Drawing inspiration from public sector problem-solving

The private sector is not alone in leading the way in innovation. Jes Ladva, Odgers Interim Managing Partner and Head of Practice for Local and Central Government, provides some examples of groundbreaking local authority work.

Continuing my theme of how all sectors can benefit from ‘porosity’, by which I mean the flow of top talent from public sector roles to private sector businesses, and vice versa. I have written about local government executives taking up private sector roles and dispelling the myth that they lack the commercial skills to make a success of the transition; and I have explored how politicians might best navigate a career in their life after politics. I consider porosity to be an overlooked and under-appreciated talent pool for all sectors; public, nfp and private.

There is however more to porosity than the flow of talent per se. It is also about the flow of ideas. Sometimes, innovation is the only way to overcome obstacles, make budgetary ends meet or to provide communities with the best possible services. I’d like to share a few inspiring examples of local government/ public sector teams thinking outside the box to develop innovative and effective solutions.

There are several studies published that examine innovation in the public sector, segmented as follows:

• Systemic innovations
• Social innovations
• Service innovations
• Administrative process innovations

Systemic innovation in the public sector refers to the process of introducing transformative changes to the way governments operate. Leaders create new policies, programs, and organisational structures to address the underlying causes of societal challenges, rather than just treating the symptoms. Eg –

• Results-based management (RBM) is an approach to public management that focuses on setting clear goals, measuring progress, and using data to make decisions. This approach to public management has been adopted by many private organisations to improve efficiency and effectiveness.
   

Social innovation in the public sector involves new ideas, products, services, and processes that address social challenges and improve the well-being of citizens. Examples include:

• Community development financial institutions (CDFIs) are specialised financial institutions that provide capital and financial services to underserved communities. This can include microloans, small business loans, and affordable housing financing. CDFIs help promote economic development and reduce poverty in low-income communities. This model has been replicated in the private sector to promote financial inclusion and economic development.
   
• Social impact bonds (SIBs) — a type of public-private partnership — help to attract private investment to address social challenges. With an SIB, private investors finance a social program and are repaid by the government based on the program's success.
   

Service innovation in the public sector refers to the process of introducing new and improved ways of delivering public services to citizens. Technology is often the focus here:

• Data analytics to improve decision-making and program evaluation. For example, governments can use digital platforms to provide services like online voting, online tax filing, or online education.
   
• There have been numerous government initiatives to replace manual toll collection with an electronic system, involving private sector partners, to improve efficiency, reduce delays, and plug revenue leaks.
   
• Digitising land records, a public sector initiative, has led to more authenticated transactions, reduced compliance costs, and helped unclog the judiciary's backlog of land dispute cases.

Administrative process innovations in the public sector are new ways of managing administrative procedures within government organizations. Examples:

• Digital platforms and technologies can streamline and automate administrative procedures, such as online forms, e-signatures, and digital document management. Digitalisation reduces paperwork, speeds up the processing of applications and requests, and improves the customer experience.
   

• Open Data Initiatives: Many local governments have pioneered open data initiatives, making a wide range of data available to the public for free. This has influenced private sector companies, particularly in sectors such as transportation and urban planning, to utilise this data for developing innovative solutions like navigation apps, ride-sharing services, and urban analytics platforms.
   
• Digital Transformation: Local governments have been investing in digital transformation initiatives to improve service delivery and efficiency. Private sector companies often adopt similar digital strategies inspired by successful implementations in the public sector. For example, the digitisation of administrative processes, such as online permit applications or electronic payment systems, has been mirrored in various private sector services.
   
• Collaborative Platforms: Collaborative platforms and networks established by local governments to engage citizens in decision-making processes have influenced private sector companies to adopt similar approaches for customer engagement and feedback. This includes online forums, social media engagement, and crowdsourcing ideas for product development and improvement.
   
• Public-Private Partnerships (PPPs): Many infrastructure projects, such as transportation networks or urban regeneration schemes, are developed through PPPs involving both public and private sector entities. These partnerships often lead to innovation in project financing, risk-sharing mechanisms, and service delivery models, which are then replicated in other private sector ventures.
   
• Innovation Funds and Grants: Local government innovation funds and grants aimed at supporting startups and small businesses in addressing societal challenges have inspired similar initiatives in the private sector. Venture capital firms and corporate innovation programs often draw inspiration from public sector funding models and priorities when investing in innovative startups.
   
• Regulatory Frameworks: The regulatory frameworks established by local governments, such as zoning regulations or environmental standards, can drive innovation in the private sector by creating market incentives for developing new technologies and practices that comply with these regulations. For example, regulations promoting energy efficiency have spurred innovation in green technologies and sustainable practices among private sector companies.

These examples are just a tiny fraction of the innovation to be found in local government. If you would like to find out more about local and central government talent, or indeed how we can all play a part in promoting porosity and its advantages, please do get in touch.