Fostering innovation: look beyond red tape to organisational culture

By David Donaldson

May 8, 2017

Silos, risk aversion, hierarchy and red tape are all commonly cited barriers to innovation in the public sector, but there is no reason government should be inherently bad at fostering and implementing new ideas, argues a recent report from the OECD.

Innovation requires effort from the top, but while politicians’ instincts are often to take a machete to the thicket of red tape, this can overlook a bigger problem: organisational culture and capability.

“Bureaucracy reflects a society’s underlying values, and in most democratic countries these include stability, efficiency, effectiveness, accountability and transparency — none of which are inherently hostile to innovation” argues Fostering innovation in the public sector.

“If rules and procedures are indeed the barrier, these can be rewritten; but, if the problem stems from the underlying culture and behaviour of the organisation, building capacity to solve problems through innovation will be a more effective approach.”

To do this, staff need support, ensuring they have the ability, motivation and opportunity to come up with new approaches. “Ability requires not just technical skills but also creativity and associative thinking, as well as the behavioural and social skills needed to bring about change,” argues the think tank.

How organisations treat risk and whether employees feel empowered to experiment can have big impacts on organisational culture, too. Although even failed experiments offer the opportunity to learn, no public servant wants to end up being thrown under the bus for trying something new.

Risk management starts with an assessment of context and aims, such as where the mandate lies and what is established practice, and will look different depending on the type of innovation being pursued — gradual change, significant disruption, or exploration of a new field — and whether progress is in its early or mature stages.

The OECD, always a fan of breaking things down into dot points, identifies six phases of the so-called innovation lifecycle:

  • Identifying problems.
  • Generating ideas.
  • Developing proposals.
  • Implementing projects.
  • Evaluating projects.
  • Diffusing lessons.

Given that these processes rely on ideas and skills, it’s vital governments assist public servants in this work. The report suggests governments address four key areas to support their own staff to be innovative:

  • People matter: invest in civil servants as the catalysts of innovation. This involves building the culture, incentives and norms to facilitate new ways of working.
  • Knowledge is power: facilitate the free flow of information, data and knowledge across the public sector and use it to respond creatively to new challenges and opportunities.
  • Working together: promote new organisational structures and partnerships to improve approaches and tools, share risks, and harness the information and resources available for innovation.
  • Rules and processes to support, not hinder: ensure that internal rules and processes balance their capacity to mitigate risks with protecting resources and enabling innovation.

Are innovation units the answer?

There are a range of structural options for embedding an innovative workplace culture — the report identifies some of the main approaches OECD countries are already using: awards and recognition programs encouraging ideas from all levels of government, innovation-oriented networks and mobility programs to bring people together across organisational boundaries, and holistic approaches to managing staff that create a framework supporting innovation.

Budget offices can play a significant role in ensuring that other agencies are still able to invest in innovation despite cost saving measures. Financial incentives and dedicated funds can help, as can allowing greater funding flexibility under fixed caps.

Dedicated innovation units are another popular way of tackling some of the challenges of making change happen: they provide a central point for what is often a cross-cutting exercise, and can be a driver where no natural promoter of change is found.

They provide room to develop news ways of doing things and overcome some of the barriers. Innovation units can help support and coordinate dispersed innovation efforts, capacity building and experimentation, and assist in dispersing knowledge about innovative processes and methods.

They have a few common characteristics: innovation units tend to be based in an appropriate position to take a cross-cutting approach, generally a central agency, they are more interested in measuring outcomes than inputs or outputs, and do a lot of project-based work.

But as with risk management, how an innovation unit or agency is organised depends on what exactly it’s supposed to achieve.

“An organisation setting up an innovation team should consider what it wants the team to achieve and choose its functions and structure accordingly,” suggests the report.

“The closer teams are to the centre of government, the more authority they will have to implement changes; on the other hand, a team located more on the periphery will tend to be more open to radical innovation.”

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