This post is written by Dr Kate Harrington, Head of Strategic Digital Initiatives, NSW Department of Customer Service & Dr Alan Thorogood, Research and Member Engagement, AsiaPac for MIT's Center for Information System Research (CISR).

  • The problem: Translating innovation into lasting results in the public sector is hard.
  • **Why it matters: **To maintain enthusiasm and commitment to innovation, governments need to find a way to capture, communicate and fund achievements.
  • **The solution: **Embed a culture of risk tolerance into public sector practices by better understanding innovation drivers and challenges.

Although programmes advocating digital innovation across the public sector are widespread in New South Wales (NSW), understanding how the public sector enables digital innovation in practice is less understood. While research on digital innovation is substantial, the public sector's values and priorities differ from those of the private sector, which confounds simple comparisons and requires changes to digital ways of working.

Our research identified five key challenges the public sector faces in realising innovation value for citizens: slow mobilisation, premature solutioning, service silos, variable digital maturity, and leadership that could be more familiar with digital ways of working.

Engage with procurement to find ways that support iterative learning approaches. Those mechanisms exist, including through innovation challenges and seed funding of initiatives

Australia's e-government is not ideal but is better than many countries. The United Nations rates Australia in the top five, and the state of New South Wales leads Australia across several measures of digital government maturity. Intermedium, the benching authority on digital readiness, said, "In NSW, investment decisions made via the Digital Restart Fund are based on strong alignment with government objectives, and there are comprehensive processes to monitor performance and programme outcomes." See also our earlier article on the Digital Restart Fund.

Putting policy into action

Our research team at the University of New South Wales interviewed senior leaders from the NSW State Government. Respondents had experience in digital decision-making and implementation, working within central agencies providing infrastructure to other agencies or large service agencies. They report five key challenges to digital innovation experienced by the public sector: 1) inability to mobilise ideas quickly, 2) premature solutioning, 3) service-based silos challenging collaboration, 4) insufficient digital maturity, and 5) discomfort with 'digital'.

  1. Inability to mobilise ideas quickly: Managers face pressure to deliver innovative services with limited human and funding resources. They face the dilemma of finding ways to conduct their business as usual whilst making room for digital innovation, even if digital would lower their service cost next year.
  2. **Premature solutioning: **Investment and procurement processes encourage premature solutioning. Competitive tendering is common proof that agencies use to show the best value. However, tenders for iterative uncertain outcomes are hard to justify when it comes to cost. So, agencies feel pressure to provide certainty around the solution. This challenges agile, user-centric, and incremental digital service development and delivery approaches.
  3. **Service-based silos challenge collaboration: **Cooperation is necessary to provide joined digital services; however, there is poor connectivity between and even within service-based siloes. This lack of connectivity hinders agencies' ability to collaborate effectively on shared customer outcomes. Further, each agency has priorities and different ways of managing its investments. Opportunities to cooperate may be fleeting.
  4. **Insufficient digital maturity: **Multiple actors in private, non-profit and public sectors need to collaborate in delivering digital services. However, actors have different levels of digital maturity, and these differing maturity levels are costly when agencies need to integrate their touchpoints into a customer journey.
  5. Discomfort with 'digital': Digital leadership is valuable but rare because many leaders are unfamiliar with digital working methods. For example, they may see allocating decision rights and operating budgets to digital product managers as abrogating responsibility. Yet leadership is necessary to embed a digital innovation culture.

In summary, NSW senior managers recognise the potential of digital technologies in achieving business goals and contributing to service innovation. However, they face barriers that make their journey difficult to control and predict and an uncertain leadership commitment.

Recommendations

Public sector leaders seeking enduring success in digital innovation should focus on initiatives that build a culture of managed risk taking:

  1. Start with initiatives whose cost recovery / payback is in one year or whose delivery aligns strongly with policy, and then communicate the successes to build confidence for fast mobilisation and multi-year commitments
  2. Engage with procurement to find ways that support iterative learning approaches. Those mechanisms exist, including through innovation challenges and seed funding of initiatives
  3. Build networks of digital evangelists across sectors and agencies, ready to help with collaboration
  4. Campaign for some central seed funding to be a catalyst for multi-silo improvements
  5. Develop a portfolio of capability uplifts that addresses individual, team and organisational needs including a micro-credial approach to learning. See our earlier publication How NSW is Building a Digitally Capable Workforce and also Williams-Bellamy and Noveck’s Future-proofing the public sector through digital and innovation skills training.
  6. Continually publicise case studies – good and bad – to build leadership familiarity and confidence with digital innovation.

This paper draws on Enabling Digital Innovation in the Public Sector presented at the Pacific Asia Conference on Information Systems 2022 by Rachel Jiang, Alan Thorogood, George Joukhadar and Kate Harrington.

👋 You can create a post like this one! Share your thoughts with a community of public servants. Learn more

(Image Credit: Unsplash)