Why do governments and public organizations block innovation?
Most disruptive or unexpected solutions are facing conservative resistance and too tight conditions where the change and innovation simply does not have the chance to fit in. This is due to a slow or zero change in how public administration works. Therefore, we must change the way we think, from what angle we look, and especially adapt the whole system to be able to support innovation from scratch.
So, let’s check why do public organizations block innovation.
1) Linear approach:
which is not efficient and does not produce the right results. An obsolete approach, where we assume that “R&D=I” will work as a verified scheme for problem solving but will not. Nowadays, we have all our needs covered and this scheme no longer works. And, new needs rarely appear, if they appear… Rather, the way we meet our needs is changing, and of course, technology and the internet are playing a key role. An example of this is how we watch Netflix’s’ Black Mirror — Bandersnatch episode, and we can choose how it will evolve. But it was already there in 1967! The first interactive film was called Kinoautomat, idea that was later used in the “Embarrassment Cook Svatopluk” series, where viewers also voted what will happen next.
How we were able make a real time vote in 1985, without the Internet? An innovative solution was to measure electricity consumption. Viewers switched off or left the lights on, and the option was chosen according to the network electricity consumption. Ok, going back to the topic (sorry for the “pride of my 🇨🇿 half” paragraph… 😊 thx AS for making me remember). It was just an example on how we are changing the way we deliver solutions instead of “covering new needs”.
To avoid an outdated linear approach, it is therefore necessary to discriminate between research and innovation. While both are part of the same flow, in many cases we expect that focusing on research will automatically lead us to innovative solutions (linear approach). But not every innovative solution requires research, and not every research will end up with an innovative solution. Do you remember LaserDisc? An example where an excellent product already in 1978, gave us a high-quality solution from the technical point of view (R&D), but it did not match the actual needs, availability, accessibility and business success.
“Research turns money into knowledge, and innovation turns the knowledge back into money.”
In other words, something new or better that adds value. Research turns money into knowledge, and innovation turns the knowledge back into money. It’s a way of thinking, set of skills, and methodologies that help us to turn ideas and knowledge into tangible changes. The difference between what we do or how we do it. No matter what kind of problem we are dealing with.
The fix:
Open Innovation is the answer, and Digital Open Innovation is the way. And it lies mainly to be applied on GUI partnerships. There’s not a unique solution for each level, actor or community, and this is why it must remain flexible, because especially Governments and Public Universities are oftentimes inflexible, inaccessible, keeping innovators and changemakers out of the equation.
Governments are investing in research, universities are creating knowledge, and industries are funding research Hub’s and “public institutes”, but most of them do it mainly in linear way. Leaving out the most important part. The doers!
- Governments should be calling for open innovation challenges, co-creation, maximizing impact and gathering crowdsourced solutions.
- Universities should allow students to pitch companies and industry outside of the traditional channels (if there are) to develop their skills, ideas, attract investment and capitalize the value. Make accessible the research and papers, but translated into “plain mainstream language” to widen the audience outside its academic ecosystem.
- Also, public institutes, hubs and universities should be open to receive feedbacks or proposals from external innovators, entrepreneurs and changemakers.
Talent and creativity are given in all parts of the world equally, but there is a huge equality gap, between accessibility, availability and quality of the resources. If we want to detect and retain talent in the early stages, boost innovation and create a fertile ground for startups, we must be open, flexible, and give an access to a fast and qualitative communication to provide innovators with greater capacity to succeed and maximize opportunities.
Two-way communication “Inside-out” (research, papers), and “Outside-in”, (innovators, changemakers). Open Innovation collaboration based on, digital GUI platform, through which knowledge can easily be shared and also welcome talent cooperation outside of the universities. Imagine connecting these three actors with a simple click.
If we are looking to successfully invest public funds to improve competitiveness and promote startups, doing it with a linear approach, will be obviously not an efficient solution. This way we will stop the flow and get stuck in the “research valley” losing the capacity to capture out the value through innovation.
2) Vertical structure:
and organization culture are the main causes of why the organization sabotages innovation. Resistance to change is so hardwired in our brains (it’s an evolutionary trait), and since organizations are made out of people, they are built to last, to “survive”. Not only a public organizations issue, big corporations and multinational companies are facing the same problem.
Kodak has developed the first prototype of a digital camera in 1975, but they have not been able to adapt to the change in the right way. Vertical structure, too many steps to validate, short-term vision, and a slow innovation workflow process, is making organizations unable to adapt quickly to new environments.
“A process is almost always an excuse for why something did not happen.”
In addition, any public organization is even more dependent on bureaucracy and processes which is due to laws, regulation requirements, and audits on how and where public money is spent. A process is almost always an excuse for why something did not happen. So, nowadays talking about an innovative public organization, sounds like an oxymoron.
Fear of making mistakes is also blocking any initiative, individually and collectively as well. Have the public organizations and employees the opportunity to err or to risk? Probably not, there’s not a room to take risks. And of course, taking risks does not only refer to money! It’s much more related to the workplace environment and the possibility to experiment and apply changes.
Another factor that blocks innovation is fragmentation, and therefore the lack of a common and shared focus. Imagine a company that establishes an external innovation team for each department, which will then work separately, independently and with the aim of improving the overall company’s innovation. The result could be interesting for sure, but I believe that ineffective. Instead of the public administration creating different agencies, which in turn rely on other government organizations, which try to define what is or isn’t innovation, what is or isn’t a start-up initiative. Well… We do not need a lot of public agencies and institutes, instead of one common framework to be applied everywhere and will help us to change the mindset.
The fix:
Have you heard of Smart Farming specific programme? Has the government ever asked you what really bothers you when you deal with formalities? If so, you are probably part of a small group or actively participate in surveys. And this must change.
- Of course, that we cannot manage the whole region and activities with a single office, but we can apply the same principles in a drill-down package. While every public administration has to prioritize, but this doesn’t mean that there is a need to create an agency for each “fancy trend”, like Smart City, Smart Mobility… No matter if it’s Smart City or Smart Farming, if we want to help innovators to create. “Smart Everything”, because the society is transversal and therefore needs a horizontal organization, where a common, and scalable framework should be applied.
- Public administrations are mostly not feedback prone. The opposite of an open and collaborative office. Let’s involve people to collaborate and help government to solve challenges and improve the way it is interacting and delivering services. A good example of it, is the Policy Lab in UK.
- How can a public structure innovate avoiding risk? Innovation and research are risky activities where is no guarantee of successful results and where errors are welcome. How to risk without wasting public funds? Setting the right KPIs, and focus on an early stage ideas development, because statistics show, that a developed idea has no difficulty in finding private investment. Balancing public funds throughout a transparent High Risk — High Value, priority investment matrix, and open data accessibility.
Changing the culture and structure of any organization into an open or horizontal model is neither an easy nor a quick process, and when it comes to public administration, it is also necessary to overcome important legislative changes, that will allow public funds to embrace “risk” and to “err”, by prioritizing high value and impact.
3) Game Rules:
for public tenders and procurement of services that systematically reject an innovative application. How the conditions and rules of public procurement are made, does not correspond to today’s society and does not create the right conditions for innovators. The society has changed, and the way we meet our needs has also changed. Nowadays, the application of new solutions and added value prevails.
“Going from products to services, and from services to better defining needs.”
When one of the most important procurement criteria is the price, how can we support new and unconventional solutions? The underlying issue of current procurement legislation is that it leaves no room for measuring added value.
The best price does not always mean the cheapest solution. We are focused on what we already know. “Every year, we consume 10,000 fluorescent lamps and, accordingly, make a tender to buy the cheapest.” Public administration does not necessarily need to define specific things, but properly define the need. Going from products to services, and from services to better defining needs. Not fluorescent lamps, but light. Not cleaning service, but cleanliness. Not vehicles, but mobility and transportation…
Innovative solutions such as Philips and Cofely delivering “Light as a Service” at Schiphol Airport in Amsterdam. They support circular economy providing devices whose lifespan is about 75% higher than previous lighting and has a 50% lower energy consumption. I am sure that sooner than later, they will also provide LiFi and IoT services, which reduces costs (no WiFi is needed) of other services, and generates new knowledge from more accurate data, to improve the services for airport users. Such a solution however, does not have the potential to flourish in a public tender with circumscribed rules, and tight definitions.
How a company applying to a lighting service tender, could provide the Internet connection service? The internet service is a part of an IT tender, so if you want to, you have to take part with another bid and fail, because you are not an IT company…
State and public administration is usually the largest “company” with big amount of funds and will never shut down. This is why public tenders are very attractive and also lucrative. So, tunneling public funds limits the possibilities for innovation, and it is a burden for every public administration.
Today, preventing or restricting corruption is more limited by the real will than available options, and technical resources.
The fix:
It is necessary to change the approach and adapt the public administration standards to leave an open space for innovative solutions, circular economy, and to become an innovative structure. Change the mentality and change the rules to make it happen.
- Split it. Public tenders divided in two parts, by quantitative and qualitative. One part will be a blockchain based system, where the technical and quantitative bid parameters are submitted anonymously, then automatically evaluated and published in a specific term. And the second, an expert jury to assess (score) the qualitative offer. To limit the risk of bias and contractors influence, the qualitative committee should be ad-hoc picked, within the regular workers and composed by different members each time, to avoid improper relations with suppliers. We also need to train public workers to make smarter procurement decisions, provide them with tools and skills to evaluate the qualitative aspects of any offer.
- Open the rules. Develop a model and acquisition process that puts innovation in the front. It will incentivize the private sector to bring more innovative solutions and reduce costs. Another regulatory framework, apart from split up the tenders into smaller lots, would be to prohibit subcontracting to any public services contractor. Many times, big contractors are outsourcing parts of the service, increasing the overall costs, instead of fostering open cooperation between SMEs and corporations.
- Change the mentality. Public administrations should be redefining their needs and fully embrace the digital transformation possibilities to explore new ways and to put a stop to old, comfortable processes.
The innovative state must have the entire structure and rules framework oriented to quick and collaborative solutions, to promote effective innovation. And digital transformation has the potential to help create better public services, accountability and transparency.
In brief:
Innovation starts with people. These changes must begin with clearly articulating the target culture we want, enabling innovation leaders at all levels of the government’s structure, and shift your focus to horizontal integration. Even the cabinet committees should be renamed and working as innovation council.
“Modern and innovative state needs to change its mindset to a holistic view.“
We could start disrupting with:
- GUI Partnerships
- Open Policy & Open Data
- Participatory design
- Policy Lab
- Blockchain based tender
- From products to services
If the public administration does not have a holistic approach to change the old structures, it is as if we wanted to wear the pants that we used when we were six years old and hope the pants to suit perfectly even today.
Well, if I try very hard, two things may happen. I will tear them (disrupt) or I will be unable to walk (blocked).
