the principle in a city and the amount of the daily charge are progressive. the success of the congestion charge was due to two main factors: A strong political leader keen on introducing reforms was elected after the re-instatement of a pan-London government with powers over transport.uk/stations/autogas/Latest_News/London_Congestion_Charge_Environme ntal_Success.conocophillips.gov. with traffic in central London decreased by 15%. Implementation happens with the help of partners from the private sector making use of their IT expertise. the telephone. While the introduction of road charging in general is not an innovative concept. the 1999
http://www. Modern technology is used to run the scheme: o CCTV-style cameras with automatic licence plate recognition software are used to monitor cars entering the congestion charging zone.7
What methods and mechanisms are used to?
Integration of the scheme into a wider transport strategy ensuring it contributes to several of its strategic goals.htm
. A clear legislative framework which gave the mayor of London and the GLA autonomy over public transport in London. congestion reduced by 30% and emission reduced by 12%.
5. services or ideas. the Sure Start Programme and the London congestion charge. Genuine cross-departmental or cross-service collaboration facilitates the introduction of innovative services. the reforms of the New York City police department in the 1990s. It is clear that these assessments are subject to interpretation and an individual’s subjective view of how the world works. Nevertheless. it is due to a lack of in-depth analysis providing a “structure and agency” based analysis of innovation processes in the public sector. however. This also means making use of the right political circumstances when they present themselves. Liverpool City Council’s “customer first” approach. Conclusions
In Part II of this report we have presented five examples for innovations in public services: NHS Direct. During the review of these examples it has not been possible in every instance to provide a comprehensive set of reasons for why the innovation was successful. This must be combined with an ability to act. from the examples presented above it is possible to draw some general conclusions and lessons as to why they were successful: The ability to spot gaps in service provision or modes of delivery is essential for public service innovation. These examples have in common that they were all introduced successfully (though some relating programmes or policies faced challenges): both service deliverers and service users felt that the frameworks created. either a clear legislative framework or a programme design which empowers actors to be creative in implementing a policy.Greater London Authority Act gave a future mayor the power to introduce a form of congestion charge without requiring the consent of the Transport Secretary. A political leader with a reform agenda will spearhead innovation. approaches chosen and results achieved benefited them and their community.
Lessons for successful innovation in public services
A clear legislative framework helps the introduction of innovative policies. More specifically. that is. especially when combined with effective communication between all levels of
. Support from political leaders or superiors is essential for the successful introduction of innovative policies.
. New technologies can both spark innovations and support their successful implementation.Engagement with service users on the ground – be it at the local or sublocal level – in order to tailor service provision to their needs has been shown to be effective for the introduction of innovative services.
Kennedy School of Government.surestart. 48
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