SubscribePaper 09: What Could Government Innovators Learn from Business Innovators?
Innovation in the government space may be the greatest — and most important — opportunity for NC over the next ten years. Seriously.
Government processes, infrastructure and policies should be more innovative — we have an obligation to use taxpayer dollars more efficiently and effectively and meet critical public needs. And government must be better — our state faces huge challenges that government needs to help us solve.
But where could government start? We have some ideas, and they come from the business world.
Innovation, which we define as the translation of “new ideas and technologies into new systems, products and services,” has come to business in six broad areas over the past twenty years. Each of those areas raises some possible areas government might look for progress over the next ten (or twenty) years. Make no mistake: government is different from business. But make no mistake: government can learn something from the hard lessons business has learned and the progress it has made.
Lessons from the business world?
1. More machines, digitization:
What’s already happened in business?: Over the past twenty years machines have replaced people in any number of businesses. That’s one of the ways that we are able to produce, for example, more textile products than ever with less than 30% of the textile workforce we had in 1990. The job cuts are painful, but they also enable remaining textile companies to keep their doors open and compete with the rest of the world. Even after 20 years, business is still finding new efficiencies: a new report finds US productivity increased at an annual rate of 9.5% in the business sector overall and 13.6% in the manufacturing sector in the third quarter of this year.
What could happen in government?: This is the area where government has taken the most steps so far; but it has still only scratched the surface of possibilities. Digitization of records will cost more government jobs, but in a “smaller government” scenario (see “starvation” notes in Paper 08) it will also improve access and “hours of service,” and could free up people to perform service that people value more. It is painful but it will enable us to do more with less.
2. Increased outsourcing, revamped back office operations, aggregation
What’s already happened in business?: We may complain about the range of things businesses have done to move work to places where they can make goods or purchase services more inexpensively, and we may be frustrated by the mergers and closings of neighborhood branch plants, but on some level we know businesses are doing what it takes to remain competitive. We may not like to admit it, but at the end of the day, if quality is equal, we as consumers will choose the lower priced product or service made all or partially somewhere else over the higher priced product made here. Businesses know that.
What could happen in government?: Governments on starvation diets will take a hard look at what they can do most efficiently, and which pieces of their operation they can hire someone else to do for them. Small towns will consider working with other small towns to do joint billing of customers. They’ll look for bigger, shared water facilities or power coops. They’ll increase work from home options and shared work areas to reduce work space needs. Police departments will form purchasing alliances with other police departments to get better deals on weapons or patrol cars or flak jackets. North Carolina’s 100 counties may never consolidate, but sheriff’s departments in big counties may soon share patrol duties with sheriff’s departments in the next county over. And their customers (that’s us) will see that government is finding innovative efficient ways to deliver the same service for less.
3. Improvements to product, processes and services:
What’s already happened in business?: Cautious businesses have been investing in such “little I” innovations as making known products better (versions 2.0, 3.0, etc.), extending known brands (Reese’s Pieces, Reese’s Whipps, Reese’s FastBreak, Reese’s Nutrageous, Reese’s Broccoli [okay, I made the last one up]), setting up just-in-time supply chains to reduce inventory or offering enhancements to existing services (instant responses to consumer problems, etc.).
What could happen in government?: Improvements to products may come from listening to customers (taxpayers) and front line staff or investing in enhanced staff training; improvements to processes may come from flexible schedules that extend hours and reduce wait times; improvements to services may come through streamlined permitting procedures for certain types of projects or estimated wait times (expect response in 4 days) or proactive notification of services (when will my garbage be picked up or what are the new hours for the library?) or creative bundling of multiple agency services into new “one stop” shops (can I pick up my unemployment check at the social services office?).
4. New products, services
What’s already happened in business?: Innovative companies have been investing in new product development during the downturn, knowing that people will buy new products and services if the company can provide them a unique benefit, and knowing equally well that if they don’t have a constantly renewing set of unique products and services, another company with lower manufacturing or personnel costs will be able to underprice them.
What could happen in government?: As starvation begins, state and local governments should be looking for new, unique ways to offer consumers the public services they need. The customers themselves will come up with some of the innovations, if they know they are being taken seriously; government employees will come up with other ideas, if they are asked and if they know their ideas are welcomed.
What sort of ideas? How about:
- Virtual town halls — do you need to be in the room to voice your opinion?
- Instant polling during town meetings — what does the crowd think about agenda Item 3c on the town council agenda tonight?
- Virtual court appearances for routine cases, with no attorney needed — could save hours of people’s time and prevent resentment of the government process
- New incentives to share revenues for new economic development projects between counties
- More flexible policies for use of government meeting spaces by community groups
- More budget flexibility for agency heads to move funding between lower priority and higher priority areas — making government better able to respond to emergency and other needs
- Adjust “capital” and “operating” budget regulations to encourage government agencies to build more energy efficient spaces even if it costs a little more up front, with the idea that you will save the money later in reduced operating costs
- New fee-for-service extensions for non-mandated services that government can delivery effectively
The actual lists are best developed by those who use the services, but the ideas exist and can be developed and delivered at all levels of government
5. New analytics
What’s already happened in business?: New technologies enable businesses to much more narrowly target their advertising; to get instant feedback on consumer response to their products and services; determine if their websites are effective or a waste of money. The feedback, in turn, gives them the opportunity to fine tune their products and better serve their customers.
What could happen in government?: Take advantage of the new analytics to determine what government is doing well, what it’s doing poorly, what the public wishes it did more or less of. In the past, some government agencies had a “take it or leave it” approach; in the new world, it is not only a good strategy; the public is coming to expect those who provide services to do this as a matter of course.
6. Increased responsiveness
What’s already happened in business?: Business has learned, painfully, how ignoring customers feedback can doom their products in the blogosphere and in the larger court of public opinion. Crowdsourcing solutions to company problems has gone from a fad of the month to standard business procedure – there is more wisdom in the crowd than in any company’s R&D department alone (see Paper 06). People expect to have their complaints listened to, responded to and acted on quickly. And if they don’t get quick response, things can get ugly pretty quickly.
What could happen in government?: A public accustomed to more responsive companies expects more responsiveness from every institution they are involved with. They increasingly expect that from government too. What would happen if government asked the public for help in developing innovative solutions to key challenges we face? Chances are good we would collectively come up with better ideas than if the only ideas come from Bob in Accounting (bless his heart).
We welcome other ideas from instate resources such as the UNC School of Government, a current and potential future proactive clearinghouse for innovation (disclosure: I work for the UNC system), NC League of Municipalities, the NC Association of County Commissioners, SEANC and, maybe even more valuable, ideas from the tens of thousands of people who work for our towns and cities and state. And we can’t just look inward for ideas either: surely there are insights we can glean from formal efforts like the Georgia Tech Center for Innovation in Local Government.
The culture thing:
In previous papers and comments we have heard about the importance of creating a culture that values — no, demands — new solutions to the problems our companies or agencies face. That means finding creative ways to encourage experimentation, new ways of looking at solving problems. It means permitting failure and rewarding innovation.
Creating that kind of culture will take real leadership from our government leaders. If the Governor or a department secretary or a city or a county manager or a department head wants to launch a determined effort to empower an innovation-driven agency, the effort will attract attention. It also has the potential to fail. And it might just create a new way of thinking or “doing” government that can change a town or a city or a county or a state in a glorious way.
That’s a chance we are just going to have to take. It’s “I” time for our state to start working toward becoming the most innovative place in the world. And government has to be part of the effort.
Next time: the importance of leadership, communication and persistence in getting innovation in government done.
Okay, government employees (and analysts and government consumers): looking at the six categories, where do you think the greatest opportunities in government are? Do you have specific suggestions for improvements in process or programs? How could they get done? Email or twitter us, or comment below.
Tags: Center for Innovation in Local Government, crowdsourcing, efficiency, Georgia Tech, NC Association of County Commissioners, NC League of Municipalities, outsourcing, productivity, R&D, Reese's, SEANC, UNC School of Government
While I agree that government does need to learn to be more innovative, I find it disheartening that this innovation must be done through this “starvation” diet. I think citizens need to be better educated on the need for not trying to starve government out. The past thirty years have been characterized by increasing the burden on individual states and localities to provide goods and services that the federal and state governments used to. The result is our increasingly awful infrastructure, a struggling health insurance and welfare system, and incredibly strained educational systems. While innovation and efficiency can help to address and mitigate these issues, we cannot sit idly by and tell people that life will be better simply because they can twitter their opinions to government. Government can’t respond to their needs and concerns without the resources to do so. Eventually, we’re going to cut out so many people that nothing gets done. Innovation, yes, but that needs to be coupled with resources. What the post misses is that while business has embraced innovation, business also has access to capital. Not all innovation is due to businesses doing more with less. Those innovations improve profits, they bring in more resources. And that’s precisely what government also needs.
Jamaal — I think the case for government going off the starvation diet it is heading toward is improved immeasurably if it is able to show in as many ways as possible what it can do to make people’s lives better. Innovative behavior, both the kind that makes it more efficient where it can be more efficient and the kind that leads to more innovative programs, can play an important role in making that case.
What about looking to nonprofits for innovation? Nonprofits these days are no longer your grandmother’s charitable organizations. Many are working on the toughest social issues and attempting to change complex systems. All this on meager budgets. While not delivering at the scale of big business, nonprofits can teach government a few things:
- Building partnerships to leverage resources
- Connecting with philanthropy
- Program design and delivery
- Creating s sense of social mission
- Attracting hip young people
- Capturing new markets
The list could go on. My main point is that we usually look to nonprofits to deliver services, when they can also be engines of innovation.
Colin: I’m with you that nonprofits can teach government something, especially about effective delivery of services while facing funding challenges. The Latino Pathways program, for example, that you and MDC developed a few years ago, for example, hits on all the elements that you list.
Nonprofits will be challenged even more to do those things they’ve been learning to as the full consequences of the recession hit home over the next couple of years (as foundation endowments have shrunk, the amount available to invest in nonprofits has fallen).
I think the biggest areas from your list that nonprofits are generally good at that government can learn from, are partnerships and talent attraction. Partnerships enable you to focus on what you do best; a sense that you are really working for a cause and meeting a vital need really helps attract enthusiastic smart young people.
We have a post coming up next week looking at some of what nonprofits are already doing, highlighting a couple of places working in partnership, and outlining what nonprofits might do to be even more innovative. We need them.
It’s hard to question the logic of making government more innovative….but what’s the incentive for it to innovate? What reward does it reap? Remaining in power?
To me, government has 2 fundamental mandates – to protect us and to educate us. Now, each of those include lots of things, but in order for government to reach excellence, let alone innovation, it needs to focus on and be able to articulate its goals and what the rewards are for achieve them. (come to think of it, maybe that would be an innovation in and of itself!).
It, of course, needs money, tax money, to do this.
The above list of tools at the government’s disposal would indeed be relevant if it knew what they were to be used for.
Can we get government to focus?
Mark: I work for the government in higher ed, so consider the source, but…
I think an innovation in government effort could achieve three big purposes:
1) identify ways to provide existing services that people have already agreed are useful, more effectively and/or efficiently (preferably both)
2) identify new programs or services (in response to demand) that are viewed as valuable/useful/appropriate
3) ensure that there is continued support for the broad notion of a right-sized government. A government that better and more responsively meets needs will be more likely to find support from citizens. An intentional innovation effort would increase the chances of getting there.
So the incentives here would be professional (be good stewards of people’s money), ethical (meet the most important needs of people) and personal (if we can find enough useful work to do, we can keep our jobs).
In the next post, we’ll look at a possible sort-of-monetary incentive to spur innovation in government that may be closer to what you had in mind…
When it comes to government’s role, I’ve appreciated Abraham Lincoln’ summation:
“The legitimate object of government is to do for a community of people, whatever they need to have done, but cannot do at all, or cannot so well do for themselves, in their separate and individual capacities.”
I think there are significant opportunities for innovation in government services. Looking at any specific program, whether it is a program like Medicare or Medicaid, or taxing programs or road building, we citizens should expect our government to experiment with new solutions and new offerings. If the government and its offerings stood still, then we’d have antiquated offerings and services that did not match our expectations and needs. Note that by suggesting the government should innovate, we should expect that rather than simply following the trends, our governments (local, state and federal) could create new offerings, business models and trends that fulfill unmet needs or provide radically different services or experiences. Any organism that doesn’t change atrophies and dies. Any government that doesn’t demonstrate value to its constituents loses credibility. Our state government needs to become more nimble, more transparent and more focused to deliver the services that our state needs, on a timely basis. It’s definitely time for more innovation, experimentation and piloting in all agencies in the state government.