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Disruptive Innovation – A New Way To Look At The Bureaucracy

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This past week I have been reading a report by Deloitte called Government Disrupted, accessible at: http://www.deloitte.com/govdisrupted. This report takes a look at the public sector in an interesting light by focusing on the concept of disruptive innovation. Disruptive innovation is defined on Wikipedia as:

An innovation that helps create a new market, and eventually goes on to disrupt an existing market (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.

The Deloitte report argues that the public service, while innovating, is not experiencing disruptive innovation causing ever increasing cost to maintain public services. As a result, the cost of public sector programming continually increases, often higher than the rate of inflation, and puts increasing pressure on taxpayers to either pay more taxes (increase revenue) or see a decrease in the quality or quantity of public services (decrease expenditures).

As many governments go through a period austerity and cost cutting, public servants are being asked to do more with less. The typical response by the government in such a situation is to either increase revenue or decrease expenditures resulting in a trade-off between price or performance. Disruptive innovation represents a new way of thinking that challenges the typical conventions of public administration.

When disruptive innovation takes hold we typically see a process improve yet we also see costs decrease. This is counter to typical innovation in the public service which generally equates increased spending to maintaining or increasing performance. To see this in action, one must simply look to the ever increasing expenditures of public health care in Canada. Especially, as the baby boomers age, Canada will face an ever increasingly health care bill to simply maintain the public health care system let alone improve it. Health care alone consumes nearly 40% of provincial budgets and this number is increasing.

It is one thing to theorize about how disruptive innovation can reduce cost while improving the quality of public services, it is another challenge to come up with a strategy for making it take hold. Public servants must discard existing “assumptions” about how government works and be willing to think outside the box. Too often we define the bureaucracy around programming that is often dictated by the priorities of the government of the day. The bureaucracy has limited control over the political aspects of the operation of the bureaucracy but we do have control over how we organize and execute the functions of the bureaucracy. We must create organizational process and policies that support innovators and rewards innovators. At all levels in the public service, we must accept the benefits of disruptive innovation (demonstrated through countless examples) and be willing to challenge even the most conventional of notions of the bureaucracy.

So, how do we get disruptive innovation to become part of the regular business in the bureaucracy? How do we allow disruptive innovation to become a part of delivering public services? I challenge the extensive social public servant community to engage your managers, talk with your co-workers, share this blog post to everyone in your network and start thinking of ways to innovate in your own office. However, we can’t do it alone. Our success is also dependent on our ability to engage and convince senior management that our efforts are worth it. If you have access to senior managers, bring up the Deloite paper and talk about disruptive innovation with them. Show off your disruptive innovations and demonstrate how useful they are.

The public service must also create innovation programs. Several private sector firms offer cash bonuses and other rewards for new ideas that provide a benefit to the organization. The Government of Canada or individual departments must establish programs to support innovation at a grassroots level. Ideas small and large must be encouraged. However, the program must aim high. The program cannot support innovation that represents incremental innovation, a slight improvement to an existing policy or process. The program must encourage radical thinking and ultimately innovation that threatens and disrupts the public service itself.

P.S. Please visit http://govstories.tumblr.com to share your government story with the world. Contribute!

P.P.S. I’ve signed up for Marcom a Professional Development Forum that is taking place May 15 and 16. The topics for discussion center around social media and marketing in the public and non-profit sectors. Lots of interesting speakers and workshops. Check it out: http://www.marcom.ca/

Scott McNaughton, thenewbureaucracy.ca and govstories.tumblr.com

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Dick Davies

Excellent definition of the situation. Since a disruption is unbelievable before it occurs, I have seen agencies trotting out other agency’s improvements and wondering why they run out of gas by the third refitting. The culture of disruptive innovation is not repetition. Disruptive innovation is providing fewer features at much less cost and attracting whole new classes of users.

Bill Brantley

Although I like the concept of disruptive innovation, you have to deal with mission accountability when applying it to government. Agencies exist to deliver essential services to the public. How do you continue to deliver the essential services without interruption while launching a disruptive innovation?

For example, describe a disruptive innovation for Social Security that does not interfere with the delivery of Social Security benefits as scheduled.

Paul Boos

I’ll definitely check out this report…

For Bill, wouldn’t get too assumptive on some of our services being essential; read Umair Haque’s blog post and reframe the corporation as non-profit or perhaps even profit based organization: http://www.fastcoexist.com/1679054/the-corporation-as-you-know-it-is-probably-obsolete

If the ‘future’ disruptive NGO found a way to do one of our essential services with significantly more value people may be willing to pay for that service and that Govt entity could become irrelevant. I’ll use EPA as an example: if some NGO could find away to mobilize people and lawyers against a corporation polluting even perhaps at lower than Govt standards, but with proof that harm was being done, people may not feel that is an area required for us to do. They may be willing to donate funds to that NGO to keep it running. Whether this is likely to happen, I have no idea, but I think as business models get reinvented for the ‘corporation’, we might see emerging NGOs that might bite into our ‘business’ as Government in certain sectors. Thus if we think Govt is the place for it, then we need to also think to disrupt (reinvent) ourselves from time to time IMHO.

Bill Brantley

@Paul: Some of government’s services may not be essential but it is still a fallacy to compare government to corporations or even non-profits.

I appreciate the EPA NGO example but how would you tackle my Social Security question?

Scott McNaughton

Hi Bill and Paul

I would actually suggest that disruptive innovation can lead to an agency changing their mission statements. It is an incorrect assumption that mission statements are set in stone or even “tough” to change. I believe that agencies reach a point where innovation is putting pressure on them to evolve. Obviously, they can’t change to an extent that they go outside their mandate but there is flexibility.

I like to use social media as the best example. Social media has caused many agencies to re-think how they do business and in some cases the chatter they here is informing policy or shining things in a new light.

A question for both of you though: Does the changing of a mission statement require the political will of elected officials?