This is the third in a series of profiles of innovative leaders in government based on interviews for the book “Paths to Making a Difference: Leading in Government” by Paul R. Lawrence and Mark A. Abramson. The book highlights the management lessons of 24 political executives during their first two years in the Obama administration.

Organizations, both in the public and private sector, have come a long way since the employee suggestion box of the 20th century. For much of the last century, the suggestion box was the major vehicle for soliciting input from within organizations. Other than receiving mail and perhaps conducting focus groups, organizations were also limited in ways that they received information and ideas from outside their organization.

Twenty-first century organizations have a variety of powerful tools to obtain new ideas from both inside and outside their organization. In the federal government today, the Department of Veterans Affairs has become a leader in implementing new ways to innovate. The VA Innovation Initiative (VAi2) was launched in 2010 as part of the Department-wide transformation effort led by Secretary Eric K. Shinseki, Deputy Secretary W. Scott Gould (pictured above), and Chief of Staff John R. Gingrich.

“We launched the VA Innovation Initiative with the purpose of designing and managing a structured process for innovating at VA,” said Deputy Secretary Gould, who also serves as chair of the Executive Selection Board of the Department of Veterans Affairs Innovation Initiative.

In describing the creation of the program, Jonah J. Czerwinski, Director of VAi2, recalls, “We had a venture capital mindset, but not exactly the venture capital toolset. We needed to use the tools that existed in government to bring about innovation, without making direct financial investments in companies.”

The BAA procurement vehicle was key for innovations because it permitted a more open engagement with industry and a more flexible process.

In creating the program, Czerwinski and his team created a four prong approach:

Industry Innovation Competitions. “We launched with the Industry Innovation Competition in June 2010,” recounts Czerwinski. “The goal of the program is to get the best thinking from the private sector to solve the Department’s most pressing problems.” As an outgrowth of a brainstorming session with VA colleagues, the VAi2 team determined that the Broad Agency Announcement (BAA) was the best tool to specify broad areas of high interest to the Department (such as redesigning the PTSD treatment experience or creating mobile application for streamlined Veteran benefits). While rarely used by VA, the BAA procurement vehicle was key for innovations because it permitted a more open engagement with industry and a more flexible process that included the ability to select more than one approach to a problem.

Since the creation of the program, over 600 ideas in eleven topic areas have been submitted to the Department. Based on the review of those ideas, a total of 37 pilot projects were selected for award and funding. So far, funding for the pilot projects range from a few hundred thousand dollars to $9 million. Pilot projects are designed to deliver results within 24 months. At the end of the project, the pilot is evaluated and a decision made as to whether a full and open competition will be pursued to implement the tested concept.

The competitions have been successful. Deputy Secretary Gould reports, “We have seen several promising innovations fielded. For example, one provides VA clinicians with secure mobile access to patient electronic health records and another puts EKGs on mobile devices, allowing cardiologists to review and respond to critical time-sensitive information from anywhere for the first time.”

Employee Competitions. “These competitions are similar to our industry competitions but are designed to draw on our own employees within VA to tap into their experience and expertise,” says Czerwinski. “Employees submit ideas, which are subsequently crowd sourced to help us manage the inflow. We then select pilot projects which are implemented by VA employees.”

Over 15,000 ideas from employees have been submitted to date. The VAi2 program invests in the internal pilot, such as software development to test an idea. No money is awarded directly to employees.

Prize Contests. “We used the new authorities in the America COMPETES Reauthorization Act of 2010 to conduct prize competitions,” recounts Czerwinski. VAi2 currently sponsors a challenge competition on the website that seeks the development of an app that provides immediate access to resources that the homeless need. Volunteers and outreach workers would be able to use the winning app to look up the location and availability of shelters, free clinics, and other social services, and instantaneously be able to share this information with those in need.The challenge will award $10,000 to five finalists, with an additional $25,000 being awarded to the Grand Prize winner.

One of the outcomes of that effort led to rock star Jon Bon Jovi joining forces with the VA in an effort to challenge software developers to create mobile apps that can help homeless vets connect with services they need in real time and nearby.

Special Projects. “When an emergent opportunity arises,” says Czerwinski, “we may conduct a special project to generate rapid innovation.” To date, VAi2 has managed two special projects: the Agent Orange Fast Track system and the Open Source Electronic Health Record project.
Innovation projects are supported on both the health side and benefits side of VA. Deputy Secretary Gould explains, “VA innovations cover more than healthcare. The first business incubator for Veteran entrepreneurs was launched under VAi2 and now more than 200 Veteran-owned ventures are thriving in the VETransfer pipeline less than a year since its launch.”

A clear goal of the initiative has been to avoid becoming just another management fad to be tried and subsequently discarded. In order to institutionalize innovation at VA, the Department is in the process of transitioning VAi2 into a new Center for Innovation at VA. The Department of Veterans Affairs clearly offers a model for other departments and agencies to follow in fostering innovation, both from within and outside their organizations.

Paul R. Lawrence is a Principal at Ernest & Young LLP and a leader in the government and public sector practice. Aloha McBride is an Executive Director at Ernest & Young LLP and leads the federal health sector practice. Mark A. Abramson is President, Leadership Inc.

Photo credit: Suzanne Glassman