Can innovating today drive opportunities tomorrow?

Authors
Lance Mortlock

EY Canada Managing Partner, Energy

Forward-thinker. Strategist.

Kirsten Tisdale

EY Canada Managing Partner, Government and Public Sector (GPS)

Trusted advisor in supporting governments and public entities through complex reform and transformation. Passion for road biking, hiking and keeping up with my two very active young boys.

5 minute read 6 Feb. 2017

The public sector faces obstacles to innovation. But finding new ways to evolve isn’t just possible; it’s essential. 

Innovation is no longer just a buzzword. It’s now a potential solution to challenges, becoming ubiquitous in both the private and public sectors.

On the private side, the need to be innovative has an obvious driver: staying ahead of the competition, and delivering products and services that will increase market share and drive shareholder value. Our EY cross-industry market study showed 93% of executive leaders believe innovation is important to driving growth.

Public sector leaders must focus on finding the right balance between implementing a structured innovation process, and ensuring it doesn’t become so rigid as to defeat its purpose.
Kirsten Tisdale
EY Canada Managing Partner, Government and Public Sector (GPS)

Although not yet as clearly defined, the case for innovation in public sector is similar. As governments strive to balance priorities — including the effective allocation of resources and meeting public expectations — it’s becoming increasingly clear that new approaches are required. Governments must innovate in the areas of service delivery, process improvement, regulation and policy implementation.

Many private sector organizations struggle to define what innovation means and to effectively implement an operating model to enable it due to the lack of a defined innovation strategy, limited budget or leadership capacity, and the sheer size of an organization. On top of this, the public sector is also dealing with public scrutiny, and the traditionally risk-averse approach governments are known for.

Despite these challenges, here are five key reasons why governments need to innovate now:

  1. Optimal resource allocation. Innovation can enable governments to fulfil their duties to citizens, while using each dollar prudently.
  2. Competitive advantage. Through smart regulation and by being an early customer, the public sector has a role to play in enabling innovation in the real economy. Jurisdictions that embrace this role will take the lead in attracting foreign direct investment.
  3. Credibility. Knowledge is being created and put to use faster than ever. The public expects governments to keep pace.
  4. Talent retention and attraction. Engaging work and leading-edge opportunities will be the biggest attractor of millennial talent. The public sector has an opportunity to compete for the best talent in a way it can’t when compensation is the only driver.
  5. Enabling the private sector. Stretch targets embedded in legislation or regulation can push industry to innovate and meet goals that it might not otherwise have aimed for.

Innovation has a role to play in how government develops policy and delivers programs and services. Still, it’s a broad concept that can envelop a wide range of improvement concepts, and there’s no hard and fast definition for innovation. But in the public sector, service, process, regulatory, and policy areas are each ripe with their own opportunities to dig in and innovate.

How can the public sector effectively innovate to serve citizens better?

Knowledge is power. First, the sector needs a clear understanding of what’s driving the need to innovate. Whether this is about better allocating resources, keeping up with citizens’ expectations, working with the private sector to ensure a competitive economy, or attracting the next generation of public sector leaders, understanding the need is imperative.

Then, public sector organizations need to clearly understand what they’re trying to innovate — services, processes, regulatory models or policy design and implementation.

Last, but most important, public sector leaders need to clearly understand what operating model they intend to use to enable innovation given their specific needs, circumstances and talents.

In innovation, as it has in some other areas, government can learn from the approaches taken in the private sector, but ultimately every organization must chart its own course if it’s going to work. Keeping core fundamentals in mind can be the dividing line between a plan that works, and one that doesn’t.

What are the key pillars to successfully accelerating and innovating?

  • Clearly define your approach. Outlining a methodology that best aligns with your overall strategy is the first step to building a culture for process innovation. You may find that an enabler, advocate or producer model works best for your organization. Do your research and choose an approach wisely; it will dictate your future operating model.
  • Create a portfolio strategy. Innovative ideas come in all shapes and sizes. The majority are small, incremental ideas that are easily identified, developed and distributed throughout the organization. Other innovations include big bets that could revolutionize the way you work or deliver services. It’s important that a portfolio strategy exists so you can maintain a pipeline of ideas. That’s how your organization avoids becoming stagnant or complacent. Establishing a prioritization process that matches resources to ideas is equally important. That way, you improve the chances of seeing real action around your best ideas.
  • Foster a culture of innovation. As with any change program, you may encounter pockets of resistance when attempting to adopt a more innovative culture. This will likely come from those who don’t understand innovation, don’t believe they can contribute to it, or see the very idea of innovation as “just another initiative.” Managing the pushback takes more than just clearly articulating the innovation strategy. It requires building and executing a well-structured change management program. This starts with tone from the top, but requires champions throughout the organization, and quick-win connection points to highlight the upside of the new culture in action.
  • Focus on funding. Adopting an innovation approach is a real infrastructure investment. It needs measurement and monitoring. Establishing and communicating a clear set of innovation goals against which you can measure investment decisions and establish evaluation criteria gives your approach the kind of rigour that only metrics can bring.

Innovating today for a better tomorrow

Public sector organizations face real challenges to innovation. Even the best-intentioned efforts can quickly become overtaken by process and rigidity due to the inherently risk-averse nature of government.

This makes it even more crucial for public sector leaders to focus on finding a balance between implementing a structured process and ensuring that the structure doesn’t become so inflexible as to defeat its purpose.

It’s possible to customize an innovation framework that’s built for purpose in the public sector. Using it to strike that elusive balance between allowing innovation to flourish, and respecting traditional governance and taxpayer dollars is more than possible. In fact, it’s necessary.

Getting there means first looking inward to understand where you’re starting from. Then, looking outward and drawing a map to where you’d like to go.

Summary

As governments strive to balance priorities, it’s becoming increasingly clear that we need new approaches to old problems. Learning to build innovation into the public sector can help drive transformative results.

About this article

Authors
Lance Mortlock

EY Canada Managing Partner, Energy

Forward-thinker. Strategist.

Kirsten Tisdale

EY Canada Managing Partner, Government and Public Sector (GPS)

Trusted advisor in supporting governments and public entities through complex reform and transformation. Passion for road biking, hiking and keeping up with my two very active young boys.