This is the fifth 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. Marc Andersen collaborated with them on this article.

Innovation is an important topic. All organizations want to do more of it, including the federal government. Like the proverbial elephant, everybody has a slightly different take on innovation and what it looks like.

In the private sector, innovation is somewhat easier to identify — a flashy new product which fulfills an unfulfilled consumer need. Innovation is often discussed in the context of technology and technological innovations.

Based on our research over the last several years, we have found that innovation in government can most effectively be discussed when one makes the following distinction between types of government innovation:

• Innovation driven from inside government, when government employees seek to find new solutions and improvements in the delivery of traditional government activities; and

• Innovation when government seeks to engage the private sector in developing new solutions or approaches

Innovation from Inside Government

This type of innovation has received the most attention over the years. Since 1985, the John F. Kennedy School of Government’s Innovations in American Government program has recognized nearly 500 innovation initiatives in federal, state, and local government. The Innovations awards program was created to foster increased attention in government to finding new ways to deliver services which address the nations’ most pressing issues and to reward and recognize those organizations that undertook new initiatives.

The challenge facing government has been in finding ways to institutionalize the quest for innovation. The bureaucracy has historically excelled at developing routines which could be repeated and duplicated. Thus, finding new routines (or new ways of doing business) has not been traditionally encouraged.

Over the last several years, there are an increasing number of examples of where the federal government has been active in institutionalizing innovation:

• At the Department of Veterans Affairs, an Employee Innovation Competition was created as part of the Department’s Innovation Initiative (VAi2). The VAi2 program is significant because it created an ongoing process which could tap into the experience and expertise of its employees. Historically, employees have always had the opportunity to volunteer ideas (see the suggestion box). What is different about the VAi2 program is that it organized employee participation by identifying specific topics to improve care quality, access, and transparency in the delivery of programs to the nation’s veterans.

• At the Department of Agriculture, innovation took the form of delivering a new program — Know Your Farmer, Know Your Food (KYF2). Instead of creating a new office, the Department organized an initiative through a cross-department task force, with every Agriculture department represented. The concept was to involve the entire department (all agencies) in the process rather than locating it in a single office.

• At the Department of Education, the department developed a new twist to an old tool of government — the grant-in-aid. Instead of following tradition and creating a formula grant program (in which every state receives funds), the Department used the grant instrument to create a nation-wide competition in which only a limited number of states would receive funding — based on the quality of their proposals to reform education in their states.

Engaging Private Sector in Problem Solution

In contrast to when government itself develops innovative approaches to delivering services, the second type of innovation appears to be expanding throughout the government.

Government is increasingly recognizing that in many cases, government itself does not have the solution to a problem that they are trying to solve or a product they are trying to develop. Thus, government is developing new ways to engage citizens, universities, corporations, and non-profits in problem solving. This approach can now been seen in the following initiatives:

• The Challenge.gov website was created to be an online platform which government agencies can use to bring the “best ideas and top talent to bear on our nation’s most pressing challenges.” (link to website) The website now contains over 175 challenges, some which include monetary rewards.

• Similar to the Challenge.gov, the VAi2 program is now running an Industry Innovation Competition in which it seeks ideas to be submitted in response to the department’s specified list of topics on which it is seeking innovation solutions.

• At the Department of Transportation, the Federal Highway Administration created its “Every Day Counts” program. FHWA is seeking to engage industry in finding new ways to accelerate technology and innovation deployment, as well as to shorten project delivery time.

• At the Department of Energy, the Advanced Research Projects Agency-Energy (ARPA-E) was built on the model developed by the Defense Advanced Research Projects Agency (DARPA). ARPA-E is now engaging the private sector by soliciting concept papers in specified areas which are then reviewed and full proposals requested for those who pass the initial review. Based on the full proposals, awards are made to develop technologies that are too risky for private-sector investment, but have the potential to identify disruptive energy technologies that can make current technologies obsolete.

In all of our interviews, we found government political executives wanting to ingrain the quest for innovation in their organizations – both for innovation driven within government and innovation engaging the private sector. In both quests for innovations, competition, recognition and rewards are being used to solicit ideas.

Some leaders, however, recognize that innovation is more than tactics.

Arun Majumdar, Director of ARPA-E, summed this up nicely when he told us, “I want innovation to be the DNA of ARPA-E. It is part of our core strategy. Once you get people here, you have to give them the freedom to solve problems. So the key elements to creating a culture are getting talent, creating an open dialogue, and allowing people to realize their potential.”

Paul R. Lawrence is a Principal at Ernst & Young’s Government & Public Sector practice. Marc Andersen is a Principal and the leader of EY’s Government & Public Sector practice. Mark A. Abramson is President, Leadership Inc.

Photo (left to right): FHWA Administrator Victor Mendez; USDA Deputy Secretary Kathleen Merrigan; VA Deputy Secretary W. Scott Gould; and Education Department Deputy Secretary Anthony Miller.

Photo credit: Suzanne Glassman