2013 Innovation Processes for Public and Nonprofit Organizations.pdf

Running head: INNOVATION PROCESSES FOR PUBLIC AND NONPROFIT

ORGANIZATIONS

Innovation Processes for Public and Nonprofit Organizations

Amy Berger

College of Saint Scholastica

Project Committee

Sponsor: R. John Welsh, Jr., Ph.D.

Reader: Erik C. Burns, MA, MBA

Approved: December 2013

Submitted in partial fulfillment of the requirements for the degree of Master of Business

Administration, The College of St. Scholastica.

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INNOVATION PROCESSES FOR PUBLIC AND NONPROFIT ORGANIZATIONS 2

Acknowledgements

This paper represents a special part of my journey from a career in the public sector to a

new one in the private sector. I have learned so much about myself, and my abilities throughout

this process, and I firmly believe that anything is possible if you truly want to accomplish it. It is

never too late to learn new things and challenge yourself in ways that you never imagined. None

of this would have been possible without my faith, family and friends. Thank you all for your

love and support during these past few months. A special thanks also to John Welsh and Erik

Burns for their support and guidance. I am blessed and grateful to have you all in my life and I

cant wait to take you all along with me on the next step of my journey.


Abstract

Public sector and nonprofit organizations are currently facing financial constraints and fall

behind the private sector when it comes to developing new innovative products and services.

This qualitative analysis provides a new model for public sector and nonprofit organizations by

analyzing case studies from two public organizations and one private, as well as the experimental

elimination theory that is proposed by Potts (2010). Analysis of these case studies and theories

resulted in a model that focused on utilizing people and programs within an organization to help

develop innovation. Examples of organizational culture, creativity, and strong communication

tools are recommended and their usage can help improve the people and program side of

organizations. This proposed model provides guidance for innovative development and helps

satisfy the public sectors need for such a model.

Keywords: Innovation, public sector, government


Table of Contents

Introduction ..........................................................................................................................6

Introduction to the Problem .......................................................................................6

Background of Study .................................................................................................8

Purpose of the Study ..................................................................................................8

Research Question .....................................................................................................10

Rationale ....................................................................................................................10

Significance of Study .................................................................................................12

Assumptions and Limitations ....................................................................................14

Organization of the Remainder of the Study .............................................................16

Literature Review ................................................................................................................17

Introduction ................................................................................................................17

Theoretical Perspectives ............................................................................................18

Private sector vs. public sector innovation ................................................................21

Innovation implementation ........................................................................................22

Research Approach ...................................................................................................26

Reliability and Validity ..............................................................................................27

Methodology .........................................................................................................................29

Introduction ...............................................................................................................29

Research Design.........................................................................................................29

Research Procedure ....................................................................................................30

Data Collection ..........................................................................................................32

Data Analysis .............................................................................................................38


Reliability and Validity ..............................................................................................39

Ethical Considerations ...............................................................................................41

Summary and Discussion of Results ..................................................................................42

Introduction ................................................................................................................42

Summary ...................................................................................................................42

References ..................................................................................................................58

APPENDICES ......................................................................................................................63


Introduction

Introduction to the Problem

Government agencies around the country are facing difficult fiscal situations. They

are being forced to make do with less, but at the same time, are still expected to provide

important services to citizens. Innovation is generally thought of as a private sector concept.

Traditionally companies have used innovation to create new products and services and have been

able to increase profitability by doing so. Some public sector agencies are using innovation in

effective ways, but the majority of them choose not to innovate. Reasons against innovation

include risk aversion, lack of financial resources, confusion over who is in charge of the process,

and what innovation itself really means. Innovation has varying definitions. For purposes of this

paper it is defined as the process of introducing, developing, adopting, and using of a new

product or service idea (Hartley, 2005). Innovation can help increase efficiency, profitability, and

contribute to the overall success of the global economy.

Research on public sector innovation is limited, but common themes can be found

through a review of current literature. Public sector theories such as the Traditional Public

Service Model, and New Public Management illustrate how government agencies have evolved

from hierarchies to organizational structures that currently strive to become more efficient. Other

current trends include collaborative innovation, creativity management, as well as the

development of public-private partnerships. All of these trends are important to consider because

their evolution shows the ability of the public sector to slowly change.

Differences between public sector and private sector innovation are also discussed in this

paper. Research has shown that these sectors are different in audiences, structure, and goals.

Although it can certainly learn from existing private sector innovation models, the public sector


requires a different innovaton model because it is not the same as the private sector. It should not

be expected to use a model that does not incorporate public sector factors such as limited

financial resources, complex organizational structures, and political influences. Finally, current

innovation trends and processes from existing research are discussed. These include innovation

awards for employees, incorporating lean principles into innovation processes, and an

experimental elimination method as part of the development of new ideas and evaluation of old

ideas.

In addition to the factors listed above, case studies and existing theories will be

analyzed as part of the development of a new innovation model that can be used by government

agencies and nonprofit organizations. Innovation is not a new topic, but based on existing

research, there appears to be a shortage in the number of innovation models that are available for

these organizations to use. This paper provides a new model that can be used in order to further

develop the innovation process. The model includes the concepts of people and programs and

specifically discusses how the concepts of culture, creativity and communication can help

employees and management grow new ideas. For the programs component, the proposed concept

is to take the new ideas that were discovered and evaluate them through an innovation advocate

or innovation board. Old ideas will also be evaluated through this process. By utilizing people

and programs in better ways, the innovation model that is developed will be considered an asset

to public sector organizations.


Background of Study

Prior research on this topic has focused on the general benefits of innovation itself

and how it can be used to help an organization become more profitable. Research has also

focused on how the private sector uses innovation. Little research has focused on developing a

specific innovation model that public sector and nonprofit organizations can use. This research

study will provide greater detail regarding public sector innovation and give these organizations

a new model that they can use to grow their organizations innovation priorities. Case studies

will be used to develop this model and special attention will be given to the public sectors

unique innovation challenges.

Statement of Problem

In todays challenging economic climate, government agencies and nonprofit

organizations are being forced to make do with fewer resources. Instead of continuing to use the

same existing processes, innovation can help create an opportunity for these organizations to

grow and become more successful. Innovation has become an important topic in the business

world and most previous research on this topic has focused solely on the private sector. Most

businesses have innovation processes already in place and their management has committed time

and money to producing innovative products. It is not typical for public and nonprofit

organizations to have innovation processes established or even fully comprehend the meaning of

innovation. This can be explained through a variety of reasons, such as lack of knowledge, lack

of financial resources, lack of management support, and lack of procedural ability. Because of

these hindrances, the public sector is at a severe disadvantage. Not only is this sector not able to


compete alongside private corporations, public and nonprofit organizations are not contributing

to the improvement of our society.

Public and nonprofit organizations often struggle with how to start the innovation

process. Often they are overwhelmed with how innovation may impact their organization. For

this reason there is a growing need for innovation processes that can be tailored to specific public

and nonprofit organizations. This new process would provide them with the tools and knowledge

that they need to succeed. For other organizations that may not see the benefits of innovation,

these processes can help remind them that innovation can give them competitive advantage and

improve the overall economic health of their organization. If nonprofit and public organizations

could harness the innovation potential that is out there in their field, the business community

would also benefit from its successes.

Purpose of Study

The purpose of this paper is to provide nonprofit and public organizations with a new

innovation process that can be tailored to their specific organization. Background information on

innovation and its benefits will be provided. In order to establish the new process, prior case

studies on this topic will be analyzed as well as innovation processes that are currently being

used by the private sector. Nonprofit and public organizations will be able to use this new

innovation process to help improve existing products and services as well as create new ones.

Hopefully, this process will inspire the nonprofit and public organizations to become known for

their innovation.


Research Question

The purpose of this qualitative analysis is to examine the relationship between innovation

and public and nonprofit organizations. This research provides background information as well

as a model that can be used by individual organizations to help them become effective

innovators. The research question is: What type of innovation model can be utilized by public

sector and nonprofit organizations?

Rationale

Businesses in the private sector are familiar with innovation and have designed and

adopted innovation processes to create new products and services. The public sector community

has not focused on innovation. It has grown accustomed to doing things in the same exact way

for a long time. It is important to distinguish between the goals of nonprofit innovation compared

to the goals for innovation for the private sector. In the private sector, innovation can be seen as a

way to increase profitability. Apple is an example of a corporation that has used innovation to

have a competitive advantage over its competitors. In the public sector, the goal of innovation

should be to advance the public good and create public value (Bland, Bruk, Donghin & Lee,

2010). Innovation should improve services such as obtaining a drivers license at the DMV, it

should help a nonprofit promote its mission through unique technology, and it should contribute

to society.

There are significant differences between nonprofit and for profit institutions when it

comes to factors that impact innovation processes. The main areas are: extensive responsibility

structures, motivations and compensations of employees, and the overall goals of the

organization. Private corporations are responsible to shareholders and are likely to take risks in


order to satisfy shareholders. In nonprofit organizations, the organization provides services to

clients and usually has a board that oversees their work. In terms of motivations and

compensations of employees, nonprofits are often run by volunteers and employees that work for

low wages in exchange for working for a cause that they are passionate about. Corporations pay

their workers higher wages and offer significant compensation packages. Finally, the overall

goals of the organizations are very different. For profit organizations focus on making profits and

giving those profits back to their shareholders. Nonprofits provide services to clients and can be

risk adverse when it comes to innovation (Hull & Lio, 2006).

There are also unique issues that arise in nonprofit and public organizations. There

can be diversity within the organization that causes communication issues. There may be

differences between generations of workers, workers of different cultures, and workers who

dont share ideas. Communication is not always encouraged. Nonprofit and public organizations

also have to deal with competing interests. Government organizations face pressure from

lobbyists, legislators and constituents. Nonprofits face pressure from policy activists and board

members. The organizations have to find a balance between these competing interests. Finally,

there is often no single person in charge of the organizations management, or there may be

many people who do not work together to reach the organizations goals (Bland et.al, 2010). All

of these factors are important when an organization is looking to develop an innovation strategy.

Many companies in the private sector have an innovation process that has been

established by management. If a nonprofit organization decides that it wants to establish an

innovation process, it may find that there are not very many resources available. This may cause

them to not even want to try the process. By examining previous case studies of nonprofits and


public organizations and taking a closer look at innovation theories, an innovation process

framework for these organizations can be established. These organizations will have the ability

to look at what has worked for similar organizations as well as the benefits of innovation.

Innovation can provide these organizations with the unique opportunity of improving the ways

that they serve the public as well as enhancing their organizations. Having more innovative

nonprofit organizations will also enhance the business community. Additional nonprofits that

choose to innovate may also be able to partner with private corporations to develop joint

innovation processes.

Significance of Study

This qualitative study takes existing case studies and public sector innovation theories

and expands it to create an innovation model that can be utilized by public sector and nonprofit

organizations. This model provides a practical way for organizations who may be deciding

whether to innovate or for those who are already innovating, it may help provide a new

perspective on innovation. Management is given information that reminds them that although

innovation in the public sector may be sometimes perceived as risky, the benefits can outweigh

the risk factors. If management is able to educate its employees about innovation and other

organizations see the success of the model and want to participate, the public sector will benefit.

When the public sector benefits, the private sector and the American economy will as well. In

tough economic times, new innovation processes are needed to ensure that resources are being

utilized in the best way possible. Finally, public policy could also be impacted in a positive way.

The public and nonprofit organizations who choose to use this model may be able to change the

way that the industry views innovation and this could be reflected in future legislation and policy

discussions.


Definition of Terms

In this research paper, there are terms that will be used that are intended to convey a

specific meaning as it relates to this paper topic. These definitions may vary across research

fields, however in this case they relate to the fields of public sector and nonprofit organizations

that are discussed in this paper. Terms and their definitions are provided below.

Collaborative innovation: The organization works with outside interests to improve goods and

services.

Creativity management: Knowledge management theory that focuses on acquiring new ideas

from an organization and its members to address and solve new challenges (Berman & Ch-Gon,

2010).

e-Governance: Focuses on using technology to provide email updates and current websites for

citizens.

Innovation: The process of introducing, developing, adopting, and using of a new product or

service idea (Hartley, 2005).

Networked Governance: Public sector innovation theory that believes in having a continuously

changing environment and focuses on public value (Hartley, 2005)

New Public Management Theory: A public sector innovation theory from the 1980s and 1990s

that focused on efficiency and accountability. Experimentation through innovation efforts was

viewed as a waste of valuable resources (Townsend, 2013).


Nonprofit Innovation: Consists of developing new ways to improve the administration of

services to help the organization better serve its constituencies. These organizations often rely on

volunteers and donations (Beekman, Steiner & Wasserman, 2012).

Private-Public Partnership: The private sector partner provides the business development

expertise and the public sector agency provides access to specific resources and networks

(Micheli, Schoeman, Baxter & Goffin, 2012).

Private Sector Innovation: For profit organizations that focus on producing new goods and

services that will help increase company profits. These organizations report to owners and

stakeholders.

Process Innovation: Changing the process by which goods and services are produced

Product Innovation: Creating new goods and services

Public Sector Innovation: Innovation that is guided by principles to reduce waste and improve

the delivery of government services to constituents. The public sector is funded by public

revenue, accountable to citizens, and does not compete for market shares (Hartley, 2005).

Traditional Public Service Theory: The public sector is seen as stable, composed of hierarchies,

and focuses on the public good (Hartley, 2005).

Assumptions and Limitations

An assumption of this research paper is that a nonprofit organization or public sector

agency will be able to use the innovation process that is discussed to improve their current

organization. It is important to recognize that some organizations may not be willing to


undertake this process and may not fully allow themselves to capitalize on this opportunity due

to lack of resources or management support. It is important for organizations to understand that

this template is not a complete solution for an organization, rather it is to be used as a guide.

Specifications can be altered to fit an organizations size, budget, location, or other internal

factors. The significance of this study is that it provides helpful background information on

innovation in the public sector, its challenges as well as potential opportunities.

A limitation to this study is that there is a knowledge gap on this topic. Innovation

itself is not a new concept, however most of the research available focuses on private sector

innovation. Private sector innovation is seen to be more beneficial because it can help increase

profits and help grow the economy. There is not a significant amount of information on the

importance of public sector innovation and how it can be used in coordination with the private

sector. According to Nahlinder, public sector innovation was not very established even in 2005.

Since then the interest in this topic has increased, but there are still not nearly enough case

studies and existing research that can help provide organizations with the tools they need to

innovate. Potential issues that still need to be further researched include how to handle

incentives, employee motivation when it comes to innovation processes, attitude toward risk, and

the differences between the public and private sectors (2013).

Future research should extend this current innovation process and conduct follow up

studies to analyze how utilizing these innovation processes have impacted the organization. This

data could help further improve the innovation template as economic conditions or

organizational structure changes over time.


Organization of the Remainder of the Study

The organization of this paper is structured as follows: Chapter 1, provides an

introduction of the problem, background information of the problem, purpose of the study,

research question and limitations of the study. Chapter 2, Literature Review, examines research

on the topic of public sector innovation. Three general themes are identified and evaluated. They

include: theoretical perspectives on public sector innovation, public sector vs. private sector

innovation, and innovation process implementation. The reliability and validity of the literature

that is evaluated is also highlighted. Chapter 3, Methodology, describes the qualitative approach

of the study and specifically discusses the procedures used, data collection and analysis, as well

as reliability, validity and ethics. Data collection focuses on the three case studies and theories

that were chosen to be part of the innovation model. Finally, Chapter 4, Summary and

Discussion of Results, summarizes the new innovation model, discusses its implications, as well

as provides limitations of the current study and opportunities for future research.


Literature Review

Introduction

Innovation is a relatively new concept in the public and nonprofit organization sectors.

Historically the public sector has not been encouraged to innovate, however this is starting to

change. In recent years there has been an increasing focus on government innovation because of

three main developments. State government agencies around the country are experiencing

government cutbacks as expected state revenues fall short. Second, important policy issues such

as climate change, government run healthcare, and continuing high levels of unemployment are

now becoming impossible to avoid. These issues require unique solutions to be able to solve

them and innovation can offer solutions that never existed before. Not only is technology a

distinct possibility, but collaboration between governments and corporations may also occur. A

relationship between these two sectors can also benefit our economy. Finally, the world has

become more global and will continue to increase its global presence. Products and services are

shipped differently, goods and services can also be administered online from one country to the

next, and people have the desire to have their products and services delivered in a manner that

reflects the changing global dynamic (Sorensen & Torfing, 2012). It is important for government

to change the way it does things to reflect these new ideas.

This literature review will examine three main areas that are important to this

research paper. These include historical perspectives, public sector innovation vs. private sector

innovation, and innovation implementation. Although the existing research on this topic is

somewhat limited, the existing information does help contribute to the development of a new

innovation process that can be utilized by the public sector.


Theoretical Perspectives

Before establishing a new innovative process for the public sector, it is important to

take a look at the theories of how government has viewed innovation in the past. Examining past

research helps explain the mindset of the public sector and what issues need to be taken into

account. Traditionally, government has a reputation of being very bureaucratic. The traditional

public service model is a good example of this. This particular theory focuses on agencies being

stable, having an organizational structure that is hierarchical in nature, and focuses on the public

good (Hartley, 2005). In the 1980s and 1990s, government started to focus more on efficiency

through New Public Management (NPM). Innovation is done through downsizing of agencies

and there is a focus on improving government services. The concept of E-Government is a result

of this philosophy. E-government focuses on using technology to provide email updates and

current websites for citizens. It has four main components that include e-administration, e-

citizens, e-services, and e-society. Some organizations choose to focus only on a few of these

components, others use them all as they have the time and resources to do so.

Because it is technology based, e-government gives organizations the opportunity to

interact with citizens in a unique way. E-administration focuses on the improvement of

government processes. E-citizens focus on connecting with citizens. E-Services provide online

services to constituents. E-society aims to build relationships with citizens and business

organizations (Feller & Finnegan, 2011). E-government is becoming more popular, as traditional

methods of connecting with constituents have become outdated. E-government will continue to

evolve as more government agencies decide to use it.


Research also suggests that collaborative innovation may be the new trend in government

innovation. Gonzalez, Llopis and Gasco conducted a study of local Spanish government units to

obtain information regarding what type of innovation is most beneficial to them. Those units that

were large cities preferred to use a form of collaborative innovation in which they formed

relationships with external organizations (2013). Additional research by Sorensen and Torfing

suggests that if done correctly, collaborative innovation may help bridge the gap between private

and public sector innovation. Government agencies tend to only share ideas within the walls of

their own organization. Collaborative innovation allows them to share ideas with corporations

and in exchange learn more about how the private sector uses innovation as an advantage (2012).

For example, the Danish government created a program called the Danish Mindlab to see how

collaborative innovation could be used in their country. The goal was to provide a safe

environment where key stakeholders, businesses, and citizens could interact and discuss new

ways for government and businesses to work together to innovate. The lab has gone through

three different stages since its formation in 2001. Its first focus was on employees and idea

generation. In Mindlab 2.0 in 2006, value creation was its goal and users were the target. The

most recent Mind Lab focuses on both users and organizations (Carstensen & Bason, 2012).

Through this unique concept, the Danish government has improved its processes and has reduced

government waste. This effective collaborative model could be applied to other governments

around the world.

One of the newer innovation theories in the public sector is creativity management.

Creativity is not new in all public sector organizations, but using it as an innovation model tool is

certainly new. Creativity management focuses on developing new ideas through idea generation,

orientation and training, incentives and rewards for new ideas, and an appraisal process for ideas


(Berman & Chan-Gon, 2010). Idea generation can be accomplished through individual and group

brainstorming sessions and ideas can be collected and reviewed by management or other staff

members. Orientation and training sessions can be conducted a few times a year so that staff

members are aware of new ideas and any upcoming changes to the new innovation process.

Depending on the size and budget of the organization, employees may be rewarded for new ideas

they have submitted and ones that have actually been implemented by management as part of the

organizations innovation platform. Finally, an appraisal process can be established for ideas that

are submitted. All of these tools can help an organization become more innovative.

As public sector organizations continue to struggle with tighter fiscal constraints, they

are seeking new alternatives to fully funding programs and implementing them. Public-private

sector partnerships give them the opportunity to innovate by using private sector resources and

networks. There are three conditions that should be met in order to have a successful partnership.

They include the following: the partnership should be a long-term relationship so that the

partnership can fully develop instead of being a one-time project. The private sector partner

should also recognize that the public sector organization has expertise in administering services

better than the private sector organization. Public sector organizations focus on services instead

of profitability. Finally, the partnership organizations should agree on the level of risk that will

be involved in establishing the relationship. This may include costs, political impacts, and

measures that may be used to evaluate the partnership as it develops (Forrer, Kee, Newcomer &

Boyer, 2010).


Private sector vs. Public Sector Innovation

Innovation in the private sector is significantly different from the public sector.

Public sector innovation is seen as slow, ineffective, and insignificant. This is because it doesnt

compete directly for market share, and is driven by competing political interests (Potts, 2009).

The private sector is seen as greedy and produces new products and services that are too

expensive for the public sector to replicate. It is important to recognize that these two sectors do

have significant differences in how they choose to approach innovation. First, they differ in their

vision. The private sector uses innovation to increase profits and maximize shareholder value.

The public sector and nonprofit organizations often have a vision of helping provide services to

others. The private sector tends to be more willing to take risks and has the adequate staff and

financial resources to innovate (Hull & Lio, 2006). In contrast, the public sector lacks staff

experts on innovation, chooses to focus more on societal change, and often does not have the

extra finances to spend on developing new products and services.

Additionally, the private sector has a different audience compared to the public

sector. Corporations report directly to shareholders who are concerned about increasing company

profits. The public sector reports to citizens. The public sector also is effected by political

interests. Depending on the results of a policy issue, policy makers may lose power of a

legislative branch due to their decisions. Political failure is not always a risk that government is

willing to take (Potts, 2009). The public sector also struggles to add more to its workload. It is

not always excited at the possibility of innovation, mainly because it wonders how it can

complete the task when its workforce is already stretched too thin.


Typically the private sector is viewed as a complementary partner to innovation.

Some private sector organizations innovate because they recognize that it makes them more

responsive to what is happening in the market. The public sector structure makes innovation a

somewhat unlikely match for this sector of the economy. Innovation requires risk taking,

creativity, and adaptability and bureaucracies just dont naturally do these things. They question

the need for innovation and sometimes see it as a threat to their old way of providing services to

constituents. If government agencies do choose to innovate, they do it only to maintain its

current system, not to help the organization promote new ideas for implementing services

(Fajans, 2006).

Innovation Implementation

Research suggests that there are important factors that public sector and nonprofit

organizations should keep in mind when deciding whether to innovate. An organizational culture

that promotes innovation and where employees feel comfortable taking risks needs to be

established. Board members of nonprofits and leadership of government agencies should set an

example for employees and also provide incentives for new and innovative ideas. Creativity is an

important component of creating a culture that encourages innovation. Creativity should include

expertise, motivation, and creative thinking. Management should provide questions and

discussion forums to encourage the sharing of ideas. Virtual teams can also be utilized by global

corporations that may have offices around the world. These teams can serve as a hub for the

sharing of ideas and interaction between employees (Hiennala, 2011).

A form of creativity management that can be used by organizations is a concept

called concept mapping. The goal of concept mapping is to help employees identify the


characteristics of their work environment that help encourage creativity. It involves

brainstorming sessions, the rating and piling of characteristics that are identified through

brainstorming sessions and email surveys. The data is compiled into cluster maps that show the

average importance of the creativity characteristics. Through the mapping process, an

organization is able to identify what is most important to its employees when it comes to

creativity (Jaskyte, Byerly, Bryant & Koksarova, 2010). The organization can then implement

changes to the work environment based on the data that is has obtained.

Government doesnt typically use financial incentives, but it is a potential avenue to

encourage innovation. Kay proposes that the public sector use prizes and other reward incentives

to encourage innovation. Federal agencies such as NASA already use this concept. Prizes help

promote awareness and competition, and accelerate new research (Dalziel, 2007). Dedicated

funding for innovation should also be a priority. Although this may be a challenge for

organizations that already have financial difficulties, innovation projects may not be able to

succeed if they do not have the necessary funding. Finally, strategic planning can be used to help

provide an organization with direction. Agencies should examine where it is at with regard to

innovation and identify key characteristics that they can use to implement innovation processes

(Kohli, 2012).

Innovation awards can also be used as an incentive to encourage employees to

innovate on their own or participate in overall company innovation projects. The purpose should

be to recognize successful innovators and to encourage future efforts. Some positive effects are

that winners of the awards can serve as innovation heroes for other employees to look up to.

Or, innovation awards can help direct employees towards meeting overall company goals.


Problematic issues can arise if employees win multiple innovation awards or the same group of

employees win most of the time, so special attention should be paid to how the awards program

is structured and that employees fully understand the guidelines (Rosenblatt, 2011). Individual

innovation is important, but groups can also be used to help research new ideas. With the support

of management, departments can establish achievement awards for those teams who reach these

goals. Because many government organizations still have limited budgets, cost saving ideas

should be welcomed. Cost saving ideas that are implemented may help provide other resources

that can be designated for innovation purposes (Borins, 2001).

Agencies can also use existing resources and organizational structures to help

establish innovation processes. Potts suggests an experimental method that is used to eliminate

innovation programs that dont have value and fund those who show promise. Each program

would be coded and assigned an elimination percentage. The experiments are conducted and

results are analyzed to help determine value (Potts, 2010). Researchers have also studied

government innovation in other countries to obtain ideas that may be helpful in the United States.

Gruen discusses the establishment of an Advocate for Government Innovation. This government

position would help provide resources and financing for innovative ideas, establish a reward

system, and also partner with local universities to host annual conferences and seminars on

innovation (2009).

Lean principles could also be used as part of an innovation process. Traditional lean

principles focus on eliminating unnecessary waste, which may contradict work environments

where traditional innovation processes require more resources, not less. However, there are some

commonalities between lean thinking and innovation that can be used. Lean thinking focuses on


identifying relevant stakeholders to determine what they value. Innovation processes should also

involve many stakeholders to better understand their needs (Srinivasan, 2010). Both principles

also focus on organizational learning that can be conducted through employee training programs

and promoting a work environment that encourages creative thinking and ideas. The important

consideration is to make sure that lean principles are not the only method used as part of an

innovation process model. Too many lean principles may harm employee creativity. The lean

environment can make employees stressed because they must now meet new expectations in

addition to previous programs (Srinivasan, 2010). Special attention should be given to

incorporating some, not all, lean principles into an innovation model.

Potts suggests that a completely different innovation perspective should be taken into

account as the public sector is typically on the defensive side of innovation. Because the public

sector does not depend on capturing new business or profits like the private sector does, he

believes that the public sector needs to use a different type of model. The innovation model he

proposes is experimental elimination. In this method innovation programs are identified and

coded, a percentage is selected for elimination, the program is implemen ted and results are

analyzed. The programs that have value are kept (Potts, 2010). This method could help focus

time and resources on those programs that really innovate and other monies could be used for

other programs. This method will be discussed further in the methodology section of this paper.

Heracleous and Johnson examined two public sector organizations in Singapore to

discover if the private sector could learn from the public sector regarding innovation. The

National Library Board was able to transform many libraries into lifestyle libraries, which

consists of libraries that are in cafes, shopping malls, or self-sufficient libraries. The library used


succession planning, executive coaching, leadership development, and a performance based

reward system for its employees to innovate (2008). Singapore Airlines focused on

differentiating itself through staff development and building stronger relationships with its

customers. It learned to embrace change rather than fearing it. These two organizations used

technology to increase its efficiency and differentiate themselves from competitors. They are

important to consider in developing an innovation model because they did not wait for a crisis to

innovate, rather they took the initiative before situations occurred.

Although research on this topic is limited, existing research and case studies will be

used to help formulate a new innovation process for the public sector and nonprofit

organizations. This literature review has served as a guide that will help factor in necessary

considerations as a process is developed. The challenge of a new process will be not only taking

these factors and theories into account, but also making the process easy to understand and

helpful for organizations that choose to use it. Although they may be in the same field, each

organization brings different strengths and weaknesses, especially in staff and financial

resources. It is the goal of this research paper to help encourage the public sector that innovation

needs to be a priority or their organization will be left behind. In todays economy, the business

world needs public sector innovation just as much as the private sector in order to survive.

Research Approach

This research paper reviewed scholarly, peer-reviewed literature regarding

innovation, public and nonprofit organizations. Case studies were used as well as existing

innovation theories and models to design an innovation model that can be used by public and

nonprofit organizations. This innovation model can be tailored to each organizations strengths


and weaknesses and can be implemented by management and other senior-level staff members.

The literature review examined three main themes: historical perspectives on innovation, public

sector innovation vs. private sector innovation, and innovation implementation. Relevant terms

specific to types of innovation, and public administration theories are also defined.

Reliability and Validity

Qualitative research studies are sometimes criticized for being too subjective because

they often rely on personal interviews and individual case studies. The key is for this type of

research to be consistent and trustworthy. Researcher bias should be kept to a minimum as much

as possible. Reliability and validity are two important research terms that should be discussed as

part of any research project. Reliability refers to the trustworthiness of the procedures and data

generated. If the study were to be replicated by another researcher, similar results should occur.

Validity is defined as how well the research tools are used measure the topic that is under

investigation (Roberts, Priest & Traynor, 2006).

The individual sources that are discussed in this literature review are found to be valid

and reliable overall. Public sector innovation theories are consistent throughout the research that

was examined. Differences between public and private sector innovation were also found to be

from trustworthy and credible journal sources. Researchers were found to be innovation experts

and in one particular case, three different articles regarding public sector innovation were written

by the same author, which demonstrates credibility in the field. Case studies can be challenging

in terms of validity and reliability if they have small sample size or only focus on one or two

companies. If small numbers of cases are used, it could possibly be difficult to determine the


reliability and validity because the research has not been replicated often. This researcher used

multiple case studies in order to try and avoid this potential issue.


Methodology

Introduction

This paper uses a case study qualitative research approach. Case studies are a method that

can provide multiple levels of analysis, as they may contain different methods of data collection

such as interviews and surveys. Case studies may also help test existing theories and possibly

generate new ones (Eisenhart, 1989). In developing a new innovation process for nonprofit and

public organizations, examining recent case studies will help establish the criteria that should be

used in the new innovation process. Past research has focused on both qualitative and

quantitative methods, however case studies have been used to closer examine how an

organization uses innovation.

The purpose of this analysis was to explore public sector innovation case studies and

theories and use them to design a new model to be used by public and nonprofit organizations.

The following research question was addressed: What type of innovation model can be utilized

by public sector and nonprofit organizations?

This chapter will elucidate the methodology of this study and is presented in six sections

that include: (a) Research Design; (b) Procedures; (c) Data Collection; (d) Data Analysis; (e)

Reliability and Validity; and (f) Ethical Considerations.

Research Design

Case studies are frequently used in business research because they can provide

additional information that may not be obtained through traditional quantitative methods. They

can be valuable tools to help support existing models and theories and also help create new


models (Zivkovic, 2012). Existing case studies on innovation from the public sector are used to

help accomplish this goal.

The research design was to specifically examine public sector case studies and use

them in coordination with a proposed innovation by elimination model as well as lean principle

theories on innovation to develop a new model. Multiple concepts were used because using one

or more case studies and additional research theories can help discover patterns and themes that

may not otherwise be discovered through using only one case study (Eisenhardt & Graebner,

2009). Because innovation is a popular and constantly changing topic, relatively current case

studies and theories were utilized to make sure current information was taken into account.

Procedures

In order to conduct a thorough analysis about public sector innovation and develop a

new process three case studies were selected. These case studies are from 2010 and were chosen

because they display characteristics and provide information that is necessary for developing a

new innovation model. Two of them use public sector organizations as the subject matter. These

case studies display an understanding of the challenges that public organizations face when

trying to innovate. The single private sector company was chosen because it uses lean

innovation, which is a component of the new model. While searching for case studies that fit the

desire innovation model that is to be created by this researcher, a unique innovation model was

discovered. Unfortunately, this public sector model has not been tried out on a public sector

organization, but this researcher believes that it provides a model that can be supplemented by

additional innovation theories and results from the selected case studies that are discussed in this

paper. After analysis of case studies for items that can serve as part of the new innovation model,


these items were further researched and incorporated into the innovation by elimination proposal

that Jason Potts discusses in his research.

When using case studies to develop a new theory or model, there are important steps

that should be followed in order to obtain success. Although these steps are typically used by

researchers who are conducting their own case studies, this researcher believes it is still

applicable to this current research paper. There are six steps and they include: defining the

research question, selecting cases that are theoretically useful, using multiple data collection

methods, entering the research field, analyzing the data including using cross-case pattern

searches, shaping the hypothesis, comparing results with other existing literature on the topic.

(Eisenhardt, 1989).

It is also important to discuss the steps that are needed in developing a new

innovation process. The new innovation model does not incorporate all of these steps because

some do not apply, such as finding an angel investor and creating a venture company. However,

these steps reiterate the need for there to be a discussion of the right ideas and goals that the

organization would like to achieve. According to research Suhs case study on the Korean

Research Institution and Mobile Harbor, there are twelve steps in the innovation progress. They

include: identifying the need for the new product or service, performing research, creating and

testing of ideas, demonstrating the practicality of the new idea, seeking patents, testing the

viability of the new idea, finding an angel investor, raising venture capital, creating a venture

company, hiring talented people, raising large amounts of capital, and selling the venture

company (2010). Innovation processes do require a step by step process so that the project can be

implemented as effectively as possible.


Finally, one of the main procedures of the new innovation model that is constructed

through this research study is the concept of reverse innovation. Reverse innovation is innovation

that is done in the opposite manner as traditional innovation. The steps include the following: the

origination of a new opportunity for elimination, the adoption of that elimination, and the

retention of that elimination (Potts, 2010). Reverse innovation has a reputation for being

relatively easy to implement, can be enacted by a group of people, and is traditionally used

mainly in the technology field (Chanqing, Kezheng & Fei, 2005). Although unconventional,

reverse innovation may help public organizations look at their current organizational structure in

a new way and help them realize how innovation can potentially be implemented through

existing programs and resources.

Data Collection

Two public sector innovation cases and one private sector case were chosen based on

their potential to help contribute to this researchers new innovation model. In addition, one

innovation theory proposal was chosen. One of the main principles for the new innovation model

is the Innovation by Elimination model that Jason Potts has proposed. Unfortunately, Mr. Potts

did not, to this researchers knowledge, conduct an actual test case using this model.

Nevertheless, the model that he proposes is important to consider because he provides a unique

theory that takes into account the unique challenges that the public sector faces. Innovation

requires a unique approach because it in itself is a unique concept. Innovation in the public sector

needs to use a method that reflects the fact that is it not the same as the private sector. Traditional

private sector innovation models alone will not be enough for the public sector.


It is important to distinguish among the three case studies that were chosen by this

researcher, as they each bring distinct values and concepts to the new innovation model. The

Texoma case study discusses how a regional consortium successfully innovated on issues related

to economic development through integration, dialogue, and coordination efforts. The second

case study has more of an international and larger government sized focus, as it concentrates on

the Seoul Metropolitan government and its innovation efforts. The final case study focuses on

Rockwell Collins, a company that uses lean principles as part of its innovation process. This

researcher felt it was crucial to choose public sector case studies that focus on different types and

sizes of government agencies because this helps form a more diverse model. The private sector

case was chosen because some private sector models can be tailored to public sector

organizations. The private sector is more experienced in developing innovation models. The

intent of this new innovation model is for agencies of all types of organizations to be able to use

it and model it to their specifications.

Texoma Regional Consortium

The Texoma Regional Consortium was formed in 2006 and consists of various

organizations in the higher education, K-12 education, business, government and non-profit

fields. Thirteen counties from Texas and Oklahoma are represented through the consortium. The

Texoma region faces unique workforce challenges such as an older workforce, low-skilled

workers and other issues that rural communities face. The goal of the organization is to not only

create employment opportunities for its citizens, but also increase the skills of workers in the

area (Bland, Bruk, Dongshin & Lee, 2010).


For this qualitative case study, the researchers spent time during 2007-2008 speaking

with members of this consortium through in-person interviews, media reports, and other

documents to gain insight as how and why this innovative organization is so successful.

Researchers also wanted to understand the relationship between governance and innovation.

They believe that the biggest obstacles to innovation in the public sector are: the failure to

communicate, balancing multiple interests, and the fact that typically no one seems to be in

charge of innovation processes (Bland et al, 2010). Three key findings were discovered through

this case study that are worth discussing. Integration is key to help ensure that participants are

given the same opportunity to share their ideas. This can be done through increasing

participation by making employees feel empowered, utilizing past relationships to build new

ones, and building a common identity.

Dialogue is another important concept. Social interaction is key when an organization is

trying to further develop its innovation process. The Texoma organization was able to hold

regular meetings and discussion groups to make folks feel included. They also released

comprehensive reports and held economic summits to help bridge the gap between public and

private sectors. Finally, coordination is important. Texoma was able to track innovation ideas

through its web site and was also able to institute steering committees to further work on

innovation projects (Bland et al, 2010).

Innovation by Elimination Method

One of the core theories used in this research paper to design a new innovation model

is the concept of innovation by elimination. Mr. Potts argues that public sector innovation is

different than private sector innovation because there is no similar measure of profitability. The


public sector continues to grow at an alarming rate and the GDP is currently over 30% (2010).

New policies and measures have been piled on top of old policies instead of cutting old policies

that are obsolete and cost too much money. The public sector needs to have a better balance for

innovation. Because the public sector has some differences, it requires a unique innovation

approach. An experimental method of elimination would give the public sector the opportunity to

determine which programs are working and which are not. By eliminating innovation programs

that are not effective, other money could be targeted to those programs that do work (Potts,

2010).

Although somewhat controversial, this method has the potential to help transform the

public sector innovation process. The method has five steps and they include the following:

identify every program and code it, randomly select some percentage of the program for

elimination, implement the experiment, analyze the results, and if theres value, continue the

program (Potts, 2010). This program may require additional time and resources to conduct the

experiments, however the organization would be able to examine what programs work and which

do not.

The researcher also acknowledges some drawbacks to using the experimental method

that he proposes. Many public sector employees do not understand what the experimental

method is. The method is not very common in the social science field. Experimental methods can

also be hard and time consuming. Potts recommends at least a couple of years to test the

programs that go through the experimental elimination method (2010). Because this model has

not been tested on public sector organizations, this researcher believes this suggested time frame


may not be enough, depending on the program and the type of organization that is administering

the program.

Seoul Metropolitan Government

This case study focuses on site visits, mail surveys, and interviews that were

conducted in 2008 at the Seoul Metropolitan Government. Creativity management was the focus

of the case study. It is defined as a management process that can be used to increase, evaluate

and propose new ideas that can be implemented in organizations (Berman & Chan-Gon, 2010).

The Seoul Metropolitan government adopted this method at its highest leadership level. The

main principles of creativity management include rewarding managers and employees who

submit innovative ideas, creativity management training programs, auditing of existing

programs, and the opportunity for citizens to submit their own ideas.

Researchers discovered that the Seoul Metropolitan Government received over 3,000

new ideas each month. They also held a two-day training course on creativity for its employees.

During the case study time frame, only 13% of ideas that were submitted were actually

implemented, 21% were old ideas that were already being used or were not selected previously,

and 66% were new ideas that were not chosen to be implemented (Berman & Chan-Gon, 2010).

This innovation model is seen to be effective because it adds new dimensions to the traditional

innovation process that governments use. The researchers argument is that this model could be

adapted and used in the American private sector. Future research could focus on a greater time

frame and more discussion as to why only 13% of ideas were implemented and how these ideas

impacted the cost structure.


One large limitation to this study is that the innovation process was conducted on a

large scale. The Seoul Metropolitan government is larger than a lot of state government agencies

that are located in the United States. The Seoul Metropolitan government invested a lot of time

and effort into its organizational structure and the creative management model that is discussed

in this case study could potentially be hard to implement in a smaller public sector organization

that has a limited budget and limited number of employees (Berman & Chan-Gon, 2010).

Valuable insight from this study can be used in the new innovation model, however it is

important to recognize this limitation.

Rockwell Collins

Rockwell Collins is an international leader in aviation electronics. They are an

example of a company that has been successful in combining lean principles with innovation

processes. The companys organizational values include teamwork, integration, integrity,

customer focus, and leadership. The core of the companys innovation program is its people. The

company has organized its innovation program around the nature of the work. Rockwell

Scientific conducts basic research, the Advanced Technology Center focuses on applied

research, and the Rockwell Centers of Excellence focus on improving existing products

(Srinivasan, 2010).

Lean principles can also be achieved through making the strategy an integral part of

the organization. Rockwell Collins organizational structure consists of shared values, culture,

infrastructure, and rewards. People form the center of the model, as people help create company

value through their hard work and ideas. The leadership of Rockwell Collins is committed to

investing in R&D infrastructure by spending 18-20% of its sales to research and development


(Srinivaran, 2010). This demonstrates the lean enterprise principle of securing leadership

commitments to supporting enterprise behaviors. The company also has made innovation a large

part of its strategy. The company encourages the five components of its structure to work

separately, yet together so that the companys strategy is based on these components. The

company has become successful at innovation because not only is its strategy part of the

companys policy, it also is part of the Rockwell Collins organizational culture.

To encourage a culture of innovation, Rockwell Collins employees are encouraged to

submit new ideas through the 10x program. This program encourages employees to submit

specific ideas to improve cost, size, or power requirements. Each accepted idea is funded with

$50,000 and the winning employee can focus their efforts on developing the product during the

next year. Rockwell Collins is a large company and has a substantial amount of resources so not

all organizations may be able to offer the prize money and resources, but the core principles that

the company has embraced when it comes to innovation are noteworthy and reinforce that people

and programs are crucial to having an effective innovation model.

Data Analysis

The intent of examining these three case studies and the elimination theory was to

help generate a new innovation model that can be used by public sector and nonprofit

organizations. The model includes themes from each one of these. The Texoma case principles

of integration, dialogue, and coordination are included. The experimental elimination method is

included, creativity management from the Seoul Metropolitan Government case, and some of the

lean principles of the Rockwell Collins case. These concepts and their applicability as well as the

new innovation model will be discussed further in the Results section of this paper.


Reliability and Validity

In qualitative research studies the researcher is not usually completely objective in

their research. They may have prior bias going into the project or may develop unintended bias

as they develop their research and validity are two measures that can help determine if the

research investigates what it intends to, and whether the study can be replicated. There are

important factors to take into account as qualitative research is conducted. The researcher must

have credibility, the articles used should be peer-reviewed, a detailed literature review needs to

be provided, the methods used should reflect the research question, and the analysis should be

easy for the audience to comprehend (Farrelly, 2013).

For the purposes of this qualitative study these criteria have been met. For the three

case studies and one theory that was chosen, the authors of the journal articles are thought of as

experts in this field. Jason Potts has written multiple articles regarding the public sector and

innovation, which include topics such as innovation by elimination, the innovation deficit in

public services, and what is next in the field of public sector innovation research. All of these

articles are used in this paper. Mr. Potts is with the School of Economics, University of

Queensland, Australia.

For the Seoul Metropolitan Government Case study that is used, Mr. Berman is the chair

professor at National Chengchi University in the International Ph.D. Program. He is also the

author of Public Administration in East Asia: Mainland China, Japan, South Korea, and Taiwan.

His co-author Mr. Kim is the deputy mayor of the Seoul Metropolitan Government and has a

Ph.D. in Public Administration. All four authors of the Texoma case study article are with the

Virginia Polytechnic Institute and State University. Their research interests include public


policy, innovation and governance. The author of the Rockwell Collins case study is at the

Massachusetts Institute of Technology.

The four journal articles that were discussed in this research paper were peer-

reviewed. They were published in journals such as the International Journal of Management,

Innovation: Management, Policy and Practice, Public Performance and Management Review,

and Innovation Journal. All four were also published in 2010, which was important to this

researcher, as innovation is a changing and current topic and information within the past few

years must be used so that the innovation model that is proposed in this paper reflects current

trends and topics. All four articles also provided literature reviews that included information on

the topic of private sector versus public sector innovation, as well as theories and other important

concepts. However, it would have been beneficial for these articles to include previous case

studies that were relevant to their own study so that data could be compared and contrasted.

The fourth criteria of using methods that best answer the research question was also

discussed in the case studies that were chosen for this qualitative analysis. The Seoul

Metropolitan Government case also used quantitative methods to obtain information from local

officials and employees, which brought additional perspective to the research. In all four cases

this researcher felt that the research questions were answered by using the case study. Finally,

overall the analyses that were provided were easy to comprehend. A reader with limited

background regarding public sector innovation should be able to understand the case studies.

Helpful background information regarding the company or organization that was chosen was

provided to the reader as well as information about innovation itself. Definitions of terms used in

this research were also defined earlier in this paper.


In terms of the new innovation model that is outlined in this paper, this researcher feels

that the proposed model is reliable and valid according the definitions described above. The case

studies used provided helpful information to help answer the research question. The proposed

model could also be replicated for multiple public sector organizations. However, in order to

prove reliability more thoroughly, this study is only a proposed model, and this model does need

to be tested in multiple organizations.

Ethical Considerations

It was this researchers intent to design, implement, and discuss an ethical research

project. Case studies and other materials that were used in this qualitative study to develop a new

innovation model were properly cited and discussed. Although no human participants were

involved in this qualitative study, the authors interpretation of the research was screened for

unethical bias.


Results

Introduction

The purpose of this qualitative analysis was to answer the research question: What type

of innovation model can be utilized by public sector and nonprofit organizations? The goal of the

research study was to examine existing public sector case studies by Berman and Chan-Gon

(2010), Bland, Bruk, Dongshin & Lee (2010), and Srinivasan (2010). In addition, the

experimental elimination theory by Potts (2010) was also examined to help provide additional

information to develop this model. The intent of this research paper was to design a new

innovation model that can be utilized by public sector and nonprofit organizations.

Summary

Suh describes innovation as a process in which research and ideas are converted into

new products or services. There are many steps in the innovation process that he goes into detail

describing, but the main steps that apply to this researchers new innovation model are:

identifying the need for a product or service, performing basic research, creating and testing

ideas, and testing the viability of the proposed idea (2010). Suh also states that innovation should

involve a funneling of ideas. The innovation process should start with having a lot of different

ideas and by the end of the process the best innovation ideas should remain. These two concepts

are important when considering the new proposed model. There can be variations or various

opinions regarding specific steps in the innovation process, but the general concept of converting

ideas into new products and services is the foundation for any innovation model.

In all three of the case studies that were examined in this paper there were common

themes of utilizing people such as management, employees, and the importance of programs that

provide goods or services. People are the backbone of any organization. Their hard work helps


create value for the organization. Programs help provide structure for the development of ideas,

training for employees, organizational learning, as well as financial resources to innovate. Potts

experimental learning theory also provides information regarding program development, as he

suggests a model that provides structure for program evaluation. The heart of this innovation

model is to take these two concepts and expand them to develop an innovation model.

In putting together a model, this researcher examined what factors are common to

companies that are successful in establishing innovation processes in their organizations.

Research has shown that using an innovation model can help increase innovation. It requires risk

and time, which unfortunately, some companies are not willing to sacrifice. Those organizations

who do choose to innovate sometimes have a designated sponsor who helps make sure that there

are resources dedicated to innovation. Employees are also given separate time from their

everyday tasks to innovate. These companies also anticipate customer needs and promote a

culture of organizational learning. It is important for employees at all levels to be involved and

feel like they are contributing. Organizations also are willing to learn from mistakes and

recognize that too many steps in the innovation process can do more harm than good (Harper &

Becker, 2004). Not only should new ideas be received, the organization should also try and

figure out if there are ways to utilize old ideas in a new way.

Using Suhs innovation concept, the first step in developing a model is to identify the

need for new ideas. As previously discussed in this paper, the need for new ideas and

reformation of old ideas in the public sector has been identified. Reasons include fiscal

constraints, reforming the way in which services are administered to constituents, contributing to

the global economy, and improving the overall health of the public sector. In order to perform


research, create and test new ideas, and testing the validity of the ideas, it is important to split the

model into two separate areas: people and programs. Each component has a subset of ideas that

involve the people or program and help the organization identify its innovation goals. These

goals may vary from organization to organization, but the main question that these organizations

should ask themselves is, What type of process can we use to innovate? or if an innovation

process already exists and is currently being used, the question then becomes, How can we

innovate better?

Before getting into the specifics of the model and its components, there are some key

questions that organizations should be willing to ask themselves. Questions should be answered

as honestly as possible so that a true commitment to innovation is demonstrated. The questions

are as follows:

1) Vision: What is our organizations vision when it comes to innovation? It is important

that goals are defined so that organization knows what it would like to achieve (Suh,

2010).

2) Leadership: Is our organizations leadership committed to innovation? Are they willing

to devote their own time and company resources to not only make sure the innovation

model is used, but also become the spokesperson for such ideas? (Kohli, 2010). Strong

leadership is important because research has shown that leaders who views their roles as

being change agents tend to have a higher probability of increased innovation in their

organizations (Fernandez, 2013).


3) Culture: Is our organization willing to create an organizational culture that emphasizes

employee creativity and the sharing of ideas? Are we willing to also not only tolerate

failure, but also learn from our mistakes? (Harper & Becker, 2004)

4) Employees: Is our organization willing to offer incentives to our employees to encourage

innovation? Are we willing to help hire talented people who are innovators? (Browning

& Sanders, 2012) (Suh, 2010).

5) Evaluate: Is our organization willing to eliminate policies and programs that dont work?

An organization should be willing to look for processes that do not create value (Potts,

2010).

People and programs also work together to reach the end goal. They must work

together or this model will not be effective. For the first component of people, people refers to

employees and members of company leadership. People are the heart of any organization and

without them, the company would cease to exist. The components of the people portion are the

following: culture, creativity and communication. All of these components were taken from the

case studies that were analyzed in this research paper. These components also complement each

other and an organization can choose the amount of time and money that they wish to spend on

these components, based on their individual resources and needs. The most important

consideration is that they do all of these items in some form, in whatever scale makes sense for

their own organization.

Culture


The first component under the People section of the innovation model is culture. Culture

refers to developing an organizational culture than encourages innovation. An organizational

climate often involves learning. It can involve internal sources of learning such as formal

training for employees, seminars and conferences that provide information about innovation and

the new innovation process. External sources include industry research, public-private

partnerships, and customer/constituent panels (Maden, 2012). In order to promote creativity and

communication, an organizations culture should be established first.

Currently the public sector does not do a good job of promoting a culture where

employees feel comfortable and confident in being creative. The environment is viewed as being

more distant and focused more on political accountability and election results than encouraging

employees to challenge themselves. It is up to management and members of leadership teams to

encourage an open culture that encourages direct participation and responsiveness. There should

be the freedom for employees to make mistakes and take risks (Van Duivenboden & Thaens,

2008). In order to do this, leadership should encourage knowledge sharing between different

departments, especially those departments that play a distinct role in innovation processes. These

include research and development, information technology, and marketing.

Employee empowerment is an important component of a strong organizational culture

that encourages innovation. Large organizations can have the potential for larger amounts of

innovative products and services, but they also have a limited capacity to really change because

of their organizational structure. Employee empowerment is a tool that can be used to help public

sector organizations ability to be efficient. Empowered employees seek to improve their

performance by working smarter. They can be the source of innovative ideas because they have


first-hand knowledge of an organizations problems and understand where improvements in the

innovative process can be made (Fernandez, 2013).

In order to encourage empowerment, management should provide employees with

information regarding their goals and individual performances, offer incentives based on

performance, provide access to job-related skills, and grant discretion to change their individual

work preferences. One of the principles of lean enterprise thinking that the Rockwell Collins

case study emphasized was that emphasizing organizational learning is a concept that can be

translated into innovation through developing human capital through education, training and

knowledge management (Srinivasan, 2010). Rockwell Collins has been successful at

encouraging its employees to dedicate themselves to the organizations five shared values:

teamwork, innovation, integrity, customer focus and leadership. The management has also been

on the forefront of explaining changes in organizational innovation processes to its employees.

The company also recognizes that there may be multiple pathways to get to successful

innovation. The innovation model that is proposed in this paper takes this into account by giving

organizations the opportunity to do a variety of things in these three

2013 Innovation Processes for Public and Nonprofit Organizations.pdf

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