Driving innovation

Above: The Centre for Defence Enterprise encourages and fosters innovation by supporting development work. Here racing driver Andrew Jarman and Jackal armoured vehicle driver Oliver Parsons swap seats to mark the award of a defence research contract to motor racing technology specialists Cosworth.

“Like a wet bar of soap, ‘innovation’ somehow eludes a firm grip.” Christian Bason, head of the Danish government’s innovation unit MindLab, is describing the difficulty of defining ‘innovation’ – but he might just as well be talking about the process of innovating. (More about this later.) Most people recognise the value of innovation, but it’s hard to turn intentions into action.

Innovation could help produce both cost savings and effective reform of public services – and the new government is ready to take risks to achieve these aims. At Civil Service Live in July, David Cameron told delegates that government’s plans for replacing  “bureaucratic” with “democratic” accountability would require boldness and acceptance of a risk of failure.

Some have blamed civil servants themselves for government’s lack of innovation, but this isn’t a fair perception, says James Gardner, chief technology officer at the Department for Work and Pensions. “There is a huge untapped store of creativity in the civil service, and I think that the more difficult times get, the more likely it is we will find creative ways of ensuring that we use all that potential,” he says. “In the past we simply didn’t have the burning need, and therefore it was easier just to do what we’ve always done. Well, we now have a burning need.”

Culture to innovate

But are senior civil servants ready to support and manage increased innovation? A report by the National School of Government’s Sunningdale Institute  suggests not. Published in June, Beyond light bulbs and pipelines: leading and nurturing innovation in the public sector, said that government lacks capability and a clear strategy to support innovation. It outlines a need to change organisational culture: “The civil service needs to value – and be seen to value – innovation, while being more accepting of risk and failure,” the report said. “Without the strategic leadership capacity to bring this about, innovation is a non-starter.”

Lynn Maher, interim chair of the NHS Institute for Innovation and Improvement – the Health Service’s innovation support agency – agrees that risk aversion is a big cultural barrier. A degree of risk aversion is “quite right” in the NHS, she says, but “risk isn’t being assessed at all well.” Better assessment of risk, based on consistent metrics rather than gut feelings, and balancing the risks of innovation against the risks of inaction, can help to counter this culture, she says.

Another way to manage the risks involved with innovation is through adopting prototyping and rapid experimentation techniques from the world of design. Ellie Runcie, director of design support at the Design Council, says this idea can be intimidating for civil servants used to testing ideas with large-scale pilots. Many of the public servants she’s met through the council’s Public Services by Design programme, she says, are “quite nervous about trying things out quickly and cheaply, whereas from a design point of view you want to test something as early as you can to avoid making expensive mistakes further down the line.”

The difference between a prototype and a pilot is partly one of scale, but also one of purpose. Prototyping doesn’t need to be a test-run, as a pilot would be, but could be a sketch, diagram or model designed to test whether the idea is viable and desirable. In one MindLab project, a cartoon outlining a mobile system for submitting tax returns was shown to members of the public. They didn’t respond well, and the idea was stopped before money had been spent on development.

Gardner describes the benefit of early testing as allowing projects to “experiment and fail quickly. In the civil service failure is very frightening, but if you fail early enough that’s not really a failure, that’s a learning lesson from which you move on quickly,” he says.

Mitigating against efforts to reduce risk aversion in the civil service is the fear of critical National Audit Office reports, select committee hearings, and media ‘witch hunts’ for leaders and public servants seen as failing in their duty to the taxpayer. This was something Cameron addressed in his speech at Civil Service Live, saying: “We’ve got to try and win the argument with the press and the public that more risk-taking is worthwhile, because we’re not going to find the great social enterprises of tomorrow if we don’t have this [bold] attitude towards risk.” The views of Margaret Hodge, new chair of the public accounts committee, will be welcome here.

Systems to innovate

Changing cultures can foster innovation, but the DWP’s Gardner says departments also need a systematic approach to generating new ideas: “You can say that innovation is important and hope that a few heroes will make this happen. This is unpredictable and unreliable. Or you can say innovation is a business process like any other, and create the systems and tools you need to make that process work.”

Those tools and processes include a structured approach to capturing and assessing ideas from a large body of people. At the Centre for Defence Enterprise, which funds research into innovative technology for the MoD, a structured but simple procurement system provides this ideas-generation system (see case study below).

At DWP, staff can use a social network called IdeaStreet, which allows them to submit and rate ideas for improvements. IdeaStreet allows staff to collaborate on ideas, and the DWP’s innovation team looks for the ideas generating the most network activity to pinpoint those with the most potential for further development.

DWP also has an innovation unit, which is responsible for managing the innovation process from capturing to implementing ideas. It also runs a cross-government programme – Spark –  with the business department (BIS) to help share good ideas.

Systems to inhibit innovation 

Unfortunately, many dynamics within the civil service currently inhibit innovation, according to the control civil service work carry implicit messages that innovation is not recommended,” it says. One problem is that there are few incentives to innovate within performance management and pay systems. “All of the people we interviewed maintained that the incentives against innovation are greater than those for it,” said the Sunningdale report, calling for civil service incentive structures to be reconsidered “as a matter of urgency”.

Then there’s the ‘siloed’ nature of government. This can inhibit the development of good networks, which Maher sees as a key characteristic of innovative organisations, and restrict the kind of system-wide view of problems that facilitates innovative thinking.

Financial systems can also inhibit innovation, says Matthew Horne, managing partner at the Innovation Unit – a not-for-profit social enterprise which began life as an in-house innovation lab within the Department for Education. “Radical innovation often generates savings in other people’s budgets,” he says; and year-long budgets can discourage the longer-term investment which innovation may require. Underdeveloped systems for measuring social outcomes can make it difficult to demonstrate returns on investment, and the rules around revenue and capital spend make it hard to invest in innovation.

“The rules around capital spend take you down a procurement of buildings and technology route, and they don’t [encourage] capital investment in new enterprises, new business products, start-ups and services, so we tend to do a lot of that out of revenue spend,” he says. Classed as revenue spend, research then competes for funds with ongoing services which may have “an operational urgency about them”.

There’s also a risk that the way in which the public sector procures services will hamper innovation, he says, as the trend towards consolidating procurement could result in public sector organisations having fewer and fewer providers, and larger and larger contracts: “That can be very damaging for innovation in the system, because innovation requires a mix of small and new organisations, businesses and enterprises, which are often the most creative, and larger organisations that can take to scale some of those innovations.”

Public sector procurement expert Colin Cram disagrees, however: larger companies can also innovate, he says, and larger contracts give commissioning bodies enough buying power to demand innovation from suppliers. It’s a case of ensuring that innovation is built into tender requirements at an early stage. Any supplier, Cram argues, will offer a ‘safe’ service if that’s what the tender asks for – but a more lateral and results-based contract will foster innovation.

Skills to innovate

Beyond light bulbs is particularly critical of senior leaders’ ability to support innovation, recommending that these skills be included in the Core Learning Programme currently being developed by the National School of Government. It also calls for a cross-government unit to assess capacity, build capability, and identify barriers to innovation. There is already innovation support on offer through the Public Sector Innovation Unit within BIS, internal units such as DWP’s, and external organisations such as the Innovation Unit, Young Foundation and NESTA. But this new body would look specifically at barriers to innovation across the public sector, and the development of incentive structures to boost the level of innovation within the civil service.

While Gardner agrees that central support is valuable for supporting innovation, he adds: “Merely having a cross-government innovation unit isn’t the same as having every department sign up to the innovation that comes out of that unit. There would be a lot of work to do to make that a success, although if it were a success it could be very powerful.”

Funding innovation

Innovation may have great potential – but it does require investment. “Much of our work at the moment is trying to convince officials that they shouldn’t just cut back office costs and strip out management overheads, but fundamentally shake up the services they are delivering,” says Horne. “There is an enormous opportunity for innovation here, but what I hear very clearly is that there isn’t loads of money in the public sector to invest in innovation.”

That needn’t be a barrier, says Gardner. Projects with a strong business case should be able to win investment despite the squeeze, he says, while small investments should be prioritised because they do not necessarily mean small results. “It’s quite possible to spend a very little amount of money and still get very big returns,” he adds, “and I think that we should at this time be focusing on those sorts of characteristics.”

While there is – as Gardner says – a “burning need” for innovation in the public sector, financial pressures may push officials towards small-scale innovation. But this is probably fine, he believes: “My experience suggests that if you do enough small, incremental innovation, sooner or later the numbers add up to big, transformational change,” he says. In the longer-term, he adds, systemic change will still be required to ensure that innovation doesn’t become stifled again when the “burning need” subsides.

Something innovative in the state of Denmark

Over in Denmark, a systemic approach to fostering innovation has been supported through MindLab. Originally set up in 2002 to support innovation and develop creativity within the Danish Ministry of Economic and Business Affairs (MEBA), it expanded in 2007 to reflect a growing focus in Danish policy-making on customer involvement and joined-up government, and to build a broader research base.

Bason explains that MindLab moved from conducting “typically one-off workshops [within MEBA] to orchestrating longer-term innovation projects that involve the end users of public services.” It is now funded by the business, tax and employment departments, which have a large shared policy agenda and wanted to develop better collaboration – especially in reducing regulatory burdens on businesses and citizens. Bason sits on the executive board of MEBA; MindLab’s board includes the ministries’ permanent secretaries, and its secretariat is led by senior civil servants from the parent ministries.

On each project, a team of designers and anthropologists from MindLab work with project managers, policy developers and other departmental officials to conduct field research, facilitate workshops and ideas generation, and support testing and prototyping of solutions.

One of the first cross-government projects it undertook was a ‘burden hunter’ project, which used anthropology, ethnology and design techniques to identify administrative burdens. This contributed to 37 simplification initiatives in the government’s ‘easy administration’ plan. Bason explains that using in-depth research techniques exposed civil servants to a new way of thinking about the problem of administrative burdens, adopting a qualitative rather than quantitatve perspective. Such new viewpoints can be a powerful driver for innovation, and also help to ensure that solutions are more aligned to end-users.

Other projects have included research into health and safety in the workplace, consumer attitudes to banking, and how to attract and retain skilled foreign workers to Denmark.

MindLab evaluates all of its projects through questionnaires sent to project managers, plus a follow-up interview three to six months afterwards that asks about outcomes and barriers to transformation.

“We are seeing that our efforts make a difference,” says Bason, explaining that civil servants report they are thinking differently about how they define problems, gather information and test and evaluate solutions.

He suggests that connecting civil servants with citizens and businesses in more in-depth ways can overcome a target-focused culture whose aim is often keeping ministers happy rather than making better policy. “In the best moments we’ve had working with [design and anthropology-based] processes and methods, we generate a real desire, even a passion amongst public servants to make a difference for people,” he says. “We’re connecting them with the experience of being a citizen. That’s a very powerful thing, and it hardly ever happens in government.”