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Innovation by Design: Improving Customer Service

Oftentimes, customer service improvements occur only after very public and very embarrassing failures. Consider the IRS. In the late 1990s, a series of televised Congressional...

Oftentimes, customer service improvements occur only after very public and very embarrassing failures.

Consider the IRS. In the late 1990s, a series of televised Congressional hearings brought images of distraught taxpayers into America's living room. Tales of decent, law-abiding citizens hounded mercilessly by revenue agents filled the press. "The IRS is out of control," concluded Oklahoma Senator Don Nickles, expressing the view of many.

The crisis brought about changes. New training, new metrics and better management controls helped the IRS improve its performance and its image.

But why wait for a crisis? Why not proactively invest in innovation that can improve customer service? Denmark is doing just that through "MindLab," a small, public-sector innovation center making a big impact.

MindLab's cross-departmental unit has one goal: improve the customer service experience for those touched by the public sector. Funded and staffed as a cooperative effort between Denmark's Ministry of Employment, Ministry of Taxation and Ministry of Economic and Business Affairs, MindLab breaks down the silos within government to see things from the customer's perspective. (See interview with Denmark's Helle Carstensen here.)

According to its Web site, "MindLab does cross-disciplinary work in areas involving design, anthropology, sociology and political science." Far from a musty bureaucracy, MindLab has a physical space and an organizational structure totally devoted to spurring transformational change across departments. With funky furniture and white boards everywhere, its elite group of experienced professionals are focused on finding ways to do things better, faster and cheaper.

That often means walking in the shoes of those impacted by government regulations.

One of MindLab's projects was its successful "burden-hunting" effort. Guided by MindLab, public officials visited companies and interviewed the workers who had to comply with regulations. Talking to those who actually had to fill in the various forms opened officials eyes to cases where needlessly cumbersome procedures frustrated those trying to follow the rules. Discoveries from MindLab's burden-hunting exercise resulted in concrete changes, including a new e-Gov solution for sickness benefits, clarifications to health and safety at work legislation and streamlined regulations for food-handling businesses.

"We go out to companies and observe the effect of certain burdens," says Helle Carstensen, head of the Danish Ministry of Taxation. By experiencing life on the other side, innovation teams realized that different reporting requirements, confusing terminology and competing information platforms could make life hell for businesses trying to comply with the three different ministries. "We learned how to plug into companies, to get the information we needed but without the uneccessary burden. We now were much more hooked into their processes." (For more with Denmark's Carstensen on her country's unique approach, watch the interview.)

MindLab is small, but influential. The three ministries employ roughly 20,000 employees, but MindLab is a group of perhaps 15 full-time employees, augmented on a project by project basis with volunteers from the various agencies as well as local universities and businesses.

"We've found it very important to include in the design of innovations those who will be involved in the actual implementation. It is critical to make the connection, to have those who develop an innovation to then go and implement it. Otherwise, it can be rejected as "NIH" -- Not Invented Here."

Not surprisingly, MindLab sees digitization as being a crucial innovation tool. With possible reductions in agency staff, MindLab seeks transformational change. "We are looking for 'next practices' not just 'best practices,'" says Carstensen.

In the United States, public sector innovation tends to be a hit or miss affair. A particular manager will establish an ad hoc team, some improvements will occur and then the team will disband. The capacity for reform is lost. The MindLab approach ensures that innovation is baked into the culture.

MindLab emphasizes the importance of customer-centric innovation in the regulatory realm -- something all too rare in officialdom.

When we think of public officials improving client services, we tend to think of the caring professions. It seems easier to promote a better way to help the homeless or to assist families than to improve how well we collect taxes. But the "cold hands" agencies need to innovate every bit as much as the "warm hands" agencies. As the problems at the IRS proved, failure to do so can prove disastrous.

The MindLabs model -- a small, dedicated team focused solely on innovation, working with teams who will be part of the implementation -- is one that should be considered for American bureaucracies, particularly those who tax and regulate business.

Heads state and local government research for the Deloitte Center for Government Insights
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