Public Sector Innovation: An immense opportunity

By: Asger Daugbjerg

Most Western European countries are struggling with fundamental, long term issues, e.g. an ageing workforce; downward pressure on public sector budgets and increasing demands from citizens, to which Danish learning could be applied.

Envisage the public sector in 2015: every fourth-core welfare worker, including nurses, teachers and care assistants, will have left or be on the brink of leaving the workforce, with no replacements forthcoming from the next generation because there are simply not the human resources required to replace them. The next generation of workers will be much smaller than the workforce it is meant to replace.

Add to this scenario that as citizens we are becoming more and more demanding. We demand more welfare services, more welfare benefits, and the right to retire early. The real curse of this scenario is that because most welfare services do not carry a price tag, but are essentially free of charge to the consumer, welfare demands are endless. No matter how much funding society invests in welfare, in principle, it can never be enough.

At the same time we do not want to pay higher taxes to finance the expanding welfare state. Intrinsically, we know that this situation is unsustainable and will have to be addressed, but we are not yet ready to face this reality. We pretend that there is no dilemma, which frustrates the true visionaries because the longer we procrastinate, the bigger will be the problem.

Public sector innovation – an immense opportunity to do things better, easier, faster NOW!

There are two solutions to this problem. Either we can accept reform of the welfare state, led by the politicians, resulting in our needing to work for longer and to become more productive, to lower our expectations about what we should receive for free from the state and to accept that not all of us will be able to have the wide range of free benefits that our parents’ generation takes for granted. Or we can innovate – starting right away – to find smarter, cheaper, and less labour intensive processes to produce welfare services.

The first option is unlikely – at least in the short term. The politicians are too afraid to risk upsetting the electorate by introducing unpalatable reforms. Although we all know that society cannot deliver the human resources or the budget to continue delivering the current welfare service level, we refuse to remedy the situation. And the politicians know that because the electorate will not face the truth, they could risk losing their seats at a general election by forcing – or even discussing – reform of the welfare state.

This leaves us with the alternative of radical changes to the welfare state based on innovation, which is needed now if we are to cope with the scenario described above.

Whether governments agree to reform from the top or not, innovation is rarely a bad idea. The only question in this context is whether there is sufficient sense of immediate urgency to foster enough innovation power to solve the conundrum. If not, innovation from the bottom cannot replace reform – the first alternative.

A three step approach based on Danish examples

The starting point to a solution is not uplifting. Local communes and governments are often very reluctant to share best or next practice experience. Furthermore, the public sector has a culture of ‘not invented here’ – everyone focuses on his or her own little worlds, without thought for the bigger picture.

The irony in this is that everyone would benefit hugely from sharing local innovations because many could be replicated, addressing the need for actions to be smarter and less labour intensive.

I suggest a three step approach to increasing the level of innovation in the public sector and to sharing best practice across different units in the public sector:

1. Accept there is a need to do things differently, to address the bigger issue outlined above.
2. Share your knowledge and evaluate ideas from outside positively.
3. Meet with and discuss with others, including the private sector, to foster new thinking.

On point (1):
Unless decision makers in the public sector open their minds nothing will happen or change. Innovation requires an open mind, a willingness to take risks and to move out of comfort zones. I think and hope that stark reality of a smaller workforce in the near future will support open minded attitudes.

On point (2):
There are many solutions out there already – in local communities and communes – from which others can benefit: ideas that are easy to copy and implement, because they exist and have been proven. Share them!

I can give some examples from two local communes that embraced innovation – and from which others can learn.

The management of a hospital decided to implement a new IT-system to plan and monitor staff work schedules – connecting this new system to existing booking and salary systems. This innovative approach saved hundreds of man hours, delivering the same output with fewer resources.

In one commune, chess has been included in school timetables. Schools have focused on teaching the weaker, more introverted and socially handicapped students to play chess, which has improved their social skills, increased their ability to focus and concentrate, all of which have strengthened their learning skills. This programmes biggest success is transforming weak students into enabled students, able to help themselves, thereby reducing the numbers of future welfare dependent citizens in the commune. This is a low tech and easy to copy solution.

On point (3):
Build a platform – web-based or otherwise – for knowledge sharing. Post your ideas and programmes, and learn from those of others. Open up to new partnerships, refuse to be led by dogmatic thinking; free yourself and proactively look for new suppliers, new partners and new solutions.

Innovation is always stronger if you involve and discuss with others.

By Asger Daugbjerg, Business director, Monday Morning