The Operator’s Manual – Innovation

Recognize that employees, especially those who are on the front line of your organization and who regularly deal with your agency’s customers, often are the source of innovative services that can benefit your customers. Getting them engaged is key.

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
SUBJECT: Innovation

Innovation is a hot topic. While not usually viewed as a tool, innovation can assist you in improving performance and achieving your goals. Many organizations in the public, nonprofit, and private sectors are devoting much time and effort to developing new approaches to innovation. In Expanding the Innovation Horizon: The Global CEO Study 2006, IBM developed a typology to characterize different types of innovation:

Business model innovation that changes the structure and/or financial model of agencies or organizations that provide programs, deliver services, or support operations. In government, business model innovation is more about the “what” rather than the “how” of government.

Operations innovation that improves effectiveness and efficiency at the tactical or core process/ function level.

Products/services innovation that creates new programs or services, or citizen-facing activities. In his book, The Future of Management (Boston: Harvard Business School Press, 2007), Gary Hamel adds a fourth type of innovation:

Management innovation that “substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and by so doing, advances organizational goals.” Your challenge is to foster the right mix of the four types of innovation in your organization.

In each of these aspects, the Chief Technology Officer (CTO)–if not the Chief Innovation Officer (CIO)–in your agency is usually a critical player and an important champion of innovation. Demonstrating the importance of the CTO, the Administration created the position of the national CTO in 2009, and empowered it to engage with citiezns, for example through the likes of Data.Gov, and launch programs, like the Presidential Innovation Fellows. Whatever the title, your chief officer acts as cheerleader, spearhead, coach, and director for innovation, providing light, and where appropriate, heat, to help create an environment more conducive to innovation.

The Innovation Fellows themselves are also drivers for innovation. Based on the idea of an “entrepreneur-in-residence,” an innovation fellow is a private-sector professional who joins the government for a brief “tour,” six to twelve months, and works on a specific problem or project. The ultimate success of the fellow’s work, however, depends on its being institutionalized, a process that will be carried out by agency leadership and career staff.

Some agencies, such as the State Department and the General Services Administration (GSA) have offices devoted to innovation. Within GSA, the Office of Citizen Serivces and Innovative Technologies focuses on initiatives that enable agencies to deliver effective and efficient services to citizens. It works closely with other government agencies—federal, state, local, and international—to collect and consolidate information and make it available to the public and share experiences that lead to better solutions.

Foster Business Model Innovation

You should challenge your management team to examine your current agency-wide business models. For example, in the case of the Internal Revenue Service’s (IRS) e-file, IRS moved toward the adoption of electronic filing. Your team should ask themselves: (1) Are we sufficiently challenging the way our agency conducts its business? and (2) How can we better measure and manage our agency’s performance in achieving objectives?

Changing a business model in government will not be easy. Business model innovation frequently creates anxiety and fear within agencies. It is thus crucial that you target your business model changes wisely, communicate effectively, implement the changes quickly, and make adjustments as necessary over time.

Foster Operations Innovation

For the development of innovations in business operations, you will need to create “safe spaces” for mid-level management entrepreneurs to pilot new ways of doing business. For example, in the case of shared services, this approach was piloted a decade ago in selected agencies, with great trepidation by both oversight bodies as well as by the providers (who thought their previously mandated customers would go elsewhere).

After several years of successful operation, this concept was expanded government-wide. For the implementation of innovations in operations, you will need to champion things that work and expand them beyond the pilot phase. For example, as the pilots begin to demonstrate promise, you them to other parts of agencies and begin to share them as best or promising practices so that they can be developed in other parts of government.

Foster Products/Services Innovation

To foster innovation in products and services delivered by your organization, there is much that you can do. First, recognize that employees, especially those who are on the front line of your organization and who regularly deal with your agency’s customers, often are the source of innovative services that can benefit your customers. Getting them engaged is key. You can do this by creating an atmosphere that encourages individuals to be entrepreneurial in proposing and advocating for innovations. This goes beyond the traditional “suggestion box” to allowing them to try new ways of doing things and recognizing them for their efforts.

Second, the success of most innovations involves effective collaborative approaches—whether it is within your organization, across agencies, across levels of government, or across public-private-nonprofit sectors. Recognizing that this is both an opportunity and a challenge is important when endorsing efforts to pilot or implement innovative products or services.

Foster Management Innovation

In The Future of Management, Hamel sets forth a three-prong approach to fostering management innovation in your organization:

Challenge long-standing management “orthodoxies” in the organization. In short, Hamel recommends that you should go to “war” with precedent. If you are going to undertake innovation in the above three areas (business model, operations, and products/services), you will also have to undertake management innovation by developing new approaches to management “systems” in your organization.

Develop new principles that will encourage new approaches which will “reinvent” the “management genome” in your organizations. Hamel recommends that you bring together your management team to examine specific processes within your organization to ask questions such as:

• Who “owns” this process and who has the power to change it?
• Who are the “customers” of this process?

Find insights from what Hamel calls “positive deviants”— those individuals or organizations with management practices that are eccentric yet effective.

Be Engaged

In its 2006 survey of 765 CEOs, business executives, and public sector leaders, IBM found that a crucial element in the success of innovation is:

Innovation requires your personal engagement. This is where you come in. The survey found that CEOs believe that the major obstacles to innovation reside in their own organization: Culture, budget, people, and process were cited as the most significant hurdles. The federal government is no different. You can change these.

Innovation does not happen in isolation to all of your other activities and initiatives. Innovation can become a key ingredient on actions related to all the tools discussed in this volume. The test of the success of innovation in your agency will be whether it has contributed to improving performance and achieving your goals.

Related Center Resources:

Challenge.gov: Using Competitions and Awards to Spur Innovation by Kevin C. Desouza – 2012

Cutting-edge government leaders are constantly seeking new and innovative ways to solve public problems. The challenge facing government managers is to find these new approaches.

Transformation of the Department of Defense’s Business Systems – Jacques S. Gansler and William Lucyshyn – 2009

The Department of Defense launched an ambitious effort to transform its vast network of back office mission support systems in 2001. It has since invested large amounts of funding in the effort. What progress has been achieved to date? What has been its impact? This report provides answers and insights into these questions as it assesses the progress of this effort. The authors, who have extensive experience in Defense reforms, also offer recommendations on leadership, governance, and management steps that the new Administration may want to undertake to ensure the Department’s business transformation efforts are meaningful.

Managing Innovation Prizes in Government – Luciano Kay – 2011

The use of prizes and awards is a visible element of the Obama Administration’s efforts to promote innovation in government. For example, the Office of Management and Budget (OMB) has sponsored a competition among federal employees to find cost savings and the White House has created the “challenge.gov” website where federal agencies can pose problems in hopes of getting solutions from the public.

Putting Irregular Warfare in Perspective Preparing for the New Norm of Conflict by Frank B. Strickland and Chris Whitlock – 2012

And

Irregular Warfare at Sea: A Case Study on National Defense Choices by Frank B. Strickland and Chris Whitlock – 2012

National defense choices can leave a country vulnerable. Military organizations routinely deal with risk and trade-offs. But longer-term strategic defense choices—shaped by multiple factors including uncertainty about the future, the pressure of dominant current constituencies, and fiscal constraints that are difficult to “get right.” Once a conflict begins, a new set of options and trades emerge but the uncertainties, the pressure of constituencies and resource constraints remain (even in a national level mobilization). In the United States, we are currently dealing with strategic choices that will propel the direction of the military and national readiness for the next 10-15 years.

Transforming Information Technology at the Department of Veterans Affairs – Jonathan Walters – 2009

Jonathan Walters’ report chronicles the Department of Veterans Affairs’ (VA) efforts to realign and centralize its information technology activities. Describing it as an “ambitious, audacious and arduous crusade,” Walters makes it very clear that this is still very much a work in progress.

In addition to his captivating description of the VA experience, Walters also identifies ten lessons learned – based on the experience of change management at the VA – which are clearly applicable to any organization confronting a change management initiative.