Public V Private Sector Innovation – The Basis For Success

A lot has been written over the years about both public and private sector innovation. Following the wave of managerialist reform in the 1980s and 90s it has been widely believed that the Public Sector could improve its innovation performance by looking to the Private sector. That is not the conclusion we drew from a recent comparative study of Private Sector CEOs and Public sector heads of agencies experience of innovation. Innovation was commonly pursued for different reasons irrespective of whether in the public or private sector. The approach adopted differed primarily based on the degree of uncertainty presented by the environment and whether the innovation was in response to an unexpected situation or part of a deliberate repositioning. The means available for being proactive, as well as the options available for managing uncertainty in the different contexts, most explained the difference between the sectors and the likelihood of a successful outcome.

The backdrop to the debate

Over the past few decades public sector innovation has been a hot topic in many countries. This has been in response to rapidly changing national and global circumstances requiring increased innovation in both policy and delivery to meet the needs of diverse stakeholders within limited budgets. While the need for innovation has increased there is a general perception that the public sector lacks the capacity to deliver it. This perception has been reinforced in the research literature, with the public sector frequently characterised as conservative, bureaucratic and reluctant to change. However, much of this past commentary has been based more on opinion (and perhaps a little prejudicial stereotyping) rather than solid evidence. There have been few direct comparisons made between the public and private sectors approach to innovation and none that considered both successful and unsuccessful innovations. As with all areas of public management, innovation in the public sector has been influenced by changing ideological conceptions of governance and public management. The New Public Management (NPM) of the 1980’s widely advocated the adoption of private sector management principles in Government. One of the implications has been a focus on the similarities between the public and private sectors in their approache to innovation, rather than the differences. We sought to understand what is unique about the public sector and what implications this has on the approach to innovation most appropriate to the public sector context.

How we did it

We collected 84 stories of innovation from the 25 CEOs and 20 Public Sector leaders (generally heads or deputy heads of Government Departments). Forty two of these stories were of innovation experiences which were successful and a further 42 unsuccessful. Detailed qualitative analysis was then undertaken to identify patterns within and between these stories. What this analysis overwhelmingly revealed was that, regardless of whether it was the Public Sector or the Private Sector, the way the leader thought about innovation was driven by the context they found themselves in and the problems they needed to solve – not some higher meaning or concept of innovation. Understanding and accounting for the context in which the innovation occurs is therefore crucial to the adoption of the best approach. The stories were drawn from a wide variety of contexts so we looked for those contextual characteristics that were common. Two characteristics emerged:

– The Level of Uncertainty the CEO/Head held about both their organizational situation and the environment it was operating in; – The Level of Pro-activity inherent to the CEO/Heads situation – whether the innovation was part of a planned strategy or a response to external triggers that needed to be incorporated.

Public V Private: What are the differences?

The first and most obvious difference was the existance of three quite distinct approaches to innovation in the private sector. Following the wider literature we labelled these incremental, evolutionary and revolutionary. The public sector, howerver, only displayed two, which we have called:

– Ministerial: innovation that occurs through interaction with and on behalf of the government’s political appointee; and – Departmental: innovation that occurs within a department and has been initiated internally and led internally.

Interestingly, and contrary to what many might expect, relatively few Public Sector innovations could be classified as incremental – characterized by low levels of uncertainty. This may reflect the generally more complex environment which the Public Sector confronts – particularly the diversity of stakeholders and interests which must be managed during any change to existing process. Secondly, the private sector interviews showed that the approach taken by the CEOs to different types of innovation can have a significant impact on the likelihood of success or failure. The same can be said of the public sector but the reasons for this are completely different.

Irrespective of whether a private sector CEO was reacting to an organizational circumstance or proactively innovating there was little difference in their likely success or failure. In the public sector the difference was dramatic. Indeed there was only one successful innovation from a reactive context in the public sector. Conversely the complexity or uncertainty appeared to have little impact on success for the public sector indeed the public sector had more revolutionary successes than failures suggesting a well developed innovation capability when circumstances are right – a finding which challenges those negative stereotypes!

There is a case for comparison or benchmarking between ‘Departmental’ innovation and the private sector. However ‘Ministerial’ innovation, presents such a significantly different innovation context that comparison with private sector approaches is of limited value. For example, comparisons are sometimes made between the role of the Board and that of the Minister and Government in terms of oversight of executive functioning. When it comes to innovation, the Board will generally take its lead from the corporate executive. In the public sector, in addition to performing an oversight role, the Government is an important source of innovation initiatives. Departments have an obligation to pursue political initiatives and these may be introduced with relatively little advance warning and with limited scope for modification or adaptation at the Departmental level. Consequently, public sector managers are far more likely to find themselves reacting than are their private sector counterparts.

A further and particularly significant difference is that the private sector assumes and accepts that failures are a normal part of innovation. The failures are acceptable as long as the successes outweigh the losses from a commercial point of view. This is reflected in the use of probability based approaches – an approach completely absent in the public sector profiles. In the private sector, return on investment is the ultimate measure of success. In this context, speed to market can be more important than a perfectly implemented idea. Removal of all uncertainty associated with the idea is a luxury that it cannot always afford nor indeed always need. By contrast, failure is not acceptable in the public sector due to the attendant political risks.

Historically the public sector, in many Western Democracies at least, has been very successful in the implementation of quite complex and revolutionary innovations – not least the extensive reforms of the 80s and 90s. However, it has arguably succeeded because it can use time as a resource to reduce uncertainty in a way that the private sector cannot. Innovation in the public sector then is highly sensitive to time and the quality of the idea, in a way that does not exist in the private sector.

It is significant then that of the thirty public sector stories collected we only had one successful story where the innovation was initiated in a reactive context. To put it another way, where the public service had little influence over the idea or the timing of the implementation, the chances of failure were substantially increased. The concern is that the public services in many countries may increasingly be confronting an innovation environment where reduced influence over the nature of the idea and the timing is the norm. The implication of this is that it removes some of the key strengths of public sector innovation, by reducing the time taken to implement complex public policy, and the ability of the public service to temper bad ideas through the reduction of uncertainty. If this trend is believed likely to continue, new models are needed designed to deal specifically with this environment.

Dr Chris Goldspink is an Executive Director of the Sydney Australia based research and consulting firmIncept Labs. The company helps SMEs, large corporates and Government deal with uncertainty in current and future environments by providing targeted research and supporting innovation, risk management, change and quality governance.

A Spider’s Web Advantage In Business Networking

Aside from securing you with effective business marketing online, entrepreneurs interested in joining networking groups also can receive perks as soon as they sign up in business networking sites.

The internet has made the world a smaller place for any person who has access to it. Proof is the mushrooming of so many social networking sites one can sign in for free. In these sites, there are always new things to do like, being introduced to new people, building ties, reuniting with long lost friends or engaging in forums with people all over the world. Entrepreneurs doing business online have their own networks, and they have their own perks too.

Business networking is a common phenomenon in the world of entrepreneurs. They are built for businesses to come together essentially to share business referrals and other business opportunities to one another in a more personal manner, in meetings they can have outside the circle. Because of such networks, businesses can have strong connections with each other when the need to expand arises or when there seems to be trouble in achieving goals. Through this system entrepreneurs extend their help to each other and at the same time establish important relations that could help each member prosper. Being a part of business network group is also a cost-efficient way to gain support from the business community while having people back you up in the promotion of your products and services. Some businesses need other business’ products and services, through networking businesses can find their best partners hence deals can be made without fuzz.

Business networking groups have also already established their websites for online businesses to avail of the benefits of being a part of a network. Business networking sites are functional for any online business because through them business marketing can be done in a breeze. The foundation of an online business is on how well products are endorsed and how much sales are made. Because everything online is fast-paced the threats of competition is doubled hence, the success of these processes could be hindered. The facilitation of the sale of their products or services can happen in a more effective way through business networking sites. Of course, because there are so many online businesses, there is also a lot of business networking websites to choose from, each offering different benefits and prizes for their members. Aside from being effective in business marketing online, there are also perks in joining business networking groups.

Online business networking groups provide big discounts for its members when they avail of products from their co-members’ businesses. Also, membership to this group that happens on the website is free and any member has a chance at their lotteries where incredible prizes are up for grabs. In other words, through a business networking website, any entrepreneur can instantly become a member and have the opportunity to create ties and widen opportunities.

Doing business whether it be in a small or large community, online or not is serious matter. Truly, there are benefits of joining a business networking group, just like joining an online social network, you get to know more people, exchange conversations and produce transactions. However, what is most important in being a member of any business networking group online is to know whether the services and the benefits offered really work.

Are you looking for an organization of members which run a powerful internet listing of businesses, products and search directories, also offering its members benefits, discounts, prizes and business networking? Then, just log on to Julio Martinez’s http://www.abclisting.net.

The Psychology of Innovation

On the practical applications of innovative ideas and the creation of value… and why the 21st century is the century of innovation

Innovation is not just creating something completely new, but creating a product that will be of value, especially commercial, economic, practical or social value. Thus creativity when associated with value and enterprise is innovation and an innovative product is “useful to others”. Innovation could lead to enterprise and commercialization as innovative products are commercially viable. Whereas an invention is creation of something new, innovation is the creation of a product or service that is valuable and useful to consumers. New and innovative products are sometimes radical and revolutionary, although there is incremental innovation that improves systems or products that already exist. Innovation helps in creation of commercial, practical or social value by implementing new ideas.

Innovation is applied invention and helps to create a new product to fill the unmet user needs in the market. An invention is a new product but could be a valued solution to a problem and only by becoming commercially, socially or practically valuable, an invention is transformed to innovation.

This discussion is based on the psychological basis of innovation and although innovation would be associated with creativity, creativity is a trait in humans and innovation is ‘what you do’. Thus innovation is a form of action that requires creativity, enterprise and radical thinking. Thus innovation being focused on creation of a product is action-oriented whereas creativity is thought-oriented. Enterprise is necessary to turn a creative idea into an innovative product that will have significant value in the short or long term. The psychological process of turning an idea into an innovation goes beyond the creative process and involves practical planning of designing and marketing the product to make it commercially viable.

Innovation involves the stages of brainstorming of a creative idea, problem solving, processing or developing it to come up with something radical and different and then developing a business model to help meet market and user needs. Creativity as a thought process is the first step of innovation. Innovation usually involves a new idea, method or product and either the art, technology or business of introducing something new. When ideas are translated to innovation, value is created and this forms the potential for business. Innovation is creation of a product with inherent value and this is done by considering what product will be of value to the user or will be successful in the market. It could be argued that even creativity is responsible for creation of products with aesthetic value or artistic value. Well, that is true but the value created by innovation is probably more objective, because innovation creates economic, commercial and social value.

The psychological processes in innovation differ from creativity as the action-oriented nature of innovation will have to be directed towards fulfilling a user or market or product need. In creativity, the only goal seems to be the creation of the product, although creative products like books can also be market directed. Innovation is specifically focused on meeting user needs, it is action-oriented, so it is based on applications or practical purposes. Whereas creativity being thought-oriented, primarily fulfills the needs of the creative artist and is directed internally, innovation is about the world and fulfills the needs of the user and market and is thus directed externally. Creativity also does not involve a focus on commercialization whereas innovation is about developing the commercial value of a product.

Creativity is the basis of art, architecture, poetry and any artistic or scientific activity for the matter. Innovation is invention with added value, is based on action and is thus more practical in its applications and tangible in its usability. Creativity and creative products are more abstract and not too well defined or tangible as far as their applications are concerned. The only application of creativity seems to be aesthetic pleasure and creativity is the basis of the aesthetic value of any product, including an innovative product. It is when creativity helps make products that are significantly useful to the market that it evolves to an innovation. Thus creativity is the foundation of all innovation, however creativity is not based on innovation. Creativity is the first step towards innovation and innovation is focused on delivering exceptional product or service to the value chain. In innovation, value is added for both user and developer.

The different components of innovation are creativity, radical thinking, business model, user needs, market, design and practical applications. Any new product will have to be well planned in terms of design and application and the business model guides the innovation to market launch and profitability. Thus the ultimate goal of creativity is providing aesthetic pleasure to the users or perceivers and the ultimate goal of innovation is meeting user needs and deriving profitability through commercialization.

Innovation could be about a radically new product or an incremental improvement, so innovation is about improvement whereas creativity is focused on originality. However the most original products are also considered as the most innovative. For example Apple Inc.’s design of iPhones and iPads are among the most original and that is why the most innovative. Thus originality is a common factor in both creativity and innovation and it is the basis of self-expression in creativity and the basis of a business model in innovation.

Innovation is frequently about revolutionizing drastically what already exists. The most innovative products bring about a paradigm shift in technology, or other market and sometimes ‘create’ market needs, rather than simply follow or meet the needs. Apple successfully created market needs for new technology and new design by integrating user expectations. Thus innovation not only meets market needs but can create new market needs and change market dynamics. Innovation is a commercial and business process, whereas creativity is more of a personal process and creativity itself cannot change the market, whereas innovation can change market dynamics significantly and can in fact change the world. Innovation is about evolution and progress of an industry, whereas creativity is more of about the evolution and progress of a creator’s mind.

Innovation is necessary in technology and in every industry to keep the pace of progress in human civilization. Innovation is usually preceded by an invention, whereas creativity is preceded by incubation and organizing the thought processes. Innovation is capable of revolutionizing the market, any industry and set the direction for future technologies and products. Let’s talk about search engine technologies by Google. That’s an innovative technology which brought about considerable profits to Google and thus transformed from a mere technology invention to innovation. So success of an invention defines an innovation. Innovation is used not just in technology but in architecture, automobile industry, engineering, and in all other fields and the primary goal of innovation is progress and also profitability by meeting or creating market and user needs.

The most successful companies thrive on innovation and cannot survive in the market without innovation. Today’s market is an innovative market and the focus is on competition in innovation. Whether it’s Samsung and Apple competing for the most innovative product in the market or two lesser known advertising companies competing for the most innovative advertising campaigns, innovation is the pulse of modern businesses. Even in the 20th century, innovation was not so important and the focus of businesses was on growth, strategy and advertising with emphasis on quality of products.

Quality management is what drove the 20th century businesses. This has changed significantly as businesses have now realized that to reach to the top and to become a powerful force in the market, quality and strategy are not enough. The 21st century will truly be the century of innovation.

This is part of a psychology series archived by a University and copyrighted.

Copyright 2013 Saberi Roy. This is part of a psychology series published as a book in Reflections in Psychology – Part I & II – by Saberi Roy (2009/2012) and archived on the digital archives of University of Iowa.

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Motivate Your Employees Using Quality Strategic Leadership Training

In today’s fast changing business world, there is an almost daily influx of ideas, programs, and technology that corporate leaders and managers in the United States of America and other countries need to address if they are to stay competitive. There is also the risk of your highly trained professional employees who are always on the lookout for more lucrative jobs and avenues to further their career.

Motivational Ideas

One of the ways to keep your employees motivated and challenged is to enroll them in executive leadership programs with specialized organizations to help them train and focus their goals and ideas. The expertise gained during these programs, usually conducted by industry professionals who know exactly how to instill leadership qualities as well as organizational development procedures in their potential business candidates. These professional organizations can observe your potential business leaders and select the ones they feel would be the best to improve your business with leadership and management skills. These executive direction programs help in highlighting the effort and time needed to teach future managers the strategies as well as fundamentals of how to enrich their ideals.

Leadership Qualities

They will assess your requirements and explain in detail what can be expected from the comprehensive guidance that the inductee will have to go through. Many companies are so confident in their abilities that they even guarantee Leadership Team Development qualities with a considerable improvement in productivity. They ensure wholehearted participation and completion of the training program with results that were envisioned by the management. In the United States of America, there are hundreds of outfits providing this sort of control training for the corporate world, but very few have the experience and qualities that are sought after worldwide.

Advanced Training

In the current competitive world of business, providing your managers, supervisors, and potential staff with executive level guidance training. This type of executive guidance and organizational development preparation is supposed to prepare your selected employees insight into creating headship vision qualities that will hopefully help them meet any challenges when leading your company’s operations. The thorough professional training highlights the basic concepts and principles of headship as well as enabling them to design, communicate, and execute their ideas, visions, and goals. This type of instruction program is not limited to large corporations, but is available to small and medium-sized businesses that can do their bit to level the playing field.

Strategic Leadership Details is a qualified Content writer and publisher for Business Growth. Review details on www.strategicleadershipsac.com to know more about Strategic Leadership and Organizational Development.