Balancing Innovation, Risk, and Control

A Canadian think tank has released a report on how senior government executives can support innovation by their employees as a way of solving societal problems and delivering better value to citizens.  The report’s insights have some useful application to U.S. government executives, as well.

The report, “Innovation, Risk, and Control,” is by the Canadian Comprehensive Audit Foundation (CCAF-FCVI).  It is based on a series of dialogues among 100 senior Canadian government officials, auditors, legislators, and academics. 

They sponsored this report because broad changes in society are increasing risks as well as demanding more innovation to respond to these risks.  Government is not well-structured to address these kinds of challenges because of the many silos of services as well as its “opaque world of administrative complexity.”

To address these challenges, the report offers four management principles, leading with “managers should encourage innovation.”  It says the key role of managers it to remove barriers to innovation and encourage others “to take intelligent risks.”  For an organization of auditors, this is a remarkable statement!

 “Innovation,” the report notes, “is nothing more than finding, testing, and exploiting creative ideas to solve problems and achieve better value for citizens.  It occurs when maangers align incentives, remove barriers and build trust with employees. . . Innovation is a management job.”

But just encouraging innovation isn’t sufficient as a management principle.  Three other principles come into play:

• Be in control.  Management should create a “control” environment that puts in place procedures that support people in three areas:  stewardship of resources, achievement of intended results, and accountability. (I’m not sure I’d use the word “control,” but it’s probably a word comfortable to auditors!).
• Create a capacity to manage risk.  Government employees tend to be risk adverse and “tend to shift the focus from performance to the service of process.”  The report notes that “risk savvy entities are more likely to innovate because they . . . are unafraid to act.” (A recent IBM Center report by Karen Hardy addresses this dimension).
• Reduce red tape.  The report notes that management should eliminate unnecessary rules, but more importantly it should challenge the creation of new ones because “When rules are well attuned to risk – and reduced when risk is low – officials are able to focus more of their energy on finding ways to improve value for citizens.” 

The report provides more detailed examples of best practices and notes that these four principles are interdependent – that government can’t deliver better value to citizens using only one or two of the principles.  It also notes that the aim of the report is “to encourage dialogue among leaders in the federal and provincial governments of Canada and abroad,” since this should improve performance and citizen benefits.

Interestingly, the themes of this CCAF report are being picked up in official government sources in Canada.  For example, this year’s annual review of the state of the Canadian public service, by the Prime Minister’s Advisory Committee on Public Service, is titled “A Relevant and Connected Public Service,” and it recommends “doing business differently” by emphasizing both innovation and risk management.

Conversations with Leaders: Dr. Robert Childs

In the corporate world, and throughout the federal government, information is a very valuable asset. Having timely access to this information, and using it to inform strategic decision making, have become critical in today’s competitive, networked, and interconnected world.  Information technology (IT) plays a  central role in making this happen.  We spoke with Dr. Robert D. Childs, senior director, Information Resources Management (IRM) College, about the mission of the IRM College, its successes, its cultivation of the next generation of IT leaders, and its expanding partnerships. 

On the Mission and Evolution of the IRM College — We’ve completed celebrating our 20th anniversary last September [2008]. It made us think about a lot of things that have gone on in the past and how it has very much paralleled [changes] in society. We started thinking about what we really do, and we came up with the line, “Shaping the Future.” We put that in our catalog, and then we talked more about what does “Shaping the Future” mean? What do we really do with our classes and our programs? We discovered that what we’re really doing is crossing boundaries—interagency boundaries, international boundaries, and boundaries with the private sector.  Building communities of like-minded people was the second thing that we do—and by [extension] we transform organizations. We’re organized to really be flexible, innovative, creative, and be a hothouse for ideas that address the concerns of leaders in the information age. From the very beginning, we set out to do four things. The first was: be a distinctive institution—be unique. We visited [and] benchmarked against other colleges, other universities, and other institutes such as the London School of Economics. I went to Singapore, different institutions in Europe, and tried to learn how we could take their practices and use them. What I found out is, we were very unique already. Point two is: focus on the customer, either individuals or organizations. The third point is to secure and sustain the allegiance of DoD (Department of Defense) and the federal community. If you don’t have allegiance, if you don’t have money coming in, you can’t sustain your programs. Since then, we’ve added the private sector and international partners. The last one: achieve national and international recognition. Some people say, “Well, why are you concerned about that?” Well, it’s the fastest way to get attention and to let other people know what you have and what you can contribute.  

On Technologies Shaping the Classroom and Workplace of the Future — I think the classroom of the future and the workplace of the future are almost one and the same thing. We have to tie it to the lifestyle that people want. You have to give them the collaboration tools so they can do their jobs. I had a faculty member on the beaches in Hawaii conducting his distributive learning classes. I mean, why does he have to be in a classroom or in an office to do that? He has his computer;  he has his students connected, so that’s all he needs. There are other technologies that we’ve run into. They tie into a number of things we’re trying to do at our labs.  Telepresence is one; it is such an improvement over video teleconference. You really can be there. We’re using telepresence to project our faculty expertise to conferences we’re going to put on and courses we’re going to offer around the world. 

On the Future of the IRM College — I want to [share] a quote. I was asked to diagram my vision for the future, and I described it as such: 

“It is a series of at least 10 interconnecting crossroads, all meeting at the hub of an English-style roundabout. The titles of the roads were Defense, Policy, Economics, Government, Private Sector, International, Interagency, Business Processes, Best Practices, and Emerging Technologies. Every road was chock full of speeding and honking traffic and [great] potential for collision or collaboration. I was the cheerleading cop at the middle of that traffic circle, swinging my arms, shaking my body, and blowing the whistle. I had total confidence I was about to orchestrate a world-class symphony, and I can’t blame the diagram on exuberance of youth because it happened just a few years ago.”  

My job is to create an environment so that IRM’s creative faculty and staff can bring these things together. How do I see the future? I think it’s going to be totally mobile, incredibly compact, ridiculously “nano-tiny,” and eye-wateringly powerful. And everything around you that you see will become “hyperized,” socialized, “networkized,” and virtualized. 

Read this conversation in its entirety: Dr. Bob Childs

Listen to the complete interview: The Business of Government Hour

Governing by Suggestion Box

The Obama Administration is stepping up its efforts to solicit ideas from employees.  In its first big effort, the SAVE Award (Securing Americans Value and Efficiency), the Office of Management and Budget encouraged employees to submit cost savings ideas.  As of the end of the 6-week long contest period, OMB said it had received 38,400 ideas.  They will spend a few weeks sorting through them and the “winner” will get to present his or her idea to the President sometime in November and it would be included in the President’s FY 2011 budget.

The White House then announced another contest, this time for “greening” the government.  This new contest, the Green Gov Challenge, runs through the end of the month (Halloween).  This contest will hopefully help agencies meet a separate challenge from the President, where he gave agencies a 90-day deadline to come up with plans to lower their carbon footprints.

Individual agencies have developed on-going innovation programs to solicit ideas from employees.  The most well-known is the TSA Idea Factory, which was created two years ago and receives over 300 suggestions per month on ways to improve operations in the Transportation Security Agency.  This has been so successful, it is being adopted at the departmental level by the Department of Homeland Security and is being looked at by other agencies as a potential model.

What will be interesting is to find out what the best practices are in such efforts. 

• Can they be run ad hoc or should there be a strategic frame?  Is a six-week period (e.g. SAVE Award) better than two weeks (e.g GreenGov) in terms of getting good ideas? 
• What about incentives (meeting with the president vs. just getting your ideas heard)? 
• What about the kinds and size of staffs to sort through the ideas received (38,400 suggestions, at one page apiece, would be equivalent to 8 cartons of Xerox paper)? 
• Can you run them continuously, or should they be spaced out, say, once a quarter so the novelty doesn’t wear off? 
• Should visitors to the websites be able to comment on others’ suggestions or vote for them, like the TSA Idea Factory allows?

These will be interesting questions to explore, especially if the “governing by suggestion” effort expands!