Innovating Against the Odds

Public-sector innovation is a special sort of challenge.
April 26, 2006
By John D. Donahue  |  Contributor
John D. Donahue is a GOVERNING contributor. He is the Raymond Vernon Lecturer in Public Policy, faculty chair of the Harvard Kennedy School Case Program and the SLATE teaching initiative.

Of course government can innovate.

Boryeong was a pleasant, but entirely unremarkable, little town on Korea's western coast when Sang-don Park was elected its mayor in 1994. Mayor Park had big dreams for Boryeong. But the town had no major industry, an out-of-the-way location, schools no worse and no better than the rest of Korea; there was nothing much to set it apart from every other pleasant little town up and down the coast. One thing Boryeong possessed in abundance, however, was mud. The tilt of the seabed made Boryeong's tidal flats uncommonly rich in deep, viscous goo. This had always been true, and it had never much mattered. But Mayor Park decided he could make mud the foundation of Boryeong's economic development.

He first brokered a deal with a private company to produce a line of cosmetics based on Boryeong mud. It turned out that there weren't many takers. Then one evening the mayor happened to rent a video of an American movie, "The Player," featuring a scene of the lead actress taking a mud bath. Inspiration struck. If people won't pay to wear Boryeong mud on their faces, Mayor Park reasoned, perhaps they would pay to bathe in it. Thus was born the Boryeong Mud Festival. By 2003, the six-day festival was drawing well over a million visitors from around the world, and Boryeong was booming.

Mayor Park provides just one existence proof for public-sector innovation. Anyone who pays attention can point to plenty more. Governments refine their strategies and their tactics, develop new solutions to old problems, and find ways to recognize and meet previously latent needs. This is unsurprising, since governments are built of people and people are inclined to improvise.

However ...

The way people are organized powerfully shapes and constrains their propensity to innovate. And those organizational forms we call "government" tend to be formally structured, entrusted with missions that are multiple or complex or both, and subject to judgment on many criteria by multiple interests. These features make public-sector innovation a special sort of challenge.

Most public organizations, most of the time, represent an intricate equilibrium. It might seem to a naive outsider that the organization's current configuration is just one of many open alternatives, with plenty of options for choosing different means or embracing different goals. But most squares on the game board are off-limits. The status quo is one of a handful of configurations -- however lengthy the list of imaginable options -- that satisfies the minimum requirements of every interest with veto power. Innovation in government is a delicate game. It requires getting from the status quo to one of those other scarce squares on the board, one that is actually open.

Private-sector innovation is child's play by comparison. If a corporate manager has a new idea with plausible prospects of boosting profits, the odds are good she'll be able to blitz through the obstacles and make it happen. Objections from colleagues, subordinates, suppliers and other stakeholders have to be both vigorous and unanimous to trump the crystal-clear goal of increasing shareholder value.

Public managers aiming to innovate need to outperform their private-sector counterparts in two ways. First, they have to develop really, really good ideas. A proposed innovation must offer benefits that are big enough, widespread enough, and (not least) certain enough for supporters to outnumber skeptics by the requisite wide margin. Second, public managers have to promote their ideas with exceptional deftness and determination. Public-sector innovators rarely have the luxury of ignoring objections or failing to mobilize latent constituencies.

Governmental innovation is special not just because it tends to be more difficult than private-sector innovation, but also because it tends to be more valuable. Some business innovations -- breakthrough drugs, the next big IT gizmo -- represent significant wins for the world at large. But many are pretty minor. Because public organizations touch the interests of so many -- and because they tend to be entrusted with particularly vital tasks -- a governmental innovation that permits new needs to be met, or old needs to be met more cheaply or more precisely or more flexibly, usually creates more value than an equivalent corporate innovation.

Sluggish or distorted governmental innovation, by the same token, imposes a correspondingly large loss of potential public benefit. Scholars are well aware of this, of course, which explains the enduring academic interest in strategies for lowering the barriers to innovation within the public sector. Practitioners know it, too, which is why so many struggle so diligently to maneuver around the barriers to change.

There are systematic, built-in reasons why innovation in government is so hard. That's why you're a hero when you manage to make it happen.