The Moxie Sessions: The visible hand: innovation in government agencies

Ministry of Business, Innovation and Employment chief executive David Smol

New Zealand is amongst the world’s top 20 countries for innovation, according to the Global Innovation Index from Cornell University. Our number eight wire (or rewired heritage glorifies tinkering and demonstrates our ongoing national inventiveness, and we are throwing more and more public resources at commercialising our good ideas, even if private sector-funded RnD remains stubbornly low.

But how does innovation play out in government organisations or in a government town? And what could be holding us back? We convened a Moxie Session in Wellington in April to find out.

David Smol, CEO of MBIE (the Ministry of Business, Innovation and Employment), reckons the government is becoming more innovative. He points to the R9 Accelerator as a good example, but also says there is much more to do. The Accelerator is a time-limited private/public sector innovation hothouse to generate ideas to improve government interaction with business. It recognises the value in pairing up private “entrepreneurs” with government “intrapreneurs”. MBIE is aiming at some pointy and very public targets in this endeavour, which must help to focus the mind.

Mr Smol expects that the R9 Accelerator will generate and test practical ideas that will reduce the pain of dealing with government. But he also notes that there are barriers to implementing new ideas in government. Committed organisational leadership is very important to make space for innovation. Cultural factors matter: the potential for public and media criticism if ideas do not work out is limiting.

[Update: the 2015 R9 Accelerator has a sequel. Applications are due February 5 2016.]

Philippa Bowron, the Head of Innovation at the Wellington City Council talked about innovation at a city scale. For the Council, an ideas forum that empowers those who drop ideas in a digital suggestions box to join a team to actually implement their idea had been a great way of removing roadblocks and making people ask “why can’t we do it differently?” Council-supported civic hackathons in Miramar, and the Council’s open data portal have led to private innovation with civic benefits.

But civic innovation too can be much more difficult than it sounds. Opening up Council and city issues to wider society should enable the WCC to “tap into the smart brains around the city”. But convincing council to be open to change can be hard, and external innovators sometimes feel a sense of entitlement once the WCC has engaged with them and encouraged them along, suggesting the need to be very clear about where the Council’s role in innovation starts and ends.

Ben Hayman, a Transformation Lead for Assurity Consulting, brought an international perspective to the discussion, having spent 25 years working in innovation in the UK. For him, attitude was the key to progress. “Innovation is just another word; the real barrier is fear, so we must find a way to encourage organisational bravery”. Managers getting out of the way of good ideas is one thing, but the bigger challenge is creating a culture where innovation is necessary and expected. Innovation is not distinct from other things, and if organisations do separate it out (annual “innovation day” anyone?), innovation risks being treated like a buzzword or a distraction from the day job as opposed to a core part of business.

The organisational openness to new approaches can be hard to create. Philippa Bowron had run into constraints to innovation in the Wellington City Council from the need for compliance with established rules, and from the powerful history that sat behind the way things were.

David Smol, talking specifically about procurement of software, said that the government can help by asking “how do we solve this problem” rather than issuing an RFP with a preconceived notion of what the required solution is. When the best answer is not obvious and in environments characterised by high levels of change, there should be scope to “decide what to do by doing”, to make sure the system is “open to brilliant ideas”, and able to look at opportunities rather than being overly conservative and risk-sensitive.

There are some specific public sector challenges in how to deal with the fear of failure, with the perception of waste from taking experimental approaches instead of well-worn paths that may not work very well but at least are predictable, and with the embarrassment from having to do all this in public. Adrian Gregory, another experienced import from the UK and now General Manager of Innovation and Workforce at Grow Wellington, pointed also to over-reaction in response to failure as a not uncommon public sector problem.

Some in the room felt that senior government leaders showed commitment to innovation, and were supported by grassroot and junior staff. The problem was those in-between, who have stronger incentives not to take risks. “Tier 4 and 5 of government workers are the valley of death for innovation”, said one attendee. Silos between and even within government agencies were another common stumbling block.

The easiest way to avoid failure is of course to do nothing: nothing ventured, nothing lost.  Stefan Korn, CEO of CreativeHQ suggested an alternative way forward: an open and mature discussion about the risks of failure, but informed also by the opportunities available from success. Changes to systems and processes might also help. All the positive attitudes and in the world won’t save a project that is poorly conceived or poorly executed: Novopay and projects of its ilk still cast a long shadow over government IT procurement. As Ben Hayman noted “it is still too easy to spend large amounts of money badly, and too hard to spend small amounts of money well”.

At the heart of this discussion about the unacceptability of failure is a dissonance in public thinking: if our expectations of government are for continuous innovation and improvement, we can hardly at the same time demand that everything always comes up roses.

Every month, The Moxie Sessions brings together a small group of business thinkers to discuss ways New Zealand can take advantage of the Internet to boost its national competitiveness. For more, see This article is one from the archives: in late April 2015 we were at Wellington innovation hub Creative HQ discussing innovation in government.

Thanks to Alcatel Lucent and its ng Connect programme for the generous sponsorship that helps to make The Moxie Sessions possible.

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This session should be titled the "Un-Moxie Session".

But it is useful in that it provides evidence that government bureaucrats just cannot do innovation. David Smol's big contribution is essentially a fancy suggestion box involving the private sector to work with bureaucrats to "improve government interaction with business". In doing this Mr Smol implies that he and his bureaucrats have no innovative ideas themselves. At least MS Bowron from Wellington Council does not mince words - her "innovation" is a digital suggestion box.

Possibly the only way bureaucrats will innovate is to have innovation forced on them - by a strong minister or other signficant external disruption. Remember Roger Douglas? Did he deliver innovation or what? Wholeslae restructuring of how government ministries work - here's jsut a few: the Statement of Intent and other machinery never before seen in the NZ public sector or that of overseas; overhauling the acocuntability mechanism and redefinign what the Reserve Bank could do; annual public statements of government finances; restructuring government ministries and spearting the "policy advice" function from the "operational or service delivery" function; creating businesses out of some service delivery fiunctions and then running these as state-owned enterprises, under the same commerical conditions as private sector businesses.

Now those were innovations, Mr Smol - and even more, in today's jargon they were industry disruptors. And it does not matter whether one agrees with the effectiveness of those things - I certainly do not agree with all the changes Mr Douglas put in place - but it is difficult to deny that these were truly innovative measures.

Good luck to Mr Smol in his search for innovation. But I will not hold my breath waiting for anything significant to arise. That is the anture of bureaucracy.

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Thanks for your comment. The main trouble with innovation, as I see it, is not in coming up with ideas (that bit is quite easy). It is actually trying them out sufficiently to discover whether they are any good or not in practice, and without betting the farm. So I like MBIE's R9 Accelerator because it creates an environment where small experiments in innovation can be tried. Whether it works or not, well, we shall see.

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The two best things that MBIE can do to improve software procurement (from a cost, fitness-for-purpose, and usability point of view) are to 1) mandate that solutions comply with open standards relevant to the specific software domain (e.g. document file formats) and 2) focus on modular, loosely coupled solutions rather than monolithic ones, where the interactions of modules are governed by published APIs.

Not doing this is effectively handing all gov't software procurement to overseas owned-multinational corporate vendors, not local vendors, and it hands them domain monopolies (like MS' current monopoly on document, spreadsheet, and presentation file formats) which they will exploit at taxpayer expense. See for a campaign to help MBIE move in the right direction.

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Thanks Dave. From what people said at the session, there are lots of challenges with software procurement. The change in approach required for government agencies to seek to buy something without specifying up front too exactly what they need (an issue that arises particularly with innovative software solution) was one that leapt out at me from the session.

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Agreed, Hayden - the Gov't would do well to take a low-risk, low-cost "pilot" project approach to demonstrate a viable solution to complex IT requirements.

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The issue is there is a lot of basic talk but no visibility as to actions. Running an accelerator is irrelevant if nothing comes out of it. How many ideas tabled, how many tested, how many implemented and what was the impact?

Government agencies and others can talk all they like about being open to innovation but what counts is action.

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Thanks for your comment. I agree that action matters a lot (although I would also say that improving the way existing processes work is likely to get a much bigger bang for buck than any single new initiative).

I am not aware of any public evaluation of how the R9 Accelerator went. But you can see the five ideas pitched at the end of it here:

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