PUBLIC INNOVATION
An Assessment of critical success factors
Jonne Klaver
University of Groningen
Faculty of Management and OrganizationMsc BA Change Management
Supervisor: T.E.P. Lotgerink CO-Assessor: dr. B.J.M. Emans
Supervisors at Capgemini: drs. C. Sadée & drs. R. Jongejan
February 2009
Fahrenheitstraat 58 2561EC Den Haag
06-44209669 j.klaver.1@student.rug.nl
“In public services, innovation is justifiable only where it
increases public value in the quality, efficiency or fitness
for purpose of governance or services.”
(Hartley 2005)
ABSTRACT
Acknowledgement
Special thanks go to; Rogier Jongejan for his expert knowledge and process guidance, to Con Sadée for providing me with the opportunity of learning from his wisdom and wealth of knowledge about human nature. Finally to Theo Lotgerink for sharp methodological advise and personal coaching and to Tecla Hoekstra for her unconditional love.
In this theory building study on innovation in the public sector, literature and case-studies are combined to find the critical success factors for the implementation of innovation. Different perspectives on innovation are presented, followed by the discussion of different types of innovation. A multidimensional model is used to create a frame of reference for positioning innovation. The studied public innovation is positioned as organizational and radical.
In the search of the critical success factors, specific public sector characteristics are taken into account in crafting the tools for the field research. A wide variety of success factors is tested and analyzed in multiple ways. Five critical success factors are selected; political pressure, change agents, relative advantage, experimentation and active top management support. Additional literature is presented to sharpen and verify these conclusions. Further research directions are recommended to continue the theory building process.
CONTENT
1. INTRODUCTION ... 4
2.THEORY; INNOVATION ... 7
2.1HOW IS INNOVATION DEFINED?PERSPECTIVES ON INNOVATION ... 7
2.1.1 Incremental or Radical? ... 7
2.1.2 Process or Discrete Event? ... 8
2.1.3 Is innovation new to the world or new to the adoption unit? ... 9
2.2TYPES OF INNOVATION ... 10
2.2.1 Types of innovation ... 10
2.2.2 Types of innovation, a multidimensional approach ... 11
2.2.3 Types of Innovation; How technical are innovations ... 12
2.3PUBLIC INNOVATION ... 13
2.3.1 Public sector characteristics influencing innovation ... 13
2.3.2 Implications for successful public innovation ... 15
2.4IMPLEMENTATION ... 16
2.5REDEFINING THE RESEARCH QUESTION ... 16
2.6SUCCESS FACTORS FOR INNOVATION ... 17
2.7SELECTING THE CONSTRUCTS ... 21
3. METHOD ... 24
3.1THEORY BUILDING RESEARCH ... 24
3.2DATA COLLECTION ... 26
4. RESULTS ... 28
4.1WITHIN-CASE ANALYSIS ... 28
4.2CROSS-CASE ANALYSIS ... 34
4.2.1 Shaping hypothesis ... 36
5. THEORY BUILDING ... 39
6. DISCUSSION ... 44
6.1CONCLUSIONS &RECOMMENDATIONS ... 44
6.2LIMITATIONS ... 45
7. REFERENCES ... 47
APPENDICES... 49
APPENDIX A -ENABLERS OF INNOVATION ... 49
1. INTRODUCTION
Inspired by the European Treaty of Lisbon, innovation was introduced as an important item on the political agenda of the Dutch government (de Groen, Potze, de Jonge & Rutjens, 2004; Ruwette, 2005). In 2003 the Dutch government installed an innovation platform to improve the innovative capacity of the public sector. “The innovation platform has been installed to create the means necessary for innovation to flourish in the public sector” (innovatieplatform.nl, 2008). By installing this innovative platform, the Dutch government emphasizes the need for innovation.
The importance of innovation for public organizations is shared by the British Government. According to Albury (2005:51) principal adviser to the British prime minister: “Innovation is essential to the improvement of public services; it is not an optional luxury but needs to be institutionalized as a deep value”. Furthermore a global survey by (Capgemini, 2008) reveals that Chief Information Officers throughout the public and private sector acknowledge the need for innovation, they are however looking for means by which they can accomplish the implementation of innovation.
Developments like these gained momentum through increased public pressure for improvement. Citizens demand better services (Borins, 2001) and the government answers this request, by pressuring their public organizations for improvement and new ways of working (de Groen et.al., 2004). Public services have been improving the way they work but are increasingly frustrated by the fact that this is not enough. They cannot answer society‟s demands by just upgrading their efficiency. It is no longer sufficient to become more efficient, organizations will have to change the way they work substantially (Albury, 2005). In other words they will have to innovate.
Within this situation where public organizations feel the need for innovation and are looking for ways to implement innovation, a case in point is found with the innovation started at the Dutch inspection services in 2007. It goes by the name of „Vernieuwing Toezicht‟ and spans multiple inspection services. To truly grasp the magnitude of this innovation and its implementation, a further exploration of the Dutch public system is necessary.
FIGURE 1
Dutch inspection services linked to their ministry
Source: Author (2009)
The problem is however that the original lay-out is no longer working properly for modern society. Because the inspection services are organized by governmental department instead of by how best to serve their customer, a problematic situation starts to exist. Not only are the inspection services not designed in a customer focused fashion but even more problematic, they are not designed to work together. This creates a situation where it is possible that three or four different inspections services will contact a given organization and ask for the same information not knowing from one another what kind of information they have requested. This creates such an undesirable situation that the Dutch government decided to start an innovation program, the program „Vernieuwing Toezicht‟.
„Vernieuwing Toezicht‟ is designed to create a customer focused inspection system where inspection services are organized around their „customers‟. Similar „customers‟ are grouped together in a domain. For this domain all inspection services will collaborate in serving the customers. From the customers perspective only one virtual inspection service will exist. Additional to these changes will be the new approach of the civil servants who will execute the inspections. Instead of just punishing those who did wrong, they will have to coach those who want to improve.
So cross-organizational collaboration, customer focused organizations and improvement orientated inspections are the building stones of „Vernieuwing Toezicht‟. This innovative approach, that will try to transform the Dutch inspection system, will be at the center of this research.
In the light of this implementation program and more general within the situation where public organizations feel the need for innovation, the question rises; „how can this be accomplished?‟. This research will focus on the implementation of public innovation, trying to answer the question:
To answer this question it is necessary to explore the different topics incorporated in this research question. The next chapter will discuss these different topics, starting with innovation. Different perspectives on innovation will be reviewed and the relation with incremental and radical change will be discussed. Finally light will be shed on the nature of innovation discussing whether it should be seen as a process or as a discrete event.
The second part of the theory chapter will discuss the different types of innovation and introduce a multi-dimensional framework as a frame of reference. This will be followed by a discussion of the public sector and how its characteristics influence innovation.
The theory chapter will end by discussing the potential success factors for the implementation of innovation. Inhibitors and enablers will be discussed and groundwork will be laid down for defining the success factors which are to be tested in the research section.
2.THEORY; INNOVATION
There have been many authors who wrote about innovation which resulted in a vast amount of literature presenting different perspectives, typologies and terminology. In this chapter a frame of reference will be created, a standpoint from where the research will be executed. To do so different perspectives on innovation will be discussed and choices will be made concerning its nature and typology.
2.1 How Is Innovation Defined? Perspectives on innovation
Innovation is a concept with a different meaning to nearly everyone you‟ll ask. “Practitioners and investigators often treat innovation as an all-inclusive term, even though they may be referring to very different events or processes” (Cooper, 1998:493). It is regarded all-inclusive in such a way that it holds everything from a small adaption to organizational transformation (de Groen et.al., 2004). Drucker (in Hesselbein, 1999:2) defined innovation as: “Change that creates a new dimension of performance”. Others define it as: “the successful exploitation of new ideas” (Duggan, 1996:503) or as another word for renewal or change (Tidd, Bessant & Pavitt, 2001). These definitions are broad and need further specification.
2.1.1 Incremental or Radical?
The weight and impact of the change, that is brought about by innovation, is open to discussions and interpreted differently by several authors. “Some writers reserve the notion of innovation for radical or breakthrough novelty while others emphasize a spectrum of innovation from large-scale dramatic innovations to small scale incremental changes” (Hartley, 2005). In other words, it seems to depend on whether or not incremental change is included. De Groen et.al, (2004) are amongst those who describe innovation as a complete spectrum and include incremental change as one of the forms of innovation. Tidd (2001) describes innovation as another word for change, leaving room for different interpretations.
Albury (2005), Drucker (in Hesselbein, 1999) and de Heer, Heite & Wels (1998) adopt a more radical definition of innovation, they clearly describe a break with the past. De Heer et. al. (1998) define innovation in a way which describes how innovation becomes more and more radical by increasing the gap between the current and new level of knowledge, capabilities, values and norms. His definition shows how a variety of innovation forms can spring to live, one more radical than the other. Based on his ideas innovation is described as breaking with the frame of reference by exceeding the current level of knowledge, capabilities, values and norms. The amount by which the current level is exceeded will define the degree of innovation (de Heer et. al, 1998). So the innovation gets more radical when the difference between current and new level increases. Furthermore the change that is brought about by this radical innovation will become more transformative.
efficiency, effectiveness or quality”. One can even go as far as Darroch & McNaughton (2002) by claiming that radical innovation creates such an enormous change that it transforms markets completely.
In this article innovation is perceived as a radical phenomenon. Based on the definition of de Heer et.al. (1998) this article positions itself on the far end of his spectrum where there is a significant break with the past. Innovation is expected to bring about transformation for the organization but not for complete markets.
2.1.2 Process or Discrete Event?
Nearly every definition of innovation describes a situation where the current state is altered with the intention to create a new and generally better situation. Where they differ however is the way in which the change takes place. As described earlier, one can distinguish between incremental and radical innovation but there is another classification that needs to be addressed. (Cooper, 1998) proposes that innovation can be classified as a discrete event or as a process. Whether or not innovation should be seen as a process or as a discrete event is an important consideration. “It is one of the more common debates concerning the definition of innovation”(Cooper, 1998:494). Based on Cooper‟s (1998) findings the next section will explore the dilemma that rises with this classification trying to answer the question: “How should innovation be classified along the axis of discrete event vs. process?”
How should innovation be classified? A discrete event approach
According to Cooper (1998) adherence to the idea of innovation as a discrete event does not directly mean that one denies the processes involved in innovation, it is mere the fact that they do not label the complete process as innovation. “For them, implementation of innovation occurs when there is actual acceptance of risk and the commitment of resources occurs.” (Cooper, 1998:494). So actually implementing and committing to the change is what makes it an innovation and by this interpretation a discrete event. This focus, according to Cooper (1998), promotes examining the size and age of the firm and conditions of the industry. Questions that are likely to be asked by someone who perceives innovation as a discrete event would be: “What kind of organization is more likely to successfully adopt an innovation?” or “How can we differentiate between adopters and non adopters of innovation?”. This approach is more focused on the macro questions concerning the organizations structure and strategy. This implies that when someone is interested in macro questions concerning innovation, it is useful to approach innovation as a discrete event and examine its macro characteristics.
How should innovation be classified? A process approach
those who choose to approach innovation as a process, the focus lies with communication, relationships between parties and the characteristics of teams and individuals (Cooper, 1998). A process approach is therefore more focused on internal processes and examines the micro characteristics of innovation.
How should the right interpretation be chosen? Embracing the paradox
Based on the ideas presented by Cooper, this article will not try to determine whether innovation should be seen as a process or as a discrete event but accept the paradox as it is. Accepting the fact that innovation can be both provides a starting point from where new ideas can be explored.
We can either choose to approach innovation as a onetime, discrete event or as a process. Depending on the choice made we can focus on the macro characteristics or focus on the flow of events that together determine the process of innovation.
How to define innovation would than just be a matter of focus. If one is interested in aspects like success factors on macro level than innovation should be seen as a discrete event. If however one is interested in the adoption process and factors like; stages of innovation and the nature of relationships between parties during these stages, than innovation, should be seen as a process. 2.1.3 Is innovation new to the world or new to the adoption unit?
Having reached an understanding about innovation on the topic of radical versus incremental change and the classification of discrete event versus process approach, there is one issue that needs to be addressed before we can move on to discuss the different types of innovation. This concerns, whether or not innovation should be new to the organization using it or new to the world in general. This study will use the idea of open innovation (Openinnovation.nl, 2008) where an innovation and ideas for innovation can come from virtually everywhere and don‟t have to be new, they just have to be new to the organization using them. As Schumpeter (1994) describes it, innovation is a process of creative destruction in which new combinations of existing resources are achieved.
2.2 Types of Innovation
There are many different types of innovation, nearly every author presents his or her own typology. Most writers only distinguish between process and product innovation (Albury, 2005; Bessant, 2005; Van Zyl, 2006), Bekkers & Korteland (2008) and Cooper (1998) however specify this even further. In this article, their typology of innovation, will be used as a basis for the segmentation of the different types of innovation. Their typology is supported by Hartley (2005) who uses the same kind of segmentation. Next to the discussion of the different types of innovation articulated by Bekkers & Korteland (2008), this article will explore the multidimensional model of Cooper (1998). By using his model it is possible to position the innovation researched in this article within a comprehensive frame of reference.
TABLE 1 Types of Innovation
Types of innovation
Product innovations Focused on the introduction of a new product or service
Technology innovations Focused on the use of new technologies Process innovations Focused on process reengineering
Organizational innovations Focused on the introduction of new organizational models and management methods
Conceptual innovations Focused on introducing new concepts
Institutional innovations Focused on the changing the rules by which governments operate, like introducing a referendum
Source: Bekkers & Korteland (2008)
2.2.1 Types of innovation
Innovations can be described in many ways, choosing a typology is not a matter of right or wrong but of applicability. Bekkers & Korteland (2008) are very specific in their typology, furthermore it is more tailored to the public domain than most typologies. As can be seen in table 1, Bekkers & Korteland (2008) specify six different types of innovation, from product to institutional innovations. Where they differ from most authors is by including the last three types of innovation; organizational, conceptual and institutional.
When new concepts are introduced to an organization, this can be seen as conceptual innovation. Conceptual innovations comprise the introduction of new frames of reference, paradigms and concepts. A proper example of conceptual innovation would be the adoption of a personal budget. Institutional innovation, comprises fundamental transformations in the structure of public administration. These innovations change the rules of the game (Bekkers & Korteland, 2008). A good example would be a government that introduces a referendum or an elected mayor.
The innovation studied by this research, „Vernieuwing Toezicht‟, can be seen as an organizational innovation. The fundamental change brought about by this innovation is a change that transforms the inspection services from a functional organization to a customer orientated organization. In other words, the implementation of this innovation tries to bring about change towards a customer-centric organization. Although this implies an organizational nature, one should realize that every given innovation has characteristics of more than one type of innovation. As Hartley (2005:28) explains: “In practice, any particular change may have elements of more than one type of innovation”. Following Hartley (2005), this article will focus on an organizational innovation but acknowledges the fact that it could be seen as a combination of organizational-, conceptual- & institutional innovation.
2.2.2 Types of innovation, a multidimensional approach
The recognition of elements of different types of innovation in one innovation is clearly displayed by Cooper's (1998) multi-dimensional model of innovation. In this model, he combines different types of innovation with different classifications of innovation, to capture the nature of innovation in a multidimensional framework. His model is shown in figure 2, and comprises three different axis which respectively run from product to process, administrative to technological and incremental to radical. Ideally all six types of innovation introduced by Bekkers & Korteland (2008) would be included in the model which would require several more axis. However within this framework, „Vernieuwing Toezicht‟ would be positioned as depicted by the dotted line.
FIGURE 2
A Multidimensional Model of Innovation
The characteristics of „Vernieuwing Toezicht‟ align closely with the characteristics of administrative innovation which comes close to the organizational innovation as described by Bekkers & Korteland (2008). Furthermore as has been discussed thoroughly in the beginning of this chapter, the innovation can be seen as radical and finally on the axis of product to process innovation, „Vernieuwing Toezicht‟ would align more closely with the characteristics of process innovation.
To conclude this exploration of the concept of innovation, there are some important notes regarding the technological bias that some people feel when it comes to innovation.
2.2.3 Types of Innovation; How technical are innovations
2.3 Public Innovation
How do public sector characteristics influence the implementation of radical innovation? Because this research will take place in the public sector, it is important to acknowledge the distinctiveness of public sector characteristics and their influence on innovation (Bekkers & Korteland, 2008). As Hartley (2005:27) puts it: “Important lessons for policy, practice and research include the need to develop an understanding of innovation which is not over-reliant on the private sector manufacturing literature but reflects the distinctive contexts and purposes of the public sector”. That is why the last theme of the theory chapter will focus on public sector characteristics and how they influence the implementation of innovation.
Until recently there has been little research into public innovation and its characteristics (Bekkers & Korteland, 2008; Albury, 2005; Hartley, 2005; Zouridis & Termeer, 2005). The prevailing idea regarding innovation in the public sector, displays a picture of an inhospitable environment which does not support the competition needed for innovation to flourish (Albury, 2005; Borins, 2001; de Groen et.al., 2004; Hartley, 2005) Nevertheless as many of these authors conclude, when looked into properly, the public sector is littered with examples of innovation.
2.3.1 Public sector characteristics influencing innovation
This part of the article will examine the characteristics of the public sector that influence public innovation, models of different authors will be discussed and their implications for innovation will be shown. De Groen et.al., (2004) define three important paradoxes regarding characteristics of and challenges in the public sector. Hartley (2005) presents the dichotomy of innovation in the public and private sector and Bekkers & Korteland (2008) show us how innovation can be approached from different perspectives.
De Groen, The Paradoxes of Governmental Organizations
When promoting factors of innovation are seen as; pressure for competition, freedom to experiment, culture which values experimenting, focus, knowledge, leadership and technique (de Groen et.al., 2004), the question can be raised as to how the public sector represents these factors. The Dutch government, based on society‟s expectations and cultural values has tried to create an image of trustworthiness, legal certainty, security and reliability. This does however oppose the promoting factors mentioned above, where risk taking and experimenting are basic ingredients for an innovative environment. De Groen et.al. (2004) introduce three paradoxes which describe challenges faced by public organizations when it comes to innovation.
Decentralize to create innovation opportunities. Because governments are so used to controlling it will be slightly unnatural for them to decentralize power and create leeway at the borders of the system. But according to De Groen et.al. (2004), this is exactly what is necessary to create the right environment for innovation. It is necessary to create the needed freedom to experiment.
have to learn that risk taking and accepting failure is a learning process and part of the road to innovation. Experimentation will have to be motivated throughout the line of command.
Innovative image. The government and governmental organizations will have to find a way to combine their reliable image of trustworthiness and legal certainty with a more innovative approach. By creating innovative labs and working with pilots for experimentation the government could create both a reliable and innovative image (de Groen et.al., 2004).
Next to these paradoxes that influence the possibilities for public innovation, Hartley shows us distinctions between the public and private sector and their implications for public innovation.
Hartley, Difference between private and public sector
Hartley (2005) discusses the idea that public and private sector have different reasons and motivations for innovation. Although there is some overlap like competition as a driver for innovation, which is something that many governments have tried to introduce (Zouridis & Termeer, 2005), there are clearly different reasons for innovation in the public and private sector. “Innovation in the private sector is driven primarily by competitive advantage …. this tends to restrict the sharing of good practice to strategic partners. By contrast, the drivers in the public sector are to achieve widespread improvements in governance and service performance, … in order to increase public value” (Hartley, 2005:27) In other words, according to Hartley (2005) the motivation for innovation is different for the public sector. It is focused on cross-organizational learning and widespread implementation. This implies a greater role for public agents in the adoption and diffusion of innovation.
The discussion of the difference between public and private sector will continue in the next paragraph where different perspectives on the adoption of innovation will be discussed. Bekkers and Korteland (2008) introduce three different perspectives
Bekkers and Korteland – Perspectives on innovation in the Public Sector
According to Bekkers and Korteland (2008) organizations apply different meanings to the adoption of an innovation depending on the frame of reference they use. This frame of reference can differ significantly between the private and public sector. The information on which decisions are based can be assessed differently by seeing it either from a functional, political or institutional perspective. Every perspective brings different considerations in its wake.
how the innovation should be approached from a political point of view. According to Bekkers & Korteland (2008), this perspective is quite dominant in the public sector.
Finally there is the institutional perspective on adoption of innovation, which is also based on the „logic of appropriateness‟. The institutional perspective refers to the pressures exercised by government and society on an organization to adopt a certain innovation. Like the political perspective on innovation, this institutional perspective is common in the public sector.
These three perspectives provide different reasons for the adoption of innovation. When investigating the factors that contribute to a successful implementation of innovation in the public sector it is important to keep these three perspectives and especially the last two in mind.
2.3.2 Implications for successful public innovation
These three authors provide several insights into what differentiates the public sector from the private sector and which implications this holds for the implementation of innovation.
From the information of de Groen et. al. (2004) three lessons can be learned concerning decentralization, risk taking and pursuing a certain image. Hartley (2005) adds to this list, the need for cross-organizational communication and the role of public servants to spread innovation. Finally Bekkers & Korteland (2008) provide us with the inside to the different perspectives on innovation. The following list represents these different suggestions.
Decentralize and empower to create opportunities for innovation at the outer boarder of the system
Take legitimate risk and create room for experimentation
Find a way to combine the carefully build reliable image with an innovative government Promote cross-organizational communication and learning
Realize the different perspectives people can have on innovation; functional, political or institutional
2.4 Implementation
According to the Harvard Business and Management dictionary implementation means: “The process that converts .. strategies and plans into action in order to accomplish … objectives.” The Stanford University Glossary speaks of: “ Working within limits set by policy. Development of directives, procedures, etc., and supporting systems and training and documentation may be necessary to effect policy successfully” The term implementation is used very often in the business and management literature especially when it comes to innovation and change. This article will work with the first definition. This relative broad definition, suits the objective of this which is to determine the critical success factors of the implementation of innovation in the public sector. Because of this focus a narrow definition would be inappropriate.
A common discussion in the implementation literature is the debate of whether or not innovation should be top down or bottom up (Matland, 1995). It is an interesting matter in itself and well worth a literature study but a thorough discussion is beyond the scope of this thesis. The thesis will work with the definition presented above and will embrace the fact that implementation can be both top down and bottom up.
2.5 Redefining the Research Question
Having discussed the four different themes that together makeup the research question; the characteristics of innovation, the different types of innovation, the implications of the public sector and the definition of implementation, the moment has come to incorporate these findings into the research question.
Taking the definition posed in the opening chapter of this thesis and adding to this the themes discussed above; the research question should be defined as;
What are the critical success factors contributing to the implementation of radical organizational innovation in the public sector?
Which is grounded in the definition; Breaking with the frame of reference by exceeding the current level of knowledge, capabilities, values and norms. The amount by which the current level is exceeded should be such that it is regarded radical and brings about transformation in a way that is new to the organization.
This definition will be used throughout the article, it is based on the original definition from (de Heer et. al, 1998) which was discussed in the beginning of this chapter.
2.6 Success Factors for Innovation
In this last part of the theory chapter the article will explore the different success factors that influence the implementation of innovation. There are many authors who write about how circumstances for innovation can be improved, about sources of innovation and about how to adopt innovation. These authors use very different labels ranging from; enablers and disablers via sources of innovation to plain success factors. In this paragraph the different categories and segmentations throughout the researched literature are brought together and will be discussed.
The choice for selecting information is derived from the different themes incorporated in the newly defined research question. Borins (2001), Van Zyl (2006) and Ministerie Verkeer & Waterstaat (1999) write about success factors concerning innovation in the public sector, Rogers (1995) writes about the adoption and diffusion of innovation and Albury (2005) sheds his light on public innovation from a relative radical perspective on innovation.
Together these authors produce over fifty factors that could contribute to the successful implementation of radical innovation in the public sector. They are shown in tables 2, 3 and 4a/b and more extensively in appendix A.
The information available is distilled into three general topics; sources of innovation, stimulating factors of innovation, and the implementation of innovation. Respectively table 2, 3 and 4a/b. Some factors are important in multiple settings and will thus be shown more than once. The last category is, with respect to the topic of this research, the most important one. It shows the actual success factors, that are mentioned most frequently by the selected authors. So the grounds for selecting these final success factors, are based on the frequency of occurrence in the mentioned literature. They will serve as a stepping stone for the determining the constructs later on. There is one exception on this rule; the factor arrogance and belief was only mentioned once but was included by authors choice because it stood out clearly from all the others.
TABLE 2 Sources of Innovation
Sources of innovation
Political Initiatives Initiatives coming from the political system and flowing into the organization
New leadership New leadership often brings change in its wake and with this change innovation comes along Crisis Defined as a current or anticipated publicly visible failure or problem
Internal problems Inabilities to meet certain goals or demands or constraints on resources New Opportunities Opportunities created by technologies or via other ways
Initiative from the bottom Important source of innovative initiatives Outside learning Find best practices from other organizations
Table 2, presents information on the different sources of innovation. These are relatively clear cut. They present the different threats and opportunities that give rise to new situation, opt for change and ask for new solutions. In others words they stand at the very cradle of innovation.
Table 3, shows the different factors that, according to the chosen literature, have a stimulating effect on innovation. These factors generally focus on creating a fertile breeding ground and safe haven for innovation. This comes, among others, in the form of stimulating creativity and diversity, empowering and trusting employees and granting them permission to experiment within certain boundaries. Furthermore innovative behavior needs to be stimulated by recognizing and rewarding those who bring innovative theory to practice.
TABLE 3
Stimulating Factors for Innovation
Stimulating factors for innovation
Recognition / Rewards / Awards Recognition, rewards and awards motivate employee‟s to focus their activities on innovation.
Separate funding
Create independent funds for innovation. When innovation is funded from slack in the budget, it will be easily put on hold when cuts have to be made. Separate funding can mirror venture capital of the private sector and signals the importance of innovation
Diversity
Broadly define jobs, give people the opportunity to develop skills in different areas of expertise. This will improve the variety and diversity of their work and focus.
Creativity Actively promote and support creativity within the company. This will provide a fertile breeding ground for innovation.
Experimentation & Risk taking The company and its management will have to accept risk taking and will have to promote it. It should be part of the learning experience.
Empowerment & Trust Empowering and trusting employees makes them feel responsible and involved. Innovation generally comes from intrinsically motivated people who are enthusiastic about improving their work
Visioning & Goal setting Clear goals and bold vision provide guidelines and motivation to work in a certain direction and to look for opportunities to accomplish these goals
Entrepreneurship Like with empowerment, employees have to feel that they are responsible for what they‟re doing. If they do, entrepreneurship will help them look for new working methods.
Source: (Borins, 2001; Van Zyl, 2006; Albury, 2005; Rogers, 1995; Ministerie Verkeer & Waterstaat, 1999)
TABLE 4a
Success Factors for the Implementation of Innovation - Actors and Circumstances -
Implementation of innovation; Actors and Circumstances
Crisis / Political pressure / Stimulate / Motivate Top
When mismanagement in public services becomes publicly known or if politicians feel that there is need for change, they can pressure the management of public services to act on their behalf
Top management support for Innovation (lead by example, visioning ability)
Top management needs to support the innovation project, not only by officially granting the project permission but by leading by example and by envisioning the project results
Top management priority and focus for Innovation Top management will have to make sure that the innovation project receives priority
Top management responsibility for innovation
Top management should be responsible for the innovation project and clearly display this responsibility throughout the process
Top manager as innovation / project champion
There should be a manager from the management team who acts as project champion, he or she promotes the project and provides funds and support where necessary
Top management trust / Error tolerance / Support for calculated risk taking
Top management should support and promote a culture of error tolerance and calculated risk taking. Mistakes should be seen as part of the learning experience
Change agents throughout the organization
Change agents throughout the organization should promote the innovation, preferable the role of change agents is performed by (informal) (social) leaders
Public entrepreneur The entrepreneurial spirit should be cherished in the public sector to promote pro-active employees
No comfort zone
Employees should be taken out of their comfort zone to create momentum for change and prevent them from settling for the status quo
Arrogance and Belief
To accomplish the implementation of innovation and the successful introduction of a new way of working a certain amount of arrogance and belief is necessary to maintain momentum when the change process meets with organizational inertia
Communicate relative advantage of innovation
The innovation project and the change needed should build on the relative advantage compared to the current situation. This Intrinsic motivation, seems to be especially important when motivating the bottom of organization
Communicate compatibility
The compatibility of the innovation at hand should be communicated very clearly from the beginning of the change project. Employees should understand how the innovation fits with the organizational policies and goals
TABLE 4b
Success Factors for the Implementation of Innovation - Process of Implementation -
Implementation of innovation; The Process
Separate innovation from daily work Activities concerning the innovation project should be separated from daily work
Communicate short-term successes Communicate short term successes to motivate everyone involved in the innovation project
Communicate ambitious goals
Communicate ambitious goals, promote the envisioned results and motivate people to belief in the successful outcome of the project
Measure and Feedback Measure and feedback the management information necessary to stir and manage the project
Available means for innovation (Funds, Time to experiment)
Make sure that the means necessary to accomplish the innovation project are available; funds, time, personnel and room for experimentation
Cross functional teams
Work with cross-functional and cross-organizational teams to promote learning and organization wide involvement, commitment and feedback
Empowerment To make sure decisive action can be taken during the implementation, empowerment is necessary
Project teams
Project teams are often necessary to implement an innovation project, it can provide an effective structure which insulates innovative activities from daily routine.
Reward innovative initiatives Reward innovative initiatives, this motivates the innovator and shows the importance of innovation
Source: (Borins, 2001; Van Zyl, 2006; Albury, 2005; Rogers, 1995; Ministerie Verkeer & Waterstaat, 1999)
2.7 Selecting the constructs
Based on the factors mentioned in the preceding paragraph, constructs will be selected. These constructs will comprise success factors presented by the chosen authors, their selection stands at the cradle of these constructs nevertheless other authors are mentioned to reconfirm their opinion. These final constructs, that are to be tested during the interviews, will be presented in six different themes. The choice for clustering the constructs in different themes is of pure practical nature. It provides a guideline for the interviews.
Motivation for implementation
There are two important factors that need to be considered when it comes to the motivation for innovation and its implementation (Borins, 2001; Rogers, 1995; Bekkers & Korteland, 2008). First and foremost there needs to be pressure on top management to act. This pressure can radiate from an approaching crisis or from political pressure. Especially for this research where the focus lies with the public sector, political pressure is important to include in the research. The other option is communicating the opportunity, which is done through the communication of the relative advantage of the innovation at hand. The relative advantage is the degree to which an innovation is perceived as better than the idea it supersedes (Rogers, 1995). The above items need to be included in the research.
Does a crisis stimulate the implementation of innovation?
Does political pressure stimulate the implementation of innovation?
Does communication of the relative advantage stimulate the implementation of innovation?
Top management
A theme that receives a lot of attention in the innovation and change literature is top management (Borins, 2001; Cooper, 1998; de Groen et.al., 2004; Duggan, 1996; Hartley, 2005; Kanter, 2006; Van Zyl, 2006; Burnes, 2004; Cummings & Worley, 2004) Top management involvement in the implementation of innovation is an important aspect and has been opted by many of these authors to be of crucial importance for successful implementation of innovation. The importance of active top management support and leading by example will be tested during the interviews. Next to top management support and responsibility, priority for and focus on innovation will be assessed. Other factors like; top management trust, error tolerance and support for calculated risk taking will be included. Finally the importance of a project champion will be tested during the interviews. This brings us to the questions;
Does top management support contribute to successful implementation of innovation? Does leading by example contribute to successful implementation of innovation? Does a top management trust contribute to successful implementation of innovation?
Does top management support for calculated risk taking and error tolerance contribute to successful implementation of innovation?
Change ingredients
When innovation is seen through the light of radical change and transformation, certain elements of change programs seem to be important for the implementation of innovation. Change agents or Public entrepreneurs are said to be of high importance for the successful implementation of innovation (Bekkers & Korteland, 2008; Borins, 2001; Burnes, 2004; Rogers, 1995). Furthermore Van Zyl (2006) points out that employees need to be taken out of their comfort zone for the company to gain momentum in the implementation effort. Adding to this Van Zyl (2006) introduces the idea that (change) leaders need to have a certain amount of arrogance and belief to accomplish the implementation. Arrogance and persistence is needed to overcome those who try to protect the status quo during a change process. The same goes for belief and conviction, belief in the righteousness of the innovation will help overcome bureaucratic barriers and organizational inertia.
This brings us to the following questions;
Does the presence of change agents or public entrepreneurs improve the successful implementation of innovation? Should employees be taken out of their comfort zone to improve the successful implementation of innovation? Does a certain amount of arrogance and belief contribute to the successful implementation of innovation?
Means for innovation
One of the elements necessary for proper implementation of innovation, according to Borins (2001), is separate funding for innovation. It is not uncommon for organizations to fund innovation from a surplus on their budget. Problems arise when the organization has to deal with a setback and the funds for innovation start to evaporate. This is why Borins (2001) pleads for separate funding for innovation. In the same line of thought innovation should be separated from daily work. This is to prevent innovative activities from being put on hold when daily routines becomes more demanding. Which is what might happen when innovative activities are executed in extra or spare time. So for innovation to prosper, innovative activities should be separated from daily work. Furthermore time should be available for experimentation, try-outs and pilots.
Does separate funding for innovation improve the successful implementation of innovation?
Does the separation of innovative activities from daily work contribute to the successful implementation of innovation? Does the availability of extra time for experimentation, try-outs and pilots improve the successful implementation of innovation? Work method
Empowerment and collaboration are of significant importance during the implementation process (de Groen et.al., 2004; Borins, 2001). A certain amount of power in the lower parts of the organization improves the climate for innovation. De Groen et.al. (2004), clearly state that innovation will flourish at the outer borders of the system. This is why empowerment is so important. Collaboration in the shape of cross-functional and cross-organizational teams improves the creativity of the team members and the diffusion of the innovation.
Does working with cross-functional and or cross-organizational teams improve the successful implementation of innovation? Does empowerment contribute to the successful implementation of innovation?
Communication
To reach the goal of successful implementation of innovation, communication along the way is of utmost importance. Right from the start and during the process of implementation, ambitious goals should be communicated. They should be clear to everyone in the organization. Part of this communication should be the relative advantage and the compatibility of the innovation. The compatibility of the innovation is the degree to which an innovation is perceived as being consistent with the existing values, experiences, and needs of the potential adopters (Rogers, 1995). Furthermore, short term successes should be communicated during the implementation process. This will motivate those involved and help to retain momentum of the implementation process.
So to complete the representation of constructs in the interviews, the following questions should be included;
Does ambitious goal setting contribute to the successful implementation of innovation?
Does the communication of the relative advantage positively influence the successful implementation of innovation? Does focusing on the compatibility of the innovation constitute to the successful implementation of innovation? Does the communication of short term successes contribute to the successful implementation of innovation?
3. METHOD
This research started with the broad topic of innovation, from there the focus has been narrowed to the implementation of radical organizational innovation in the public sector. This is a niche area where very little research has been executed. There seems to be no clear answer present in the literature so far, no answer to which factors are most critical for the successful implementation of radical organizational innovation in the public sector. So the question arises; “how can we assess which constructs are most critical?” In other words; “what are the critical success factors?”
As Bekkers & Korteland (2008) mentioned, the attention for this topic concerning the public sector has been very limited. Or as Albury (2005) explained it more vigorously: “Until recently, an almost complete dearth of research on innovation in the public sector existed.” As a result, there was not enough theoretical ground to build and test hypothesis on. A solution was found in the theory building method of Eisenhardt (1989).
In the first part of this chapter Eisenhardt‟s (1989) method will be discussed. In the second part the realization of her method for this research will be explained.
3.1 Theory Building Research
Eisenhardt (1989) introduced a method for researchers who are exploring fields where no clear theory stands. She provided a guideline for theory building. Her method synthesizes “work on qualitative research methods (Miles & Huberman, 1984), the design of case study research (Yin, 1981) and grounded theory building (Glaser & Strauss, 1967)” (Eisenhardt, 1989:533). The roadmap she provided served as a guideline for this research. It is presented in table 5 which is displayed on the next page.
1) Getting started
The first step of Eisenhardt's (1989) eight-step model consists of defining the research question and a priori constructs. These constructs can help to shape the initial research design and they provide a basic structure for the research lay-out. In doing so, they span the bridge between the start of theory building were no information is available and the conventional research were existing theories are tested through the use of hypothesizes.
2) Selecting cases
The second step of the process is characterized by the selection of cases. The research population is determined and samples are selected. “An appropriate population controls extraneous variation and helps to define the limits for generalizing the findings” (Eisenhardt, 1989:537).
within a single or a relative small number of cases, then you will have to choose your cases there, where the process is transparently observable.”
TABLE 5
Eight-step Model by Eisenhardt
Source: (Eisenhardt, 1989)
3) Crafting the tools
The third step engages in the crafting of instruments and protocols. This research combined two data collection methods to improve the substantiation of the tested constructs. A list of constructs was crafted and combined with the interviews.
Roadmap for Theory Building Research
Step Activity Reason
1) Getting Started Definition of research question Focuses efforts
Possibly a priori constructs Provides better grounding of construct measures 2) Selecting Cases Neither theory nor hypotheses Retains theoretical flexibility
Specified population Constrains extraneous variation and sharpens external validity Theoretical, not random, sampling Focuses efforts on theoretically useful cases-i.e., those that
replicate or extend theory by filling conceptual categories 3) Crafting Instruments
and Protocols
Multiple data collection methods qualitative and quantitative data combined
Strengthens grounding of theory by triangulation of evidence
Multiple investigators Synergistic view of evidence
Fosters divergent perspectives and strengthens grounding 4) Entering the Field Overlap data collection and analysis,
including field notes
Speeds analyses and reveals helpful adjustments to data collection
Flexible and opportunistic data collection methods
Allows investigators to take advantage of emergent themes and unique case features
5) Analyzing Data Within-case analysis Gains familiarity with data and preliminary theory generation Cross-case pattern search using divergent
techniques
Forces investigators to look beyond initial impressions and see evidence thru multiple lenses
6) Shaping Hypothesizes
Iterative tabulation of evidence for each construct
Sharpens construct definition, validity, and measurability
Replication, not sampling, logic across cases Confirms, extends, and sharpens theory Search evidence for "why" behind
relationships
Builds internal validity
7) Enfolding Literature Comparison with conflicting literature Builds internal validity, raises theoretical level, and sharpens construct definitions
Comparison with similar literature Sharpens generalizability, improves construct definition, and raises theoretical level
4) Entering the field
In the fourth step the researcher starts his or her field research, this is where the actual data collection takes place. During this phase data collection and analysis will often be intertwined (Eisenhardt, 1989). When this happens a certain degree of overlap between data analysis and data collection exists. This overlap is used to improve the interview setup and complement the list of constructs. Opportunistic as this may seem, it is actually perceived as an advantage for theory building case study research (Eisenhardt, 1989). For example, if it becomes clear that important success factors are missing they can be included in the next interview to test their importance.
5) Analyzing within case & cross-case
The fifth step in Eisenhardt‟s roadmap consists of thorough data analysis, both within case and cross-case. The within case analysis extracts the most important success factors from each separate cross-case. Success factors gathered from the interviews are complemented by the factors that were selected from the list of constructs.
The cross-case analysis focuses on patterns across all the cases studied. This is necessary to counteract the bias that an investigator might have when processing the information from the within-case analysis (Eisenhardt, 1989).
6) Shaping hypothesizes
During the sixth phase, patterns or success factors that emerge from the cross-case analysis are tested against the evidence provided by each individual case. As a result, hypothesizes representing the most important success factors might be formulated.
7) Enfolding literature
The fore last step of the roadmap broadens the scope of the research. From a broad perspective supportive and conflicting literature is consulted. This done to test and sharpen the hypothesizes and raise the theoretical level of the research.
8) Reaching Closure
In the ideal situation the research is finalized when improvements become marginal thus when theoretical saturation is reached (Eisenhardt, 1989). However the aim for theoretical saturation is often restricted by more pragmatic considerations like money and time. This research was restricted by both time and money which is why the number of cases was planned in advance.
3.2 Data Collection
All of the cases were selected from a target population of inspection services that had joined the „Vernieuwing Toezicht‟ program. By determining this group as target population and only picking cases which belonged to this group, the environmental variation could be controlled. From the target population six cases were chosen on the basis of expert knowledge. As Pettigrew (1990) suggested, these experts were asked to identify cases where the process of implementation, was transparently observable. Next to this, internal reports and extensive webpage analysis were used to determine a pool of candidates.
Once a pool of likely candidates was selected, cases were picked to resemble the most extreme situation that could be found within the target population. These extremes were represented by the progress in the implementation process, the method of implementation and the nature of the markets that were served by the different inspection services. Choosing extreme options increased the chance of extending the emergent theory (Eisenhardt, 1989). Furthermore it enhanced the internal diversity and in turn the external validity. The fact that a wide variety of organizations were implementing basically the same organizational innovation in different environments and circumstances, greatly improved the representativeness of the sample used.
For every case, one or more interviewees were selected. All of them were leading figures in the „Vernieuwing Toezicht‟ program. Examples would be program managers and project leaders. Their contact information was provided by Capgemini and authorized by „Bureau Inspectieraad‟. Furthermore „Bureau Inspectieraad‟ introduced me with the different project leaders of „Vernieuwing Toezicht‟. Before I was introduced, we agreed to present the results of the interviews in an anonymous way. After finishing the interviews a concept version was drawn up and sent to the project leaders for verification.
During the interviews the project leaders were asked which factors were of highest importance for the successful implementation of the „Vernieuwing Toezicht‟ and for public innovation in general. During the first half of the interview the interviewees could talk freely about what they perceived as important for the implementation of a radical organizational innovation in the public sector. So not only were they asked what actually happened with their own projects but more importantly, how to their opinion, the ideal situation would look like.
During the second part of the interview, the interviewees were confronted with a list of the constructs. They were asked to select the eight most critical success factors for the implementation of radical organizational innovation in the public sector. The list of constructs can be found in appendix B.
4. RESULTS
The results of the interviews will be shown in two sections. The first section shows the results of the within-case analysis and the second section shows the results of the cross-case analysis.
During the within-case analysis each case was scanned for important success factors. The once that were seen as important by the interviewee(s) during the first half of the interviews are displayed in the first part of each case description and the once chosen from the list of constructs are shown in the accompanying tables. Each case represents a different domain from „Vernieuwing Toezicht‟. For privacy reasons these domains and the accompanying project leaders are not mentioned and just denoted by case x
In the cross-case analysis, cross-case patterns were analyzed for critical success factors, those success factors who were perceived important throughout all the different interviews were selected and will be used to sharpen the constructs and formulate hypothesizes.
4.1 Within-case Analysis
Case 1
Extracted success factors from the interview
When it comes to critical success factors concerning the implementation of a radical innovation in the public sector, one needs political pressure to create the necessary momentum for the implementation, preferably this political pressure will be supported by the introduction of a new law. In the ideal situation the need for change will be emphasized by an (upcoming) crisis. These factors will create the necessary pressure for change. However they represent only one side of coin. Next to pressure there needs to be a clear chance, the relative advantage of this innovation compared to the old system needs to be communicated.
Selection from list of constructs Motivation for implementation
political pressure
Top management
top management actively supports the innovation program
leading by example Change ingredients
change agents or public entrepreneurs arrogance and belief
Means for innovation
time should be available for experimentation, try-outs and pilots.
Available supportive ICT System
Work method Communication
relative advantage Case 2
Extracted success factors from the interview
When implementing a public innovation program one should tailor their method to the circumstances at hand. In case of implementing „Vernieuwing Toezicht‟ in this particular domain, – in theory- the Inspection service would have to work together with 400 different local authorities. The project leader tries to initiate this via a bottom up method. She cannot rely on political pressure because there is no binding mandate for the local authorities. In a situation like that it is crucial to create support amongst the employees of the local authorities. Through this support, in the lower parts of the organizations, the local authorities will feel the need for innovation by pressure of their own employees.
When implementing an innovation in the public sector, working with pilots and try-outs will enhance the chances for success. It provides valuable information for the overall implementation process. Furthermore there should be a proper supportive ICT-system to link the different partners together. Throughout the implementation, quick wins need to be communicated to motivate the employees in reaching the challenging goals ahead.
At the same time project leaders will have to anticipate different political agendas, create support and communicate the urgency the implementation at hand. They should try to get a management team member to adopt the program and become a project champion. A project champion will emphasize the importance of the program and its implementation.
Selection from list of constructs Motivation for implementation
Political pressure
Top management
top management actively supports the innovation program
project champion or innovation champion. Change ingredients
Change agents or Public entrepreneurs out of their comfort zone
Means for innovation
time should be available for experimentation, try-outs and pilots.
Work method
cross-organizational teams
Communication
Case 3
Extracted success factors from the interview
The basis for a successful implementation project lies in convincing the employees of the relative advantage. Although change cannot be brought about without political pressure or the feeling of a crisis, the focus should be on the positive message of the relative advantage. To reach your goal you will have to experiment and try new methods. It is very important to create a tolerant culture that supports innovative initiatives.
The implementation of an innovation in the public sector should be supported by active top management support, there should be one member of the management team operating as project champion. He or she should cherish the project as if it was his / her own. Furthermore informal leaders should be convinced of the value of the new program. They should be used as change agents. The project leader should have a certain amount of arrogance and belief concerning the success of the project. This will help him / her to continue his / her quest even when many factors will oppose this.
Selection from list of constructs Motivation for implementation
Crisis
Political pressure
Top management
top management actively supports the innovation program,
support for calculated risk taking and error tolerance
project champion or innovation champion. Change ingredients
Change agents or Public entrepreneurs arrogance and belief
Communication
relative advantage
Case 4
Extracted success factors from the interview
For the implementation process itself, the ideal situation would be characterized by active top management support, the usage of change agents and a proper supportive ICT-System. Next to this, the focus should be on communication of short term successes and the ambitious goal ahead. Use pilots and try-outs and focus on the bigger picture without getting stuck in local fire fighting.
Selection from list of constructs Motivation for implementation
Crisis
Political pressure
Top management
project champion or innovation champion.
Change ingredients
Change agents or Public entrepreneurs arrogance and belief
Means for innovation
separate funding for innovation.
Work method
empowerment.
Communication
relative advantage
Case 5
Extracted success factors from the interview
When implementing an innovation like this, all stakeholders need to be involved. The project leaders of this domain involved the stakeholders from early on in the decision process. This is crucial in the process of building support for the implementation. Not only will the different stakeholders support the innovation at hand, they will feel more responsible during the implementation process. As a project leader, one has to convince the stakeholders of the positive added value of the innovation. Communication is of utmost importance and involves both the formal and informal networks. The informal network is vital for quick and efficient communication but the formal network should not be neglected. One should understand the official „rules of engagement‟ and the influence that some stakeholders possess. When dealt with properly, this can speed up the implementation process. The same goes for political pressure, it can signal the necessity of the innovation at hand.
