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Are budget cuts the real catalyst for Innovation?

Think about this; stability rarely breads innovation. Traditions and norms don’t generate creativity. So keeping that in mind, doesn’t it stand to reason, that severe budget cuts like the ones that the government is currently dealing with, could be the real catalyst for growth and innovation?

That’s the hope of Alan Balutis. Balutis is senior director of Cisco’s Business Solutions Group about digital government.

He told Chris Dorobek on the DorobekINSIDER program that all the planned budget cuts, potential for sequestration and looming hiring freezes could really usher in a new era for agencies.
“When the real fiscal crunch happens, budget pressures, sequestration, fiscal cliff. Whatever you want to call it. When it happened people realized that we wouldn’t be seeing any real IT grwoth in teh future. And we will need to re-think the way we do business,” said Balutis. “This will drive innovation.”

Do you agree?

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Terrence (Terry) Hill

I agree that innovation can often be stimulated by significant emotional events, such as budget crises. However, leadership has to be open to considering alternatives and be empowered to effect change. Too often, leadership just gives up and doesn’t consider alternatives before making dire proclamations, many times for political purposes. I believe that we can still perform our mission, even with draconian cuts, if we make a conscious effort to work smarter.

Mitch Netzer

While I totally agree with this, I can also see the flip-side where once you have a budget to work with, you can finally do all those things you’ve been wanting to do but haven’t had the budget for.

Maybe this is just my perspective from the technology side of things though.

Bob Gourley

First, thanks to Govloop and to Chris Dorobek for providing a venue where we can hear from champions like Alan Balutis. When he speaks we should all listen.

I really hope innovation occurs. And I think there are a couple other drivers besides the ones Alan mentions. One is incredible new capabilities that can be delivered more efficiently via technology “services” (Cloud). Another is the incredible new capabilities that are being created by startups (Disruptive IT). Another is the insertion of new ideas that can come from social media like Govloop.


Paul Wohlleben

Real change is possible when an organization faces a common external threat, which is what the budget cuts represent. First comes a greater willingness to share an enterprise perspective versus a more narrow agenda, leading to enhanced cooperation and a breaking down of organizational stockpiles. This creates an environment where change and innovation becomes more possible, lessening strong ties to that status quo.

Eric Melton

I agree that extreme challenges like budget cuts breed innovation. But innovative new IT projects requiring infrastructure… require larger budgets, and these may not be the droids we’re looking for…

Jaime Gracia

Although innovation can be created from a catalyst such as budget cuts, it should not be. Leaders should not need the impetus of a negative event or catastrophe in some form to foster a culture of innovation (e.g. risk taking).

Innovation should be encouraged and fostered in organizations across government, but the trap of resistance to change, coupled with the strong resistance to change in federal circles, is a difficult challenge to overcome.

Henry Brown

Yes the “government will have to re-think the way we do business” but it has been my experience that the percieved cheapest way through a crisis like this is take two steps back to the good ole days.

Examples would/could be:

  • only favorites will need any kind of technology to do their jobs:
  • Just think how much we can save if we don’t replace those 4 or 5 year old PC’s
  • All training is an expense which we cannot afford