Governments need to build up an appetite for failure and iterate their way to success, rather than accepting consistently bad outcomes on social issues, says policy expert Mary Ann O’Loughlin.
Ms O’Loughlin said that while governments could not be expected to innovate in the same way as the private sector, agencies needed to focus more on creating incentives for innovation and ensuring a greater focus on implementation.
“It’s the function of private companies to be innovative – to develop new products or services. And they find out very quickly if they have succeeded or failed – people either buy them or they don’t. What people often do not recognise is that the public sector is operating in a more complex environment and you are taking risks across multiple domains - financial risk, political risk, and the risk of negative effects on people’s lives,” she said.
“But we need to think about how we innovate, and how public services can build the structures and processes that encourage that.”
Ms O’Loughlin is a senior advisor at ANZSOG and was recently a senior advisor to the Royal Commission on Aged Care Quality and Safety. She has experience of both consulting and working for governments at state and federal levels; she was a senior social policy advisor to Prime Minister Paul Keating and was executive director of the COAG Reform Council from 2008-2014.
She said that innovation was not just about ‘bright ideas’ but how they could be turned into something practical and useful, and, in the public sector, that needed to involve implementation.
“We can talk about pivoting, being agile and flexible, but that needs to happen beyond policy,” she said.
“Michael Barber, the former adviser to UK Prime Minister Tony Blair, has said that 90 per cent of thinking is around policy and 10 per cent around implementation – we should flip that around’.
“In complex areas of social policy where I’ve spent my career, we still need to think about policy, but the focus should be on developing something that is good enough to implement as a starting point.
“Don’t wait for endless reviews or analysis of the policy, when it’s good enough then start implementing - but you need to build in evaluation and feedback along the way. Learn, adapt and keep going, which is what the best of the private sector does.
“The key thing is permission to do trial and error - have a good enough policy and then iterate your way to success.
“Innovation is gradual, incremental and bottom-up rather than top down, it is always about trial and error and learning by doing. As UK thinker Matthew Syed says: without a problem, without a failure, innovation has got nothing to latch on to.”
Ms O’Loughlin said that during COVID-19 in 2020 she was part of the team working on ways to respond to the impact of the shutdown on the labour market. They embraced the uncertainty of the times by adopting the private sector concept of the ‘minimum viable product’ – getting a plan to start with that could be tested and adapted along the way ‘when the world does not meet your expectations’.
She said the public sector needed to be more collaborative and open to debating ideas and testing their weaknesses – something agencies were not always comfortable with.
“You need to have not just a tolerance for failure but an appetite for it. It’s not a question of is it going to happen, but how do you react to it, how do you build on it?”
She said that encouraging this kind of culture needed to be done at a senior departmental and ministerial level.
“Public servants can’t just go off by themselves, they need to have supports in place which back that approach.
“It’s no different to anything else, you need to encourage it and take the lead from the top. Encouragement comes from the top but it has to be supported by processes and structures. You can’t say we want innovation but make people’s performance reviews all about success and positive outcomes. You also need to tailor recruitment and learning and development.
“One of the difficulties is that the policy and implementation feedback loops are long-term, but the political ones are short-term and the risk is front-ended.”
She said that innovation and learning from failure was linked to understanding the context of the problem.
“I’m a big supporter of place-based approaches – they are really, really hard to do well, but they are the right thing to do. The centre needs to give people more leeway to solve the problem,” she said.
“When it comes to complex social policy, you need to understand context, when you go down to the grassroots you see variation that you don’t notice from the top-down perspective.
“In many really complex areas there’s not one answer. The context changes even if we know what to do in the current context and, as they say, if you intervene, the environment intervenes back.
“As an example, NSW’s success at contact tracing last year compared to Victoria’s was not so much about a policy difference, but how the policy was implemented. Due to health services in NSW being more based at a local level, contact tracers knew the context – the communities, the languages that were spoken, and where people congregated.”
She said that Australia’s federal system was not being used as it could be to drive innovation.
“There is often too much emphasis on first ministers. This might be appropriate in certain policy areas, but particularly in social policy the responsibility rests with line ministers and departments, because they do a lot of the implementation.
“One of the good things about a federation is that it allows jurisdictions to do a lot of stuff in their own way and learn from other jurisdictions’ successes and mistakes – we don’t do enough to make that part of our processes.”
COVID-19 has changed the way that governments worked, as they scrambled to adjust to a different environment and different ways of working.
Ms O’Loughlin said that this sense of innovation and adaptability needed to be kept and built on.
“As an example, during COVID-19 in 2020 Skills Ministers set up an emergency response to fast-track the development of skills-sets in critical areas like infection control to train people in workplaces which usually wouldn’t require these skills, like transport and retail. Through streamlining processes and timelines, this resulted in the fastest time ever for the development of skills sets – a matter of weeks instead of the usual months or even years.
“The emergency response ended in December 2020. The test will be whether this innovative mind-set and experience can now change the ongoing processes and embed more flexible and timely skills training.”
The challenges of 2020 provided a once-in-a-generation opportunity to critically examine the strengths and weaknesses of 21st century governments and begin global conversations about the possible shape of a post-COVID public sector.
To help that conversation, ANZSOG and the Centre for Public Impact hosted Reimagining Government, a series of seven interactive webinars that discussed government through the ‘enablement paradigm’ – the idea that governments should focus on creating conditions that lead to good outcomes for society, rather than just managing or controlling.
Reimagining Government has returned for 2021, with the first webinar on 16 March exploring the theme of Failing Forward. The panel – hosted by ANZSOG’s Dr Subho Banerjee – included Andrea Mirviss, the CPI’s Program Manager, North America; Tina Walha, Director of Innovation and Performance at the City of Seattle; and Peter Shergold, former Secretary of the Department of Prime Minister of Cabinet.
Resources from the session are available on the Failing Forward website.
Register for Reimagining government webinars