PROMOTING INNOVATION IN YOUR COUNCIL. Human Resources Function

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1 PROMOTING INNOVATION IN YOUR COUNCIL Human Resources Function By John Ravlic Introduction This paper is based on a recent workshop I presented for Local Government NSW on Promoting Innovation in your Council at their 2014 Local Government Human Resources Conference. The workshop was designed as a peer learning session. I provided information and background to promote some thinking and generate some discussion. P a g e 1

2 The participants were broken up into small groups and invited to record the key points of their discussion and present them to the whole group. This paper will record the key discussion points and ideas presented at the workshop by the participants. Context Following a recent visit to London I published a blog Innovation is the answer what s the question? The blog explored the impact of the Cameron government s austerity measures on UK local government and the expectation that councils would innovate to bridge the financial gap. The material contained in the blog was presented as background to this workshop. Innovation and the role of HR The participants were invited to consider and discuss why innovation was a topic for discussion at a HR Management Conference. The participants considered the question and came back with the following thoughts and ideas: The participants acknowledged the impending amalgamations and the challenging environment this will present in the near future. This is in addition to the ongoing expectation of councils to do more with less. Innovation is being discussed at a HR Management Conference because HR professionals: are change agents, business partners and enablers drive the necessary cultural change to support the council's innovation activity help create an organisation that thinks differently: that thinks less traditionally are management coaches Innovation is being discussed at a HR Management Conference because HR professionals support the innovation process by: developing and implementing appropriate organisational structures recruiting people with appropriate skills, knowledge and experience P a g e 2

3 implementing performance management and reward systems that support innovation implementing training and development programs creating and supporting learning organisations Apple's Steve Jobs was quoted as saying: "Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're lead, and how much you get it. Innovation has everything to do with human resources people, leadership, engagement and ownership. What is innovation? How do you know when you see it? The participants were asked to take a few minutes to discuss innovation in the local government context, how will you know when you see it and record the key discussion points. The participants considered the question and presented the following thoughts and ideas: What is innovation? new ideas moving the organisation forward evolving efficiency adapting to the community s needs different workplace culture problem solving and capturing ideas empowering employees to make ideas not mistakes, take risks and take time to generate ideas exploring ideas from community, neighbouring councils and other sectors researching other companies for new ideas and new ways of working P a g e 3

4 making things better Innovation how will you know when you see it? when you measure and evaluate when your organisational culture survey results show trust, ownership and organisational excitement when new language is being used questioning why we do things this way when things are being done differently when employees and community members are generating ideas on how to improve things Innovation leads to: positive responses from people and management rewarding ideas generation improvement in outcomes improvement in behaviours alignment of employees roles with service delivery The participants concluded that innovation is about: building a collaborative approach where employees have permission to test, fail and learn. the passion of a few driving the necessary changes to enable successful innovation to flourish for positive community impact Defining innovation There are many definitions of innovation however the following was very relevant to our local government context. Innovation is defined in Empowering Change: Fostering Innovation in the Australian Public Service as the generation and application of new ideas. This definition helps us remember that: Innovation is not always a new product, service or process. An innovative idea may be stopping something (such as an out-moded or now unnecessary function) or it might be a new way of thinking about an issue P a g e 4

5 Innovation is not just about coming up with ideas, but also their application, integrating them with other systems and processes, and monitoring the results over the longer term Innovation is a process. It involves people, resources and systems and it is something that can be managed and encouraged Everyone has the capacity to be innovative, and many people actively want to innovate and bring creative and new ways to bear on the problems or issues faced in their work by their organisation or their clients and stakeholders LGA UK Future funding outlook There is a growing sense of optimism about UK's finances. While this is good news the immediate future for their local government remains a huge challenge. Councils are shouldering the biggest spending cuts of any part of the public sector and the predictions are that the next spending review period will see more of the same cuts. The UK Local Government Association in its Future Funding Outlook report indicated that councils have continued to balance their budgets. However local governments funding gap is still growing by 2.1 billion each year adding up to 12.4 billion by the end of the decade. While closing the gap each year demonstrates the councils' resilience, each efficiency saving found reduces the potential for efficiencies in future years. Many councils will be forced to look for savings from service reductions or through new and innovative approaches. P a g e 5

6 The sector adopted a range of innovation initiatives as it moved to respond to the drastic funding cuts. In a recent survey the New Local Government Network (NLGN) asked its members what proportion of their savings do they estimate could come from innovative new approaches to service delivery as opposed to incremental efficiency gains and other cutbacks. A third of the respondents indicated that they believed at least 50% of their savings could come from innovation. Almost two thirds of the respondents believed at least 30% of their savings could come from innovation. What proportion of your council s savings do you estimate could come from innovative new approaches to service delivery, as opposed to incremental efficiency gains, restricting access to existing services and other kinds of cutback? >=50 % 40 % 30 % 20 % <=10 % of savings Doing more with less The mantra of doing more with less has been heard the world over as government agencies and councils try to continue service delivery against the backdrop of falling revenues and funding cutbacks. The expectation is that the public service will find a way to stretch whatever resources are available to meet all the community needs. In the past two years the number of Google hits on the words "government innovation" has increased from 38 million to 1.4 billion as leaders and staff at every level of government look for ways to do more with less. P a g e 6

7 Barriers and stereotypes There are many barriers to councils adopting innovative cultures and implementing innovation programs. One of those barriers is the perception of local government by those around us. The participants were invited to consider the most common stereotypes used by ratepayers, residents, politicians and the media to describe councils. The participants had a couple of minutes to discuss, agree and record their responses. The participants considered the question and came back with responses that could be put together to describe local government along the following lines Inefficient lazy bludgers in jobs for life working for slow bureaucratic councils bound in red tape. The NLGN surveyed their members on what they thought were the main barriers to innovation in their council. Over 70% of respondents indicated that lack of time to focus on innovation would be the main barrier. What do you think are the main barriers to innovation in your council? Lack of time to focus on innovation Lack of skills necessary for innovation The public is resistant to change Lack of belief in the potential of new ideas to deliver practical change Staff are generally resistant to change Too few good ideas being generated within the council Lack of the political buy-in While some 50% of respondents indicated that lack of skills necessary for innovation would be a barrier only 20% of respondents felt that lack of political buy-in would be a barrier to innovation in their council. P a g e 7

8 Expectation without full appreciation for innovation The expectation from many quarters was that UK councils will have to innovate their way through austerity. At the time austerity measures were announced (2010) there was little appreciation for the development and implementation of innovation in traditionally bureaucratic institutions like councils. In implementing an innovation agenda councils need to have greater regard for: time it may take to innovate lag between development, implementation and results required cultural shift and skills to innovate innovation not leading to immediate benefits and savings innovation needing time for experimentation trial and error innovation requiring significant investment at times innovation generating service improvements without savings Significant organisational transformation needs to take place before an innovative culture can be embedded in government institutions. Culture and workplace conditions The participants were invited to take a few minutes to discuss and describe the culture and workplace conditions that will best support innovation. The participants considered the question and came back with the following thoughts and ideas which could best be described as a blueprint for how HR can support the implementation of a successful innovation program. Workplace Culture Adopting a culture of innovation is a significant step for any organisation even more so for government institutions such as councils, which are bound in legislative compliance and bureaucratic processes. To achieve the desired organisational culture that promotes innovation in your councils you will need staff that: P a g e 8

9 are empowered with permission to fail and make mistakes are working within a supportive and safe culture have ownership of the agenda and process have time to innovate as part of their day to day role To achieve the desired organisational culture that promotes innovation in your councils you will need leadership that is: honest, trusting and open to new ideas and new ways of doing things strong, aligned and committed to the same set of priorities committed to mentoring managers and staff within a learning organisation framework proactively encouraging innovation using formal and informal mechanisms to stimulate/generate new ideas To achieve the desired organisational culture that promotes innovation in your councils you will need management that is: promoting innovation by actively inviting staff to think about how they can improve the way they work encouraging problem solving by using creativity and out-of-the-box thinking not constraining the culture of innovation with council rules, policies and organisational structures resourcing the innovation process with training to enable development of appropriate skills and budgets to provide for the necessary investment building multidisciplinary teams to solve the council s wicked problems To achieve the desired organisational culture that promotes innovation in your councils you will need supportive elected members and a community actively involved in generating ideas and thinking creatively. Workplace conditions Councils implementing a program of innovation will need to consider all the elements of their HR system and how they align against a culture of innovation. P a g e 9

10 Each of the HR elements need to be reviewed and aligned against a culture of innovation to ensure they play a supportive role and don't conflict. Workforce planning The first step to be taken by a council introducing an innovation culture is to define the sort of people it will need in the organisation what skills, knowledge and experience it will need to implement an innovation program. Defining these attributes for an innovative future is the council s first step. Position descriptions Once there is some clarity of the innovative future and the attributes have been identified they need to be incorporated in position descriptions across the organisation. Developing position descriptions that incorporate the desired responsibilities along with knowledge, skills and experience will promote innovation consistently across the organisation. Recruitment and selection Once the roles have been defined it's important for councils to recruit and select diverse people with the right skills, knowledge and experience. Diversity of gender, culture and background is critical as people from different walks of life bring with them different ways of thinking and working, which is important in a culture of innovation where we need to continue to question "why are we doing it this way?" Induction From the first day new employees start within the organisation its culture of innovation should be promoted and spelt out as part of their induction. It should be clear to employees what's expected of them and what their boundaries are. While providing a safe and supportive work environment within which new ideas will flourish and trial and error will be tolerated, even expected, the council will not be expecting reckless, unaccountable and questionable activity. P a g e 10

11 Training and development All staff should take part in the innovation program, therefore awareness raising, education and training should take place to promote and encourage new ways of thinking and new ways of working. The program of awareness raising, education and training will be targeted to meet the specific needs of elected members and community, executive and management, staff and those responsible for implementing and supporting the innovation program. First steps may be to encourage solving everyday problems using creativity and outof-the-box thinking. The awareness raising, education and training program will provide the participants with a range of tools to enable them to effectively participate. Performance reviews and rewards The council will be looking to broadly encourage new ways of thinking and new ways of working. This will need to be supported with annual performance reviews. The development of KPIs needs to be consistent with the innovative culture the council wants to promote. If the objective of the program is to generate ideas then it s the idea generation that needs to be measured and rewarded rather than any success attached to the implementation of those ideas. The council will need to establish and regularly review key performance indicators that promote innovation and reward the activity accordingly. The objectives of organisational KPIs may evolve over time with the sophistication of its innovation activity. Management development In many organisations the middle managers responsible for line management hold back many changes organisations attempt to introduce. Management development is critical to impart the necessary skills and experience that will build and support a culture that promotes innovation. These new initiatives may be more difficult for some babyboomer managers who find it difficult to move with the times. P a g e 11

12 Budget resource allocation For a successful innovation program to be implemented it needs to be supported with an adequate budget allocation. While most of the initial investment in innovation may well be time for the employees to think on-the-job there may be occasions when implementation of ideas will require additional investment. Conclusion Clarity around implementing an innovation program is needed clarity around what that means for the council and how it will be rolled out. A narrative needs to be developed around what the council is trying to achieve and why, ensuring that it's clear for all where the benefits will come from. Innovation programs can be disruptive influences in an organisation if they are not managed and left to run unchecked. Afterall work still needs to be done and the community s expectations need to be met. Imagine staff challenging how things are done and attempting to change things against a backdrop of significant workload and pressing timelines. The process clearly needs to be managed. Ideas need to be assessed for their impact, priorities need to be determined and resources need to be committed in a strategic and holeof-organisation approach. Ideas labs need to be created within formal council structures with agendas to implement new ways of thinking and new ways of working. While no one is expecting councils to go from being government institutions to Google overnight everyone is expecting appropriate due diligence within the council s governance framework. Work in this space is not black and white, it's mostly grey and there are no off-theshelf solutions. Afterall councils implementing innovative cultures are not an everyday occurrence and there is much to learn in this space from trial and error. Councils shouldn t put anything in stone, everything should be flexible and open to ongoing feedback and review for adaptation on the run. P a g e 12

13 John Ravlic Principal Ravim RBC ravim.com.au P a g e 13