Unleashing public innovation Serial innovation and the public sector

William D EggersResearch Director,

Public Sector Deloitte

Price in 2011 C$Log scale and inverted

Horsepower

Low end High end

Morefor

More

Ford Model T T$3,200

20 Horsepower

Bugati Type 35$180K

140 Horsepower

1920Tata Nano

$2,10033 Horsepower

Bugati Veyron$1.9 million

987 Horsepower

2011

How do we typically innovate?

Higher education: 439% increase after inflation

19601962

19641966

19681970

19721974

19761978

19801982

19841986

19881990

19921994

19961998

20002002

20042006

20080

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Other third party payers and programs

Health insurance

Out of pocket

Health care inflation equally bad….

Innovation is about breaking tradeoffs

Bridge International Academies

$4 Fee per month of private education for 1 student

15:1 Pupil: teacher ratio at a Bridge school

47:1 Pupil: teacher ratio at average Kenyan school

$3 Cost in bribes for public education for 1 student

Bridge International’s “school in a box” model makes it easy to open and operate new schools.

What started with 1 school in 2009…

Is now more than 70 schools…

With a target of 1,800 schools by 2015

CultureCapability Innovation that should happen

but won’t

Potential innovations that can’t

happen

Authority

Public value created by innovation

Innovative activity that could create

public value but is not permitted

Key Factors for Public Innovation

Capabilities

The innovation process: One weak link in the chain can stump the flow of innovations

11

GNL Senior Leaders - Innovation Workshop

Idea Generation Sustaining & DiffusionImplementationTesting

&Selection

Filter good ideas by creating an efficient sorting process

Convert ideas into products, services and practices

Manage stakeholders and disseminate ideas widely

Create systems to generate and maintain the flow of good ideas

Measuring Innovation

There has typically been a wall between those on the inside of government and those on the outside

Government

…but that leaves a lot of minds untapped

Governments need to open up to everyone…

Government

…and engage the outside world in problem solving

CultureCapability Innovation that should happen

but won’t

Potential innovations that can’t

happen

Authority

Innovative activity that could create

public value but is not permitted Public value

created by innovation

Expanding the space for public innovation

NASA will post its challenges online for a network of more than 180,000 self-enlisted solvers to tackle

NASA enlists the world’s help to advance the U.S. Space Program

“In less than a week, Martin O’Leary, a PhD student in glaciology, outperformedthe state-of-the-art algorithms”

“The world’s brightest physicists have been working for decades on solving one of the great unifying problems of our universe”

Kaggle’s Dark Matter Competition on the White House blog

Rules/authority

“Try again. Fail again. Fail better.”

-Samuel Beckett

Chris Rock

Rapid prototyping, rapid engagement

Gmail beta: 1 day

24

First version of Twitter:2 weeks

Changing the rules

• Hold a ‘failure case studies’ conference• Report to parliament on failures as well as successes• All annual reports include a section on failures and

what was learnt• Put innovation into performance plans• Put failure into KPIs• Funding for failure• Have a system to share failures

Improving Policy Execution26

The idea was that we would throw hundreds of ideas on the wall and even if five of them survive, they will be transformative.” –Vivek Kundra

OCTO Labs: Managing Risk the Right Away

Cultivate Replicate Partner

Network Open Source

Tap into Tacit Knowledge

DevelopEmerging Ideas

Drive Organizational

Change

Engaged Employees

1 2

Mechanisms to Identify innovation

Adapt to local context

Collaborate

Core Group of employees

Internal partners

External partners

External partners

Seek new solutions

Test new approaches

Benefit from cross- border diffusion

Overcome internal

constraints

Types of Partnership

Public-Private

Public–Public

Public-Nonprofit

3

4 5

Citizens report a number of problems

External partners, citizens and employees can be engaged in selecting ideas

Citizens know what they want but may not be able to articulate it clearly

Citizen input is necessary if new ideas are to succeed

External partners

Middle and senior managers should not be insulated f rom citizen reactions

In-source ideas

Predict ideas worth pursuing

Build citizen networks Create a

learning organization

Look for solutions that meet unconscious needs of your customers

Engage the creativity and specialized skills of a range of providers

User Community

Local community

CitizensDevelopment Community

SpecialistsOpen

source companiesOpen source project

Global community

Government organizations

Technology experts Students

Government agency

Nonprofits Private companies

Five Strategies for Innovation

28 The Public Innovator’s Playbook

Government Innovator

Citizens/customers

Participative and responsive government

Internal Partners

Joined-up and reinvented

government

External Partners

Partnered and networked government

Employees

Collaborative, outcome-focused

government

Tap all sources of innovation

Culture

The Core and Edge Concept

Edge Participants

EDGE Growth Opportunities

FLOW Connect Participants

Knowledge Flow

CORE

EDGE

Demographic Edge

EDGE TYPES

Geographic Edge

Technologic Edge

Increased Collaboration

Robust ConnectionsLower Inertia

UnexploitedCapabilities

Unmet Needs Greater Risk Tolerance

Cultivate – Innovation from the Edges

Edge Characteristics

31The Public Innovator’s Playbook

20% Time

Cultivate – Safe havens

Ensure that emerging ideas get the time to develop, protected from short-term budget constraints and premature criticism

Permit low-risk experimentation

Motivate “renegade” thinkers -- not people seeking to undermine authority, but independent visionaries looking to achieve results.

Safe havens are separate units kept close to mainstream activities but away from the line organization.

Havens of creativity within an organization

Employees who act as

entrepreneurs within an

organization

Skunk Works

Intraprenuers

“People are very open minded about new things. As long as they are exactly like the old ones”

- Charles Kettering

The Power of Words .wmv

Bill Eggers

Email:weggers@deloitte.com

Twitter:@wdeggers

Web:williameggers.com