Agencies are failing to become more innovative at a time when they can least afford it.

Governmentwide scores tracking how agencies foster and reward employee innovation dropped in 2012 for the second year in a row, according to a new report from the Partnership for Public Service and Deloitte.

“Government is slipping on innovation at a time when its ability to be creative is paramount, given the increasing needs for its services and the reduction in available resources,” the report found.

The report calls on federal managers to take steps to build and bolster a culture of innovation at their agencies.

“I think innovation is about the way anybody in a leadership position, whether political or career, motivates a group of employees who are largely career,” said Dan Helfrich, a principal at Deloitte Consulting LLP and leader of the Federal Human Capital Practice. “That’s about management technique. That’s about creating and fostering a culture where new ideas are encouraged and failure’s OK. And to me, that’s not a political characteristic. That’s about good leadership.”

Governmentwide slip

The governmentwide innovation score dropped by 1.7 points in 2012 — to 61.6 points (out of 100), according to the report, which is based on responses to the Office of Personnel Management’s 2012 Employee Viewpoint Survey.

Helfrich told The Federal Drive with Tom Temin and Emily Kopp Tuesday that low score was a “wake-up call” for government leaders and managers.

“The way we look at it is innovation is about introducing new ideas,” he said. “They don’t need to be big ideas. They need to be new ideas to help solve everyday problems facing our government, everyday problems facing our citizens. In my mind, the key to unlocking innovation is empowering employees to have forums to share new ideas, to test new ideas, whether they fair or they succeed, creating the environment for them to do so.”

The vast majority of federal employees — 91 percent — said they continue to look for ways of doing their jobs better. But the number of employees that reported being encouraged to do so dropped, from 59.2 percent in 2011 to 57.2 percent in 2012.

And just 36.3 percent of workers agreed that their agencies reward creativity and innovation.

That led the report to conclude that “while federal workers remain motivated to improve the ways they do their work, they do not feel supported by their organizations in doing so.”

Innovation scores also declined in 2011, according to a Partnership for Public Service report, which largely blamed the drop on a lack of encouragement from agency leadership.

Another factor in agency innovation is the extent to which employees feel empowered in their jobs, which also dropped last year, from 46.1 percent in 2011 to 43.1 last year.

Agency-by-agency look at innovation

Despite the drop in innovation scores, Helfrich said the data shows some agencies are fostering innovation among their employees.

Once again, NASA took the honors for the most innovative large agency, with a score of 76.5. Other high-scoring innovative large agencies were the State Department (67.6) and the Environmental Protection Agency (66.1).

“Not surprisingly, the agency that ranked best in the overall Best Places to Work this year, NASA, also rated the most highly on the innovation score,” Helfrich said. “To me, what NASA’s doing is they are taking their employees and they’re offering them, through a whole bunch of techniques, including an effective use of social media, through a lot of two-way dialogue with their employees, they’re offering ways for innovation and new ideas to be tested.”

Among mid-size agencies, the Federal Trade Commission ranked the most innovative with a score of 70.6. It was followed by the Nuclear Regulatory Commission (69.6) and the Federal Deposit Insurance Corporation (67.7)

The Surface Transportation Board ranked first among small agencies and, with a score of 83, bested all federal agencies regardless of size. The Office of Management and Budget (73.9) and the Federal Mediation and Conciliation Service (73.6) were also among the highest ranking small agencies in terms of innovation.

Despite some of the high individual scores for agencies, the government still lags behind the private sector when it comes to innovative workplaces.

Federal workers scored 13 points lower than their private-sector counterparts when asked if they feel encouraged to come up with new and better ways of doing their jobs.

Innovation onus on agency leaders

The report put much of the innovation onus on agency leaders, which doesn’t bode particularly well given that rank-and-file federal employees’ view of senior leaders has also taken a tumble recently.

“The beauty of unlocking the power of innovation to me is, it’s cheap,” Helfrich said. “You don’t need lots of expensive programs to do. What you need is simply to create forums where people are comfortable introducing new ideas and in this environment of fiscal austerity, innovation’s actually the key to unlocking improved government performance.”

The report recommended agency managers emphasize the importance of thinking and working innovatively by providing employees with specific examples of where doing so has led to agency success.

“Inspire employees by telling a story about how a new idea or process improved the organization’s ability to accomplish its mission,” the report recommended.

Managers should also involve seek to involve employees in the business process.

“Give employees an avenue for sharing new ideas in team meetings, brainstorming sessions, or launching an employee competition,” the report stated. “If an idea isn’t yet ready for implementation, don’t shoot it down immediately. Help employees refine the idea.”

Helfrich said managers can employee a variety of techniques to foster innovation among their employees. “If I’m a manager out in the field with a group of employees, I’m going to create weekly, biweekly interactions where it’s an idea- jam, where people are throwing out ideas,” he said, “We might select one idea every month, and we’re going to test that idea in practice and measure it against the way we always do things. Then, we’re going to assess whether that new way of doing things improved.”

Managers can also look at establishing two-way interactions with employees. “The State Department, who scored very highly in these innovation rankings, has done things like Diplopedia, which is a Wikipedia-like form to encourage interaction,” Helfrich said. “That’s what I’d be doing if I were a manager.”

Web editor Michael O’Connell contributed to the reporting of this story.

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