WILL HUTTON
“NOT INNOVATING IS NOT AN OPTION”
Mention the word innovation and few people think of the public sector. Rightly or wrongly, the state in its various guises is linked to big bureaucracy, the filling of forms and the maintenance of rules; moreover, many of us have an instinctive sense that innovation in activities such as policing, teaching and guarding prisons may be a bad thing – associated with faddishness and a decline of basic standards. Perhaps coupled to this sense is the notion that there are lower incentives to innovate in the public sector because there is no competition between providers and no overall objective to raise profits.
The prejudices may be sometimes ill-informed, but they nevertheless place hurdles in the way of encouraging innovation in the public sector. The impetus and energy to overcome such hurdles is one of the most pressing challenges facing leaders and managers in the public services. Not doing so is no longer an option – but no one should pretend it is easy.
Obviously, some are better than others at it. The ambition of authorities, their leadership, their openness to novelty, how empowered their staff and partners are, the space they allot to creative thinking, the use of information and organisational structure: all play a part in the generation and dissemination of innovations.
But none can now escape the pressure to innovate. First and most important is pressure from citizens. As the UK has become a consumer society, there is a new emphasis on public services changing to meet the rising demands of citizens; products, services and the way the public sector interacts must all change.
Second, there is increased pressure from central government through demanding efficiencies, by the messages sent by ministers and through the target regime. None of these lead in their nature to more innovation – targets can foster an excessively risk-averse culture, for example – but they are important drivers nonetheless.
A final pressure is examples from elsewhere. Ideas such as ‘beacon councils’, city academies, superheads – all have behind them the notion of exemplar institutions and individuals cascading a constant flow of new ways of doing things to others in their sector. New standards are thus set. The pressures are there, the culture of innovation must now follow.
Will Hutton is Chief Executive of The Work Foundation. He also writes a weekly column for the Observer
Top three public sector innovations
1 NHS DIRECT This service provides information direct to the public via telephone, the internet and digital TV. More than two million people access NHS Direct every month.
2 RECYCLING WASTE Households across the UK now regularly recycle glass, paper, tin and plastic in a bid to reduce the 100 million tonnes of waste that the UK produces each year.
3 BBC iPLAYER For up to seven days after BBC shows are aired viewers can watch what they missed by going online and downloading programmes or streaming content.
PAUL CORRIGAN
“MOTIVATION, INCENTIVES AND THE IMPORTANCE OF CHOICE”
Those of us interested in bringing about radical improvement in public service outcomes recognise that innovation and change are difficult. Too often it is assumed that all improvement and innovation ‘speaks for itself’; as if improvement simply happens because it is the right thing to do. In fact, the conservatism of most organisational cultures makes improvement and innovation very hard indeed.
Therefore, those of us interested in improvement and innovation recognise that different forms of motivation drive different forms of this process at different times. These motivations can overcome the conservatism of those against improvement and innovation. It is strong individual motivation that drives public service professionals to become innovative and transform the way in which they work.
In most organisations individuals are allowed to be innovative in their work with only minimal interference. Motivated by their own drive for improvement, individuals develop improvements within their own sphere of work. Their colleagues and their superiors recognise this individual motivation and, unless their organisation is deeply conservative, they are encouraged to develop that innovation. If it works, the organisation gains from it; if it fails the individual loses.
The same driver is there if an individual leader is motivated to improve their organisation. The conservatism of the organisation needs to be overcome but that is what organisational leadership is all about. It takes time but, if the leader will take the risk and drive the change, then all that is necessary is skill and persistence. So one way of driving an innovation across an entire service is to develop leaders with the individual motivation to change their organisation.
And while leadership is important, what is necessary to bring about change throughout an industry or service, is the motivation for that entire industry. And for that we need to construct powerful incentives.
These motivations need to clearly offer organisations success if they take the innovation throughout their organisation and failure if they don’t. In public service this does not necessarily have to involve financial motivation but almost certainly must involve publication and the public.
If the public know that one organisation is moving forward and improving (and if they have a choice) they will choose that organisation. If they clearly know that one organisation is failing, then that organisation will be driven out of business.
Over the last 10 years the English education system has clearly labelled some schools as failing. The public have been regularly given that information and in many places have the opportunity to act upon that knowledge. If a school fails to innovate, the cost of that is clear in terms of its future.
For a whole public service to improve, the motivations for success and failure need to be clear across the service.
Paul Corrigan is Director of Strategy and Commissioning, NHS London
Top three public sector innovations
1 FEEDING THE BRITISH PEOPLE During world war two the British population were fed to such an extent that nutritional inequalities were reduced.
2 THE HUMAN GENOME Completed in 2003, the Human Genome Project (HGP) was a 13-year project coordinated by the US Department of Energy and the National Institutes of Health. The goals included the identifying of all the approximately 20,000-25,000 genes in human DNA and determining the sequences of the three billion chemical base pairs that make up human DNA.
3 PUTTING A MAN ON THE MOON in 1969, American Neil Armstrong became the first man to walk on the moon. His mission was part of the Apollo programme undertaken by NASA between 1961 – 1975.
ANN ROSSITER
“CONSIDER INCENTIVES AND RISK”
Incentives matter: this is one lesson that the public sector must absorb if innovation and experimentation are to become routine practice. Effective organisations provide workers with some return on increased effort (financial or otherwise) and have effective mechanisms for dealing with poor performance. Nowhere are these challenges more acute than in the civil service. Despite the new civil service reform agenda, which aims to increase performance management, the link between effort and reward is still too weak.
At the organisational level resource allocation remains tied to resource use, rather than to success. In many cases (but not all) attempts to drive efficiency through targets and monitoring are running against the grain of embedded incentive structures.
The use of incentives within organisations is closely tied to responses to risk. The culture of the civil service is one which gives few rewards to those who seek to innovate, something which necessarily involves taking risks. However, for those who risk little, the threat of redundancy is small and jobs are strongly protected. In other words, the response to risk taking in the civil service is hugely skewed. So much so that risk aversion has become a cultural feature.
Historically, there have been several significant steps towards a more results-driven culture. The US was at the forefront of offering incentives for good performance – for example, the Civil Service Reform Act of 1978 required that 50% of any pay increase be variable depending on performance. In the UK, several parts of the civil service now operate as trading funds. They remain part of the public sector but are increasingly market driven in their pursuit of output, efficiency and individual responsibility, often with impressive results. However, it was New Zealand that was in the vanguard of innovation in public service provision. It was among the first to introduce fixed-term, performance-based contracts for departmental heads.
It also requires them to have signed annual performance agreements with their respective portfolio ministers. Models to improve the incentive structure in the civil service and promote a more risk-taking attitude will bring continuous improvement to service users. In well-managed private sector organisations, the market provides a mechanism to ensure that production processes become more efficient over time. However, the traditional system of resource allocation and the culture of risk aversion have prevented this from happening in the civil service. This must change. Without incentives, innovation in the civil service will always be subject to the limitations of bureaucratic oversight. With new incentive structures a dynamic civil service can be created.
Ann Rossiter is Director of the Social Market Foundation think-tank
Top three public sector innovations
1 FIXED-TERM PERFORMANCE-BASED CONTRACTS New Zealand’s introduction of fixed-term performance-based contracts for departmental heads.
2 THE CIVIL SERVICE REFORM ACT (1978) A US initiative, which required that 50% of any pay increase be variable depending on performance.
3 TRADING FUNDS The UK’s move to operate several parts of the civil service as trading funds, which means they are increasingly market driven.
IAIN DUNCAN SMITH
“ENGAGE WITH THE VOLUNTARY SECTOR”
I want to see a revolution in the way we approach poverty and social deprivation in this country. We do not just live in a welfare state, but in a welfare society in which the vast majority of care is delivered by families, social networks and voluntary associations.
Public sector professionals must be encouraged to support rather than supplant these existing efforts. We need to develop their engagement with the voluntary sector. The best way to encourage innovation in delivery of public services is to expose professionals to the vibrancy, dedication and risk-taking of the volunteers and those working in small- and medium- sized charities.
The Centre for Social Justice, of which I am the chairman, made several concrete recommendations with regard to processes last year. For a start, we must strengthen the ‘Compact’ by giving it legislative force. The Compact is a voluntary agreement between government and third-sector to promote fair-dealing on both sides. It calls on the public sector to create multi-year funding arrangements, and deliver payment promptly with full recovery of costs. It is routinely flouted. If they are serious about encouraging innovation, the professionals must deal fairly with this sector.
Public service professionals have a duty to the taxpayer, and if they are to foster the growth of the voluntary sector they need to be confident that money is being spent effectively.
This makes monitoring of performance a key issue. Unfortunately, our research uncovered a tendency for the public sector to seek to micro-manage those projects it supports. Public sector professionals must develop outcome-based assessment of charities – and charities must become more transparent.
Partnership between government and the voluntary and private sectors is the future of public service in this country. These latter two groups must be at the front-line delivery of most services. We must learn from the (qualified) successes of Academy schools, making it much easier for the voluntary and private sectors to respond to local demand for better schools.
The public sector has strategic expertise and large resources. The voluntary sector is constantly identifying social problems and creating innovative solutions. Both need to learn to complement each other in their joint ideal of effective public service.
Iain Duncan Smith is an MP (Chingford and Woodford Green). He is also founder and Chairman of the Centre for Social Justice
Top three public sector innovations
1 DRUGS ENFORCEMENT POLICY IN SWEDEN Abuse of illegal substances is not tolerated and drug use is regarded as deviant behaviour.
2 US CHARTER SCHOOLS Nonsectarian public schools that operate with freedom from many of the regulations that apply to traditional public schools. The schools are accountable to their sponsor to produce positive academic results.
3 NURSE FAMILY PARTNERSHIPS IN THE US This scheme provides support to deprived first-time young mothers and their babies. The aim is to prevent future problems linked to social exclusion.
LUCY DE GROOT
“COURAGEOUS POLITICAL LEADERSHIP REQUIRED”
Like all organisational change, taking a revolutionary approach to what we do and how we do it in public services comes down to people, relationships and behaviour.
Get good public servants working together to listen and respond to individuals and communities, give them permission to address the problems they see in front of them, and new things happen. The biting point in public services, though, is when permission to innovate runs up against issues of political accountability. Throw in a four- to five-year political cycle and a cynical media out for the next failure story and it’s really very hard (though right) for public service leaders to “let go”.The politics of public service innovation in the UK, then, is a critical but little understood issue: one on which we need more evidence. For every international example of politics restraining innovation, there is an opposite, more encouraging story. Increasingly, people recognise the value of working with users as the key element of the service development process. However, the capacity of the public sector to turn it into real practice is limited. For many professionals, engagement of service users in the design and delivery of public services is a deeply held value, but too often they do not have the capacity to do it for themselves. We need public service leadership that understands the critical importance of relationships in solving the most intractable problems and puts a strong emphasis on a professional approach to developing the necessary interaction with partners and service users. We need courageous political leadership that will provide the covering fire while these relationships develop. And, finally, we need to connect the disparate parts of the system of public service innovation, so that professionals are aware of, and can access, the support they need when they need it.
Lucy de Groot is Executive Director of the Improvement and Development Agency
LORD VICTOR ADEBOWALE “DELIVERING BESPOKE SERVICES”
The revolution has started and there are already great examples of public service professionals being innovative. The third sector is going one stage further than just delivering public services.
For example, Turning Point, a social care organisation of which I am chief executive, is delivering services to the public, which, as far as possible are bespoke to individual and community needs.
In many cases, and certainly in health and social care, our sector has been shown to be highly effective in terms of outcomes, innovation, value-for-money and value for people.
Revolutionary services to the public can be provided by a partnership of public, private and third sector organisations. The forward-looking projects are those that involve both central and local government: those which engage the third sector as equals, delivering maximum opportunities for innovation and improvement. These changes started when those people who use public services demanded personalisation. The focus should be on service users as customers.
Our Connected Care pilots in Hartlepool and Bolton are showing that multiple needs can be tackled through one integrated service. We are running audits of local opinion, which means training local people to become community researchers: they are going into their own neighbourhood, finding out what kinds of services people want. This allows us to engage with those who cannot or will not use existing services. It also fosters the development of a skilled, innovative and professionally coordinated workforce. They are able to tackle all the needs of someone who, until now, has had to knock on several services’ doors and keep telling their story.
Lord Victor Adebowale is Chief Executive of Turning Point
Top three public sector innovations
1 THE NHS Our health service is the envy of the world and continues to lead the public services revolution. Polyclinics, which will offer a range of services in one location, is one example of innovation.
2 SOCIAL HOUSING The bedrock of a civilised society, stable housing helps those people who have complex needs to re-engage with society and turn their lives around.
3 PENICILLIN Discovered by Alexander Fleming in 1929 at St Mary’s Hospital, London, penicillin has since saved the lives of millions of people.