While the government can not operate like a business, but it can learn from the way businesses operate, especially when it comes to innovation.
This column was originally published on Jeff Neal’s blog, ChiefHRO.com, and was republished here with permission from the author.
On March 27, President Trump announced a new Office of American Innovation and appointed Jared Kushner to lead it. Critics have focused on the “make government operate like a business” aspects of the new office, and point out previous presidential initiatives that failed to dramatically transform government operations.
It’s true that every president since Reagan has tried to do something similar. It is also true that they had mixed results. President Reagan’s Private Sector Survey on Cost Control in the Federal Government, commonly referred to as the Grace Commission, made 2,478 recommendations that it claimed would save $424 billion when fully implemented over three years. The Congressional Budget Office and Government Accounting Office (its name at the time) concluded the savings were overstated and few of the recommendations were adopted.
Join us Mar. 26 and 27 at 1 p.m. EST for Federal News Network's DoD Cloud Exchange where we'll be hosting leaders from across Defense along with industry tech experts to get in the weeds on the latest policy initiatives, real-world implementations and latest technology developments. | Register today!
President Clinton had better luck with the National Performance Review (later renamed the National Partnership for Reinventing Government). The NPR made hundreds of recommendations that were implemented and there were real savings. On the other hand, the government is still feeling the effects of the large reductions in human resources and procurement specialists that resulted from the NPR.
President George W. Bush also saw some successes with his President’s Management Agenda and particularly with the Program Assessment Review Tool (PART) that was intended to measure the effectiveness of federal programs. President Obama also had some success with the creation of a chief performance officer and initiatives such as “Cloud First” for information technology.
Even though prior efforts have not be completely successful in transforming government operations, it is clear that both republican and democratic presidents have seen a need to make government more efficient and effective. They have tried slightly different approaches, but the “make government operate like a business” theme is usually part of it.
The government is not a business and it is not going to operate like US Gov, Inc. The fundamentals of running a business are not the same as running a government. Businesses exist to return value to their owners. They choose the markets where they want to compete. Good businesses want to serve their customers to grow and build the value of the company. They make decisions based upon what furthers their interests. There is nothing wrong with that. Good businesses are the engine of our economy and a little enlightened self-interest is an important part of that.
Government, unlike businesses, has to serve everyone. It has a public trust because it belongs to the people and it also has substantial coercive power to get what it wants. We can go to jail if we don’t pay our taxes or violate some other criminal statutes. We cannot have a government that decides it will not serve the part of the population that isn’t profitable or that doesn’t pay for services. We do not want a government that sees growing itself as part of its mission. Growth drives businesses to learn, innovate and become more efficient — to find new lines of business, new products, untapped markets, and new goods and services and ways to deliver them. It is a powerful force that drives the best (and sometimes the worst) of businesses.
What can and should happen is that government can learn from business. Government will not have the same drivers, but it certainly can learn, innovate and become more efficient. In fact, innovation is essential if we want to make the government work better. Identifying specific government problems where innovative solutions are needed is only one part of the equation that may have limited long term impact. The most successful businesses avoid the temptation to focus only on big bang, high profile innovation success stories and instead commit substantial effort and sustained resources to building their organizations’ underlying capacity to innovate over the long term. Government can take lessons from the most innovative businesses by focusing on innovation capacity building and agile culture change in two primary areas:
Let’s briefly explore some strategies in these areas along with examples of how parts of government are already applying these lessons.
One challenge for government as it seeks to innovate is that many of its programs involve the delivery of services and not the invention of new products or capabilities. Employees may fail to see how they can innovate without inventing new things. However, innovation frameworks like the three box solution that have been successfully applied at businesses like General Electric, Hasbro, Caterpillar, and Pepsi can be equally helpful in making innovation more relevant and tangible within services organizations. Government can benefit from adopting such an innovation framework that enables broader understanding and engagement by senior, mid and junior level employees across the organization:
Innovation always sounds great in concept but is far more difficult to execute in practice. Most employees in the public and private sector are trained and incentivized for execution, not innovation. Successful businesses realize that execution is paramount — if you don’t take care of the health of the core business, innovation isn’t possible. Not every employee in a business can or should be trained in a full suite of innovation skills. However, the most innovative organizations identify key internal barriers to innovation and train employees with very specific innovation skills to extend their existing capabilities and overcome the challenges most relevant to their day-to-day jobs. For example, businesses may train project managers who are primarily responsible for execution, delivery and financial management to have conversations with clients that uncover opportunities for innovation that extend beyond the current engagement. However, they may not be asked to then take that creative idea and to drive a process that ultimately delivers a finished solution. Instead, they may be trained to tap into human-centered design experts in the organization to further develop the opportunity while they return to their core responsibility of execution. By giving the employee a tangible and realistic pathway to contribute to innovation without requiring full training in a new skillset, the organization efficiently extends opportunity identification and innovation engagement to more employees without having to turn everyone into “innovators.” There are many lessons from innovative businesses on how to do this well, but there are also an increasing number of successful adaptations from local, state and federal government programs that can be replicated or expanded. For example:
If it follows the path of trying to make government operate like a business, this effort is likely to be an exercise in frustration and futility. However, if the Office of American Innovation focuses on just that — innovation — and enabling the hard and sustained work it takes to build targeted innovation capacity at depth across organizations, it may make a difference and that could be a very big deal.
Jeff Neal is a senior vice president for ICF International and founder of the blog, ChiefHRO.com. Before coming to ICF, Neal was the chief human capital officer at the Department of Homeland Security and the chief human resources officer at the Defense Logistics Agency.
Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.