Fostering an Innovation Culture

When public officials fear bad press, it dampens innovation. Here are five principles to help leaders embrace change.
by | April 20, 2011

Stephen Goldsmith is deputy mayor of operations for the City of New York.

New York City Mayor Michael Bloomberg has consistently declared that his third term is to be a time of progress and innovation. To his credit, Bloomberg isn't willing to allow the tyranny of the status quo to obstruct change. Several months ago, he asked me to specifically review the way the city handles its large IT contracts. As in many large organizations, these contracts tend to produce scope creep, change orders and quality issues that lead to unanticipated costs.

After a thorough review, we recently announced significant improvements to how the city plans to manage these IT projects. The changes include beefing up our in-house expertise and enhancing our ability to manage IT contractors. By doing this, the city will be able to save potentially hundreds of millions of dollars and reduce risk.

New York City is not unique in facing the challenge of managing large IT projects -- the federal government is trying to improve IT management as well. Unfortunately, whenever governments undertake these types of policy changes, the media inevitably responds by asking, "Why wasn't this been done before?" Or, "Why is the city reversing itself on a policy?"

If leaders were to internalize the logic of such headlines, no political leader would ever risk improving current practices. The media are encouraged to adopt this critical perspective by special interests, be they incumbent vendors or disgruntled employees, who don't like change because of how it might affect their pocketbooks or because of the ways they benefit from the status quo. While effective governing demands that leaders must constantly adapt policy to keep pace with changing realities -- particularly in the rapidly evolving world of technology -- the media rarely rewards such behavior.

So is this "damned if you do" punishment an unavoidable price of progress? Or is there a way to foster a culture of innovation in spite of the risks?

There is no sure way to get the headline right -- other than never innovating -- but these five principles might help encourage a public culture that embraces change:

Create an environment and attitude of continuous innovation. An elected leader needs to create a culture of continuous innovation that encourages public employees to identify a problem or generate solutions. This strategy has been employed with success around the world, including in the United Kingdom where the Prime Ministers Delivery Unit aggressively identifies and advocates for change. Ultimately, the chief executive must be willing to accept the risks, both real and perceived, and embrace change. He must encourage subordinates to generate ideas, assess feasibility, build business cases, coordinate implementation, track results and help make successful reforms stick.

Create dedicated innovation teams. A dedicated change unit is trusted to interact with agency heads and other key officials, but neither manage nor are managed by those units they seek to influence. Bloomberg chose to create dedicated teams to deliver on his key reforms. These dedicated teams have been the drivers of success in promoting sustainability (PlaNYC), combating poverty (Center for Economic Opportunity) and maximizing agency efficiency (Mayor's Office of Operations). Boston Mayor Tom Menino has taken a similar approach with his Office of New Urban Mechanics -- a unit focused 24/7 on innovation.

Continuously and transparently measure results. Performance measures drive change. Quarter by quarter, year by year, performance data helps identify targets for improvement. For example, in New York City Hall's "bullpen," senior officials work in sight of large television monitors that constantly scroll performance data. When an agency's numbers drift above or below the norm, they get noticed. Each deputy mayor's computer also has an icon through which they can access performance data for their agencies and give insight on where they need to intervene or innovate.

Never cover up failure or mask mediocrity. Given the attitude of the press, the temptation to sweep imperfection under the rug is understandable. Don't do it. As painful as negative press may be, a cover-up is infinitely worse. Use the discomfort to spur positive change.

Relentlessly seek ideas for innovation. Within any bureaucracy, many great ideas remain locked inside front-line employees. Tap into this resource. In New York City, we have launched an internal "idea market" to capture these ideas. But that forum is off to a slow start because employees with good ideas don't want to risk being seen as offering criticism of their managers. We are trying to nurture a culture of innovation, encouraging employees who share their ideas despite such trepidation.

From the mayor on down, innovation comes with some risk. But the alternative is a stale acceptance of the status quo that neither serves citizens nor nourishes those public servants who seek the intrinsic satisfaction of delivering great results.

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