Innovation and Government's Fear of Failure

When it comes to trying something new in the public sector, we're especially averse to risk. But there are ways to gain support for these kinds of initiatives.
by | March 12, 2014

"Why can't government be run like a business?" How often have we heard that question? In my mind, many government functions should be run in a business-like fashion; help-desk units, customer-service offices, financial transactions and dozens of other government activities should seek out and adopt the best private-sector practices. But many Americans really don't want government to act like a business if that means investing their tax dollars in innovative (and thus risky) programs.

Any experienced entrepreneur knows that the process of innovation involves trial and error, and often failure. Think of your favorite high-tech companies. Many of them -- Apple, Twitter and PayPal, among others -- began with failures. Indeed, Silicon Valley entrepreneurs have a mantra: "Fail fast, fail often." They know that you rarely get it right the first time. Develop the product, get the "beta version" in the hands of some users, learn what doesn't work, fix it and repeat the process until you have a winner.

While most Americans are delighted to use the amazing products that survive this process, we are ambivalent at best about the risks of innovation in the public sector. Take Solyndra, a clean-energy startup that received over $500 million in federal loan guarantees and left taxpayers holding the bag when it went bust in 2011. Politicians and many other Americans were outraged, and it became an issue in the 2012 presidential campaign. Yet when the signs of a resurgence in clean-tech companies became apparent in 2013, few in the media bothered to cover it.

So it's easy to understand why so many elected officials and public managers are risk-averse when it comes to innovation. The risk/reward ratio just isn't in their favor. Except ... except that Americans are also extremely proud of a host of innovations that came directly from government -- things like land-grant universities, the Interstate Highway System, the technology underlying the Internet, drugs to treat a host of ailments, effective law-enforcement approaches such as "broken-windows" policing and CompStat, and hundreds of products developed from NASA research, such as safety grooving on our highways, aircraft de-icing systems and cordless phones.

Each of these were innovations, none of them were guaranteed to work, and all of them cost considerable money to develop. Now there is no constituency to eliminate any of them. But today, when government officials announce an effort to do something new and unproven, powerful constituencies emerge to argue against it.

What to do? How can public-sector leaders overcome risk aversion and gain support for their innovative projects? Here are some strategies to consider:

"Sell" the problem. "The cost is high, other (traditional) approaches fell short. Avoiding the problem is irresponsible."

Manage expectations. Don't promise the world. Call it a pilot, start small, focus on learning.

Be realistic about risk. Describe where this approach has been tried, and the results.

Partner wisely. If working with a private firm is appropriate to the task, find a respected company that has experience with the approach.

Develop a constituency. Seek backing from well-respected individuals in the community who have no self-interest in the program and believe it's a legitimate role for government.

Compare what you want to do with other programs: The U.S. government, for example, has been funding cancer research since the late 1960s. We haven't found the cure, but the need is huge and the public supports ongoing research.

Play to pride: "This is America. We don't back away from the tough ones. We're a can-do people."

And perhaps the most important strategy is patience. Take the long view. It may take years to get the needed support to launch an initiative, guide it through the inevitable failures and setbacks, and finally see results. That's a cost innovators learn to pay. And it's often well worth it.

Be part of the campaign for civic innovation at the City Accelerator, presented by Citi Foundation.

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