It is one of the most challenging times in American history to be part of a government bureaucracy. A dysfunctional congress offers little or no support; agency budgets face gutting as the nation stares down a fiscal cliff; hiring freezes and the looming shadow of furloughs threaten to turn the government’s talent pool stagnant.

But if you’re an innovator, this is – in a strange and unfortunate way – good news.

It’s good news because these difficulties mean opportunities to impact the future organization and performance of government in a very permanent way. And if you’re a government innovator, they mean embracing non-traditional definitions of innovation. This isn’t Apple or Google; it’s the federal government, the largest, most complex and entrenched organization in the world.

At a time when the very sustainability of the federal government and the global environment are in question, “developing new ideas … isn’t enough,” said Daniel Tangherlini, acting administrator for the U.S. General Services Administration (GSA).

“These [challenges] foster an environment that creates the necessity to be the mother of invention,” said Tangherlini, who spoke Oct. 11 at a public service roundtable on the innovation imperative for government, with leaders from DARPA and OMB, hosted by George Washington University’s Trachtenberg School of Public Policy and Public Administration.

(L to R: Dr. Bruce Chew, Global Thought Leader, Monitor Group, OMB’s Shelley Metzenbaum, DARPA’s Jay Schnitzer, GSA’s Daniel Tangherlini, and Patricia McGinnis, Distinguished Professor of Practice, Trachtenberg School of Public Policy and Public Administration.

But today’s mothers of invention are giving birth to things people don’t always associate with innovation. This isn’t always about a new form of computing or a new Web application that takes a market by storm. To the contrary, in today’s austere government environment innovation more often means tackling the thorny issues of organization, inter-agency collaboration and performance.

Tangherlini, displaying a mind-numbing organizational chart of the entire federal government, explained the natural inertia that very large, complex organizations experience that forces them to separate into the smallest possible management units. But this creates “organizational and fiscal barriers” that often stifle innovation by preventing the sharing of ideas and the transfer of innovations to the larger market, he said.

Tangherlini may be onto something here, since the GSA is one of only three federal organizations (next to Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) ) that has a true government-wide role and mission. GSA manages more than 200,000 vehicles, purchases more than $55 billion in goods and services for agencies (putting it in the top half of the Fortune 50), and manages more than “a third of a billion dollars” in real estate, he said.

“We’re big, we’re interconnected to all of these agencies, and we think that puts us in a great position to share innovation and ideas across agencies,” said Tangherlini.

To help kick-start that process, GSA has followed the example of New York City Mayor Michael Bloomberg, who implemented a “bull pen” concept for the mayor’s office in New York. “There’s no problem in New York that one person resolves,” said Tangherlini. “There’s no problem in New York that one agency resolves.” So Bloomberg created an open office floor plan and put himself in the middle.

“We’ve done the same in GSA,” said Tangherlini. “We need to begin to literally and physically erase those boundaries between separate organizations,” he said. But the mobility revolution and the emergence of cloud computing capabilities also means that GSA and other agencies can take the “bull pen” collaboration model even further.

“We can begin to unchain ourselves from the office and the desk itself,” said Tangherlini. “We can begin to free the worker to go and work amoSngst each other, amongst the people they serve, from almost anywhere. The office reinforces the hierarchy, it reinforces the separation, and it reinforces the org chart. What it doesn’t necessarily do is reinforce the work and reinforce the outcome.”

Crowdsourcing

With the “tyranny of the traditional office” now a thing of the past, GSA has turned its attention to trying to crowdsource innovation. The effort is called Challenge.gov, a program GSA manages to help agencies tap a larger world of ideas. Now entering its third year of operation, agencies have set up more than 200 contests, offering prizes to citizens and entrepreneurs who come up with new, innovative approaches to problems that can help the government deliver better and more efficient services.

Tangherlini has also deployed the crowdsourcing approach within GSA with a program called the Great Ideas Hunt. It challenges all GSA employees to come up with new ideas to help the agency save money or improve efficiency.

In the first month, employees submitted more than 600 ideas. The first five ideas the agency acted on saved roughly $6 million. One idea involved moving the agency’s employee survey from a paper-based system to electronic. The paper system cost the agency $1 million to deliver and was actually a redundant survey – because OPM was already providing a similar survey for free.

But what was really interesting to Tangherlini was the volume of participation. The internal social network on which the agency ran its Great Ideas program generated more than 20,000 comments from employees across the nation. For Tangherlini it was clear the system had enabled employees to overcome and subvert the normal organizational barriers.

At the Defense Advanced Research Projects Agency (DARPA), crowdsourcing has taken the form of giving internal program managers the leeway to build unconventional teams to work on near-impossible technological innovations. “Our program managers are given license and liberty to match-make,” said Dr. Jay Schnitzer, Director of DARPA’s Defense Sciences office. And one of the keys to DARPA’s success has been the agency’s focus on collaboration between and among different disciplines, and the ability to identify partners that at first glance don’t even appear to “fit the solution to the problem we’re trying to solve,” said Schnitzer.

“That’s where some of the magic occurs and some of the secret sauce.”

Productivity as Innovation

There is a productivity crisis in the public sector. According to data presented by Tangherlini, productivity growth in the government between 1985 and 1995 (the last year it was measured) was just .4%, compared to a 4.5 % growth rate in the private sector. “We have to ask ourselves, how can we with the continued demands and the limited resources, close the gap?” said Tangherlini.

That’s exactly what Shelley Metzenbaum, Associate Director of Performance and Personnel Management at OMB, is studying – how to help agencies achieve reasonable productivity and change in a short period of time through innovative approaches to performance.

There are “things that don’t seem like innovation but, in fact, the evidence shows really drive innovation,” said Metzenbaum. One of those things involves trying to get agencies to better manage performance based on what is known to help drive innovation.

“Stretch goals make a huge difference,” said Metzenbaum, referring to performance goals that are considered extremely difficult to meet in the short period of time set for them, but that are achievable and make a major impact when completed. In fact, during the first 24 months of the Obama administration, OMB instructed the heads of all 24 major agencies to set a small number of stretch goals, identify goal leaders and quarterly reviews, and accomplish them within 18 to 24 months using expected budgets and legislation.

One of the major examples Metzenbaum points to was the Department of Interior (DOI)’s goal of issuing permits for up to 9,000 megawatts of renewable energy on DOI-owned land. Within two years the agency had permitted for approximately 6,000 megawatts of energy – enough to power between 1 million and 2.5 million homes. And while the agency did not meet their goal, it was a major improvement. The DOI had only permitted 1,500 megawatts during the prior 20 years.

“It is a remarkable accomplishment,” said Metzenbaum. “They didn’t meet their target. But the issue was to drive innovation. It forced them to think differently.”