Building a public sector infrastructure for ‘innovation by design’

In this article, first published in The Mandarin, Sally Washington, ANZSOG Practice Fellow (Policy Capability and Public Management), looks at how public sector agencies and their leaders can support innovation, and create the conditions to move beyond innovating out of necessity, to innovating by design. 

ANZSOG’s focus on innovation continues in July with the Public Leadership Masterclass Series ‘Leading Innovation in the Public Sector’   which will see five two-hour online masterclasses themed around different aspects of innovation, featuring presenters including Thea Snow, Eddie Copeland, Emma Blomkamp, Brenton Caffin, and Vafa Ghavazi,

Is public sector innovation a misnomer? Claims that the public sector is clunky, inefficient, and suffering from bureaucratic inertia ignore its role as a catalyst or facilitator to breakthroughs like the moon landing and internet, and its quick and flexible responses to natural disasters and pandemics. 

It’s true that there are a range of system barriers to innovation in government operations: risk aversion, budget processes based on yearly appropriations to single organisations, accountability settings that don’t allow for collective responsibility and results, internal and across government siloes, and political and bureaucratic short-termism. At times when public service restructures and cuts are on the agenda, people are even less likely to put their head above the parapet to propose new and different ways of doing things. 

So, what does public sector innovation look like? More importantly, where and why does it happen? What are the essential ingredients of an organisation or system that supports innovation? And what can leaders do to encourage and enable innovation?  

Recently, 62 senior officials from across Australian jurisdictions visited Christchurch, Aotearoa (as part of ANZSOG’s Executive Master of Public Administration program). They examined lessons drawn from public sector innovation following the 2010-2011 Earthquakes there and explored what it takes to build an infrastructure for innovation – not by necessity, but by design.  

The Canterbury Context and Seismic Shifts programme

The earthquakes that severely damaged Christchurch and the wider Canterbury region (and caused 185 deaths) resulted in a range of changes in the way government worked in the area. Driven by necessity (or even the presence of a functioning toilet) government agencies worked together to keep services operational, including in collaboration with the private sector and other non-government organisations including iwi Māori.  These ‘innovations’ were documented in the ‘Seismic Shifts’ programme highlighting the importance of co-production, co-location, sharing information and technology between agencies, and collaboration with the wider community. Australian visitors got up close and personal with some of those innovations, including a visit to the state-of-the-art Justice and Emergency Services Precinct. They engaged with former and current Canterbury leaders and explored key enablers for innovation – outlined below. 

What is innovation? From small tweaks to giant leaps

Innovation can happen in any part of the public sector – in services, procurement, regulation, organisational practices and governance, and even in delivering policy advice. In the Canterbury example, rather than presenting a dry paper to ‘tell’ Cabinet ministers about the public service innovations, local officials came to Wellington for a ‘speed dating’ session with ministers to ‘show’ them the innovations.  

Innovation is often not about invention or totally new ideas; it’s more often about diffusion or taking something from one sector or service or jurisdiction and applying it to another. For example, in the redesign of the Christchurch hospital, cardboard mock-ups of beds and wards drawing on design features from business class pods in planes were user-tested, and new courtrooms adopted design and other features from marae to make them more accessible and culturally welcoming for Māori and generally.    

Innovation can be small tweaks to the status quo (‘doing things better’) or significant shifts or transformation (‘doing better things’). The former is more about efficiency, the latter about effectiveness. Scale and impact depend on the challenge or opportunity. Innovation is a continuum (Figure 1). But as one of the executives in the Canterbury examples said – “You can’t leap a chasm one step at a time”. If a big shift is required, continuous improvement won’t do the job.  

Figure 1. The innovation continuum (source: S Washington).  

The OECD’s Observatory of Public Sector Innovation hosts a repository of innovations from across OECD countries. But what is innovation in one jurisdiction might be business as usual in another. Lessons about the ‘how’ of innovation – what drives and supports it – is more transferable than individual innovations (the ‘what’).  

What drives innovation?

The OECD facets model posits 4 types of innovation (figure 2.) from top-down (big cross-cutting issues) to bottom-up (solutions to problems faced on the ground) and incremental (continuous improvement) to radical (anticipating future opportunities or shaping the future).  

Figure 2. OECD facets model 

This framing suggests different conditions to exploit for innovation. David Albury from the UK Innovation Unit categorises these into; burning platforms (the status quo is not an option); hot (or warm) possibilities for change (opportunities to leverage); and relentless dissatisfaction (pressure for change, usually from people affected by services or regulatory settings). In short, we need to see where things need and can be improved and be open to opportunities for new and better ways of working.   

An innovation infrastructure – how can we build a system for innovation?

In the Canterbury example the various ‘co-s’ stood out as being enabling of innovation: collaboration (inside and outside of government) co-location (of agencies), co-design (of policy), co-production (of services), co-governance (of desired outcomes or strategy), open information and communication, and a more permissive approach to decision rights and risk. If we see system enablers as the counterfactual to systemic barriers to innovation then we can look to building these into the public service operating model and how accountability, performance management, decision rights, and rules and processes are structured. Innovation enablers relate to organisations, leadership, capabilities, methods and mindsets. Taken together we can think of these as an infrastructure for innovation (Figure 3).  

Figure 3. An innovation infrastructure

Characteristics of organisations that support and enable innovation 

Insights from Canterbury and elsewhere, suggest that organisations that support and enable innovation have some common characteristics. They: 

• Focus on outcomes and what they want to achieve (the what) but are flexible about how to get there (the how) 
• Encourage experimentation and risk-taking (bounded and informed) with tolerating some failure as ‘learning experience’ – if experiments fail, they fail fast and fail small 
• Are customer-focused, they solicit ideas from and engage with diverse internal and external sources. Participatory approaches are valued and supported.  
• Have capability, skills and experience in innovation disciplines/methods, supported by resources (funding, time and space) discussed below.   

These characteristics all align with general principles of good public governance, but what kind of specific leadership is required to drive innovation?  

Innovation leadership – characteristics and roles    

On a New Zealand Government Leadership Fellowship some years ago, Lis Cowey and I studied ‘leadership for innovation’ which included embedding ourselves in organisations considered innovative and/or specifically dedicated to innovation activities. We found that innovative leaders also had some common characteristics. They were curious and interested in a wide range of issues and thinking. They ‘leaned back and listened’ to others, rather than hogging the floor or dominating in meetings (although it was the time of Sheryl Sandberg’s ‘lean in’ and we did wonder whether there would be a gender penalty for leaning back – seen as ‘she has nothing to say’?). These leaders appeared empathetic, enabling and empowering of staff, letting them ‘have a go’ as well as ‘have a say’. They valued diversity of thought and diversity in their teams.  They invited challenge – to them, ideas and the status quo. Their teams appeared to be well nurtured. In short, they were the epitome of the ‘host’ leader and the antithesis of the ‘hero’ or ‘command and control’ leader.  

We also concluded that leaders of innovation don’t need to be innovators or creatives themselves. Indeed, there are many leadership roles in the innovation ecosystem, from sponsor and protector (of space and resources) to champion and challenger (critical friend) to facilitator/broker or partner (Figure 4). Innovation requires many helping hands.     

Figure 4: Innovation leadership roles 

Do we need dedicated ‘places and spaces’ for innovation?

Many organisations and jurisdictions have set up special units or labs dedicated to driving innovation. As this OECD report notes “the last 20 years have seen a surge in the emergence, spread and occasionally death of public innovation labs across the globe.”  

Where these special places in the system sit influences their activities, impact and survival. They need to be connected to the real work of government to ensure influence and impact and that they’re working on real challenges (and not just playing with methods). But they also need to be at enough arm’s length that they aren’t sucked into and distracted by business as usual. A successful Aotearoa New Zealand example is the Auckland Co-design lab, co-located with Auckland Council’s Southern Initiative which offers plenty of place-based policy and delivery challenges. The lab is co-funded by a range of central government agencies and has survived for a decade from its beginnings as a two-year ‘proof of concept’ initiative. The Co-design lab and Southern Initiative together contribute to building collaborative design, participatory processes, and policy capability across the public service, such as a recent masterclass for the senior policy community hosted by DPMC’s Policy Project on utilising place-based evidence for policy. The most effective labs work on real live challenges while sharing evidence and methods to help build broader capability for innovation.     

What capabilities and skills drive innovation?

The OECD has articulated core skills for public sector innovation (figure 5), as have other organisations like the UK’s NESTA which set out the ‘skills, attitudes and behaviours that fuel public innovation’. There are common threads, such as building a ‘test and learn’ or an experimental and iterative approach to challenges, user-centricity (focus on the user), participatory processes (collaboration and co-design), and in the NESTA example including futures acumen and political astuteness (for system learning and to ensure change sticks).   

Figure 5. OECD core skills for public sector innovation 

These skills and capabilities suggest the need for competence in applying certain innovation methods and tools. Design thinking and methods dominate (a structured process for problem solving) but systems thinking, behavioural insights and foresight and futures are increasingly part of the repertoire of innovation methods. Many related tools are linked to design methods and understanding the perspectives of users – such as journey mapping, personas, visualisation – and co-creation techniques like 3D mock-ups, sandboxes etc.    

While all public servants don’t need to be innovators, having an innovation mindset would enable them to have a relentless focus on doing things better and doing better things. That mindset could be defined as being curious and open (having a ‘beginner’s mind’), entrepreneurial (seeking opportunities for improvement), adopting a healthy risk appetite (manage, don’t avoid risk), and being collaborative (doing things ‘with’ not ‘to’ people). Taken together these ‘mind shifts’ are likely to help unleash public sector creativity and collective imagination.      

An innovative public sector – responsive today, creating tomorrow

Former Deputy Public Service Commissioner John Ombler and I wrote in 2014 “An innovative public sector is one that is agile, responsive, and ready for whatever comes its way. Building innovation capability is an important strategy for future-proofing the state”. Building innovation capability is a system challenge and essential for ensuring ongoing improvement of the public service operating model – for doing things better and doing better things. While public servants step up and innovate in times of crisis, we need to ensure the system can go beyond innovation by necessity, to innovation by design.  It needs to be responsive today and be working to shape a better tomorrow.