what is innovation?
This post is part of innov-hate, a brief series of thoughts and reflections on innovation in Government.
What do I mean by innovation?
The term dates back to at least the Middle Ages, the etymology tells us
Innovation is not the same as improvement. It is doing something different, rather than doing the same thing better.
Innovation is not the same as invention. It is adapting an idea to add value, rather than creating the idea.
Innovation relates to transformation as mutation relates to evolution. It is adaptation leading to positive change. Not every mutation leads to evolution but over time the valuable ones become more common.
Innovation is context dependant
Whilst innovation is not the same as improvement or invention, they are related. In some senses improvement and invention represent ends of a spectrum. Most organisations invest time and money along this range of risk and return. It can be portrayed like this
Now: Improving existing products and services incrementally. Low risk. Known opportunities. Activity best integrated within product or service teams.
New: Introducing emerging trends that exist and work somewhere else. Knowable opportunities that can be planned for and tackled. Activity closely tied to core product or service teams.
Next: Inventing breakthroughs that don’t yet exist or exploring things that are untested. High risk. Unknown opportunities. Activity distinct from business norms and expectations.
The ratio of Now:New:Next will usually differ according to the size and type of industry, level of competition, customer base, organisational maturity and attitude to risk. The average ‘golden’ ratio is often stated as 70:20:10 based on analysis across the private sector.
Government context is different
- Government is a hugely complex, monopoly provider with a wide reach. The drivers for change are our responsibilities for public service and efficient spending rather than profit or competition. All of this traditionally combines to make a culture of stability and slowness to change.
- Activities towards the high risk end of the Now:New:Next spectrum, usually to gain a competitive edge, more profit or a new market — think Amazon transitioning from online bookstore to cloud computing via e-commerce — are commonplace in the private sector but don’t apply in the same way in government.
- The current Government Transformation Strategy is looking to change the relationship between citizen and state at pace and scale.
The first two points here lower the risk ceiling and appetite in Government relative to the private sector. The third raises the ambition of improvement. That combination somewhat condenses the spectrum of change in-between the lines of Now:New:Next. I see it something like this
Iterate: Enhancing existing products or services. Introducing capabilities that are standard elsewhere. Lower risk. Culturally current. Driven largely by user needs and a focus on existing processes. Activity embedded within product and service teams.
Speculate: Discovering and exploring things that are emerging elsewhere but are relatively untested in public services. Higher risk. Culturally ‘within sight’. Driven by concepts that might be better, quicker or more practical to solve the problem or improve the outcome. Activity distinct from business norms (and from discovery) but needing a defined route to product and service teams.
In private industry, the long term, cumulative, return on investment along the Now:New:Next spectrum is said to be roughly the inverse of the ‘golden’ ratio i.e. 10:20:70. So you get 70% of the return from 10% of the investment — the higher the risk the higher the reward.
In the public sector the ratio will inevitably differ, as importantly will the way of assessing return on investment. I would argue for an average ratio of 85:15 for Iterate:Speculate. However in any context and however you measure success, genuine transformation requires investment along your full risk spectrum.
Innovation comes in different forms
Whilst this is an oversimplification, my observation is that
Iterative activity tends to involve micro-innovations in working practices and habits. Adapting ideas from across teams and disciplines, evolving the team and how it works. These innovations are not given enough credit.
Speculative activity tends to involve macro-innovations in products/services. Whilst I focus on this in the next post — how to do innovation — I think much of what I say is more widely applicable.