Future of Work : Boosting Innovation in the Public Sector

Paul Sloane is the author of the Leader’s Guide to Lateral Thinking Skills and the founder of Destination Innovation (www.destination-innovation.com/) which helps organisations like HMRC and DWP improve leadership and innovation. He is the head of the BQF Innovation Unit.

Public sector reform is the holy grail of modern politics. If we could create a streamlined, efficient public sector that delivered better service with fewer direct resources we could slice billions of pounds off public spending and add significant value to our economy.

But how do you do it ? It seems an intractable problem. We have tried armies of expensive management consultants, swathes of outsourcing, rafts of political targets and all sorts of reorganisations and we are still struggling. Many NHS trusts have run out of money and are cutting back on staff and services. The Home Secretary, John Reid, described the Home Office as not fit for purpose. The Child Support Agency has been a long-running calamity.

Maybe the answer is less external interference and more internal reform and innovation. If the leadership, culture and processes within government organisations became more creative and entrepreneurial then performance would be transformed. If innovation was valued and rewarded in the public sector and if systems encouraged good ideas from everyone, then we could create a sea change in people’s attitude to their jobs and their work. This would create a better platform for real and effective improvement. Innovation can provide the engine for public sector renewal.

Plainly it can be done. Let’s take a couple of examples. If you have renewed your car tax online you will have benefited by a tremendous innovation implemented by the DVLA. The agency worked with IBM to automate car tax renewal over the internet. The system is sophisticated – it has to check MOT status, insurance status and relief eligibility. But it is easy for motorists to use. The project cost some £38m. It took 18 months to implement and it went live on time and within budget. Some 19 million people will use it in the next year. The projected savings are massive - some 30% of administration costs. But the real benefit is in improved customer service. Instead of queuing at a Post Office the user can complete the application at home – and at any time of the week. Unlike the Post Office there is no queue and it is open 24/7.

Another successful innovation is Automatic Number Plate Recognition, ANPR. The development of this project was a collaboration between the Association of Chief Police Officers and PA Consulting. Cameras in police cars read number plates of passing vehicles and check them with online databases. These databases can quickly identify stolen cars or cars without car tax or insurance. A major pilot scheme with 23 police forces began in 2003 during which there were 17000 arrests. The arrest rate for officers using the technology was nine times the national average. Interestingly some 75% of the arrests were for non-driving offences. The police recovered millions of pounds worth of stolen goods and confiscated 329 weapons. It is known as the ‘Al Capone effect’ – serious criminals are also more likely to commit motoring offences.

Innovation is not just big IT projects. There is the opportunity to innovate in all operations and activities – in every method, process, service, partnership, procurement, interaction with the customer etc. So what is preventing innovation in the public sector ?

According to a detailed report by the National Audit Office (Achieving Innovation in Central Government Organisations, July 2006) the innovation process in government agencies is top-down and dominated by senior management. Contributions from lower-level staff are not valued as important. This is in stark contrast to the leading innovative companies where staff ideas are critical to filling the innovation pipeline with creative initiatives. The main barriers to innovation which the report identifies are a reluctance to embrace new ways of working, fragmentation between departments, the multiplicity of stakeholders whose approvals are needed, difficulty in freeing resources for innovation and the perceived risk of public failure.

The culture of many public sector organisations is about avoiding risk and reinforcing the status quo. However, as Peter Gilroy, CEO of Kent County Council puts it, ‘to be innovative an organisation must not be afraid of ambiguity, change and a little chaos. Anyone in the organisation who has a good idea, we want to hear it. If that means the system has to cope with some ambiguity and paradoxes then fine. Modernisation is all about embracing change – not avoiding it.’

Many public sector organisations have suffered from a barrage of targets and initiatives imposed from above. In the face of change fatigue, employees have become reluctant to volunteer suggestions even when they can see clear benefits in changing the way things are done. But if they can be managed properly internally generated improvements are more likely to be accepted, implemented and successful.

HMRC is tackling this issue with an initiative called Angels and Dragons. Launched in November 2006, this scheme encourages all staff to submit suggestions to a panel of experts who can cut through the bureaucracy and immediately release funds for the development of the idea. Employees submit ideas for new ways to do things in HMRC using an intranet site. After some initial feedback they are assigned a coach who helps them prepare a one page summary document containing costs and benefits and a presentation to be given in front of a panel of ‘Dragons and Angels’. As Helen Badcock, who is a coach puts it, ‘The panel is not there to trip you up. They want to support good ideas. You present. They ask some questions and 10 minutes later you know whether you have got the money.’ An early suggestion that was approved involved replacing tedious manual keying of documents with scanning.

The quick approval process is key to the HMRC scheme. The NAO report criticised cumbersome approval procedures in many government agencies and recommended that review processes should be proportionate for the risks that the innovations pose. It also advised that reversible innovations should be tested speedily and on a small scale before being rolled out more widely if successful.

Ultimately the challenge in improving innovation in the public sector is a leadership issue. It requires determined leaders to change a culture which is risk averse and complacent into one that is restless for improvement. The successful leaders in innovative government agencies empower their people to question how things are done and to try new ways. They are comfortable with managing risk and know that innovation involves experimentation and some failures. They fight complacency and overcome inertia by galvanising people. They allocate resources for innovation. They put in place appropriate processes for idea generation, evaluation and implementation. There is no doubt that their battle is a tough one. They have to overcome entrenched attitudes and bureaucracy. But the ultimate prize is a more effective organisation and one that is much more to work in !

© Copyright 2007 - Paul Sloane

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