Implementing Innovation in Government

Indtroduction

In our recent Commentary, Implementing Performance Management in Government, we discussed that effective political appointees need to develop ways to track performance in their organization. In this article, we focus on the need for political appointees to encourage and stimulate innovation in their organization.

Political appointees can learn a lot from the experience of the private sector in stimulating innovation: for example, it is now widely accepted that employees drive innovation. Successful companies realize that engaging employees fosters:

• new ideas;
• new products; and
• new ways of doing business all contribute to improved organizational effectiveness.

The federal government is now perceived to be behind the private sector in developing innovative new products and solutions in delivering government programs. Political appointees need to seek new processes to obtain innovative ideas from employees, as well as seek new funding mechanisms to support their development.

One example of federal agency actively encouraging its employees to innovate is the U.S. Census Bureau, the government agency charged with conducting the population and housing census every ten years, in addition to numerous other surveys. In articulating their vision of the future, the Census Bureau leadership wrote, “We must create an environment that enables and encourages every employee to help us transform he way we do business. The challenges are daunting, and we are tackling them, but we can and must do better. Establishing an environment…that rewards collaboration, embraces innovation…requires changes throughout the organization.”

The Need for Innovation

The federal government is continuing to face severe budget constraints, with limited funds for research, development, and innovation. Simultaneously, the private sector is undergoing a renaissance in innovation, such as the increasingly networked development of new applications for mobile devices that appear daily. In order to compete, the government must adapt and develop new ways to encourage and implement innovative ideas and products within their organizations.

In the case of the Census Bureau – like many federal agencies – there are several driving forces for innovation:

• Budgets are getting tighter. The Census Bureau now faces undertaking the 2020 Census with declining resources due to Congressional pressure for the agency to reduce its budget in the years ahead.
• Need to provide services more cost-effectively. In a message to Census Bureau employees, Census Director John Thompson said that as technology changes, the Bureau needs to update all of their processes at every level, including finding new cost-effective ways to deliver statistics to citizens.

Government managers are now under increased pressure to improve the efficiency and effectiveness of their programs, as well as to continue to provide useful services to stakeholder groups within the American public. Managers must do this is an environment of shrinking or stagnant resources, and therefore understanding how to cultivate and foster in-house innovation to drive success.

Types of Innovation Projects at the Census Bureau

1. Developmental Projects: These projects are needed by the Census Bureau to improve their mission or services, but are not expected to provide cost efficiencies or savings.
2. Improving Operational Efficiency (IOE) Projects: These projects are funded and expected to produce cost efficiencies and/or savings.
3. Just Do It Projects: These are projects that “just make sense to do” and are assigned to agency within the Census Bureau to implement. These projects do not require funds.

Creating New Mechanisms

Fostering innovation in government agencies requires three key components:

• The first component is already in place – employees with ideas. The federal government has one of the most highly-educated workforces in the nation and employees appear eager to contribute to improving agency performance.
• The second is to put in place processes that mine innovative ideas from within the workforce. An increasing number of agencies have put in place an internal website to collect employee ideas.
• Third is the most crucial component – finding funds to support the development and execution of innovations.

In response to the need for innovation, the Census Bureau created its Improving Operational Efficiency (IOE) Program. A key lesson from the Census Bureau is that agencies need to create and communicate a process in which innovative ideas are sought.

Census Operational Efficiency Program Metrics

Total Number of Ideas Received since 2010: 2,145 ideas

Total Number of IOE Projects Implemented since 2010: 113 projects

Total Savings an as of April 2014: $33.1M

There are also three key steps in implementing an innovation program in government:

• Step One: Collect and vet ideas. There are now a variety of mechanisms, including Idea platforms and Challenges, which organizations can use to collect and evaluate ideas. In many organizations, employees vote on the merits of each innovation submission. The following Idea platforms have been effective mechanisms for collecting ideas: IdeaHub at the Department of Transportation, The Sounding Board at the Department of State, and IdeaFactory at the Department of Homeland Security. Additionally, many agencies are effectively using the Challenge.gov platform to seek new ideas and to solve designated problems.
• Step Two: Put in a place a management plan to turn the ideas into a specific improvements. After the selection of a “good idea,” many organizations then require a business plan to be prepared which sets forth the benefits of the innovation and how the innovation will be realized. Often, such a plan will include the work steps, resources, and a time schedule to innovate.
• Step Three: Fund the innovation. Organizations are often able to complete Steps One and Two, but then encounter funding problems in Step Three. Few agencies have funds earmarked for innovation. It is thus necessary – from the start – to have a separate fund available to provide the necessary resources to develop an innovation.

Agencies are now successfully using the following funding sources for innovation:

• Working Capital Fund: Initial funding for the Working Capital Fund can come from an assessment (usually one percent) on the agency’s total operating budget. Ideally, the return on investment from the innovation replenishes the money from the Working Capital Fund that originally funded the innovation.
• Challenge grants: Agencies now have authority for challenge grants via the America COMPETES Reauthorization Act of 2010 that provides all agencies with expanded authority to pursue innovation.

Political leaders must find ways to innovate: in order to meet increasing public expectations for improved performance and improved products, federal agencies must find ways to support innovation by leveraging existing funding sources. A well-managed innovation fund will dramatically speed up an agency’s ability to innovate quickly and improve services.

Examples of Innovation Across Federal Agencies

• Idea Platforms: There are now a series of social media tools to harness the innovation and ideas from employees. These tools include online brainstorming and social voting platforms to submit new ideas, search previously submitted ideas, post questions, and discuss ideas.
• Challenges: There are now a variety of platforms, including Challenge.gov and InnoCentive, which host contests that seek the best solutions for a given problem. There is frequently a monetary reward for the best solution to the challenge posed.