University Times

Economic pressure is one of the factors forcing change in local government across the nation, said David Y. Miller, director of the Graduate School of Public and International Affairs (GSPIA) Innovation Clinic, as a precursor to a recent lecture on the role of innovation in local government.

“There has probably never been a time when the opportunity for significant reform and change in our system has presented itself and we indeed will be the products of our creativity and our ingenuity in terms of dealing with the pressing problems” now and in the future, he said.

“I really believe we are going to enter a period of the next five to 15 years where the fiscal challenges facing state and local governments in the United States are probably going to be as acute as they were back in the Depression,” he said, predicting more changes on the horizon.

“I think we have not yet seen the full impact on our state and local governments with the downturn that we’ve had in the economy. I think we’re going to enter a period where the post-stimulus environment is going to be an even greater challenge to our state governments, which are then going to, in turn, have to impact our local governments as they respond to that world of even further diminished resources.”

In addition, legacy costs for pension and retirement programs will affect government budgets and functions. “So, at a time of diminished resources, there also are going to be demands imposed that would have been difficult to fund even in better times,” Miller said.

Rather than accepting the circumstances as a dark future, the situation presents “an opportunity to rethink the way we govern ourselves, how we organize, the expectations we have of the performances of local government and, more importantly, how local governments work together to address the important public issues facing those governments,” Miller said.

He stressed the importance of new ideas in his introduction of James H. Svara, director of the Center for Urban Innovation in Arizona State University’s School of Public Affairs, who delivered GSPIA’s April 2 Wherrett Lecture on Local Government.

In his talk, “Innovation and the Future of Local Government,” Svara outlined research on the characteristics of innovative organizations and the people within them as he discussed the critical role innovation will play in helping local governments weather the changes.

“The new normal that emerges after the fiscal crisis will not simply be a reversion to something earlier. But we don’t know what the shape is going to be,” Svara said. “Innovation will really no longer be a local option. We need to find ways to make it more uniform and make it more consistent across jurisdictions.

“There is going to be a refocusing of priorities. We will re-examine the missions of local governments and the scope of services that are provided by local governments.  We will look at new ways of doing things.”

Svara said there is a trend among elected officials to be more hands-on and involved in an active approach to problem solving. Likewise, he foresees citizens participating more actively.

While he does not envision an end to fragmented urban regions —“We do not have an appetite in the United States for local government reorganization that consolidates governance” — Svara noted, “We are clearly in the era of new governance,” adding that action on public problems and goals increasingly will occur “across sectors, across jurisdictions, across counties.”

The importance of innovation

By nature, crises force organizations to re-examine themselves and to consider options they normally wouldn’t, Svara said, adding that those that already are well organized are in a better position to anticipate and understand the impact of a crisis — and take constructive action.

Instead, research shows that most governments respond to financial crisis by hunkering down to try to weather the storm, he said.

“The crisis is destructive in its impact and so it is that double challenge of coming up with new approaches with limited resources: New needs, but also under pressures and under conditions where much of what’s been constructed over time has to be re-examined or is being dismantled,” Svara said.

“We face conditions of declining resources and need to make them stretch farther,” he said. Financial pressure is causing local government officials to re-examine many of the things they’ve been doing and the way they’ve been doing them, but public pressure to provide more services at a lower cost also has an impact.

“Without innovation, governments will fall behind in a competitive position and they will not serve their citizens as well as they can,” Svara said.

In its narrowest definition, innovation is viewed as a breakthrough never-done-before idea that inspires new approaches.

More broadly, innovation “is efforts to bring about change with the intention of improving process or improving results,” he said. The practices need not be groundbreaking, only new to the organization. “They may not be new or cutting-edge in themselves, but they’re innovative compared to previous practice,” Svara said.

“It is this double approach that suggests that organizations are not only looking for, discovering new ideas on their own but also examining what other governments and other organizations are doing, what’s happening in other sectors in the economy, in order to adopt those practices and build them into the practice of that organization.”

Tinkering vs. transformation

When stressful fiscal challenges arise, some organizations react by “tinkering” to minimize or eliminate the problem. Others develop a creative approach that often builds on practices currently in place within the organization or beyond.

They may innovate by adapting others’ ideas. “It is rare that you can adopt someone else’s practice by simply putting it into place exactly as they have done,” Svara said.

Another approach aims for a process of continuous improvement, he said. “Some organizations have achieved a quality of transformation that comes about from the cumulative impact of changes introduced in specific areas, as innovations build on previous innovations.

“We haven’t paid enough attention to the transformative process that innovation can support,” he said, noting it’s an area that needs more research. “When you see it happen, it’s very exciting to see how innovation can spread throughout an organization or perhaps even throughout a collection of organizations within a region.”

Innovative tendencies

Ironically, the governments that could benefit most from innovation — those with limited resources, for example — are the ones least likely to adopt it, Svara noted.

Research shows that more innovative governments typically are larger, wealthier, non-union and located in the Sun Belt. They tend to have a council-manager structure rather than a mayor-council organization. And public pressure and competition with other cities also play a role, Svara said.

“These conditions are not givens. They don’t determine the outcome,” he stressed. “Any government can innovate regardless of resources, in part because of the individual characteristics of leaders within the organization.”

Innovative administrators, Svara said, tend to be sympathetic to principles underlying reinventing government and have more active professional contacts and better communication with associations and peers.

They see themselves as change agents and as leaders in their organizations rather than being more limited managers in their roles, Svara said.

“The presence of elected officials who focus on goal setting and have vision provides a positive climate for innovation,” he said, noting that it’s not necessary that elected officials come up with innovative proposals themselves, but that they create a positive framework for innovation.

“You can change the circumstances and look at those elements that can be affected by leadership, by organizational support, by dissemination of information and it is possible under the right circumstances to produce a very different kind of response than we typically find in the American pattern,” which follows a bell-shaped curve when it comes to adopting innovative practices.

Analysis of Innovations in American Government Award winners shows a wide range of sources for new ideas. Svara said 36 percent of the ideas came from elected officials, 36 percent from agency heads and 58 percent from others within the organization.

Of that 58 percent, 45 percent came from middle managers and 29 percent from front-line staff, he said. (The numbers total more than 100 percent due to ideas that sprang from multiple originators.)

“This is an important condition to keep in mind. Innovation can come from anywhere within the organization. And so an important issue is going to be: Does the organization encourage and support and take advantage of the ideas that can be generated?”

Most innovation comes in response to a problem rather than from the availability of a new idea, Svara said. Research has found innovations often were prompted by an election change, or by a new leader arriving from outside the organization. “Interestingly, if there was a new leader from inside the organization, there were no cases of award-winning practices coming,” he pointed out.

Crisis as a prompting factor was present in about a quarter of the cases, and three in five were associated with other kinds of problems or pressures that fell short of being called a crisis.

Only 13 percent came from the presence of a new idea or a new technology, Svara said, noting, “A lot of the work of organizations interested in stimulating innovation consists of getting out great new ideas: ‘Here’s a wonderful new approach that an organization has taken’ … and yet unless there is a match between that approach and conditions, particularly problems, that a community faces, it may be like sprinkling grass seed on a sidewalk: It doesn’t find the correct basis for taking root and taking hold,” he said.

The role of leaders

Keeping in mind that innovation can come from a variety of sources, “Any organization that tries to have a leader-controlled, leader-dominated approach to innovation is going to have a very narrow, very limited innovation record, if any,” Svara said.

Leaders may adopt an “auteur approach,” actively involving themselves in key decisions, or may choose instead to be a systematizer, utilizing a decentralized approach. Svara cited the philosophy forwarded by recently retired Phoenix city manager Frank Fairbanks: “If I have one idea a month, that’s pretty good. If my department has one good idea a month, we have 12 good ideas. But if all 15,000 employees in the City of Phoenix have a good idea, you’ve got an enormous array of possibilities that we can consider.”

Regardless of approach, leaders must be committed to a system that rewards and implements good ideas.

A mayor, council or manager’s stated commitment to a goal can spark action in the ranks, unleashing a stream of innovation, Svara said. “Having signaled that initiative, then staff begin looking for lots of ways that broad goal can be carried out,” he said. “It’s not leader or decentralized; it’s leader and decentralized approach.”

Lessons from the private sector

Other research reinforces the notion that leaders must pay close attention to the process with regard to innovation. One study found that among the most innovative companies, in only a small fraction — 15 percent — do the leaders take responsibility for the innovation process within their organization.

“They do so by stressing certain skills that bring issues to the fore and help advance them,” he said.

“They are good at connecting seemingly unrelated ideas. So they have strong association skills. They are constantly questioning: ‘Why do we do it this way? Could we do it better?’”

Svara said such leaders ask speculative questions, perhaps raising seemingly ridiculous possibilities, asking, ‘But what if we did it this way?’ as a way of sparking people to think differently.

They also show a strong focus on details, a willingness to experiment and try out ideas, and networking skills, Svara said: “Getting ideas from lots of different people and consciously trying to approach people who are like yourself, from a different kind of organization or different background.”

He said when researchers measured these discovery skills in a survey of innovative companies, they found top leaders were above the norm in observing, yet were not especially high in creativity.

Rather than being the person to come up with the ideas, the innovative leader stimulates exploration and is willing to put ideas into practice, he said.

While government operates differently from the private sector, when it comes to innovation, there are important shared characteristics that narrow the gap and may be useful to local government innovators, Svara said.

Many of the practices employed by innovative companies involve focusing on outcomes and finding ways to get better results, he said. Improving processes and performance and cutting costs are goals of concern to local governments as well.

“Governments all across the country are dropping services at the present time, re-examining what is it that we do, what is the importance of these activities and which ones are going to continue,” Svara said. “They’re finding ways to be flexible, under the pressure of strong economic downturn.”

Governments have a few advantages of their own: for one, they can embark on “co-production” by enlisting citizens as volunteers, Svara said, noting that “many of the services government provides or problems it addresses can be done better if citizens are more actively involved.

“There are advantages the private sector has but we should not rule out that government is seeing many of the same kinds of changes that we see in the private sector.”

Assessing innovative performance

Svara said the Alliance for Innovation, a partner with Arizona State, is developing a framework that will enable local governments to assess their innovation performance and capacity.

“The key question is: Are you innovating?” Svara said.

Would-be innovators also must look at how many important changes are being introduced. “Are new things happening in your departments? Is there an effort to improve practice and incorporate new conditions? How do we measure up against the best departments?” he said, adding that there also is a transformative dimension to assess: “Do our innovations have cumulative impact?”

The organizational culture also matters, he said. What is the leadership’s example? Is there a staffer or unit responsible for keeping up with innovative practices? Is there a suggestion process with recognition or rewards for accepted ideas?

Are staff assessed? Is there training? Does the culture support ways for staff to seek out new practices? Are innovation champions identified and encouraged?

Is input from citizens, nonprofits and business taken into account? How does the word about innovation get out? Do you tell anybody about the innovative practices you’ve introduced and can people find the information? Is it on your local government’s web site?

Key attributes of innovative governments include collaboration across departments, external partnerships and connections with citizens, in addition to a focus on results. “All are associated with governments that have come up with path-breaking new approaches,” Svara said.

Conversely, a lack of leadership and centralized control with a top-down approach can stifle innovation, he said, noting that if there is a dysfunctional relationship with elected officials, staff are disinclined to risk trying new ideas.

Other negatives include an organizational culture that discourages change, competition that motivates departments to hold on to their resources and ideas, silos that keep employees disconnected from one another and inattention to results.

Change is coming

Although there will be no instant depletion in the ranks of government as baby boomers reach retirement age, a generational change is coming and the balance of power is shifting, Svara noted. He predicted turnover of a magnitude not seen since the 1970s, when baby boomers came of age.

In 2021, members of the millennial generation will start turning 39 and Generation X will be 40-56 years old “and ready to take over,” he said.

“Some approaches and methods young professionals take for granted are going to be the norm,” he said.

“The change is coming and with it new attitudes, new techniques and a familiarity with new technologies that open up really enormous possibilities.”

—Kimberly K. Barlow