TRENDS & CHALLENGES TOWARDS INNOVATIVE …€¦ · IDHEAP / LIST / EIPA 5 HRM bundles of practices...

IDHEAP / LIST / EIPA 1

A partnership between Institut De Hautes Etudes en Administration Publique, and Luxemburg Institute for Science and Technology

in collaboration with European Institute of Public Administration

TRENDS & CHALLENGES

TOWARDS INNOVATIVE PUBLIC SERVICES

65th Meeting of the Directors General responsible for Public Administration in the EU Member States

3rd December 10.30-13.00

EXECUTIVE SUMMARY

Prof. Y. Emery, Ass. Armand Brice Kouadio, IDHEAP

Prof. A. Rousseau, Laurence Johannsen, Bertrand Meunier & Philippe Valoggia, LIST

Susanne Moller, EIPA


Table of Contents

1. Introduction ..................................................................................................................................... 3

2. Main objectives and research methodology ................................................................................... 4

3. Integrated model - Fostering innovation capability: the five PSD & HRM components supporting innovation ........................................................................................................................................... 4

4. Innovation capability component N°1: Innovative Culture ............................................................. 6

5. Innovation capability component N°2: Leadership ......................................................................... 7

6. Innovation capability component N°3: Expert Knowledge ............................................................. 8

7. Innovation capability component N°4: Stakeholder Engagement .................................................. 9

8. Innovation capability component N°5: Innovative Work design .................................................. 10

9. Overview of components to boost the innovation capability within public administration ........ 11

10. Overview of recommendations (More information during the DG meeting) ............................. 12

11. Key questions during the DG meeting ......................................................................................... 13

12. Bibliography ................................................................................................................................. 14

Disclaimer It should be noted that the content of this report is under the responsibility of the authors alone, and does not necessarily represent the views of the Ministry of Civil Service and Administrative Reform of Luxembourg.

Keywords Human Resources Management (HRM), Public Service Delivery (PSD), trends, public sector, innovation, innovation capability.


1. Introduction

In contemporary environments, […], there is a pervasive and increasingly critical focus on the value of new knowledge, innovation, continual change, organizational flexibility and creativity, and the role of the employee in their achievement. (Ferguson/Burford/Kennedy, 2013, p.169)

The main objective of this report is to identify and describe the most promising Human Resource Management (HRM) and Public Service Delivery (PSD) practices to boost innovation, mostly (but not solely) in the public sector within European (OECD) countries. Reviewing the HRM & PSD practices that support innovation in public sector organizations was meant to get a better understanding of innovation capabilities within the public sector, and also to contribute to reaching the objectives of the 2020 agenda. HRM & PSD practices are not the ultimate purpose of any public sector organization, but only a means to increase its capability to meet the challenges of the 21

st century. In this regard, a growing body of literature has

been published during the last 5 years. The concept of “public value” is more and more frequently used by scholars and politicians to highlight the overall importance to consider not only (in the sense of New Public Management, NPM) the products/services delivered to the citizens-users and their impact on public problems, but also to address a broader agenda aimed at refreshing democratic processes and empowering the citizens. This “Public Value Agenda” is quite in line with the main challenges of the 2020 agenda. Many initiatives have already been taken to reinforce the innovation capabilities of public sector organizations within the European Union, such as:

EPSA: the European Public Sector Award was first launched in 2007, and then every two years in 2009,

2011, 2013 and 2015.

The European Public Innovation Scoreboard (EPSIS)1.

The Inno Policy Trend chart Initiative, funded by the European Commission.

The LIPSE research project (Learning Innovation in Public Sector Environments)2.

And finally, although it is not limited to EU countries, the OPSI (Observatory of Public Sector

Innovation), an initiative launched by the OECD.

In fact, developed and developing economies alike face increased resource scarcity and competitive rivalry. Knowledge intensive innovations increasingly appear as a main source of competitive and sustainable advantage for nations and regions alike. However, the push model of innovation is outdated and the current environment requires the adoption of collaborative and networked/open approaches to innovation, following the paradigm shift to open innovation. This enables the empowerment of employees, users, beneficiaries and stakeholders in a “co-design” or at least a participative manner. It also reflects the shift towards intangible assets as the core value drivers and gives the opportunity to integrate social and economic concerns. Both the professional and the academic literature emphasize the lack of research on innovation processes in public organizations, and more specifically on service innovation, which is innately knowledge-intensive and which comprises new or significantly improved service concepts and offerings as such. The following report is dedicated to the presentation of a new and integrated model of innovation capability, which combines HRM & PSD practices. The model is illustrated by inspiring practices and leads to key recommendations and priorities for the EU.

1 http://ec.europa.eu/enterprise/policies/innovation/files/epsis-2013_en.pdf (24.06.2015)

2http://www.lipse.org/about (24.06.2015)

http://ec.europa.eu/enterprise/policies/innovation/files/epsis-2013_en.pdf

http://www.lipse.org/about


2. Main objectives and research methodology

The following objectives have been set to the project:

1. Identify the most relevant innovation-enhancing bundles of practices in the field of Public Service

Delivery (PSD) and Human Resources Management (HRM);

2. Identify and describe inspiring practices that illustrate these bundles and promote innovation. These

practices will be identified in such a way that they provide concrete examples and ‘solutions’ to

innovation challenges;

3. Formulate recommendations and priorities for the EU countries, in line with the 2020 agenda and

open government principles, with a specific attention on trust and transparency.

A classical state of the art analysis was conducted, screening major scientific and consulting databases (2009-> 2015, more than 80 documents) for the themes of interest, and summarizing the main challenges and trends in PSD & HRM, with a specific focus on innovation. A data collection template and interview guidelines were developed to identify inspiring practices in the two key topics. The selected practices (5PSD and 5HRM inspiring practices) are creative and displaying uncommon ideas; sustainable by their propensity to be long lasting; with proven impact or results; and adaptable/transferable in the same or in other areas of activity. Most of them come from the EPSA contest. The concluding part of the study is devoted to the presentation of common and specific priorities for the next five years.

The underlying philosophy of the project is to foster the European public administrations' innovation capability3

(as a core concept in our overall framework) in delivering public value and citizens outcomes according to the principles of open government. The pursued innovation value chain may be summarized as follows:

Innovation capability -> increased institutional and administrative capacity (IAC) -> new and improved services -> increased public value and citizens outcomes.

The innovation capability is anchored at the organizational level and represents a kind of macro-competence composed by five different components, which will be described in the following pages of this summary. These components are dynamically interrelated and are made of a mix of HRM & PSD practices (see below).

The development of the innovation capability through selected practices will ultimately increase public value and citizens outcomes, defined as the global societal value shared by all actors: more user-friendly and effective public services, based on high quality and transparent decision-making, and greater trust in public institutions as well as performance improvements and efficiency. During that process, citizens and other stakeholders become active co-designers and producers of public services.

3. Integrated model - Fostering innovation capability: the five PSD & HRM components supporting innovation

The most relevant HRM and PSD bundles of practices to boost innovation are the following (see below). HRM and PSD bundles are composed of mutually reinforcing HRM and PSD practices and represent a unique set (configuration), leading to increased HRM and PSD results and improved organizational results such as innovation. Pairwise associated, they build five innovation capacity components:

HRM bundles of practices PSD bundles of practices Innovation capability components

Innovation-oriented culture Open innovation culture 1. Innovative culture

Innovation-supporting leadership Sense making 2. Leadership

3 A capability describes the organization’s capacity to deploy resources to achieve a desired outcome


HRM bundles of practices PSD bundles of practices Innovation capability components

Knowledge creating, capturing and sharing

Knowledge management 3. Expert Knowledge

Organizational commitment to innovation

Citizen involvement 4. Stakeholder engagement

Flexible work design Collaborative and digital work 5. Innovative work design

Both PSD & HRM practices are interrelated, since each HRM result has its PSD counterpart (and vice versa), as illustrated by the integrated model of innovation capability underneath with 10 main components of innovation capabilities:

Figure 1: Integrated conceptual framework – Holistic approach

Note that the order in which these practices are presented does not reflect any priority nor any order for implementation. The next pages describe the five innovation capability components, according to the same sequence:

At the top of the page: a short description of the component, the rationale which is behind and the

main contributions to innovation;

In the middle of the page: listing of the PSD and HRM practices which are part of the component.

These practices are followed by a brief presentation of the two selected inspiring practices. “Start with

PSD” means: this practice is mainly PSD oriented, but has also some HRM implications. “Start with

HRM” means the opposite ;

At the bottom of the page: two recommendations are selected as examples out of the full list of

recommendations, which will be presented and discussed during the DG meeting.


Innovation capability

component n°1 INNOVATIVE

CULTURE

Open

Innovation culture

Innovation oriented culture

4. Innovation capability component N°1: Innovative Culture

The culture of public sector organizations is not innovation-oriented: due to (among other factors): restrictive and rigid legal framework, absence of competition, routine-oriented, low risk and experimentation adverse culture, absence of rewards and recognition and distrust to stakeholders. Not to mention the insufficient political support, and potential negative reactions of citizens

(and taxpayers) in the case of experimentation - or even innovation failure. The culture of public sector organizations (in general) may be defined as a strongly formalized, centralized, rule-bound and silo-bound legal culture. Nevertheless, innovative practices exist in order to generate an innovative culture within public administration. Indeed, an innovation-oriented culture is a mix of creativity,

openness and receptiveness to new ideas, risk-taking, willingness to experiment, and entrepreneurial mind-set among leaders and employees and external stakeholders. The practices hereafter related to HRM activities & PSD activities may foster an innovative culture inside the organization as such by all concerned stakeholders.

PSD Activities HRM Activities State organisational strategy & values consistent

to innovation

Promote & manage a risk culture

Build partnership with innovation lab, hub,

factory

HR policy and chart (creativity, openness and

receptiveness to new ideas), and strategic

alignment with Innovation-Oriented Strategy of

the organization

Staffing for innovation: competencies and

motivation, diversity of leaders and employees.

Collective appraisal/rewards and recognition for

innovation

Distributed heroism towards innovation

Organizational slack and experimentation

To activate these HRM & PSD activities on the model of cases below and generate Innovation capability component n°1: INNOVATIVE CULTURE Examples of recommendations (more details in the final report)

Start with PSD issues

Start with HRM issues

Inspiring Practices

Climate survey for innovation awareness

Innovation ambassador community


5. Innovation capability component N°2: Leadership

As an organization, Public Administration is an attempt to order flux of human action through generalizing and institutionalizing meanings and rules. Any changes imply to modify both meanings and organizational rules. Accordingly, the act of making sense of and giving sense about a new vision on Public Administration constitute key processes involved in instigating and managing innovation.

Sensemaking and Sensegiving have been highlighted by scholars as key leadership activities in times of organizational transformation. In other words, Leadership is crucial to innovate. Leadership requires specific managerial abilities and organizational processes. At organizational level, Leadership consists in creating an emerging picture that becomes more comprehensive through data collection,

conversation, action and experience. This organizational capability relies on public managers who are able to facilitate change by producing meaning and share it with internal and external stakeholders.

PSD Activities HRM Activities Collective observation and discussion of the

situation

Develop a shared understanding of the situation

Ensure learning from action

Transformational leadership building.

Collaborative and distributed leadership building.

Delegation and empowerment oriented

leadership (ambidextrous)

Ethical Leadership to build trust and transparency

Competency for innovation (processes, methods)

To activate these HRM & PSD activities on the model of cases below and generate Innovation capability component n°2: LEADERSHIP Examples of recommendations (more details in the final report)


component n°2 LEADERSHIP

Sensemaking

Innovation supporting Leadership



Inspiring practices

Innovation capability dashboard

Mixed training public-social-private entrepreneurs


6. Innovation capability component N°3: Expert Knowledge

From a resource-based view perspective, innovation consists in the development of new resources and/or new resources combination. Among these resources one appears as more important than others: Knowledge. Improving Knowledge gathering, sharing and creation allow Public Administration to increase their organizational capabilities

to improve existing services or to develop new ones. Knowledge is randomly distributed across several internal and external sources. Therefore Knowledge management in Public Administration requires the development of space dedicated to knowledge exchange between relevant

stakeholders (communities, social network). Management of knowledge requires equal attention to both organizational managerial and cultural considerations.

PSD Activities HRM Activities Ensure knowledge Sharing

Gather knowledge

Make information and knowledge available

Support knowledge creation

Building internal & external (social) network,

weak links

Quality circle and learning workshop at the shop

floor level

Training (on-the-job, education and self-

development)

Multifunctional cross-sectional teams

Job rotation and horizontal career paths,

generalist profiles

To activate these HRM & PSD activities on the model of cases below and generate Innovation capability component n°3: EXPERT KNOWLEDGE Examples of recommendations (more details in the final report)



Inspiring practices

Innovation square code Serious innovation games


component n°3 EXPERT

KNOWLEDGE

Knowledge

Management

Knowledge creating,

capturing and sharing


7. Innovation capability component N°4: Stakeholder Engagement

Commitment-based HR practices encompass selective staffing to improve employee-organization fit, extensive training, broad job description and flexible job assignments, team-work, performance-based compensation (individual, collective and organizational), developmental and merit-based performance appraisal and encouragement of participation. High-involvement HRM practices are

a concrete signal of the company’s support, trust and commitment towards its employees. By the same token, the engagement of external stakeholders appears as one of the main trends in the literature dedicated to Public Administration. Citizen participation ensures a greater effectivity and acceptance of the services delivered, thus increasing the latters' trust and support. Four types of

practices may be necessary for citizens’ involvement. They are not mutually exclusive and can be combined: openness, inclusiveness, co-production and citizen-centricity. To summarize, the following PSD and HRM practices may foster internal (employees) and external (citizens) engagement in the same movement towards the production of public value and citizen outcomes.

PSD Activities HRM Activities Openness

Inclusiveness

Citizen centricity

Coproduction

Information sharing and communication.

Participative and non-controlling leadership style

Training and development in a long-term

perspective

Participatory control practices

Job security and organizational support

Developmental feedback and performance

appraisal

To activate these HRM & PSD activities on the model of cases below and generate Innovation capability component n° 4: STAKEHOLDER ENGAGEMENT Examples of recommendations (more details in the final report)



Inspiring practices


component n°4 STAKEHOLDER ENGAGEMENT

Citizen Involvement

Org. Commitment to

Innovation

Wiki-style project analysis with stakeholders

Innovative collective electronic consultation


8. Innovation capability component N°5: Innovative Work design

In order to develop fast organizational knowledge creation, it is important to collect real-time info, constantly monitor and share knowledge, discuss, reflect and document knowledge, experiment and simulate. Highly adaptable infrastructure, i.e. flat hierarchy, minimal formal authority, minimal routinization and standardization and informal coordination, are highly valuable in this respect. Beside empowering people, it is important to redesign

organizations. The way work is structured within and across organisations may have an impact on innovation: this includes the development of spaces and innovative methods to structure teams, to break down silos and work in partnerships across organisations and even sectors, launching new networks. All these practices may not be effective if the organizational design is not flexible. Activities should involve different levels of government and other administrative agencies as well as external stakeholders. First

of all, organizational designs should raise the awareness of shared purpose. Secondly, they suppose team working and organizational agility. Thirdly, relationships between an administration and its stakeholders have to be deliberative, and not only communicative. Fourthly, appropriate technologies are used to support interaction and coordination between involved actors.

PSD Activities HRM Activities Deliberative process implementation

A common collective work purpose

Relevant online and social technology adoption

Team work and organizational agility

Flexible, competency-based organisation

Team and process-oriented organisation

Empowerment, decentralization,

responsabilization

Flexible collective space, co-working

Flexible worktime

To activate these HRM & PSD activities on the model of cases below and generate Innovation capability component n° 5: INNOVATIVE WORK DESIGN Examples of recommendations (more details in the final report)


component no5: INNOVATIVE

WORK DESIGN

Collaborative and digital work

Flexible

Work design



Inspiring practices

Flexi place-time workspace Systematic MBP (Management By Projects)


9. Overview of components to boost the innovation capability within public administration


10. Overview of recommendations (More information during the DG meeting)


11. Key questions during the DG meeting

One major aim of the presentation ‘Trends and challenges towards innovative public services’ which will take place on 3rd December from 10.30-13.00 o’clock is to foster interactivity and the exchange of experiences and practices in the field of public service innovation among Directors General and participants.

Therefore, the Ministry of Civil Service together with the Swiss Institut de Hautes Etudes en Administration Publique and the Luxembourg Institute for Science and Technology have prepared some key questions in the context of innovation of public organizations to be discussed on 3rd December. A preliminary preparation of Directors General to the meeting of two of these questions can contribute to an enhanced quality of the discussion during the meeting.

If you have further questions, please do not hesitate to contact the Ministry of Civil Service and of Administrative Reform.

The questions to be discussed during the meeting are the following:

Step A

- Which of the Innovation Capability Components (ICC) would you implement in the first place? Which are the most relevant to innovation? (interactive gaming)

1. Culture 2. Leadership 3. Expert knowledge 4. Stakeholder engagement 5. Innovative work design

You find the description of the ‘ Innovation Capability Components’ on page 6ff of this executive summary. According to your selection, we will work on 2 ICC during the DG meeting. This is a closed question.

Step B - For each selected Innovation Capability Component (ICC):

- How would you prioritize recommendations to boost innovation within the selected components? For instance : culture component n°1 - Innovation ambassador community (interactive gaming).

The full list of recommendations to this closed question will be provided during the meeting. This question cannot be prepared in advance to the meeting.

- What is the current situation in your organization? Tell us about your own story of innovation capability. Are there missing practices? (Round table to share your experiences with European colleagues)

The objective of this question is to launch an open discussion among Directors General about their innovation experiences in public organizations and for instance about which they think are important success factors, pitfalls, practices and competencies required etc. in the context of innovation?


12. Bibliography Bryson, J. M., Crosby, B. C., & Bloomberg, L. (2014). Public Value Governance: Moving beyond Traditional Public

Administration and the New Public Management. Public Administration Review, 74(4), 445-456. Daglio, M., Gerson, D., & Kitchen, H. (2015, forthcoming). Building Organisational Capacity for Public Sector

Innovation. Retrieved from Paris: Langbroek, P. (2005). Quality management concerning judges, judgements and court services. In N. Rivero-

Cabouat (Ed.), L'administration de la justice en Europe et l'évaluation de sa qualité (pp. 49-68). Paris, France: Editions Montchrestien.

Rivera León, L., Simmonds, P., & Roman, L. (2012). Trends and Challenges in Public Sector Innovation in Europe. Retrieved from

UNODC. (2010). Assessment of Justice Sector Integrity and capacity in Ten Nigerian States. Retrieved from Nigeria:

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