DAY:

SESSION:

PRESENTER:

Issues in Public Sector Innovation

19 January 2010DIISR

Tim Kastelle

Innovation – some definitions

• Creating something with economic value

• Putting a new idea into use

• Converting an idea into revenue

• Configuring an idea so that it can be replicated

Innovation is More than Just New Products

• “(Economic) development in our sense is then defined by the carrying out of new combinations”– J.A. Schumpeter

(1912) The Theory of Economic Development

Schumpeter’s Forms of Innovation

1. The introduction of a new good, or a new quality of good (or service)

2. Introduction of a new method of production

3. The opening of a new market

4. Developing a new source of supply

5. Changing the structure of an industry

The Business Model translates inputs into outputs

Source: Open Innovation by Henry Chesbrough

Why this…

… not this?

(photo: flickr/Martin Charbonneau Photographe

<1>

Ideas are cheap

(photo: flickr/ARKTINA)

(photo: flickr/johnkoetsier)

<2>

Invention is not Innovation

Invented: 1823Built: 1998Sold: Never

Invented: 1968Built: 1974Sold: 1981

Invented: 23 times before Edison!

So why do we say that Edison invented the light bulb?

<3>

Innovation is Evolutionary

(photo: flickr/johnkoetsier)

Variety

Selection

(photo: flickr/deVos)

Replication

Innovation is Evolutionary

• Invention is the creation of variety

• Innovation is a process that includes all three steps:– Variety: creating new ideas– Selection: choosing the best ones– Replication: getting them to spread

InnovationProblems

<1>

Our Problem is Getting Ideas

To Spread

The Innovation Value Chain

Actual Organisations

Idea Poor

Selection & Diffusion Poor

<2>

Poor Fit BetweenInnovation &

Strategy

Example Firm – Value Statement

• Success is built on our values of– Professionalism– Integrity– Respect– Innovation, and– Teamwork

Interview with Manager of Corporate Strategy

“So I want to get to a spot where the strategic plan is short and concise and pretty much future proof, it doesn’t necessarily change, we continually test it, but it’s there and provides that beacon towards the future and then we continue working towards delivering it. The process will be about testing it and the assumptions behind it and making sure it’s robust and we haven’t quite got there we’re just moving to that sort of space now.”

• Manager: Yes, so – but I must admit I haven’t been really close to the innovation stuff.

• John: I was wondering to what extent you could see innovation playing a role in delivering strategy. How would that work?

• Manager: Yes, but I haven’t thought through that.

• John: Okay.• Manager: No I haven’t thought through that,

so I think yes there is a – [us] saying we will be an innovative company, what is the... (starts mumbling – can’t be transcribed)

Summary of Interviews with12 top levelmanagers

<3>

Short-Term Focus

The three horizons: a portfolio approach to strategy

Balancing the 3 horizons

What is an InnovationCulture?

Shares a language

Generates ideas, not too

attached to them

Has good selection processes

Identifies best ideas quickly & cheaply

Learns from failures

Can get ideas

to spread

Links Innovationto Strategy

Develops anInnovationPortfolio

Thank you!

timkastelle.org/blog/