Leading Public Sector Innovation - Co-Creating For A Better Society

LEADING PUBLIC SECTOR
INNOVATION
Co-creating for a better society
Second Edition
Christian Bason
Published online by Cambridge University Press

First edition published in 2010.
Second edition published in Great Britain in 2018 by

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For Malene and our children,
Christopher, Julia and Lillian

Contents
List of figures and tables ix
Preface to first edition xi
Preface to second edition xiii
Foreword xv
List of abbreviations xviii
Introduction 1
Highlights from a global movement 4
A brief history of public sector innovation 5
Co-creating for a better society 7
A century of wicked problems 9
A double innovation challenge 11
Not up to the job yet 16
Towards an innovation ecosystem 21
one The innovation ecosystem 23

An ecosystem for public sector innovation 25
Consciousness: the innovation landscape 26
Capacity: building innovation potential 28
Co-creation: designing and learning 30
Courage: leading the public sector of tomorrow 33
Generating resilience 34
Part One: Consciousness

two Mapping the landscape 39
On the nature of public problems 41
Innovation: from idea to value 44
Where does innovation come from? 48
What types of innovation are there? 53
v
Leading public sector innovation
The value of public sector innovation 58

Viewing the landscape 61
How to do it 62
Part Two: Capacity

three Political context 67
Normative context 68
Expectations 74
Competition 76
Risk finance and the innovator’s dilemma 80
Out of the mental iron cage 83
How to do it 84
four Strategy 87
Key strategy concepts 89
Why are strategies for innovation important? 91
Approach: innovation strategy 93
Content: strategic innovation 97
Planning innovation? 103
How to do it 104
five Organising for innovation 107

The case for innovation collaboration 108
Public–public collaboration 110
Public–private innovation 115
Public–third sector innovation 119
Digital innovation in government 122
How to do it 129
six The rise of labs: prospects and pitfalls 131

The rapid emergence of labs 133
What is an innovation lab? 134
Towards a typology of labs? 135
Governing labs: a model 137
Future of labs: three stumbling blocks along
the Yellow Brick Road 140
How to do it 145
vi
Contents
seven People and culture 147

The future of work 148
Employee-driven innovation 150
Innovation culture, error and risk 153
Diversity as driver of innovation 158
Strategic competence development 161
Incentives 164
How to do it 166
Part Three: Co-creation

eight Design thinking in government 171
Design, innovation and the public sector 172
Defining design thinking 175
A model of the design thinking process 177
Four credos 180
Challenges to design in government 185
How to do it 187
nine Citizen involvement 191

What is the value of citizen involvement? 193
About professional empathy 194
The three myths of citizen involvement 196
Co-creating, co-producing 198
Informing about the present state 203
Creating a new future 208
When citizen involvement meets the design process 215
How to do it 215
ten Orchestrating co-creation 219

A process for co-creation 220
Framing 222
Knowing 225
Analysing 227
Synthesising 235
Creating 246
Scaling 251
Learning 258
How to do it 262
vii
eleven Measuring to learn 265

What you measure … 267
Measuring innovation 269
Assessing innovation potential 270
Learning from the innovation process 272
Measuring the value of innovation 274
Innovating the bottom lines 286
Using performance data in an ongoing leadership
practice 288
Outcome focus as an innovation driver? 289
How to do it 290
Part Four: Courage

twelve Four leadership roles 295
Between inspiration and execution 297
A typology of innovation leadership 299
The visionary: the political leader 299
The enabler: the top executive 302
The 360 degree innovator: the middle manager 305
The knowledge engineer: the institution head 308
About civil disobedience 310
How to do it 311
thirteen Epilogue: from decision making to future making 315
References 319
Index 337
viii
List of figures and tables
Figures
1.1 The public sector innovation ecosystem 25
1.2 Capacity: the innovation pyramid 28
2.1 Innovation defined 44
2.2 The knowledge funnel 47
2.3 The innovation space 57
2.4 Four ‘bottom lines’ – types of value of public sector 59
innovation
4.1 Bridging strategy and value 90
4.2 Coordinating the strategy and innovation processes 99
4.3 Maturation of innovation strategy 99
4.4 Gap analysis 100
4.5 Innovation effort portfolio 102
5.1 Public–private innovation 117
6.1 Governance model for an innovation lab 139
7.1 Public sector innovation compentencies 160
8.1 The design thinking process 178
9.1 Towards a new paradigm 199
9.2 Four types of citizen involvement 203
9.3 Forms of citizen involvement in the design process 215
10.1 The co-creation process 221
10.2 The iterative cycle of the co-creation process 260
10.3 The radical efficiency model 261
11.1 The four bottom lines of public sector innovation 275
11.2 Innovation and measurement process 278
11.3 Navigating the four bottom lines 287
12.1 The 360 degree innovation manager 308
ix
Tables
1.1 Conciousness 27
1.2 Capacity 30
1.3 Co-creation 31
1.4 Courage to lead 33
2.1 From incremental to radical innovation 54
2.2 The three dimensions of the innovation landscape 61
4.1 Strategic approaches to public sector innovation 94
4.2 Planning vs innovation 103
6.1 First, second and third generation labs 138
7.1 From traditional to flexible work arrangements 150
8.1 The new shape of design 174
8.2 Design thinking: bridging the gap 176
12.1 Between inspiration and execution 297
12.2 Summary of innovation leadership roles 300
x
Preface to first edition
This book could not have been written without the energy,
efforts and dedication of my colleagues at MindLab and in
the three national government departments we are part of:
the ministries of Economic and Business Affairs, Taxation and
Employment. Key insights and a number of the case examples in
the book are drawn from our experiences there. Special thanks
to Niels Hansen, who prepared our internal evaluation research,
to Jakob Schjørring, and to PhD fellows Jesper Christiansen and
Nina Holm Vohnsen, who have provided much of the input to
the chapter on citizen-centred research. I am indebted to my
former colleague and co-author Sune Knudsen for showing
me the value of design thinking, and to Kit Lykketoft for
managing MindLab while I wrote much of the book. Helle
Vibeke Carstensen deserves a special mention for constructive
critique from the particular vantage point of tax administration.
The wider national and international network of public
innovators, scholars and government officials that I have drawn
on and who have contributed in one way or another to the book
are numerous. I think most of you know who you are, and will
find your work in some way reflected in the following pages.
However, I want to especially mention David Hunter, Martin
Stewart-Weeks, David Albury, Geoff Mulgan, Valerie Hannon,
John Bessant, Sophia Parker, Brenton Caffin, Tonya Surman and
Justine Munro for exposing me further to developments in the
UK, US, Australia and New Zealand, for inspiring conversations
and for concrete inputs to the work.
Leading Public Sector Innovation also draws on my earlier work
on innovation in government, including a research project that
I headed at the consultancy Rambøll and two books I wrote on
the topic in Danish, published in 2007 and 2009. Some sections
are directly or indirectly inspired from these books.
xi
https://doi.org/10.46692/9781447336259.001 Published online by Cambridge University Press
During my writing, I have noted that innovation in

government is gaining momentum. From being an interest
mainly of academics a few years ago, public sector innovation
is quickly becoming a focus of public top executives and
politicians and, more importantly, of the middle managers and
project leaders who can get innovation off the ground. From
the UK, France and Denmark to Australia, New Zealand and
the US, public sector innovation is shifting from a ‘what’ to a
‘how’. Perhaps it is just a temporary trend. Or perhaps it is a
recognition that in times of turbulent change, just doing more
of the same won’t be even close to good enough. I choose to
believe it is the latter.
Christian Bason
Copenhagen, May 2010
xii
Preface to second edition
When my editors at Policy Press asked if I was open to publishing
a second edition of the book you are holding, I hesitated briefly,
but then thought ‘Why not? It’s about time.’ Since I wrote
Leading Public Sector Innovation in late 2009 and early 2010, the
idea and practice of innovation in the public sector has grown
immensely, in both qualitative and quantitative terms.
Qualitatively, we have gained a much better and deeper
understanding of what it takes to work systematically with
innovation in public organisations. Not only have a range
of governments – including those mentioned in my original
preface – made significant advances in innovation practice.
Some, ranging from the Australian government to Chilean
public services and the Norwegian health sector, have used the
book’s framework directly in their innovation strategies.
A range of international organisations, such as the European
Union (EU), the Organisation for Economic Co-operation
and Development (OECD) and leading civic organisations like
Bloomberg Philanthropies and Nesta, the United Kingdom
(UK) innovation foundation, have developed research, strategies
and policies to advance our understanding and practice of
innovation work for public purpose. Additionally, careful
academic research has been carried out, addressing themes like
innovation management in government or the rise of social and
public innovation labs.
Quantitatively, many more actors have joined the field,
ranging from cities and local government administrations to
national and international bodies, and the past decade has seen
a vast expansion in the adoption of approaches to create more
innovative services and policies. This has in turn contributed
a wider array of empirical cases and evidence to study –
constituting a mostly positive and reinforcing cycle of change.
xiii
So, this second edition of Leading Public Sector Innovation

necessarily entails a bit of stock taking. While respecting its
foundation, the text has been updated with additional cases,
examples, data and two all-new chapters on innovation labs
and design leadership. The new edition also reflects my own
growing experience in working with innovation in government.
After writing the first edition I worked another four years
leading the Danish government’s innovation team, MindLab,
before accepting the role of CEO of the Danish Design Centre,
a publicly funded institution committed to advancing the value
of design for business and society. The latter position has proved
to be a substantial learning opportunity, as I have attempted to
practise many of this book’s preachings in our work.
Since the first edition, I have also concluded a comprehensive
PhD research project among public managers who have used
design approaches in their innovation work. My findings have
also been published by Policy Press in a new book titled Leading
Public Design: Discovering the Next Governance Model. That book
is essentially a companion to the one you are holding now, as
it expands widely on issues of design, leadership and the future
of public governance.
I wish to thank Mme Jocelyne Bourgon for so generously
accepting to write the foreword to the new edition, and my
family – Malene, Christopher, Julia and Lillian – for supporting
yet another writing endeavour and having the patience and
loyalty to see it through once again.
Christian Bason
Copenhagen, April 2018
xiv
Foreword
One of the most important contributions of this book when it
first came out in 2010 was to return public innovation to the
forefront. The topic had been neglected for a number of years,
or treated from an increasingly narrow perspective. The focus
at the time was on innovation in public organisations. The purpose
was primarily to improve productivity or service delivery. Such
a narrow focus was in essence missing the big picture and the
importance of public innovation. Christian Bason’s book helped
to broaden the conversation and the perspectives about public
innovation. This is why, several years later, this book remains
important and relevant.
Christian Bason’s book helped to connect the concept of
innovation to the fundamental role of government and public
organisations, that is, to ‘generate new ideas that create value for
society’. This is a process of innovation and experimentation.
Governments are responsible simultaneously for ensuring
stability and for steering society through an ongoing process of
change. This delicate balancing act requires public organisations
with strong innovative capacity and a society with collective
learning and collective problem-solving capabilities. Generating
results that benefit society as a whole engages the responsibility
of the public, private and civic spheres of life, with government
being primarily responsible to ensure that the overall balance
will advance the collective interests. A number of authors
have since built on Christian’s contribution and expanded the
conversation further by exploring the unique role of the state
and the irreplaceable use of the instruments of the state to invent
solutions to public problems that stem from living in society.1
The second important insight of this book is that it is possible
to ‘consciously and systematically’ create innovative public
solutions. In other words, it should be possible to teach, learn
xv
and build the capacity of public organisations to invent solutions

to public policy dilemmas. It should be possible for public
administration faculties to prepare future public administrators
with a deep understanding of public innovation and the core
elements of the ecosystem needed to support it. It should be
possible for government to develop a curriculum to prepare
public sector leaders for the challenges of inventing solutions
to the increasingly complex problems of this time. We have
seen, since the publication of the first edition, a proliferation
of innovation hubs and centres, but it is still a far cry from a
systemic approach to public innovation capacity building. The
new edition may give new impetus to this most necessary work.
The third significant contribution will be the most obvious
one to the reader of this book. Christian Bason brings a design
perspective to his work. While design thinking can be applied
to any project, public or private, when it is applied to a public
initiative it inevitably brings a citizen-centric perspective to the work
of government. A citizen-centric perspective to policy design
and service delivery has a number of powerful consequences.
First, this encourages the active engagement of citizens in
working with government to invent solutions. In so doing, it
builds collective problem-solving capabilities. The book provides
numerous examples of the benefits of co-creation to generate
innovative solutions to complex public policy challenges.
Second, it transforms the relationship between government
and people. People are no longer mere users, beneficiaries
or consumers of public services but citizens with a shared
responsibility for the outcomes in areas of interest to them.
Today, the potential for a different sharing of responsibilities
between government and citizens is actively being pursued in
a number of countries. This includes the likes of co-creation,
co-production, technology-enabled self-organisation and so on.
The relationship between state and citizens is at the very heart
of a governing system. What will it mean to be a citizen in a
modern, increasingly pluralistic, global and interdependent post-
industrial society in the future? The answer to big questions is
embedded in seemingly small daily actions and decisions that,
taken together, will shape how we will learn, share and solve
problems together in the future. This book will help the reader
xvi
Foreword
to gain a broad view of public innovation and of the role of

citizens for a better future.
Jocelyne Bourgon
Author and President, Public Governance International
Note
1
J. Bourgon (2011) A new synthesis: Serving in the 21st century, Montreal:
McGill-Queens’s University Press.
xvii
List of abbreviations
B2G business-to-government
EU European Union
GPS Global Positioning System
NAO National Audit Office
NHS National Health Service
TSA Transportation Security Administration
UAE United Arab Emirates
UK United Kingdom
US United States
VPS Victoria Public Service
xviii
Introduction
‘In the name of doing things for people, traditional
and hierarchical organisations end up doing things
to people.’ (Writer and thinker Charles Leadbeater,
2009b, p 1)
It is an early and unusually sunny morning on Frederiksholms

Kanal, a cobbled stone street sitting along the channels in the
inner city of Denmark’s capital Copenhagen. Nestled within a
quaint courtyard, a newly renovated complex of 17th-century
buildings houses a range of organisations working to advance
architecture, design and digital innovation.
This morning a diverse group of people are meeting to explore
the future: government officials, business leaders, futurists,
healthcare specialists, technologists. Curated by a small design
team, they are meeting, about 40 people in total, to discover the
changing nature of healthcare. They are embarking on a journey
to help redefine health, shape new markets for health business
and provide a platform for preparing doctors and nurses for an
uncertain future where the only certainty is that the skills they
possess today will not be the skills they need tomorrow.
The project, titled ‘Boxing Future Health’, is ambitious in
its scope, but also very practical. The aims are, firstly, to create
three or four scenarios for the future of health in the year 2050;
secondly, to build those futures into 40-foot shipping containers,
in the shape of physical and digital exhibitions that can deliver
immersive experiences – including the sights, sounds and
even smells – of what living in different ‘health futures’ could
plausibly be like. What might the very concept of health mean
for a citizen living in 2050? For a health professional? For a
student of medicine? How would their behaviour be shaped by
1
the dominant culture, by technology, by markets, by political

decisions?
Some of the key project participants, such as medical device
manufacturers and other life science firms, see the potential
in unlocking new ideas for future products by engaging their
development teams, customers and partners in such tangible
deep-dives into alternative futures. Other participants, such as
the project director of a new, upcoming children’s hospital in
Copenhagen that aims to be the world’s best, is in the game
for the same reason – but on the opposite side of the table.
The director, Annemette Termansen, says that she is ‘highly
uncertain’ that the healthcare industry will be able to develop
the future solutions that the hospital will need to best serve
the next generations of mothers, newborns and critically ill
children. Annemette Termansen contends that the hospital’s
physical building can absolutely be beautifully designed (the
winning architectural project certainly is), but that won’t matter
if the right treatment and service processes and the technologies
to support them are not available.
This is why a third stakeholder group is engaged in the
‘Boxing Future Health’ project: universities and schools of
higher education in medicine and nursing, who urgently need
to imagine what the future of healthcare might be like so they
can educate doctors and nurses today for a future that at present
we don’t know what will entail. How do you perform as a
doctor in a world of artificial intelligence, precision drugs and
patients with mobile access to worldwide health knowledge at
their fingertips? What future for nursing and care if – and that
is certainly one plausible scenario – people will increasingly
be treated at home, not in hospitals or other formal health
institutions?
In the course of that sunny Copenhagen morning, these
diverse stakeholders have come together in a joint exploration
of the possibilities and pitfalls for healthcare in 30 years’ time.
They generate ideas together, they are inspired by challenging
presentations and they establish a common agenda for the
project as it starts unfolding.
Creating optimal conditions for creativity and imagination is
about ambition, about process, but also about the details and
2
Introduction
about playfulness: as the participants kick off the session they are
invited to taste an individually engineered croissant. To stimulate
the idea that in the future precision medicine and food will be
tailored to each of us individually, the participants are invited to
grab their personally baked croissants, each with different fillings
and toppings, each with a name tag to identify its dedicated
consumer.
Following the session, a digital summary is crafted by the
organising design team and is shared openly online to allow for
sharing, commenting, crowdsourcing and reflection in advance
of the next processes of the project – and to allow for the open
involvement of additional stakeholders. As more sessions follow,
the scenarios are prototyped in small scale, using simple means at
hand. Four rooms are converted into experiential spaces, using
light, sound and props to give early form to future contexts. To
immerse themselves in the future of citizens’ lives, the design
team has created a range of audio narratives that share stories
from the future, where radically different citizen experiences
play out under the different scenarios. These narratives are then
used by the experts to co-create ideas about potential actions
and strategies in alternative futures. A digital cataloguing and
conversation ensues, adding richness and content at the same
time as the group expands to involve philosophers, technology
experts and, not least, patients and citizens.
This example of how a public sector policy innovation process
can look and feel shows how the work of public servants can
benefit from innovation capacity – resources and platforms such
as facilitation experts, designers, physical space, artefacts and
online digital platforms. It illustrates how it is possible to co‑create
new opportunities across actors both inside and outside public
organisations, with the people and businesses that new policies
will impact on. It illustrates how alternative types of knowledge
and perspective, including visualisations, physical space and
media like audio narratives can contribute to shaping a common
understanding of key challenges and opportunities. The multiple
ways in which these Danish public servants, experts and health
professionals collaborated are all part of a growing trend:
embedding innovation in new ways in government.
3
Highlights from a global movement

The notion of public sector innovation – new ideas that create
value for society – is not new (Mohr, 1969; Hartley, 2005;
Mulgan, 2007). However, public leaders around the world are
demonstrating how a significantly more conscious and systematic
approach to creating innovative solutions can effectively address
some of our most pressing societal challenges.
This book argues that, in spite of significant barriers, it is
possible to systematically leverage the practices and tools of
innovation that are embodied by these organisations to create
radical new value. Case studies show that cost savings of between
20% and 60% can be possible while also increasing citizen
satisfaction and generating better outcomes (Gillinson et al, 2010;
Bason, 2017). In order to make such ‘paradigmatic’ innovation
much more likely to take place, leaders in government must
build an infrastructure of innovation – a public sector innovation
ecosystem. The ecosystem is built through four simultaneous
shifts in how the public sector creates new societal solutions:
• a shift from random innovation to a conscious and systematic

approach to public sector renewal;
• a shift from managing human resources to building innovation
capacity at all levels of government, including by establishing
dedicated innovation labs;
• a shift from running tasks and projects to orchestrating
processes of co-creation and co-design, creating new approaches
with people, not just for them;
• finally, a shift from administering public organisations to
courageously leading innovation across and beyond the public
sector.
Executing these four shifts within government is the essence of

leading public sector innovation. It implies specific challenges
and new tasks for public leaders at all levels – from the politician
over the chief executive to mid-level managers and institution
heads. It requires closing the gap between recognising that
innovation is important and doing something concrete about
it. Most of all, it requires courage.
4
Introduction
A brief history of public sector innovation

The growing momentum of public sector innovation has
evolved over four stages that, although they overlap, represent
distinctive steps forward. The stages roughly follow the overall
trajectory of public management since the early 1970s, which
Hartley and Bennington have characterised as ‘traditional’, ‘new
public management’ and ‘networked governance’ (Bennington
and Hartley, 2001; Osborne, 2010). Although all of these
conceptions still thrive in government, significant elements of
networked governance are seen in countries such as the UK,
United States (US) and Australia (Hartley, 2005; Goldsmith and
Eggers, 2004; Dunleavy et al, 2006; Hess and Adams, 2007;
Bason, 2017). The stages of the evolution of public sector
innovation are:
• Awareness
Looking back to the 1970s and 1980s, innovation in government
was largely a study object of academics (Mohr, 1969; Gray, 1973).
However, since the 1990s public managers have recognised
that innovation is not only a possibility; it is an imperative.
There has been a dawning awareness that government must
also be able to ‘reinvent’ itself so as to adapt to new challenges
and opportunities (Osborne and Gaebler, 1992). This stage is
by no means over, but many public managers in today’s fiscal
environment no longer question the ‘why’ of innovation.
• Cases and practice

The second stage had to do with not just recognising why
innovation is important, but also what it looks and feels like. Public
leaders may still not characterise successful change initiatives as
‘innovation’, but they have a sense of how the concept applies
to the public sector. For instance, novel uses of information
technology and Web 2.0 solutions vis-à-vis citizens are often
dubbed ‘innovative’. In addition, increasing academic interest
has meant that there is now a significant platform of research-
based analysis of the dynamics of public sector innovation
(Libbey, 1994; Borins, 2000, 2001a; Osborne and Brown, 2005;
Eggers and Singh, 2009; Bason, 2017). Since the late 1990s, we
5
have also seen a growing number of awards and recognitions

that highlight the best examples of innovation in government,
spanning from Harvard University Kennedy School’s long-
running Innovations in American Government Award to the All-
Africa Public Sector Innovation Awards, the European Public Sector
Awards and the Edge of Government Awards at the United Arab
Emirate’s World Government Summit.
• Barriers
The third stage, which also characterises much of the
conversation about public sector innovation today, has to do with
the inherent barriers and dilemmas that face public innovators
(Wilson, 1989; Mulgan, 2007). The list of reasons why
innovation in the public sector is hard to achieve is disturbingly
long and disheartening. And it isn’t new. The workings of
public bureaucracy and its negative implications for innovation
have been addressed from numerous angles, stretching back to
Graham Allison’s Essence of Decision on the Cuban Missile Crisis,
in which he stated that government bureaucracy is ‘indeed
the least understood source of unhappy outcomes produced
by the U.S. government’ (Allison, 1971, p 266). However, as
James Wilson (1989) stated in his classic treatise, Bureaucracy, we
ought not to be surprised that organisations resist innovation,
since they are supposed to resist it. His argument was that the
fundamental role of organisation is to reduce uncertainty and
introduce stability of routine. In other words, the very DNA of
bureaucratic organisations is resistant to innovation. I will share
my own summary of barriers later in this chapter.
• Practice
Beyond creating awareness and understanding barriers, some
organisations are now explicitly increasing the ability of public
organisations to make innovation happen. Government leaders
around the world, from Finland and Denmark to France, Chile,
Brazil, the UK and the US, are recognising that it is not enough
to wait and hope for random flashes of inspiration. For the very
reasons that barriers to innovation abound, public organisations
must consciously try to tear them down. As Bill Eggers of Deloitte,
a consultancy, and John O’Leary of Harvard’s Kennedy School
6
Introduction
point out in If We Can Put a Man on the Moon … Getting Big

Things Done in Government, there is still a long way to go. In
one telling comment, a US government senior federal executive
says, ‘policy design at the federal level is pathetic’ (Eggers and
O’Leary, 2009, p 66).
Innovation, like budgeting or human resource management,
must become a natural discipline in government. This implies
the need to reassess the public institutions that may have served
us well throughout much of the 20th century, but that may no
longer be fit for purpose in a global and networked knowledge
society (Bourgon, 2011). Public leaders must find better ways to
institutionalise innovation, setting up the structures and processes
and building the capacity that effectively embed innovation as a
core activity in the organisations they run. At the cutting edge
of this new paradigm is a different practice of leading innovation
in government: co-creation.
Co-creating for a better society

Co-creation, a term first used by management thinkers Prahalad
and Ramaswamy (2004), is used in this book to characterise
a creation process where new solutions are designed with
people, not for them (Sanders, 2006; Sanders and Stappers,
2008; Halse et al, 2010). This challenges how public managers
think about their roles in policy development, going far
beyond committee meetings, traditional stakeholder hearings
and customer research. Co-creation is strongly connected to
notions of ‘participatory design’, ‘co-design’, ‘design attitude’
and ‘design thinking’ – approaches that in recent years have
been emphasised as absolutely central to innovation (Boland
and Collopy, 2004; Brown, 2009; Martin, 2009; Polaine et al,
2013; Michlewski, 2015; Reason et al, 2016; Bason, 2017). As
illustrated by the collaboration across many different stakeholders
to design scenarios for the future of healthcare, co-creation is
to bring a different creative process, a different involvement of
people and a different mode of knowledge to the forefront of
public sector innovation and decision making. Involving people
inside and outside the organisation throughout the process of
creation is the key: recognising that everyone can be creative,
7
engaging people from other public agencies and institutions,

private actors, social innovators and, not least, end-users such
as communities, families and individual citizens and businesses.
There are at least two key benefits of co-creation: divergence
and realisation. Divergence means that a greater variation of
different ideas and suggestions are brought to the table, giving
public servants a wider palette of options to choose from before
decision making and implementation. Divergence is increased by
opening up the innovation process to new types of knowledge,
such as qualitative, ethnographic research, graphic visualisations,
audio-visual material, digital platforms and, not least, to seeing
the reality of citizens and businesses for oneself. Bringing such
knowledge into play among policy makers, their colleagues,
citizens and businesses (for instance in collaborative workshops)
triggers dialogues that can enable new common interpretations
of problems, challenges and opportunities (Hartley, 2005; Hess
and Adams, 2007; Scharmer, 2007; Polaine et al, 2013; Bason,
2014; 2017).
Successful realisation is another key benefit: co-creation anchors
the creative process with the people it concerns, whether
they are the IT developers in the neighbouring office (whose
commitment might be crucial to getting a new programme
operational on time) or the citizens who will ultimately use
the new services (who can help us to understand how the new
solution would work in their everyday lives). Such anchoring
greatly enhances the possibility of ultimate success (Attwood
et al, 2003; Ackoff et al, 2006; Halse et al, 2010; Polaine et al,
2013). The early ideation phase, where the first designs are
imagined, should in fact be viewed as the beginning of the
realisation of the policy. Eggers and O’Leary (2009, p 75)
therefore advise policy makers to ‘involve implementers’.
Connecting end-users and other stakeholders to the entire
creation process – not just to final piloting or implementation
– is a powerful key to driving public sector innovation. As an
ambitious study of more than a hundred cases of change in public
organisations shows, sharp increases in productivity, enhanced
service experiences for citizens and business, stronger outcomes
and increased ownership are possible to achieve – simultaneously
(Gillinson et al, 2010). Such radical efficiency, as the authors call
8
Introduction
it, is mainly generated by leveraging new (outside) perspectives

on how public organisations solve their tasks today and by
redefining the relationships between government institutions,
communities and citizens. I found similar results in PhD research
that I conducted between 2010 and 2016, which is published
in Leading Public Design: Discovering Human-Centred Governance
(Bason, 2017). Here, I found that by using co-creation and
design methods, public managers were often able to reframe
the very mission of their organisations. In turn, they used that
reframing to transform their organisation’s governance model
into one that was much more human-centric and that entailed
improvements both in outcomes and in increased productivity.
Co-creation can thus lead to radical solutions that overcome
the silos, dogmas and groupthink that trap much of our current
thinking, and give us more and better outcomes at lower cost.
A century of wicked problems

Public sector organisations seek to achieve politically desirable
goals. However, in a turbulent and changing world governments
are under pressure to increase their ability to deliver ‘good’,
while increasingly lacking the resources to do it.
‘Wicked’ societal problems that are complex and open for
interpretation, characterised by competing or conflicting
options for solutions, and which will most likely never be fully
solved, abound (Rittel and Webber, 1973). Chronic health
problems such as obesity and diabetes, an ageing population,
climate change, inner-city social problems and crime, long-term
unemployment and faltering educational systems are among the
most pressing challenges in modern economies. None of these
problems is easily dealt with; all of them require fresh thinking
and bold public leadership. Nineteenth- and 20th-century-type
organisational structures, processes and competencies will not
be sufficient to tackle those challenges. Unfortunately, the more
intractable the problem, the less likely government organisations
are to run the risks associated with addressing it (Bhatta, 2003).
As Charles Leadbeater, a British thinker, has said quite succinctly,
‘We are scientific and technological revolutionaries, but political
and institutional conservatives’ (Leadbeater, 2000).
9
However, new opportunities for addressing key societal

challenges and creating value arise from the forces of
new technology, social media and new patterns of citizen
engagement. What if governments saw each interaction with
citizens as a potential to add more value and meaning to the
relationship, to the benefit of both parties? Already we are seeing
the early contours of a new public sector, much more relational
and in touch with the behaviour of citizens and business, and
seeking out more intelligent intervention designs. Former US
Labour Secretary during the Clinton administration, Robert
B. Reich, predicted that while the global financial crisis
propelled government into new ascendancy, it would not
apply the same tools as in earlier eras of government power.
Instead of using ‘hard’ legislation to achieve social objectives,
government would increasingly rely on ‘soft’ interventions that
seek to alter behaviours among enterprises or citizens through
more subtle tools. The call to businesses would be to engage
with government, rather than to try to shield themselves from
reform, for instance in the case of healthcare (Reich, 2009).
Similarly, in Nudge: Improving Decisions About Health, Wealth,
and Happiness (2008), University of Chicago professors Richard
Thaler and Cass Sunstein (the former now a Nobel laureate),
suggest that we need to build appropriate ‘choice architectures’
in order to give people a sense of freedom of choice, but
within an environment that gently directs them towards desired
behaviour and outcomes. ‘Nudging’, according to the authors,
is creating the social architecture that alters people’s behaviour
in predictable ways that help to make their lives better. Since
their seminal book, ‘nudge’ approaches to change and public
policy have been applied across a wide range of policy domains,
from how people select insurance providers to choices on organ
donorship to loft insulation. And a range of ‘behavioural insight
units’ – dedicated teams deploying the methodology – have risen
in countries like the UK, the US, Denmark and Germany and
in the EU.
The approaches suggested by Reich, Thaler and Sunstein reflect
a deeper current that is pervasive in all modern governments,
but far from realised: the emphasis on citizens’ actual behaviour
and the search for smarter interventions that help governments
10
Introduction
to truly embrace an outcome focus. From online tax services

to schools to social work, public organisations recognise that,
ultimately, outcomes are what matter. However, outcome
strategies require a significantly deeper understanding of the
drivers of human behaviour and social change, and how to affect
them, than many of our current tools, methods and thinking
allow for. They require a consideration of how and when the
efforts of government can be better aligned with the motivations,
resources and efforts of citizens and business, and how mass
production and consumption of public services can shift to a
hybrid model: how can the division of labour in the delivery
of services meaningfully shift from government to citizens and
communities, to a mode of co-production and a more human-
centred governance (Bason, 2017)? As a consequence of these
developments, disciplines such as behavioural economics,
decision science, psychology and anthropology are increasingly
attracting the interest of public managers.
A double innovation challenge

Continuous organisational change has become the order of
the day in many parts of the public sector, driven by shifting
political agendas and a desire for action. The global financial
and economic crisis, starting in 2008, accelerated the trend,
spurring governments into new, sometimes spectacular, attempts
at reforming, restructuring and reorganising in the hope that
these initiatives would bring about large-scale productivity gains.
It has been said that a crisis is like the tide – when it recedes,
it makes everything visible. Whether the renewed visibility
of government that followed the global financial crisis will
ultimately help to transform the public sector to a higher
level of performance (at lower cost) is still not clear. Political,
socioeconomic, environmental and technological driving forces
are becoming more violent and unpredictable. Most economies
emerged from the crisis only to find themselves in new and
politically turbulent territory that called equally for inventiveness
and resourcefulness. Think only of the EU’s refugee crisis, of
Brexit, of the election of an unpredictable president in the US
– you get the picture.
11
No one thus seems certain about what the characteristics of

the future global economic and political order will be. What
does appear certain is that governments have become acutely
aware that their actions are central not only to their countries’
long-term competitiveness, but also to the very cohesion of
society. These and a number of other major driving forces are
shaping the acute need for public sector innovation:
• The productivity imperative

In spite of the relative ascendancy of government, citizens and
businesses expect the public sector to increase its productivity
and utilise taxpayers’ resources as efficiently as possible. However,
as management professor Peter Drucker pointed out more
than 30 years ago, government is more tuned to maximising
the use of inputs than to optimising its production model
(Drucker, 1985). The challenge is perhaps best illustrated in
the health sector: sharp productivity increases are becoming
an imperative as governments around the world must serve
ageing populations that live longer and demand higher-quality
care – while technology costs are exploding. For instance, in
Australia, the state of New South Wales expects health-related
costs to soar to 55% by 2032, up from just 26% in 2010 (Sydney
Morning Herald, 2010). In the US, booming health costs were
among the key motives for pushing through President Obama’s
healthcare reform. The case that opened this book is an example
of how public sector organisations, together with businesses,
are exploring new futures for the healthcare system: how can
government organisations radically increase their productivity in
times of scarce resources? Could it be necessary to reinvent the
entire system of healthcare? What about social support systems,
education systems?
• Growing citizen expectations

Citizens are increasingly used to world-class services in private
institutions, ranging from hotels and retail, hospitals and schools
to cutting-edge online banking services (Stewart-Weeks, 2010).
Many leading firms are not only inherently innovative and
service oriented; they are quick to adopt new technologies and
systematically enhance customer experience (Cole and Parston,
12
Introduction
2006). Many of them have leveraged new, clever models for

shaping closer and more personal, tailored relationships with
customers – often driven by digital solutions and available on
mobile devices. It is only natural that citizens expect similar
service innovations when they interact with government.
For instance, as senior citizens have become wealthier, they
increasingly want to be in charge of how they will be cared for,
and they certainly expect higher standards than the generations
before them. How can governments meet the ever-increasing
demands of a wealthier population for greater choice and quality
in public services?
• Globalisation
A highly networked and interconnected world puts governments
(and in particular, welfare states and quasi-welfare states) under
pressure (Hirst and Thompson, 1999; Pollitt, 2003; Osborne
and Brown, 2005). Taxes and customs, education, research,
environment, labour markets, not to speak of financial and
tax regulation, are just some of the fields of government
responsibility that are being challenged by increased economic,
cultural and social interdependence across the globe (Wolf,
2004; Friedman, 2005). As the pace of technological innovation
continues to accelerate, with the Amazons, Ubers and Airbnbs
of the world challenging existing business models, how do
public bodies stay ahead of the curve and find proactive answers
to new regulatory questions? How can governments work to
harvest the benefits of globalisation while minimising the risks
and pitfalls?
• Media
The news media cycle is becoming ever-more compressed and
demanding not just for politicians but also for the staff that serve
them. The rapid rise of digital and social media, in addition
to sharply increased competition among ‘old media’, has
intensified competition. The media focus on single-issue themes
and demand fast and accurate responses from government,
24/7 (Rosenberg and Feldman, 2008). Meanwhile the rise of
systematic manipulation of social media and ‘fake news’ means
that facts are being disputed more than ever before. How can
13
government effectively respond to the intensified media cycle

and ensure transparency, participation and trust?
• Technology
Technological innovations are a major driving force for
new public sector solutions in areas ranging from internal
administration to citizen services, new healthcare solutions and
the transformation of learning. As discussed above, technology
also drives globalisation, which in turn puts new pressures on
public organisations. The new digital technologies are often
also costly, and it can often be a challenge to accurately assess
the benefits of new public investments in advanced technology.
Meanwhile, citizens expect government to be at the forefront of
the uptake of new technology and to use technology investments
wisely for the public good (Cole and Parston, 2006; Eggers and
Macmillan, 2013; Mazzucato, 2014; Ramo, 2016). There are
also increasing concerns of how governments can regulate the
use of citizens’ data – both by private firms and by public bodies
– to ensure privacy and security. How can the public sector best
utilise new technologies to the benefit of society, without costs
soaring and without jeopardising citizens’ trust in how their
data is protected?
• Demographic change
An ageing and, in some cases, dwindling population is one of
the driving forces that is most commonly mentioned by public
sector managers when they talk about the need for change. First,
the cost of serving a larger population share of senior citizens
will be significant, putting government budgets under stress.
Second, government itself may be running out of talent. as
baby boomers leave the labour market, we are seeing a renewed
‘war for talent’ in the public sector. How can government be
competitive vis-à-vis leading private sector organisations that
may offer higher pay, more flexible working arrangements and,
perhaps, greater prestige?
• Shocks
Since the late 1990s, we have witnessed an almost unprecedented
series of systemic shocks that require immediate and concerted
14
Introduction
attention from public sector organisations. From the SARS

outbreak of 2003 to the terror attacks of 11 September 2001, the
devastating tsunami in South East Asia in 2004, Hurricane Katrina
in 2005, the Danish cartoon crisis in 2006, the EU’s refugee crisis
in 2015, the devastating Caribbean hurricanes in 2017, to current
and very real incidents of cyber terrorism – sudden crises have
challenged the ability of government agencies to respond rapidly
and effectively. Such ‘unthinkable events’ upset the institutional
surroundings and may redefine the rules of the game (Bessant,
2005; Taleb, 2007). Not all instances in recent decades (although
some) have demonstrated a high public sector innovation and
response capability (Kettl, 2009; Eggers and O’Leary, 2009).
• Climate change, sustainability and the global goals

Environmental sustainability has come to the forefront of
the public agenda, casting the public sector into a key role in
designing the strategies, programmes and (not least) regulation
that can help societies to achieve the ambitious goals of reducing
CO2 emissions and reducing the impact of global warming while
simultaneously managing a sustainable growth and employment
agenda (Friedman, 2008; IPCC, 2014). In addition, across nearly
every thinkable policy area, all the world’s nations have decided
to aim to achieve for 17 Sustainable Development Goals (SDGs)
by 2030. The SDGs are an ambitious framework, anchored
in the United Nations (UN) system, that is already inviting
governments in emerging and developed economies alike to
find novel solutions to the global challenges that they face.
It is highly likely that they will become significant drivers of
innovation –public, civic and private – during the years to come.
Devising effective schemes that are politically, environmentally,
socially and economically sustainable in the context of the SDGs
is yet another innovation challenge.
To sum up, these driving forces embody a double challenge
between adaptations to (planned, internal) ongoing public
sector reforms and objectives, on the one hand, and (emergent,
external) turbulent socioeconomic driving forces, on the
other hand. As Osborne and Brown (2005) have argued, it is
particularly the second type of factors that call for more radical
innovation in public organisations.
15
Not up to the job yet

Unfortunately, most public sector organisations today are ill-
suited to develop the kinds of radical new solutions that are
needed. The rate of change and the turbulent environment
dramatically increase the risk that public organisations will
lose even more of their touch with the enterprises and citizens
they are meant to serve. Research from, among others, the
US, the UK and Denmark shows that most modern public
organisations’ innovation capabilities are focused on internal
administrative processes, rather than on generating new services
and improved results for society (Eggers and Singh, 2009; NAO,
2009; European Commission, 2013; OECD, 2017). New ideas
mainly arise from internal ‘institutional’ sources (mostly public
managers themselves, and sometimes their employees), and
to a much lesser degree via open collaboration with citizens,
businesses or other external stakeholders. Innovation efforts are
typically driven by a few isolated individuals, dependent on their
personal initiative, willpower and luck. At all levels, from the
political and regulatory context over strategies, organisational
models, management style, staff recruitment, involvement and
incentives, to the relationship with end-users, the public sector is
characterised by numerous barriers to innovation (Wilson, 1989;
Mulgan, 2007; Bason, 2007; Eggers and O’Leary, 2009). Add to
that a lack of awareness or knowledge of the innovation process,
and lack of good and relevant data on how the organisation
performs, and we have an almost perfect storm crashing down
on any innovation effort. The result can at best be characterised
as random innovation, rather than strategic or systematic. In
particular, the following barriers to public sector innovation
come to mind:
• Paying a price for politics

First, the framework conditions in the public sector are rarely
tuned to innovation. Politically governed organisations can
be prone to keep and maintain power, rather than to share it.
Politicians sometimes (some would say often) prefer short-term
positive media exposure over what could be the most effective
long-term solution. Incentives for sharing tasks and knowledge
16
Introduction
among public sector organisations are not very high, and

internal politically motivated competition may overrule sensible
collaboration. The requirement to respect citizens’ rights and
equality before the law implies that it can be difficult to conduct
experiments that temporarily change the rights or benefits of
certain groups of citizens. Regulation of detailed processes in
local or deconcentrated government agencies may be needed
to ensure service quality and consistency, but such ‘standard
operating procedures’ can also be key barriers to creativity and
innovation. Often, funding for new and risky public ventures
is extremely limited (Borins, 2001a). A significant dose of
creativity may be needed by public managers in order to secure
funding in the first place (Bason, 2014; 2017).
• Anti-innovation DNA
Second, public sector organisations are hardly fine-tuned
innovation machines. In spite of the trumpeting of ‘re-invention’
and entrepreneurship (Osborne and Gaebler, 1992), many
of them still embody the type of hierarchy and bureaucracy
that private companies have been fighting to throw away
since the mid-1980s. In most countries, the public sector is
highly sectorised – vertically between administrative levels (for
instance in the US, federal government versus states, counties
and municipalities), and horizontally between distinct policy
domains. The possibilities, and perhaps the desire, to cooperate
across these divisions are not always present, in spite of a
growing demand for coherent and ‘joined-up’ government.
Organisational silos, traditional roles and lack of cross-cutting
coordination are still significant challenges (Pollitt, 2003; Eggers
and Singh, 2009). New forms of collaboration such as project
organisation, virtual organisations and dedicated innovation labs
have been considered exotic in many countries – although this
is changing. A conscious strategic approach to innovation is not
often found in public sector organisations. In most countries
there is no national strategy for innovation in the public sector
(although at least one country, Denmark, now has a dedicated
ministerial portfolio for that job). One would think, as Wilson
(1989) also points out, that most public sector organisations
were built to counter innovation, not to foster it. In fact, as
17
the chief executive of Nesta, Geoff Mulgan, points out in The

Art of Public Strategy (2009), there may be some truth in that: to
maintain stability in society, might we even want public sector
organisations to be somewhat slow, bureaucratic but (at least)
stable?
• Fear of divergence
Third, in many areas of the public sector there is, luckily, a
high level of professional identity. Patients in hospitals, parents
of pre-schoolers and senior citizens in nursing homes all value
that. But strong professional identity can also imply a mono-
professional culture that doesn’t allow for the constructive clashes
between different professions that is often a catalyst for radical
new solutions. Public professionals may feel that, due to their
education and experience as a nurse, a teacher, a social worker
or (perhaps especially) policy maker, they know more about
the citizen’s needs than the citizen does herself. Part of such a
strong professional identity is also to avoid error (Bhatta, 2003).
Avoiding failure is usually absolutely necessary in a hospital, but
maybe not always in a government agency seeking to develop
innovative new policy, or in a job centre that seeks to provide
more effective employment services. Of course many public
managers and employees do wish to create positive change. That’s
why many of them chose the job in the first place. But their
ideas aren’t always allowed to thrive. In Denmark, for instance, a
study showed that one in three of the staff in central government
did not feel that their talent and abilities were used fully in their
work (Danish State Employer’s Authority, 2006). To some extent
they have themselves to blame. Part of the reason is that there
is a significant discomfort: there is often a lack of willingness
to really, really explore which new ideas and solutions could be
possible. As co-founder of the design consultancy IDEO, Tim
Brown, has pointed out, the major innovation barrier in most
organisations is that leaders don’t allow for innovation projects
to diverge sufficiently (McKinsey Quarterly, 2008; Brown,
2009). They are afraid that the projects will never return to
address the original objective. While that may be a problem in
the private sector, it’s an even greater issue in the public sector.
Public managers and employees tend to shy away from the edge
18
Introduction
of something new, sometimes even before they know what it is.

Some of it has to do with lack of experience and competence in
managing the innovation process. But most of it is cultural: most
public organisations intuitively do not seek to be at the forefront
of a change agenda. Risk taking is typically not embraced, but
discouraged. Individual fire-souls are left without resources,
backing or incentives to develop, embrace and realise their good
ideas (Bason, 2007; European Commission, 2013).
• Where’s the citizen?

Fourth, most public organisations have a long way to go before
they honestly can claim that they are putting citizens’ needs
and their lived experience at the centre of their efforts. This
point has been at the core of observations by the OECD, the
European Commission and in several reviews of British public
sector innovation (OECD, 2005; Parker and Heapy, 2006;
NAO, 2006; 2009; Barosso, 2009; European Commission, 2012;
2013). Achieving administrative efficiencies is somehow more
natural to government than delivering high-quality services and
outcomes. It seems that public sector organisations are pretty
good at improving how to do things right (creating a smooth-
running bureaucracy), but not necessarily on how to do the
right thing (addressing the actual needs and problems of the
citizens they serve).
• An orchestra without a conductor

Fifth, in many public sector organisations there are few or no
formal processes for conducting the innovation process (Eggers
and Singh, 2009). Managers focus on budgeting, operations and
tasks, and employees may be highly skilled lawyers, economists,
doctors, nurses and schoolteachers – but few of them have formal
skills in creativity or innovation (Osborne and Brown, 2005).
At best, public sector organisations operate with highly linear,
stage-gate-type project processes (if they even have a formal
project organisation). However, innovation, particularly in its
early ‘front end’ phases, needs to focus more on co-creation:
open collaborative processes, iteration, active user involvement,
visualisation, prototyping, test and experimentation (Kelley,
2005; Sanders and Stappers, 2008; Brown, 2009; Service Design
19
Network, 2016; Bason, 2017). Many public sector organisations

simply have not put into place the formal systems, or built
the capacity among leaders and employees, that enable such
processes to take place. In particular, they have not put into
place the types of practices that may generate more radical or
‘discontinuous’ innovations (Bessant, 2005).
• Leading into a vacuum and the 80/20 rule

Sixth, while managers and employees in private companies
ultimately have one clear bottom line (are we making a profit
or not?), the ‘bottom line’ in most public sector organisations
is a lot more complex (Wilson, 1989). From healthcare to
social work to education, the outcomes of public regulation
and expenditure programmes are not as easy to assess as a
profit statement. But, without a clear and direct feedback
mechanism on organisational performance, how do public
sector organisations even know whether their innovations, to
the extent that there are any, are successful? While there has
been a growing culture of evaluation since the late 1990s in
most advanced economies, many public sector organisations
are still essentially navigating blind when it comes to real-time,
relevant management information on performance. Mainstream
evaluation studies are usually heavily retrospective, and often
arrive far too late to inform policy decisions in any meaningful
way (Pollitt, 2003). Although there is much good to say about
evaluation and evidence-based policy making, evaluation has
become such a prevalent tool in the public sector that it risks
overshadowing the need for faster, more experimental, forward-
looking problem solving. When it comes to their development
efforts, public sector organisations seem to spend 80% of their
energies on understanding the past and (at best) managing the
present, and perhaps only 20% of their efforts on systematically
exploring future directions for better policies and services.
• The scaling problem

Finally, one of the most significant challenges to realising the
potential of innovation in government is that of ‘scaling’. Too
many innovations stay locked in their location of origin, not
spread, scaled or diffused – regionally, nationally or internationally.
20
Introduction
Traditional methods such as best-practice publications,

websites, toolkits, command and control efforts, networks and
various forms of collaboratives have proved to be of limited
effectiveness (Mulgan, 2007; Harris and Albury, 2009; European
Commission, 2013). Even when studies show that if only
every local government, region, public agency or department
adopted the most innovative practices of their peers, it would be
transformational, it is extremely difficult to make ‘scaling’ happen
in practice. In the absence of a market mechanism, which in
the private sector generates significant demand for solutions that
can lead to a profit, how might we create an army of ‘willing
adopters’ (Mulgan, 2009)? What are the tools, approaches and
means that can scale public sector innovations from one domain
to all the domains that they might benefit?
Towards an innovation ecosystem

In spite of these barriers, public sector innovation obviously does
take place – every day. The examples that introduced this chapter
are cases in point. However, ‘random incrementalism’ still seems
to be the rule rather than the exception. New thinking often
happens by chance and against the odds, and the potential of a
more conscious, strategic and systematic approach to innovation
across public organisations and sectors is not realised. The
objective of this book is not to say that there is only one way
of leading innovation in the public sector. However, just as
great pianists master the entire scale on a piano to create truly
wonderful music, public managers and staff must master a much
broader range of ways to conduct their innovation efforts. At
one end of the spectrum are the more incremental, internally
focused change processes that we often see today. At the other
end is a significantly more explorative, experimental, open and
collaborative process of co-creation that can deliver more radical
change. Government needs both.
Unlike much of the work to date on public sector innovation,
this book is prescriptive. My ambition is not only to share an
understanding of the field, but to propose concrete ways forward
for leaders and employees – ‘to dos’ that significantly expand the
approaches and tools that are typically used today.
21
The book is shaped around the framework of an innovation

ecosystem, encompassing the four Cs of consciousness, capacity,
co-creation and courage. The ecosystem is introduced in detail in
Chapter 1.
I then explore how the level of consciousness of innovation as a
distinct, professional discipline could be raised among politicians,
public managers and staff, emphasising key concepts and
definitions of innovation and of the nature of public problems.
This section is covered in Chapter 2.
Second, how might the innovation capability of public sector
organisations be increased? What are the fundamental barriers
and the potentials that allow for creative processes to take place,
and that make innovation more or less likely to happen? What
are the key elements needed to make innovation part of the
organisational fabric? Capabilities are addressed in Chapters 3–7.
Third, what does it entail to create new ideas and concepts
through a process of co-creation, designing solutions with people,
not for them, thus expanding the scale of available innovation
approaches? What can design thinking bring to government?
What are the approaches to systematic involvement of citizens,
business and the third sector through ethnographic research and
collaborative workshops? How can the process of co-creation be
orchestrated in practice? And how can a continuous feedback
loop of learning and performance improvement be tied to the
innovation process? These are the topics of Chapters 8–11.
Fourth, what kind of leadership is needed at all levels? What
are the four roles of innovation leadership in the public sector?
And how can the task of leading innovation be understood
as shifting from a decision-making to a future-making stance?
These are the themes of Chapters 12 and 13.
The four Cs of the ecosystem are highly interdependent, but
do not necessarily have to be read chronologically. The book
may be read selectively, depending on whether the reader’s
interest is in the what of innovation (consciousness), the where
(capacity), the how (co-creation), or the who (courage). Taken
as a whole, however, the four Cs represent what I believe is
needed to finally bring government up to par with the daunting
challenges of the 21st century.
22
ONE
The innovation ecosystem
‘Governments cannot be complacent about their

ability to innovate.’ (William D. Eggers and Shalabh
Kumar Singh, 2009, p 12)
Melbourne, the capital of Australia’s state of Victoria and a

city of nearly four million people, is often touted as the city
of festivals. Indeed, a US visitor to the city wrote on her travel
blog that just during the week of her visit there were five
simultaneous festivals taking place: film, fashion, food, flowers
and comedy.
It should be no surprise, then, that the state’s public service
chose to launch its ambitious new Innovation Action Plan by
running an Innovation Festival. In late February 2010, the
Department of Premier and Cabinet, the Victoria Public Service
(VPS) brought together hundreds of public servants from across
the state administration for three days of presentations, seminars
and workshops. According to Maria Katsonis, a senior official
and one of its key sponsors, the Action Plan was the first
document she was aware of that had been signed by every chief
executive of the VPS. Aiming at bringing the public service’s
innovation efforts to a new level, the Action Plan addressed four
interrelated themes: creating stronger networks between people,
ideas and opportunities (through new collaboration software and
by creating an Advisory Group to steer the implementation of
the plan); building innovation capability (through recruitment,
skills development and making innovation tools available);
enhanced reward of best practice (through challenge and
awards programmes); and, finally, by opening up and sharing
23
information and data across the state government. The ambition

of the plan was clear: ‘Making innovation an integral part of
how we approach our day-to-day work will result in better
policies, better services and better value for the community’
(VPS, 2010).
As they gathered for the festivities, the public officials were
exposed not only to the new plan itself, but to a substantial
series of events that were designed to help them see what
innovation could mean to them in practice. From the dilemmas
of using new social media in government to how to involve
citizens in the innovation process, the festival became a starting
point for what would be a challenging but exciting journey.
With the Action Plan, the VPS did something that more and
more governments around the world have realised is necessary.
It laid down the first foundations of an innovation ecosystem:
an explicit, systematic approach to strengthening the awareness,
competencies and ways of working that can power innovation
within the public service.
Now, nearly a decade later, innovation ecosystems have been
built, adjusted, torn partly or wholly apart, and built again, in
a range of countries and city governments worldwide – some
inspired by the framework presented here. Each have, as they
should, found their own particular way of establishing the key
components, based on their particular context: history, culture,
forms of organising and governing public administrations,
depending on the opportunities presented by the political
environment. For instance, when the first major US innovation
lab opened inside the Office of Personnel Management (OPM)
in 2012, and later in 2014 when the White House team of
innovation fellows – ‘18F’ – was established, it was in many ways
a result of the ambitions of President Barack Obama to ‘make
government cool again’. This chapter introduces the framework
of such an ecosystem and addresses the following questions:
• What is the relevance of the concept of an ecosystem of

innovation?
• What are its key dimensions?
24
• What are the main barriers and potentials to public sector

innovation that characterise each of the dimensions of the
ecosystem?
An ecosystem for public sector innovation

To lead public sector innovation, public managers and staff
must develop and master four interrelated dimensions that
reinforce each other and together form an integrated approach.
Just like ecosystems in our natural environment, the different
components in social ecosystems are mutually dependent and
cannot flourish without each other. I therefore suggest that we
characterise the four dimensions of an ecosystem of innovation
in the public sector (Figure 1.1).
The innovation ecosystem proposes an integrated way of
looking at public organisations’ innovation efforts that includes
the key mutually dependent structures, processes and leadership
roles that can drive or impede change within and beyond the
public sector. Also, just like Victoria’s Innovation Action Plan,
it is a blueprint for action.
Figure 1.1: The public sector innovation ecosystem
COURAGE
(leadership)
CO-CREATION
CONSCIOUSNESS (process)
(awareness)
CAPACITY
(structure)
25
There are two sides to the innovation ecosystem: barriers

and potentials. For instance, a barrier to innovation that was
identified in Victoria was that public servants weren’t always
collaborating sufficiently across agencies. The potential that was
identified in the Innovation Action Plan was to build online
networks that could underpin more cross-cutting exchanges
of ideas and possibly more focused joint projects. This friction
between the inertia of bureaucracy and the promise of new
ideas in government, as was also discussed in the Introduction,
is classic, to the point where public sector innovation is often
characterised as an oxymoron. The dilemma has perhaps been
best captured by Eggers and O’Leary (2009), who pose the
question, if we can put a man on the moon, why can’t we
necessarily get big things done in government?
Public sector innovation thus happens in an ongoing tension
between constraining and enabling factors. The tables in each
of the sections below provide an overview of the key barriers
and potentials across the four Cs of the innovation ecosystem:
consciousness (awareness), capacity (structure), co-creation
(processes) and courage (leadership). Public leaders must address
all four dimensions of the innovation ecosystem to not only ignite
the power to innovate in the public sector, but also sustain it
over time.
Consciousness: the innovation landscape

At roughly the same time as the government of Victoria
pledged to build a toolbox for the state’s public innovators,
across the globe in Denmark, the Ministries of Economic
and Business Affairs, Taxation, and Employment launched
www.innovationsguiden.dk, a practical online portal designed
to enable their more than 20,000 staff to practise innovation
– adding another layer to their own innovation ecosystem. A
year earlier, in the UK, the county of Kent’s SILK innovation
lab collaborated with the consultancy Engine Group to create
a Methods Deck to share tools and approaches in public and
social sector innovation. Similarly in the UK, the Revenue and
Customs administration developed a toolbox, called SIMPLE,
in both printed and digital editions, about creative ‘customer
26
involvement’. Since then dozens, if not hundreds, of similar

types of digital infrastructure and method guides have been
built by public bodies to support innovative ways of working (to
the point where one could rightly ask why they are not being
shared more).
The reason for the proliferation of guides and tools is not hard
to find. To embed innovation in a public sector organisation it
is necessary to build, share and maintain a common language
and create awareness of key innovative practices. Without
shared concepts and notions about what it means to engage in
innovation, common meaning is blurred, leadership cannot take
hold and innovation efforts falter. Fostering a climate receptive
to change and innovation is crucial (Osborne and Brown, 2005;
Eggers and Singh, 2009; OECD, 2017). The Consciousness
section of this book offers components, models and frameworks
that can help to embed a common understanding and awareness
of what innovation means and why it is important. It explores the
character of problems facing public organisations and discusses
the relevance of the language of innovation to the public sector.
It provides an overview over the innovation landscape: some of
the key triggers of creativity and change in public organisations,
and analytical perspectives of what innovation is and the types
of value it can create (Table 1.1).
Table 1.1: Consciousness
Barriers >> Key factors << Potential
Not understanding The innovation Recognise ‘wicked’ and

the nature of public landscape complex problems
problems
Educate in innovation
CONSCIOUSNESS
No awareness of terminology
(Awareness)
innovation as a concept
Communicate examples
No recognition of what of own innovations and
innovation means innovators
in practice to the
Establish dialogue and
organisation
reflection about the value
No reflection over own of own practices
practices
27
Capacity: building innovation potential

Building innovation capacity is to increase the likelihood that the
organisation can effectively generate and execute the ideas that
it needs in order to tackle tomorrow’s problems. As Osborne
and Brown (2005) have pointed out, innovative capacity in
public organisations is a function not just of organisational
characteristics but also of internal culture, external environment
and institutional framework. Capacity is thus concerned with
the structure of the ecosystem, and how it can evolve or even be
(re)designed. Capacity can be thought of as a pyramid structure
– with the overall structural, institutional and political contextual
conditions at the top and the day-to-day practices within the
organisation – people and culture – at the bottom (Figure 1.2).
The innovation pyramid offers public managers a view of the
external and internal factors that they must take into account in
order to increase innovation capacity, and thereby the potential
of the organisation to innovate.
The barriers and potentials to enhancing innovation capacity
lie at all four levels of the pyramid (Table 1.2):
Figure 1.2: Capacity: the innovation pyramid
Context
Strategy
Organisation
Innovation labs
People and culture
Source: Adapted from Bason (2007)
28
• Political-structural context is concerned with the framework

conditions that public sector organisations, managers, staff
and end-users act within. This addresses the degree to
which fundamental democratic principles, administrative
frameworks, regulation and financing hinder or promote the
public sector’s innovation capacity.
• Strategy is the specific organisational arena where the need
for innovation links with the objectives that the public sector
organisation is pursuing. This domain deals with how strategy
can drive innovation. How can an innovation strategy be
formulated, and what is the difference between internally
and externally focused strategies for innovation?
• Organisation is also key. How to organise for innovation?
What is the potential in open, systematic collaboration with
external actors in the private and third sectors – approaches
that are already increasingly embraced by leading enterprises
(Chesbrough, 2006a)? How can a balance be struck between
focused innovation activities and ongoing service delivery?
Which methods and tools are available? What is the potential
of digitisation, new social media and e-government?
• Innovation labs are expressions of the ambition to systematically
embed innovation work inside and on the edge of public
organisations by establishing dedicated environments for
creativity and innovation to flourish. In this second edition
of this book, ‘labs’ have a full chapter, and their characteristics
and inner workings are uncovered. What makes labs
successful, and what are the pitfalls that can undo them?
• People and culture focuses on the people whose role it is – or
could be – to make innovation happen. This domain considers
the degree to which competencies, culture, incentives and so
on support innovation. Without managers and staff who take
responsibility for embracing new ideas, and who dare to take
a risk against the odds, innovation will not get off the ground
(Behn, 1995; Borins, 2001a; Osborne and Brown, 2005;
Hamel, 2007). The theme focuses on the individuals and
groups who carry the innovation efforts. How is a culture of
innovation promoted and anchored? What are the roles of
diversity, talent management and incentives?
29
Table 1.2: Capacity
Inflexible regulation Context Establish innovation

legislation
Lack of competition
Create innovation
No risk capital
incubators
Political climate
Make risk capital available
Explore the innovation
envelope
Task oriented; no overall Strategy Establish overall strategy
strategy for the organisation
No strategy for what Innovation strategy
innovation means to
Strategic innovation
the organisation
Strategic planning
Organisational silos Organisation Organise to power
collaborative innovation
(Structure)
CAPACITY
Random e-gov efforts

Create innovation labs
Lack of network
thinking Build new digital business
models
No place for innovation Innovation labs Establishing innovation labs
Lack of specialised Creating specialised teams
competencies inside and outside labs
No challenge to the Innovation stewardship
system
Top-management People and Active employee
driven culture involvement
Zero-error culture Innovation culture
Mono professional skill Increased diversity
profiles
Strategic competence
No strategic competence development
development
Innovation incentives
Lack of incentives
Co-creation: designing and learning

A third dimension of public sector innovation is to lead the co-
creation process, building on principles of design thinking and
citizen involvement, leveraging the potential of the organisation’s
30
innovation capacity to shape its future. The innovation process

is often thought of as a black box. However, drawing on global
best practice, including our experiences at MindLab, this
book aims to show how it can be orchestrated as an explicit,
systematic process. I will share the methods and approaches that
we’ve found to be the most effective.
The first element of co-creation is an appreciation of
design thinking (Table 1.3). This term is currently undergoing
significant exploration as an approach to innovation in business
and in government (Sanders and Stappers, 2008; Brown, 2009;
Martin, 2009; Verganti, 2009; Kimbell, 2010). I highlight some
key credos of design thinking and share examples of how they
apply to the public sector.
Table 1.3: Co-creation
No recognition of Design thinking Educate in design thinking

design thinking as
Institutionalise design
approach
principles
Lack of design skills
Recruit and source design
skills
No involvement of Citizen Involving citizens
citizens or businesses involvement and businesses in the
innovation process
Few experiences
and methods for New tools and methods for
involvement citizen-centred innovation
CO-CREATION
(Process)
No knowledge or tools Orchestrating Methods and tools to drive

co-creation innovation
Lack of platforms
Innovation labs as
platforms
No overview of Measuring and Know your innovation

potential learning metrics
Lack of feedback from Continually improve
innovation processes innovation processes
No data on value Measure four bottom lines
creation
Driving organisational
Lack of learning from performance
performance
31
Citizen involvement is also key. People – including citizens,

business and third sector actors – are not only at the receiving
end of public regulations, interventions and services but also
stakeholders and innovators in public policy. People relate
to the public sector as much more than clients, users or
customers. People relate to government as citizens who have
certain expectations, rights and powers, as well as benefits
and obligations. Citizens are at the same time beneficiaries,
paymasters and voters (Tempoe, 1994). However, there is a
rapidly growing recognition that citizens might also be sources
of inspiration and a driving force for public sector innovation.
New technology and social media offer new platforms for civic
engagement, opening up for potential mass collaboration in the
innovation process, and for de facto co-production of service
delivery. The chapter shares a range of approaches, methods
and concrete tools, from ethnographic interview techniques
to personas, which many public innovators are using to capture
citizen insight.
Co-creation ties design thinking and citizen involvement tools
together in a joint process. The chapter shows how public sector
organisations can relate effectively to citizens and other end-
users, and orchestrate the processes that involve them to create
better solutions that will have the intended value in their lives
and for the community. The seven steps of framing, knowing,
analysing, synthesising, creating, scaling and learning provide a
comprehensive and detailed process of co-creating public
solutions with people, not for them.
Managers and staff must also put into place the processes
that allow relevant data on performance to be collected and
brought into play to drive organisational learning, renewal and
accountability. How can measurement drive performance? How
to measure and learn from the value of innovation? This theme
includes a further consideration of the four key bottom lines
that express value in the public sector: productivity, service
experience, results and democracy. Will the building of new
performance management systems be killers or catalysts for
innovation and organisational renewal?
32
Courage: leading the public sector of tomorrow

Managers and staff must display the courage to lead innovation at
all levels, against the odds and in spite of the daily constraints
and pressures (Table 1.4). The overall challenge to public
leaders is to give up some of their power and control by
involving people – thereby achieving more power to achieve
the desired outcomes. This section addresses the various roles
that public managers play in the context of innovation, ranging
from the top executive to the head of a local institution, and
addresses how to lead change across complex organisations and
systems. The leadership roles are tied in different ways to the
innovation ecosystem.
• The visionary is the political leader, who must formulate the

vision and set the level of ambition, while overcoming the
temptation to interfere with ongoing experimentation and
development.
• The enabler is the top manager, who must be both protector
and the number one champion of the organisation’s
innovation ability.
• The 360 degree innovator is the mid-level manager; potentially
the largest barrier to fresh thinking and change inside
government, but also, at best, a 360-degree facilitator of
innovation.
Table 1.4: Courage to lead
Internal recruitment Four leadership Visionary leadership

roles
Diffuse relationship Clarifying the innovation
with political level space
(Leadership)
COURAGE
No tolerance for Encouraging and managing

divergence divergence
Four leadership roles
Emphasis on analysis as From decision Emphasis on designing new
basis for decisions making to options for decision making
future making
Decision focus Future focus
33
• The knowledge engineer is the head of institutions that deliver

services and enforce regulation, and that ultimately determine
how the public sector serves citizens and businesses – every
day.
Generating resilience
It may seem a daunting task to consider and address all levels
and processes of the innovation ecosystem at once. However,
leveraging all the four Cs at the same time increases the
likelihood, in a given context, that more and better ideas
can materialise and create value. In other words, building an
innovation ecosystem across all its dimensions greatly enhances
its resilience: its capacity to tolerate the pressures and disturbances
that will seek to diminish its stability and performance. For public
organisations to become true ‘serial innovators’ in a turbulent
external world coupled with strong internal bureaucratic and
conservative forces, resilience is critical (Mulgan, 2009; Stewart-
Weeks, 2010; Westley and Antadze, 2009). According to the
Resilience Alliance, a multidisciplinary research organisation
that explores the dynamics of social-ecological systems, resilience
is important to ecosystems because it defines:
• the amount of change the system can undergo and still

retain the same controls on function and structure;
• the degree to which the system is capable of self-organisation;
• the ability to build and increase the capacity for learning and
adaptation.1
These characteristics are enhanced by organisations that

strengthen all four of the dimensions of the innovation
ecosystem. As the art and practice of public sector innovation
emerges around the world, more and more organisations, and
even entire public sectors, begin to display the four dimensions.
Denmark is an example. Here, a number of initiatives have
been built to strengthen the innovation ecosystem – ranging
from innovation labs at state and city levels to programmes
for public sector service design to a wide number of training
offerings, including in design and co-creation methods. For
34
instance, the city of Copenhagen is training several thousand

civil servants in service design and co-creation. Regarding the
‘Courage’ part, in 2016 the newly formed government named
Sophie Løhde, a young politician and former health minister,
as the country’s (and, to my knowledge, the world’s) first
Minister for Public Sector Innovation. The minister’s mandate
is to develop initiatives to rethink public leadership as well as
promote a more coherent and citizen-centred public sector.
Like conducting a symphony orchestra, public leaders seeking
more innovation must activate multiple instruments, engaging
them all at once. Innovation capacity is built at the contextual
level, at the strategic and organisational levels and at the level of
people and culture. Putting the right processes in place, enabling
co-creation with citizens and powering continuous learning are
central. And finally, the courage to lead innovation is essential.
Note
1
Resalliance.org
35
PART ONE
CONSCIOUSNESS
THE INNOVATION
LANDSCAPE

TWO
Mapping the landscape
‘Innovation is a terrible word. But there’s nothing

wrong with its content.’ (MindLab, 2010)
Many would probably agree with the quote above, which is

from the communication strategy we established at MindLab.
Much like the term ‘design’, ‘innovation’ is so all-encompassing
and open to interpretation that it risks losing its meaning
(Stewart-Weeks, 2010). Perhaps that is why it is almost a given
at innovation conferences and seminars that some participant
will eventually ask ‘how do you define innovation?’
As discussed in the Introduction, public sector innovation has
evolved over a number of stages during the last four decades or
so, the momentum picking up pace, the discourse changing
from ‘what’ to ‘how’. Today, most public leaders tend to agree
that more positive change is needed in government, as societal
challenges ranging from ageing to chronic illness to increasing
productivity pressures are mounting. What is more difficult to
articulate is what innovation is, exactly, and in what way it is
relevant and meaningful to the organisation.
So, we do have to start with some definitions. Their number
is of course massive. The amount of literature focusing on
innovation in the context of business management and
entrepreneurship is huge and growing by the week. Arguably,
it started with the Austrian-born economist Joseph Schumpeter,
who famously characterised innovation as ‘creative destruction’.
He linked innovation to the rise of capitalism as the fundamental
impulse that kept capitalist society in motion through the
creation of new consumers, new goods, new methods
39
of production, new markets and new forms of industrial

organisation (Schumpeter, 1975, pp 82–5). Subsequent business
thinkers like the late C.K. Prahalad, Clayton Christensen, Gary
Hamel, Eric von Hippel, John Bessant and Henry Chesbrough
have expanded significantly on the concept of innovation,
adding new dimensions and layers onto the fundamental notion
of ‘newness’.
Uncovering how the insights of these thinkers, and others,
might apply to the complexities of the public sector across
sectors, levels and national cultures is no easy task. So why even
try? Because, as should already be clear, innovation is critical
to addressing how the public sector can better respond to the
massive and complex challenges facing our societies, just as it
is critical to businesses seeking the next source of competitive
advantage. Strategic, sustainable, ongoing innovation activity, as
opposed to one-off hits or misses, requires awareness. As British
professor Fiona Patterson, who studied everyday innovation
practices across more than 800 companies, said, ‘Our results
showed that organisations that clearly articulate what is meant
by “innovative working” are more likely to be successful in
their attempt to encourage innovative behaviours’ (Patterson
et al, 2009, p 12). Without a vocabulary, it becomes close to
impossible for managers to communicate, support and empower
staff to meaningfully undertake innovation activities. But
that doesn’t mean that innovation can’t happen anyway. The
efforts are just fewer and a lot less effective. According to the
UK’s National Audit Office (NAO), which has examined the
innovation practices of the UK central government, confusion
about the meaning and purpose of innovation among staff was
among the key barriers to generating innovative ideas (NAO,
2009).
Further, to understand why innovation – and especially more
co-creative and human-centred approaches to achieving it – is
needed, it can be helpful to remind ourselves of the nature of
the problems many public organisations are dealing with. In
fact, that ought to be a starting point for our consideration of
public sector innovation as an urgent priority: because many
public problems are ‘wicked’ and complex in character, there
is a sharpened need for managers and staff to access tools and
40
approaches that are fit for the challenges at hand. This chapter
therefore addresses the following questions:
• What kinds of problems do public organisations face?

• What is innovation in the public sector?
• Where does innovation come from?
• What types of innovation are there?
• What kinds of value can public sector innovation generate?
On the nature of public problems1

What if a significant part of the challenges we face in government
are of an entirely different class than our current institutions and
approaches were designed for? This is a question that more
and more public organisations are considering as they realise
that, despite massive investments of time and money, many of
the most urgent problems don’t seem to go away. Rather, new
ones jump to the forefront while old ones remain as sources of
expenditure and pressure on the public system.
The term ‘complexity’ is increasingly used to describe the
types of problems facing government organisations. Complex
characteristics, as opposed to complicated ones, refer to systems
with large numbers of interacting elements; where interactions
are nonlinear, so that minor changes can have disproportionately
large consequences; which are dynamic and emergent; and
where hindsight cannot lead to foresight because external
conditions constantly change (Bourgon, 2011; Bason, 2017).
A potentially even more helpful way of distinguishing
between problem types is between tame and wicked problems.
Tame problems can be understood as well-defined, technical
and engineering problems. These problems can be understood
and addressed through an appreciation and careful, systematic
assessment of their constituent parts. Although they may be
extremely ‘difficult’ or ‘complicated’ (Bourgon, 2011, pp 20–1)
or ‘hard’ (Martin, 2009, p 95), they can be addressed through
careful analysis. Here, it is relevant for decision makers to draw
extensively on knowledge of existing evidence and ‘best practice’
(Snowden and Boone, 2007). If one examines the language and
concepts deployed by most public organisations, they tend to a
41
very great extent to assume that problems are tame. Language

like ‘doing what works’, ‘solving’ and ‘fixing’ problems resembles
the language used by technicians and engineers – as if creating a
high-performing school system is the same as building a railroad.
The heavy focus on ‘big’ data and ‘analytics’ is also to some
extent connected to the view that if only we had a large-enough
calculator, we would find the ‘optimal’ ‘solution’ to the problem
at hand.
But what if problems are not something we can rationally
analyse and ‘solve’ in predictable ways?
Wicked problems were first characterised in some detail
by the academics Horst Rittel and Melvin Webber (1973).
They famously argued that a certain kind of problems are
better understood through examining the interrelations and
dependencies between their constituent parts, and by ‘probing’
to generate dynamics that reveal underlying and hidden
relationships. Arguably, a great many public problems fall into
this category. Wayne Parsons, an academic, has underscored the
particular character of public problems by reminding us that the
design of public policies is ‘a very different matter from that of
designing for a moon landing’ (Parsons, 2010, p 17). A similar
argument is put forward by Bill Eggers and John O’Leary (2009)
in their aptly titled book If We Can Put a Man on the Moon …
Getting Big Things Done in Government. The approaches needed
to deal with wicked problems are fundamentally different and
essentially require ‘probing’, experimentation, learning and
adaptation (Snowden and Boone, 2007).
Originally, Rittel and Webber put forward 10 criteria to
characterise wicked problems, the first among these being that
they have no clear or final definition, and so can be continuously
redefined. The original list contains some overlap and repetition;
for the sake of clarity Martin (2009) suggests that, ultimately,
wicked problems can be identified by four dimensions:
• First, causal relationships are unclear and dynamic. Root causes

of the problem are difficult, if not impossible, to identify;
they are ambiguous and elusive. Part of the reason for
this confusion around causality is also that many public
problems are ultimately behavioural. Scholars ranging from
42
Nobel laureate Daniel Kahneman in Thinking, Fast and Slow

(2010), to Dan Ariely in Predictably Irrational (2009) and
Thaler and Sunstein in their runaway success Nudge (2008)
and Sunstein in his more recent Simpler (2013) have pointed
out that human behaviour is not as easily understood as we
might like to think, and cannot be predicted with much
accuracy. Another part of the confusion around causality is
more political. In a public sector context the root causes, and
thus the very definition of the nature of the problem, can
be highly prone to ideological contention: is immigration
a problem or a resource for a society? It climate change a
problem or just a manageable consequence of the quest for
growth?
• Second, the problem does not fit into a known category; in fact
there are no ‘classes’ of wicked problems. Snowden and
Boone (2007) have argued that this implies that available
‘good’ or ‘best’ practices cannot be applied effectively
as a course of problem solving. This poses particular and
important limitations to the public management notion of
‘evidence-based policy’, which implies that policy decisions
should be based on solid knowledge of ‘what works’.
• Third, attempts at problem solving change the problem. Devising

potential approaches to the problem tend to change how it
is understood; and implemented solutions are consequential
in the sense that they create a new situation for the next trial;
so all solutions are ‘one shots’. This is not least the case in
the highly exposed domain of public policy, where as soon as
stakeholders learn of potential ideas, plans, laws or initiatives,
they start acting strategically and thus influence the policy
landscape even before any action has been undertaken. This
prompts the need for more iterative, nonlinear and possibly
more inclusive approaches – what Halse et al (2010) call
generative – ways of exploring and addressing the problem.
• Fourth, there is no stopping rule. Wicked problems do not

have any firm basis for judging whether they are ‘solved’
or not; as Rowe (1987, p 41) formulates it, they have no
43
‘stopping rule’. Solutions cannot be judged as true or

false, but merely as ‘better or worse’ (Ritchey, 2011, p 92).
Whenever a solution is proposed, it can always be improved
upon. Due to the indeterminacy of the problem definition,
other problem definitions will always be possible, and thus
entirely new solution spaces can be envisaged. In fact, one
can question whether wicked problems can ever truly be
‘solved’. In a public sector context this issue is hardened by
the many stakeholders often engaged in a particular policy
field, which can have wildly divergent notions of what is
‘good’ or ‘bad’ – based not on empirical or ‘objective’ data,
but based on ideology, power calculations or institutional
interests. This is something I will discuss further in the next
chapter, concerning the context of public sector innovation.
To conclude, there are strong arguments that the approaches

needed to achieve innovative outcomes in the public sector must
take account of the wicked and complex problem landscape.
Only by recognising the underlying nature of public problems
can managers identify the ways to best address them. That leads
us to the next question: How do we define innovation?
Innovation: from idea to value

I define public sector innovation as the process of creating new
ideas and turning them into value for society (Figure 2.1). It
concerns how politicians, public leaders and employees make
their visions of a desired new state of the world into reality.
The concept of innovation therefore places a laser-sharp focus
on whether the organisation is able to generate and select the
best possible ideas, implement them effectively and ensure that
they create value.
Figure 2.1: Innovation defined
Idea Implementation Value
44
Government organisations can take various roles in the

innovation process – placing the emphasis, respectively, on
the generation of creative new ideas, on their implementation
or on the continuous delivery of value. The challenge for the
organisation, and thereby for public leaders, is to consciously
balance these different roles. In spite of the mounting pressure
to embrace innovation, public sector organisations are usually
much more comfortable with the right-hand side of Figure 2.1
– delivering the same type of value over and over, in the same
way. Public bureaucracies are relatively good at maintaining
stable models of production; not so good at designing new ones.
As Roger Martin, former dean of Toronto’s Rotman School
and author of The Business of Design, has argued, this is also the
case for private enterprises. Most large organisations are effective
at delivering products and services according to algorithms –
stable and precise specifications of how to carry out a certain
process of production with high reliability (Martin, 2009). Mass
production of public services, exploiting the high returns to
scale of standardised, low-variance, high-volume delivery, has
been one of the great successes of post-Second World War
Western societies. From managing welfare payments to school
systems and hospitals, standardisation has been the order of
the day. But when the world changes, are our organisations
ready to adapt? Are they able, where necessary, to embrace the
more flexible ‘hybrid’ modes of production with the higher
degree of individualisation required in a complex, networked
knowledge society characterised by increasingly intractable
and wicked problems? Can they identify and define the new
approaches needed to battle spiralling welfare costs, failures in
our educational systems and the cries for more individualised
treatment of hospital patients?
Martin points out that most organisations are much less capable
of exploring the ‘mystery’ of what might be – and discovering
new approaches to creating value – than they are of executing
the algorithm of 20th-century-style mass production. But the
exploration of mystery is the starting point of innovation; a fact
that many public organisations today are forced to acknowledge.
The challenge is how to grapple with the early phases of the
innovation process, which are also referred to as the ‘fuzzy front-
45
end’, the innovation process looking more like a half-rolled-up

ball of yarn than a smooth ‘innovation funnel’ (Koen et al, 2001;
Sanders and Stappers, 2008). Defining innovation as the ability
to create new ideas and turn them into value for society thus
offers several important considerations for public leaders.
First, great ideas do not come from nothing. Of course,
people and organisations get lucky and a bright idea will surface
from time to time. As a panel participant said at an innovation
conference during the 2009 Swedish presidency of the EU: ‘Any
idiot who has ever taken a shower has also had an idea.’ But,
just as the fruits of Thomas Edison’s inventions were the results
of many years of focused, multidisciplinary and collaborative
team efforts in his workshop, public sector innovation is not
about luck (Leadbeater, 2009a). It is a conscious effort. It is hard
work. It is an emerging profession in itself. Innovation theories
and tools offer public leaders a way to think and a way to build
institutional capacity to systematically increase the probability
that mysteries will be explored and great ideas will be created,
surfaced, prototyped, assessed and selected. And to ensure that
there will be a minimum of barriers in their path as they are
moved through the organisation. How can such a capacity be
built?
Second, the ability to carry through with the most promising
ideas is critical. Without successfully executing the ideas with the
highest potential, there is no chance of innovation happening. As
Bill Eggers and John O’Leary have written, ‘The requirements
for achieving great things are two simple but far from easy steps
– wisely choosing which policies to pursue and then executing
those policies. The difference between success and failure is
execution’ (Eggers and O’Leary, 2009, p xi).2 Similarly, Martin
(2009) argues that organisations must be able to transform
the exploration of mysteries into heuristics: building a causal
understanding of what sequence or combination of actions
might generate the desired outcome. Public sector organisations
that embrace innovation as a way of thinking also recognise
that no innovation occurs until an idea has been realised and
makes a positive difference. The ability to quickly and efficiently
leverage resources behind new desirable efforts is not something
all public sector organisations can claim. But the most innovative
46
ones can. They systematically, rapidly and purposefully move

ideas forward, ensuring ownership, execution and scaling in the
process. Ultimately, they move along a ‘knowledge funnel’ from
mystery to heuristic to a new algorithm of how to deliver the new
policy or service efficiently to scale (Figure 2.2). They move
from idea to implementation to value.
Third, the emphasis on ‘value’ in innovation is key. Many
public sector organisations are not sufficiently aware of whether
or not they actually produce the good in the world that they
think they do. Once the ‘algorithm’ of service production
has been identified and is executed, how do we know that it
continues to work? Lack of relevant performance measurement
and management approaches means that public organisations
have great difficulty in learning systematically from their
innovation efforts. Ultimately, value for society has to do with
the four ‘bottom lines’: productivity, service experience, results and
democracy, which I present in this chapter and in Chapter 11.
To put the spotlight on innovation in any public organisation,
then, is to ask just a few questions: how do we create more and
better ideas? How do we select and validate the best ideas? And
how do we make sure that they are implemented and create the
intended value? Public sector innovation concerns governments’
ability to manage all aspects of this process, from start to end.
And – not least – back to the start again. As Martin (2009)
argues, the innovative organisation or, in his terminology, the
design thinking organisation is able to move consciously along
Figure 2.2: The knowledge funnel
Mystery Heuristic Algorithm
Source: Inspired by Martin (2009)
47
the knowledge funnel, diving into the exploration of mystery

and then moving to the exploitation of new ideas.
Where does innovation come from?

There are many ways of describing ‘where innovation comes
from’. Overall, there seems to be evidence that innovation is
more likely to happen in environments that are turbulent and
undergoing significant change. The sources of such changes
may be very different, including both external and internal
conditions (Mohr, 1969; Osborne and Brown, 2005; Mulgan,
2009; Bason, 2017). But what are the specific ‘triggers’ of new
ideas? Across the classic innovation literature, the following
triggers of innovation are often highlighted:
• Research and development

Academia and dedicated R&D efforts provide an innovation
trigger by creating new knowledge and insights about future
trends and technologies. For instance, the Brazilian government
runs its Centre for Strategic Studies and Management Science,
Technology and Innovation (CGEE), which among other roles
advises public agencies across sectors on long-term strategic
forecasting and trends. Similarly, the federal government of
Canada has since the early 2000s run Policy Horizons Canada, a
strategic foresight team. Such organisations help the government
to enhance its ‘peripheral vision’, spotting new trends and
emerging economic and social patterns that may require a
strategic response (Day and Schoemaker, 2006). In the more
purely technological realm, leading laboratories spanning from
DARPA and Bell Labs in the US to the Fraunhofer Institutes
in Germany and CSIRO in Australia have produced technical
innovations of great significance to the public sector, ranging from
the internet to the phone system and mobile telephony to audio
compression to WiFi; all of which were also wholly or partly
publicly funded (Mazzucato, 2014). Research and development
for the public sector can thus take place in universities and other
academic institutions, in think tanks or in dedicated R&D units.
In Denmark, there is a public programme for ‘industrial PhDs in
the public sector’, where government organisations are supported
48
to hire PhD students to conduct research in close collaboration

with one or more academic institutions. Similar models for
joint public–academic applied research exist in other countries.
However, the degree to which there is a strong tie and relevant
dialogue between public sector institutions and academia varies
quite significantly across countries. As a public manager, one must
ask: am I aware of domestic or international academic research
that could serve as a driver of innovation for my organisation?
Should I fund some? How might we collaborate?
• New technology
New technology is a powerful driver of public sector
innovation. The potential of digital government seems to be
accelerating – part of a wider context of emerging technologies
connected to what the World Economic Forum, and others,
have labelled the Fourth Industrial Revolution (Schwab,
2016). Improving productivity through internal administrative
IT systems is one obvious aspect, but more citizen-oriented
uses of digital technology are the real challenge. Effective
online tax services are mainstream in many countries today,
with Singapore, Canada, Sweden and Denmark as some of
the pioneers. However, digital public services are increasingly
critical across entire domains of healthcare, education, social
services and business and economic development support. In a
review of world-class public services, the UK Cabinet Office
summed up a range of ways that information technology can
drive public sector innovation, connecting government efforts
closer to citizens’ needs: provide outcome-based data online
to citizens so that they can make informed choices about the
quality of public services; open up information for use and
re-use, mobilising citizens to find innovative ways of using
public data; and harness the power of networks through new
interactive web technologies, for instance to facilitate more
dialogue between citizens and professionals (Cabinet Office,
2009). Increasingly, citizens expect these services and functions
to be available not only via their PCs but on mobile devices
too. And with the rise of artificial intelligence and machine
learning, public organisations are now experimenting with ways
to automate both administrative processes and interactions with
49
citizens. As a consequence, some of the new innovation labs in

government have focused particularly on making ‘digital’ a core
public sector competency – notably including the Government
Digital Services (GDS) in the UK and the digital innovation
team 18F in the US.
Despite some strong successes by these teams, whether it will
be sufficient to ‘insource’ more of digital development into
the public sector is still an open question. In the absence of
a market mechanism, what should be the incentive for public
organisations to search out and apply the newest technology?
Often ‘risky’ IT projects are avoided (or, alternatively, they are
implemented with huge cost and time overruns) and public
managers, staff and, ultimately, citizens miss the opportunities
for efficiency and service gains that are offered by new technical
solutions (Bhatta, 2003; Dunleavy et al, 2006). With the rise
of powerful digital offerings in the private sector (think of how
Google and Apple are entering the personal health space), there
could be a need for much more sophisticated private-public
collaboration to leverage the best of the digital revolution for
public purposes. The GDSs and 18Fs of the world should be
well positioned to capture the opportunity for innovative digital
partnerships across business and government.
• Efficiency demands
Efficiency demands are a significant trigger of innovation, for
instance when a treasury or ministry of finance carries through
expenditure cuts, and innovations are needed to find fast
efficiency gains. In the decade following the global financial
crisis of 2008, increasing the efficiency of public services
has moved to the top of the agenda. In Denmark, massive
efficiency requirements were the primary driving force behind
the innovation efforts at the Ministry of Taxation: over several
decades, the ministry invested in advanced online tax solutions,
reorganisation into virtual centres of competence, and central
call centres, to attempt to make efficiency gains of around 25%
over a few years.3 Longer-term and more systemic demands
for increased productivity are also strong innovation drivers; as
I mentioned in the Introduction, the Australian state of New
South Wales expects to see its health bill double over a 20-year
50
period. How will the state avoid budgetary disaster without

very significant changes in the operation of the health sector?
• Employee-driven innovation.
Employee-driven innovation is when the public institution
activates and leverages the experience and ideas of ‘ordinary’
staff across all levels and areas of the organisation. Also dubbed,
perhaps more appropriately, ‘everyday innovation’ (Patterson
et al, 2009), this is of utmost importance to any modern work
organisation. Rather than deposit the innovation efforts with
the experts in the R&D department, everyone must be involved
in the creative process. As Robert D. Behn (1995) and Sanford
Borins (2001b) have documented, new ideas can arise from
anywhere in a public organisation. They do not originate only
from top management or from dedicated ‘innovators’. Some
government administrations are already reaping the benefit of
this insight. For instance, in the Netherlands, the Ministry of
Public Works and Waterways has established a facilitated physical
environment, LEF, which can used by all employees and all parts
of the organisation as an incubator for innovation, bringing
out creative ideas and insights – one example of an innovation
lab, which I also discuss in a later chapter. In the US, the
Transportation Security Administration (TSA) has for a number
of years been running the Idea Factory, an internal secure
website that allows employees to submit innovative ideas (Eggers
and Singh, 2009). Studies show that such a broad involvement
of employees increases productivity and growth in private
sector companies (LO, 2006; Patterson et al, 2009). In public
bureaucracies, where there isn’t always a tradition of employee
involvement across organisational hierarchies, boundaries and
professions, employee-driven innovation seems to hold a major
potential. Usually it takes an organised (leadership) effort to get
off the ground, such as when VPS created online collaboration
platforms as part of its Innovation Action Plan. Employee-driven
innovation is considered further in Chapter 7.
• Citizen-centred innovation
Citizen-centred innovation is when organisations systematically
involve citizens, businesses and other end-users in the (co-)
51
creation of new solutions (Bason et al, 2009; Bason, 2014; 2017).

This approach combines harvesting in-depth qualitative insight
about people’s lives, for instance through ethnographic research,
combined with various methods for involvement through
workshops, town hall meetings, social media, crowdsourcing
tools and so on. It can also involve seeking out ‘lead users’
who are themselves innovators and from whom we can learn
lessons that can be adopted in new product or service offerings.
This type of innovation process has many different flavours and
implications, such as user-driven innovation, demand-driven
innovation, customer-driven innovation, human-centred design,
co-design and interaction design, to name a few (Kelley, 2001;
2005; von Hippel, 2005; Ulwick, 2005; Sanders and Stappers,
2008; Kimbell, 2015; Bason, 2017). Citizen-centred innovation
is taking hold in the public sector. In a number of countries,
ranging from the 27th Region innovation unit in France to the
Policy Lab in the UK Cabinet Office, the Lab@OPM in the US
and MindLab in Denmark, ethnographic research and design
approaches are being combined to explore interactions between
citizens and public services, and to identify how social outcomes
can be created more effectively. Citizen-centred innovation is
treated in Chapter 9.
Finally, and perhaps most fundamentally when it comes
to innovation in the public sector, we must remember that
political vision, or ambition for change among senior managers
in government, has always been a very powerful driver of
change. As I will discuss much more extensively in the two
final chapters of this book, the role of political as well as
administrative leadership cannot be over-estimated. Think of
the ambition to bring a man to the moon and return him safely
to Earth; of establishing the EU; of ending apartheid in South
Africa; of reuniting the two Germanys following the fall of
the Berlin Wall in 1989; or of bringing affordable healthcare
to all Americans. In each of these cases, strong political vision
was instrumental in opening up spaces for innovation and
change across major parts of government and, indeed, society.
In addition to such visionary policies at the national level,
the UN’s global sustainable development goals (SDGs) offer a
coherent framework that toward 2030 is likely to give ambition
52
and direction to a lot of innovation activity both inside and

outside government.
The triggers of innovation listed here are by no means
complete, nor are they mutually exclusive. An employee can
find a great idea for how to meet new efficiency demands. A
new digital service can be prototyped and tested with citizens
to explore how it might be most valuable in practice. And so
forth. However, knowing these innovation triggers can help
public managers to think more broadly about how they drive
innovation. Are we aware of new technological opportunities
that could be valuable in our policy area? Might we increase
our ability to obtain insights into the citizens’ experience, and
make that a driver of innovation? And, more fundamentally:
have we involved those closest to the problem, who have a real
stake in the changes necessary from implementation through to
the creation of value?
What types of innovation are there?

While everyone can agree that innovation is about creating
something new, there is often quite a bit of confusion as to
what this ‘newness’ is. Two key questions are: how new is it?
And in what way is it new?
The distinction between incremental and radical innovation is
usually helpful. Incremental innovation is a gradual improvement
of existing processes or products, while radical innovation is
characterised by entirely new processes or products. Radical
innovation typically is associated with higher degrees of
uncertainty and risk, and might happen through more
discontinuous ‘jumps’ or breaks from the current state, rather
than steady development (Christensen, 1997; Boyett, 1996).
Some scholars, including Osborne and Brown (2005), have
argued that ‘ordinary’ change should be seen as something
entirely different than ‘disruptive’ innovation. However,
like Professor John Bessant, a professor of innovation and
entrepreneurship at the University of Exeter, I believe that
innovation is better seen as a continuum. Change is, in this
view, a result of innovation. Table 2.1 adds a distinction
between systems level and component level, and also gives
53
Table 2.1: From incremental to radical innovation
Incremental Radical
(‘Do what we do better’) (‘New for us’) (‘New in the world’)
New editions of existing New generations of Digital government
System level
services (for instance an products and services

Sustainable
updated version of an (for instance digital
Development Goals
online tax service) patient journals in
healthcare)
Improving product New components or For instance entirely
Component level
components processes in existing new forms of

systems (for instance collaboration between
Improving single work
the introduction of lean schools, social workers
processes (for instance
management in public and police
improved human
administration)
resource tools)
Source: Adapted after Tidd et al (2005)
increased granularity to the spectrum between incremental

and radical with the category ‘new for us’, which is likely to
be where quite a few innovations belong. As, among others,
Sanger and Levin (1992) have pointed out, many innovations
in public organisations are better characterised as ‘evolutionary
tinkering’, where existing resources and solutions are combined
and implemented in new ways.
In what way might an innovation be new? Many attempts have
been made to categorise types of innovation. The challenge, of
course, is to strike a balance between detail and complexity –
and to use categories that make sense in a public sector context.
Hartley (2005) distinguishes between seven innovation types in
government. Tidd et al (2005) propose four types of innovation,
which together make up the innovation space and which, in my
experience, constitute a helpful way to think about innovation,
also in the public sector. The first two are the following.
• Process innovation focuses on the inner life of the organisation.

How are structures, work processes and routines organised,
and how does changing these factors increase the value of the
organisation’s outputs? When public sector organisations use
lean thinking to streamline case management and optimise
workflow, it is process innovation.
54
• Product innovation has to do with changes in what is delivered

to individuals and entities outside the organisation. ‘Product’
is the final output of an organisation’s efforts and so, in public
sector organisations, this could be services or, in a broader
sense, policy. When a school develops and implements
effective new learning methods, when financial authorities
change their way of regulating banks or when a foreign
ministry rethinks a key policy area, it is essentially product
innovation.
In the public sector, both process and product innovation

take place under different conditions than in private sector
organisations, and to some degree public sector innovation
should therefore be considered as unique (Koch and Hauknes,
2005). The complexity of the institutional surroundings and
the political context can make a fundamental difference (Bhatta,
2003; Pollitt, 2003; Hartley, 2005). For instance, processes can
be governed by national law, and so it is beyond the scope of
the individual organisation to change them, even if it would
make sense to do so. And the service that an organisation should
deliver is typically also regulated to some extent; in addition, a
wide range of stakeholders may have strong opinions about what
the services should be. For a retirement home, this may include
not only the seniors who use its services but also their relatives,
staff unions, politicians and the public at large. The political
context is thus a key component of the innovation ecosystem
that I discuss in the next chapter.
In service organisations, it can sometimes be difficult to draw
a line between what is process and what is product or service.
A new treatment in a hospital can be both a new process and a
new service. Building a new bridge is both product and service.
A distinction between process and service is that process starts
internally in the organisation: managers and staff must ask
themselves: ‘How do we do things optimally?’ Or, in other
words, ‘How do we do things right?’ However, the starting point
for service delivery is external. We must ask: ‘How do citizens,
businesses and others experience what we do? How does it
impact on their lives?’ Or, in other words, ‘Are we doing the right
55
thing?’ Tidd et al (2005) add another two categories to process

and product innovation.
• Positional innovation is when a product or service is placed

in a new context and therefore gains new significance for
users or targets new user groups. For instance, the town of
Horsens in the Jutland peninsula of Denmark was for decades
known as a prison town. When the local state prison was
shut down, however, the city reinvented itself throughout the
1990s as a centre for popular art and culture. Through a series
of mega-concerts with artists like Madonna, R.E.M. and
Bruce Springsteen, the city repositioned itself and became
attractive to new groups of citizens, including upper-middle-
class families. Suddenly it was cool to live in Horsens.
• Paradigm innovation is when the organisation’s existing mental
model is changed completely. In a number of countries,
public organisations that used to see themselves as controllers
find themselves in the middle of a paradigm shift to view
themselves as service organisations. For instance, when we
at MindLab worked with the national Board of Industrial
Injuries, it became apparent that the organisation needed
to shift from focusing just on settling insurance cases as
efficiently as possible to focusing on how best to assist injured
workers in their return to the labour market.
These four Ps, combined with the spectrum from incremental

to radical constitute the innovation space (Figure 2.3). The
innovation space gives us a coherent model for thinking about
what is the ‘newness’ of a given change.
Using the innovation space as a frame of reference is useful
in several respects. It offers a way to consider the organisation’s
strategic ambitions. What do we want to change? How much?
And what kind of change should we engage in? Some years
ago, in a Danish government agency, a project manager was
preparing to run a major strategy project stretching to 2020.
However, in spite of the long time horizon, to a high degree
the project was building on the organisation’s existing thinking,
systems and services. A colleague familiar with the 4P model
asked the project manager to take a look at the innovation space.
56
Figure 2.3: The innovation space

PARADIGM
(Mental model)
Incremental … radical
PRODUCT/
PROCESS INNOVATION
SERVICE/
Incremental … radical Incremental … radical
POLICY
Incrementel … radical
POSITION
Source: Adapted from Tidd et al (2005)
Was there anything even incrementally paradigmatic about it?

Or positional? The project manager acknowledged that perhaps
the scope should be reconsidered.
Most public sector organisations are rather good at process
innovation – often of the more incremental sort. Some are even
pretty adept at improving service delivery. But, while there are
plenty of calls for it, how many public sector organisations have
really embraced the idea of radical, paradigmatic innovation?
Opening up the innovation space can help us to consider a
wider range of options and start a dialogue about what the
possibilities could be beyond traditional process and product
innovation.
The innovation space is also a well-suited tool to map current
innovation practices. At MindLab, we carried out such an
exercise by interviewing a dozen mid-level managers in three
national ministries and their agencies. We asked: ‘Tell us about
something you helped to change, and how it happened.’ Building
on the detailed stories of these managers, our team then mapped
the results using the 4P innovation space as the framework. The
57
survey was used for a strategic discussion in MindLab’s board

about the three ministries’ innovation capability: how are our
efforts distributed in the innovation space? Are we satisfied with
the type and shape of current innovation activities, as relayed
to us by the managers? What might be the potential in a shift
from process and product innovation to paradigm or positional
innovation? Do we need more radical innovation? How could
such a shift be realised?
The value of public sector innovation

One of the strongest arguments for raising the level of
consciousness about innovation in the public sector is its
emphasis on value creation (Cole and Parston, 2006). Even
though the types of value that most public organisations exist to
create are very different than their private sector counterparts,
value is none the less intimately linked to the rationale of public
sector innovation (Moore, 1995; 2005). What is the value of
spending taxpayers’ money on government activities? How
do we know that an innovative new activity represents an
improvement over the past?
Raising the consciousness of innovation in government is
about making the case that innovation will help us to get more
of what we want. Innovation is what can bridge the gap between
the ‘stretch’ strategic objectives that are increasingly required
of public organisations and their achievement of concrete
results. The cycle from strategy to innovation to organisational
performance and value creation is two-way: first, strategy tells
us where we want to go. Innovation is the process of identifying
and implementing the approaches that we believe will help us to
get there. The contribution (value) of those approaches can be
measured in order to document whether we are in fact getting
closer to realising our strategy. Second, with that documentation
we can learn to what extent our innovation efforts worked and
we can (if needed) reassess the strategy.
This chain of causality is of course simplified; however, to
raise consciousness about innovation in the public sector it is
important to remind ourselves that innovation is just a way of
articulating what we do when we try something new in order
58
to achieve the success we want. Chapter 4 considers the role of

strategy in more detail.
In the private sector, success is ultimately measured in terms of
increased revenue, increased profits, increased shareholder value
or some combination of the three. What, then, does success, or
value, look like in the public sector? Cole and Parston (2006)
have pioneered the concept of public value, emphasising the
dual ‘bottom lines’ of cost-efficiency and outcomes. However,
I believe that more nuance is needed to capture all the key
dimensions of value in the public sector. Inspired by work by
the London School of Economics and the UK National Audit
Office (NAO, 2006; 2009), I propose the following model for
viewing the value of innovation in the public sector (Figure
2.4). Its foundation is a classic input–output outcome model
of public sector production. What it highlights (the circles) is
where different types of value of public sector innovation might
be generated.
The four types of value are:
• Productivity, which is an expression of the ability to achieve

a more favourable relationship between inputs and outputs
of public service production, such as when smarter work
processes allow an organisation to cut its costs, all other types
of value being equal.
Figure 2.4: Four ‘bottom lines’ – types of value of public sector innovation
Inputs Efficiency Outputs Effectiveness Outcomes
Productivity Service Results
Administrative Service Policy

innovation innovation innovation
Democracy innovation
Democracy
Source: Inspired by National Audit Office (NAO, 2006)
59
• Service experience, which can be measured by how citizens or

businesses experience public service delivery, such as how
patients would assess their experience of a hospital stay.
• Results, which are an expression of the degree to which
the outputs of public sector efforts (such as the number of
individuals placed in job training) in fact lead to desirable
outcomes (such as jobs). Results are ultimately what public
organisations are put into the world to deliver.
• Democracy, which is an overarching expression for the
different types of value generated by innovations that might
lead to increases in factors such as citizen participation and
empowerment, transparency, accountability and equality,
such as when online tax services give citizens insight and
control over their personal financial data. While they are
perhaps more difficult to capture, these types of societal value
are none the less important.
Creating value on just one or two of these bottom lines is

often not difficult for public organisations. Creating value on
some bottom lines without destroying value on another (such
as increasing productivity without diminishing the service
experience) is more difficult. As Cole and Parston (2006) discuss
in Unlocking Public Value, public service organisations must view
their production of value in terms of a ‘balanced scorecard’:
the challenge is achieving positive value on all bottom lines
simultaneously. That is difficult, but far from impossible. In her
treatise on the future of public administration, A New Synthesis,
Jocelyne Bourgon similarly argues that public bodies should
consider how to balance different kinds of results, ranging from
‘performance’ to ‘civic results’ to new emergent approaches
(Bourgon, 2011).
We are today witnessing an increasing number of public
organisations that are able to create better outcomes at lower
cost while improving the service experience (Gillinson et al,
2010).
The benefit of the ‘bottom line’ model for public innovators
is that it provides a coherent framework for thinking about
the kinds of challenges that innovation should address, how
they fit into the strategic model (or ‘theory of change’) of
60
the organisation and how they might be measured. I consider

measurement and learning from innovation activities in more
detail in Chapter 11.
Viewing the landscape

We have now seen three dimensions of the public sector
innovation landscape (Table 2.2).
It would be wonderful, at least for the analytically orientated
mind, if any given public sector innovation could be placed
neatly in this landscape. However, the ‘real world’ rarely
corresponds to our conceptual models, and this case is no
exception.
Innovation is never triggered by one source only. Employees,
citizens and other stakeholders should be part of the creative
process – in one way or another. Cutting-edge research and new
technology should always be taken into consideration, and often
plays a key role in the types of solutions that are created. And
political ambition, as well as leadership, obviously is of major
importance when it comes to large-scale innovations in public
organisations.
Placing a given change very precisely in the innovation space
can also be tricky. New products or services almost always
require a new process of delivery. Paradigmatic shifts may
fundamentally alter not just services but also the position of the
organisation vis-à-vis end-users or other stakeholders.
Generating new value on the ‘results’ bottom line may be closely
related to improving the service experience. Radically improving
services may have less-favourable implications for productivity.
Table 2.2: The three dimensions of the innovation landscape
What triggers How new is it, and in what What is the value?
innovation? way?
Research Incremental versus radical … Productivity
Technology Process Service
Efficiency demands Product (service/policy) Results
Employees Paradigm Democracy
Citizens Position
61
How to do it
Raising consciousness about the concept of innovation and its
implications for the public sector is not a very easy task. That
is why it is a responsibility for public leaders. To many people
within and, for that matter, outside the public sector, innovation
is a terrible word. Most civil servants don’t consider themselves
to be innovators. Innovation is still considered to be something
that takes place in laboratories deep within large R&D-driven
multinationals, or when engineering students mess around in
their dad’s garage, building the foundations for the next Apple,
Microsoft or Google. Lack of reflection on what innovation
means to the individual public servant and to the organisation
leads to a lack of learning and improvement of performance.
Given the formidable challenges that the public sector faces,
there is a need to formulate a concrete vision of what innovation
is and how it can help. Taking the lead in shaping that vision
will require public sector managers and staff to increase their
awareness of the key triggers and dimensions and the value of
innovation. The following efforts could be a beginning.
Educate in innovation terminology
A first step to raise awareness could be to make public sector

innovation as integral a part of bachelor’s, master’s and executive
programmes in law, political science, public administration and
economics as it is in today’s business and MBA programmes. A
second step could be to introduce the language of innovation in
internal educational programmes, such as project management
courses. For instance, at MindLab we delivered a comprehensive
training course in public sector innovation as an integrated
part of a cross-ministerial project management education.
The course focused partly on terminology, partly on real case
examples from people’s own experience and partly on ‘learning
by doing’ through hands-on field research and creative processes
like ideation and concept development. Meanwhile, because
innovation is still often a foreign word in a public sector context,
public managers must ask:
62
• What is an appropriate way to talk about innovation in our

organisation?
• How do we identify, create and maintain the opportunities for staff
at all levels to acquire a basic language of innovation?
Communicate what innovation means to us
Public leaders must help to shape the images and language used
about innovation in the public organisation. An extremely
powerful way to do so (and also a simple one) is to communicate
which practices and people are considered innovative, and why.
Building a shared understanding of what was done, how it was
successful and what kind of value it has given the organisation
is key. So, as a manager, one has to ask:
• What are our own successful cases and stories that exemplify what
we mean by innovation?
• What are the types of efforts and behaviours that we want more
of – who are our role models?
Reflect jointly on practice
One of the key barriers to innovation in today’s public sector

is that there is often a very diffuse understanding of the value
that the organisation is trying to create. If one asks front-line
service workers, they may answer ‘follow regulations’ or ‘deliver
quality’, as seen from their professional perspective. If you ask
managers, they may say ‘deliver on process metrics’. If you ask
top executives, they will be concerned as much with the political
and legislative process as with actual policy outcomes. And, not
least, and understandably, they will be occupied with how their
political leader performs in the media that very day. What is
needed is a common language across all these organisational
levels about what value the organisation should create, and how
we know it has been created. It is a leadership role to:
• Create the opportunities for staff at all levels to reflect on how they
innovate, and what the positive results are.
• Measure innovation activities and results to drive learning.
63
• Identify, together with staff at all levels, how they can strengthen
their efforts in practice.
One thing is to create a basic understanding of innovation

among public leaders and staff. Another is to build public sector
organisations that are highly likely to generate valuable new
ideas: organisations that have a high capacity to innovate. That
is the topic of Part Two.
Notes
1
This section builds on Bason (2017).
2
Here, Eggers and Singh do not, however, consider that innovation also has
to do with a third step – which really is the first one: creatively establishing
which options to choose between.
3
As most Danes are well aware, the innovation and capacity-building efforts
ostensibly did not succeed in keeping up with the cost-cutting. Following
multiple scandals, including failing IT systems, the Ministry reorganised
in 2017 and was provided with substantial multi-year additional funding.
64
PART TWO
CAPACITY
POLITICAL
CONTEXT
ORGANISATION STRATEGY
INNOVATION CULTURE AND

LABS COMPETENCIES

THREE
Political context
‘High-level government executives are pre-occupied

with maintaining their agencies in a complex, conflict-
ridden, and unpredictable political environment.’
(Professor James Q. Wilson, 1989, p 31)
Some years ago, the UK Department for Education set up

an internal unit to foster new thinking and new practices in
education, The Innovation Unit. Part of the legislation which set
up the unit included a clause called ‘The Power to Innovate’. This
enabled the Secretary of State for Education to set aside regulations
or legislation if schools could show that they constrained their
freedom to innovate – if the schools could show that the changes
they had planned would be likely to lead to the improvement
of standards. The role of the Unit was to advise schools on how
to go about this; and also to advise the Secretary of State on the
course of action to take. The ambition, then, was that the Power
to Innovate would help to eradicate central government barriers
to innovation. Over the course of the programme, the Unit
helped to approve applications to innovate in everything from
free school meals to international degree qualifications. However,
in most cases the Power to Innovate was not needed. The vast
majority of proposals were in fact capable of being taken forward
without any changes to the statutory or regulatory framework –
but teachers assumed that this was not the case.
In the case of UK schools, then, the legal and administrative
constraints on public institutions were more imagined than
real. However, not all policy areas and legislative regimes are
necessarily as conducive to innovation as it seems was the case
67
in the UK. Rather, public managers often experience that their

ability to design new solutions is hindered to some degree by
the conditions established by the existing political, regulatory
and budgetary environment (Bhatta, 2003; Moore, 2005). That
means that – in contrast to many innovators in the private sector
– public organisations must relate more actively to the political
and legal context in which they operate.
This chapter concerns the overall framework conditions for
the public organisation. Context is at the top of the ‘innovation
pyramid’ that I introduced in Chapter 1 and that includes the
different organisational dimensions that together characterise a
public organisation’s innovation capacity. This chapter discusses
key questions such as:
• What does the normative, political context mean for public

sector organisations’ ability to generate new and better ideas?
• How do citizens’ expectations determine the public sector
innovation challenge?
• What is the impact of competition as a barrier or driver of
innovation?
• What is the role of risk finance?
These factors determine the political-structural context for

innovation in the public sector, across policy domains and across
levels of governance; these are also the factors that may constrain
public managers and that in significant ways distinguish the
public sector from the private sector.
Normative context
A number of fundamental framework conditions are important
to keep in mind.
First, public sector organisations are (usually) democratically
governed. Their institutional, organisational and strategic
contexts are normative. Decisions and relationships are
negotiated, and surroundings as well as tasks have different
characteristics and a different dynamic than in the private
sector. As author and New York Times columnist David Brooks
pointed out in a commentary on the US presidency, ‘It is only
68
Political context
by coaxing, prodding and compromise that presidents actually

get anything done’ (New York Times, 2009). That goes for both
the political and administrative levels. Public organisations
need to respond to and interact with their environment at least
as much as they try to shape it. The innovation bottom line
that I’ve dubbed democracy is not only a value of the public
sector innovation process, but also a fundamental framework
condition (Bhatta, 2003; Mulgan and Albury, 2003; Pollitt,
2003; Bourgon, 2011). Public leaders will tend to focus more
on publicly authorised needs and legal accountability (van Wart,
2008). Values, ethics and intrinsic motivations all play a larger
role inside government than in private firms. The implications
for the possibility of coherent, long-term public sector strategy
and innovation are significant.
Second, expectations are high and complex (Osborne and
Brown, 2005; Eggers and Singh, 2009; Bason, 2017). Most
public organisations are not simply service organisations, they
are authorities with responsibilities, obligations and formal
competencies that relate to citizens and the public at large. Service
delivery and productivity – the two first bottom lines – are
therefore determined by both possibilities and limitations. Service
options may be severely limited by budgetary constraints and lack
of resources. The mode of service delivery is easily politicised. In
Scandinavia, for-profit firms are often not considered ‘suitable’
to handle certain ‘sensitive’ welfare tasks in areas like healthcare
or schooling. The opposite logic seems to be at play in the US,
where the spectre of near-universal, government-run healthcare
energised voters during the now infamous town hall meetings
on ‘Obamacare’ in the summer of 2009.
The third condition, competition, is also controversial. In
much of the literature, the absence of competition is highlighted
as a major barrier to public sector innovation. While competitive
pressure is among the absolute key drivers of innovation in
the private sector, since the threat of failure and bankruptcy
is omnipresent in the marketplace, what is the incentive for
government? As I will address later in this chapter, many public
sector organisations perceive themselves as being subject to some
degree of competition (Hartley, 2005). Some are truly operating
in a market, or pseudo-market. Others simply compete for
69
influence, resources and power. And finally, others are measured

and benchmarked to a degree where they are under severe
pressure to perform on the established metrics. So, many public
organisations compete, but often under different terms than
private firms (Moore, 1995). And public sector competition may
not play out so directly in the favour of innovation. Sometimes
to the contrary.
These framework conditions have implications for how
government is run and the ability of public managers and staff
to innovate. Public organisations find themselves in a constant
balancing act between enhancing their services and efforts vis-
à-vis citizens and businesses, while taking into account political,
institutional and overall public concerns. At the same time
public organisations must defend their raison d’être in a semi-
competitive environment. In the private sector, the innovation
challenge is largely about opportunities: how to identify them
and leverage them for competitive advantage (Martin, 2007).
In the public sector, the innovation challenge is much more
about problems: how to define them, what to do about them
and how to know whether they are being addressed or not,
taking into account that many of society’s wicked problems
will never, by definition, be entirely ‘fixed’. The public sector
innovation context can perhaps, then, better be described as
a set of dilemmas that managers and staff face, often in each
of their day-to-day decisions and service activities, and which
are not necessarily resolvable. The consequences of these quite
different operating environments for public managers and
staff are significant. They have to maintain their institutions
or agencies in a complex, unpredictable and conflict-ridden
political context, trying to accumulate needed resources and
perform under numerous constraints (Wilson, 1989). Two
parameters seem particularly difficult to manage in public
organisations: institutional surroundings and objectives.
Institutional surroundings
Nigel Tyrell, environmental manager at the London borough of

Lewisham, was the key driving force behind ‘Love Lewisham’,
a successful social media website. The innovative site – which is
70
Political context
now also app based – encouraged citizens to report trash, graffiti

and broken public infrastructure with their mobile phones so
that the local government can quickly identify and fix what
needs to be repaired (Prendiville, 2009). However, Nigel Tyrell
had to do a lot of convincing of his own colleagues in the
central IT and communications offices in order to get the site
up and running. First, it was against policy to establish a separate
external website beyond the existing website structure. Second,
because citizens (as the key stakeholders) were invited to take
photos of graffiti and trash with their mobile phones and upload
the pictures themselves, the site would, by definition, conflict
with the borough’s formal communication standards.
The institutional surroundings – stakeholders such as other
public organisations, interest organisations, media, citizens and
business – take up more space in public sector organisations’
environments, and require more active responses. The external
stakeholders have shifting and more complex interests and needs.
Further, the linkages and concrete contacts between the public
sector organisation and its surroundings take place at many
levels, not just at a central level. In Lewisham, the initiative to
establish the Love Lewisham website was not a top management
decision, but started at a lower management level. It illustrates
how it is often next to impossible to control stakeholder
relations. For some politically governed organisations this can
lead to institutional schizophrenia, and ongoing efforts to limit
and control who are the most important stakeholders. How do
we innovate in such an environment?
On the one hand, many public organisations attempt to
control and manage their institutional surroundings. A reduction
of their importance can provide more stability and continuity,
and increase resilience. A way to do so could be through a
tightly run external communication effort, and highly managed
top-level relations and negotiations. Such efforts may, however,
be innovation killers. And they will certainly not be helpful in
putting citizens and others of the most important stakeholders at
the centre of the organisation’s efforts, as we saw in the Lewisham
example above. Therefore, the innovative public manager will
need to take an active stand and be aware of how the institutional
context promotes or hinders innovation. Otherwise managers
71
will be governed more by internal limitations to stakeholder

engagement than by the overall objectives of the organisation.
The challenge is to learn to deal with the dilemmas and
ambivalence that are generated by the context. Complex
institutional surroundings can also be a source of inspiration
and lead to new innovations, for instance when private firms or
social entrepreneurs develop new valuable solutions that can then
be adapted or scaled by government. Such open innovation can,
in principle at least, be embraced more thoroughly by public
organisations, who are generally not as limited by concerns of
intellectual property rights and competitive differentiation as
private firms are (Chesbrough, 2006a). As I discussed in the
Introduction, and as we will see in later chapters, processes
of co-creation and co-design might be the most effective way
of capturing the multitude of interests through a conscious
process of creating new common ideas and concepts that can
be implemented by the public organisation, or co-produced
through partnerships and networks.
Objectives
Objectives and tasks, understood as the concrete strategic goals,

services or activities that the organisation must deliver, are often
somewhat more narrowly and deeply prescribed in the public
sector. Private firms can in principle choose to pursue a new
business opportunity from one day to the other (even if it is not
considered a core competence). Public organisations are usually
formally bound by agreements and regulations that determine
their activities. The complexity of the tasks themselves can
imply that the objectives and results themselves are further
complicated (Moore, 2005). Adding to the confusion is the fact
that, because objectives are essentially negotiated, it can be quite
unclear for large parts of the organisation how they are shaped
and decided upon (Mulgan, 2009). And even though they may
be formulated narrowly, their nature can be ambiguous. This
lack of transparency in how strategy is determined may lead to
confusion and disillusionment.
What are the implications for innovation? For one thing, some
public organisations deliberately seek to expand their objectives.
72
Political context
That could imply an increase in the scope and quality of citizen-

focused services, or the adoption of entirely new objectives
that didn’t exist before, or that were previously managed by
other public (or private) organisations. For instance, in the mid-
2000s the Danish Ministry of Taxation adopted a strategy of
becoming the ‘digital service provider’ for the entire public
sector, developing new services for other ministries and agencies.
Public managers will be prone to fight for their autonomy.
A number of dilemmas arise, however, as soon as the public
organisation moves beyond its formally defined objectives. It
risks initiating turf wars with other institutions (public, private
or third sector). Further, if an organisation doesn’t have the
resources to actually take on a new and perhaps innovative
objective, it may not have anywhere to go with it, as other
institutions are as limited in the formal purposes as it is itself.
An option could of course then be to identify new partnerships
or business models that might deliver. An example of this is
a Climate Consortium established by the Danish Ministry of
Economic and Business Affairs. Within the ministry’s rather wide
remit of facilitating growth and promoting a greener economy,
an alliance was established between industry associations,
large business and government to promote climate-friendly
investments in Denmark. The partnership was essentially a tool
to expand the ministry’ policy scope, and an implementation
mechanism at the same time. Some public organisations also
partner across national or state boundaries. For instance,
British Columbia, Canada has partnered with the US states of
Alaska, Washington, Oregon and California to foster innovative
solutions to environmental problems (Eggers and Singh, 2009).
Could the respect for determined tasks and objectives be a
barrier to innovation? Considering for a moment the 4P model
of innovation that I introduced in Chapter 2, there isn’t a lot
of positional innovation going on in the public sector. Roles and
tasks aren’t shifted just because a good idea arises, even if the
organisation might be competent at solving it. There may,
however, be a potential for cross-governmental collaboration,
if the courage is in place to work together to bring the solution
to reality.
73
Expectations
One of the most significant drivers of, but also barriers to,
innovation in government is how external expectations influence
everything from interactions with citizens to organisational
culture to top-level decision making.
Citizens’ rights and responsibilities
Government cannot merely think of the population as ‘clients’,

‘users’ or ‘customers’ (Tempoe, 1994). The notion of the citizen
is tightly connected with expectations of the obligations and
responsibilities of government agencies. Citizens in similar
situations, for instance families in need of assistance for a child
with special needs, expect that they will have access to the same
government services, irrespective of where they live or what
their income is. Close regulation of government procedures
and processes may be needed to ensure equality before the law.
From an innovation perspective, however, a high degree
of administrative regulation can inhibit not just potential
productivity increases but also the more fundamental possibility
of conducting experiments and pilots. The challenge is not just
how to deliver equal services to people in similar situations; it is
also to enforce the law in ways that go beyond ‘one size fits all’.
Could we treat citizens in similar situations differently, according
to their needs and perhaps even according to the likelihood that
interventions will lead to desired outcomes? As Attwood et al
(2003) have pointed out, the categories of ‘customer’ (which
for instance entails that we can tailor services to the individual)
and ‘citizen’ (which entails that everyone should have the right
to the same service) are not mutually exclusive – but there is a
friction or dynamic between them.
This touches on the dilemma between political ‘democratic’
imperatives, on the one hand, and public sector productivity,
service and results, on the other. One of the most costly but
also difficult areas of service and regulation is the control and
oversight of enterprises. In fields such as work environment,
food safety, tax and financial regulation, most governments carry
out regular controls. Now, should all businesses be controlled
74
Political context
at equal intervals, or is it acceptable to put in place a risk-based

approach where only industries or companies that are considered
highly likely to not comply are controlled regularly? As I
discussed in Chapter 2, legal regulations and citizens’ rights are
not just a potential innovation barrier. Innovations can lead to
increased transparency, public participation, empowerment and
government accountability, delivering value on the ‘democracy’
bottom line.
Avoiding error and failure
The expectation of public organisations is often that they will

avoid any kind of error. This often translates almost directly into
an internal expectation and part of the organisational culture:
‘To operate, manage, and innovate in this environment then
is rather difficult, which invariably, it could be argued, leads
to an attitude of aversion to risk’ (Bhatta, 2003). Diligently
avoiding failure in areas such as hospitals, policing, taxation and
the justice system and in other areas that affect people’s physical
and economic well-being is usually a good idea. However,
public sector organisations often take a very narrow view of
risk and failure, which in turn limits their innovation capacity.
Meanwhile, the consequences of error may be harsher in the
public sector than in the private. Part of this is the public sector’s
own doing, for instance when public managers won’t stand up
to criticism and instead try to pass the buck. Sometimes political
conditions mean that a sacrifice has to be made. As Marcel
Veenswijk (2006) has argued, entrepreneurial initiative and
the hunt for better solutions for individuals must be balanced
against the common interest and issues of accountability and
legitimacy. I take a closer look at key notions of risk and failure,
and innovation culture, in Chapter 5.
The glass bowl
Usually by law, public sector organisations are ‘glass bowls’

that media, citizens and other stakeholders can look into and
inadvertently find fault in (Mulgan and Albury, 2003). Public
access to government documents and internal communication
75
is very far-reaching in most democratic countries – and it is not

diminishing with the rise of the internet, new social media and
the blogosphere. The public scrutiny goes beyond questioning
the wisdom of decisions and strategies, to how the organisation
operates. So, whenever a novel activity is undertaken, and
risk is taken on, there is a possibility that someone outside
the organisation will want a closer look. Are public managers
courageous enough, and sufficiently confident of their practices,
to let the public in? An organisation like the borough of
Lewisham had the courage to open its process of identifying
and fixing streets in disrepair to the public – in return for the
public’s help in identifying the problems in need of fixing. But
most managers are content to share the process only when the
activities or methods are business as usual, tried and tested, or
there is ‘evidence’ that they work. Many are uncomfortable
with the unfamiliar terrain of innovation, where some of the
methods are new and where the results are often, by definition,
unknown.
Could the ‘glass bowl’ be used proactively as an innovation
driver? Some public organisations, such as the National Health
Service (NHS) in the UK and the Danish municipality of
Fredericia, which has kicked off a major Radical Innovation
project, already brand themselves through innovative practices,
organisational initiatives and strategies. They invite the public
to see how they work and try to come up with better solutions.
They also involve citizens, businesses and other external
stakeholders actively in the innovation process through co-
creation. It is, in other words, not evident that being an open,
inclusive and transparent public organisation is necessarily an
innovation killer.
Competition
‘A key driver of Victoria’s ability to compete against other
Australian states and international competitors will be the
degree to which the Victorian government is itself innovative.’
Thus begins a paper written to inform the Australian state of
Victoria’s innovation strategy, clearly indicating that competition
is not the domain of private business alone (Staley, 2008, p 1).
76
Political context
In the private sector, competition and the efficiency of

markets is generally regarded as the main source of innovative
pressure. However, the picture gets a bit more muddled in the
public sector (Røste, 2008). Often, the lack of competition
is mentioned as the key reason why government appears to
be less capable of innovating than private businesses are. But
there are clearly varying degrees of competition in the public
sector, ranging from clear-cut monopolies to near-free market
conditions. So, while some public organisations feel no
competitive pressure, others experience market dynamics as
fully as private firms do. Further, there are certainly examples
of monopolistic public organisations which nonetheless are
quite innovative. Competition or the lack of it does not in
itself explain innovation performance in the public sector. As I
will discuss later, the quality and ambition of public leadership
is probably at least as, if not more, significant.
Internal competition
In the early autumn of 2009, just two months before the

‘COP15’ UN Summit on Climate Change in Copenhagen,
Denmark, the chief negotiator of the Danish Ministry of Climate
and Energy stepped down – officially because of administrative
irregularities such as too-large expense and entertainment bills
(the negotiator had up to 200 travel days annually to woo other
nations as part of the negotiation process). Quickly, however,
the media speculated that he had been sacrificed in a power
battle between the Ministry of State and the Ministry of Climate
and Energy over which ministry would lead and, ultimately,
take credit for the negotiations in Copenhagen. Climate change
apparently lost that battle.
Even in instances of public monopolies, such as the relative
power monopolies of a ministry of state and a ministry of climate
change, the situation is usually not entirely free of competitive
pressure. Many public managers would admit that there is
significant (informal) competition over tasks and resources.
To some extent the competition is political and about power,
and to some extent it is also about core competencies. Both
may have been the case in the example above. Competition
77
internally in the public sector is often driven by very human

desires, such as the desire to do interesting things, to be at the
heart of important public agendas, to gather resources to be able
to do more interesting stuff and to receive public recognition
and respect (Pollitt, 2003). This can bring out the best in people,
but perhaps sometimes the worst. It may lead to new innovative
solutions and more efficient allocation of resources. When, in
the early 1960s, the US space administration, NASA, sought
the best method for achieving President Kennedy’s vision
of landing a man on the moon and returning him safely to
earth, three internal groups offered competing approaches. At
the time, NASA’s philosophy was to encourage dissent up till
final decision – according to NASA’s own records, because
‘competition, most people concluded, made for a more precise
and viable space exploration effort’ (NASA, 2004).
Citizen-driven competition
For many years now, travellers have had the benefit of the user-
generated hotel ratings of TripAdvisor and other similar services
when deciding where to stay on their next vacation. Increasing
numbers of public service organisations are similarly rated, either
online by users or by other agencies or international bodies.
In recent years, international surveys and benchmarks, such as
the OECD’s PISA reports on national educational performance
at different grade levels, have added to the transparency of
performance. In some countries, citizens are encouraged
to ‘vote with their feet’ and choose the public services that
best match their needs. Hospitals, day-care institutions, care
homes, schools and universities are to varying degrees and
under different governance mechanisms parts of such quasi-
markets, where their budgets may be allocated according to
usage (‘taximeter’ funding principles), or citizens are given
vouchers to spend on the services they prefer. Even if there
are no formal structures in place for user-based resource
allocation, other mechanisms might apply. Citizen satisfaction
ratings, benchmarking of performance and other tools, often
made available for public scrutiny online, introduce a degree
of competition by increasing transparency of performance. In
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Political context
the city of Stockholm, Sweden, for instance, parents can visit

a government-run website to compare staff-to-pupil ratios,
staff qualifications and user satisfaction with childcare providers
(Cabinet Office, 2009). This type of transparency puts the
pressure to innovate onto institutions, to brand themselves and
to deliver services and results that can help to raise them in
the league tables. Sometimes this is highly controversial. For
instance, some years ago in New Zealand there was significant
resistance when the minister of education wanted to post school
performance cards online so that parents could compare results.
Geographic competition
We have already seen that the state of Victoria considers itself to

be in competition with, among others, other Australian states
and territories. Likewise, deep in Silicon Valley, California, a
number of nations are competing to attract the attention of
venture capitalists and major technology corporations. Countries
such as Finland, Norway, Denmark and Sweden have established
outposts – often termed Innovation Centres or the like – in
order to support the establishment of national enterprises locally,
and to attract foreign investment back to their home country.
And in Denmark, as mentioned earlier, the city of Horsens
has rebranded and repositioned itself from being the country’s
prison city number one to being an attractive city of culture and
entertainment. A provincial city of around 40,000 inhabitants,
Horsens has, since the mid-1990s, attracted world-class rock
stars, creating an image that has attracted young families and
businesses to the region. The city has even transformed the
former prison into an interactive experience park, The Prison
(overnight stays are optional!).
Local government, regional states and even nations compete
to attract investments, people and resources across geographical
divisions. All of this activity spurs innovation. In Silicon Valley,
it’s about how to effectively address foreign investors and support
them with all the services needed for a smooth and non-
bureaucratic location in a Scandinavian country. In Victoria,
it is about attracting tourism, talent and investment. And in
79
Horsens, it’s about becoming an attractive city for tax-paying

working families via more than a decade of transformation.
Competition within the public sector not only leads to
pressure for innovation; it may also spur conflict and power-
games. But, in many instances, competition does seem to have
an innovation pay-off. The challenge is to be aware of how a
given mode of competition impacts on the incentives to innovate
– and to design the type of competitive environment that fosters
fresh and constructive thinking. As long as certain public tasks
are open for interpretation and not clearly defined, there will be
room to manoeuvre for internal competition. Public leadership
may be the only final determinant of whether that competition
will be used to drive innovation positively in the interest of
citizens and society – or to waste scarce resources on internal
power playing and killing trust, openness and collaboration. In
government, the power of leadership trumps the power of the
market.
Risk finance and the innovator’s dilemma

A final political-structural barrier to innovation capacity in the
public sector is the relative absence of risk capital. Living off
year-on-year budgets, usually with no possibilities for major
longer-term investments, public managers and staff are forced
into short-term thinking. Often, even seed money for small
experiments and ventures is hard to come by (Moore, 2005).
What is worse, innovations that have documented their value
and offer a potential for radical improvements in productivity,
service delivery or outcomes, but are no longer entirely novel,
often find it difficult to gain funding to go to scale. Harvard
professor Clayton Christensen has described this as the
innovator’s dilemma: just when a business has become really
good at producing some innovative technology at scale, and
achieved market dominance, it will usually be upset by some
disruptive new innovation, and market entrants will take over
(Christensen, 1997). And, given that the organisation has fine-
tuned its core competence and core product towards its core
customers, it will miss the opportunity and be more or less
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Political context
competed out of the market. It simply misses the gap between

the present and the future.
A related problem goes for societal innovations, whether
they are created by public, private or third sector organisations.
An example is the London, UK-based dance company Dance
United, which has found a novel methodology to engage
marginalised youth, including young convicts straight out of
prison, in contemporary dance classes six hours a day, five days
a week, for 12 weeks of intensive contemporary dance training
and performance. This ‘Academy’ model for young convicts,
which is conducted at the company’s branch in Bradford, helps
the youth t gain self-esteem and build new relationships that help
them to fulfil their potential. The results are remarkable, with
recidivism nearly 40 percentage points lower for participants
than non-participants (Dance United, 2009). The social and
economic return on the relatively small investment of around
£6,000 per participant per course is substantial. However, the
initiative in Bradford struggles to cover its front-line costs and
is therefore difficult to sustain at the required quality. Part of
the problem is that the innovation is no longer so new as to
attract attention from investors for that reason alone. At the
same time, it has not built such a major evidence base that it can
approach potential government sponsors with what they would
regard as a sufficiently solid academic record. In the words of
executive director Andrew Coggins at a seminar: ‘It is easier to
start something up on the back of an envelope than it is to scale
up something that works.’ Dance United is caught in a public
sector version of the innovator’s dilemma.
The political-structural dimension of venture finance for public
sector innovation is a truly considerable challenge. As Moore
(2005) has argued from the experience of a major innovation
project with the US Rockefeller Foundation, sometimes
philanthropic organisations can play a constructive role in
strengthening public sector innovation simply by providing
risk capital to fund activities with risk profiles that wouldn’t be
politically acceptable to the wider public. A major example of
this is New York-based Bloomberg Philanthropies, which has
invested widely in catalysing innovation in the public sector.
Through its funding of innovation teams in cities across the
81
US, and now also in France, and through its ambitious Mayors
Challenge innovation competitions, Bloomberg Philanthropies
has shown how visionary philanthropic organisations can make
a significant contribution to public sector innovation.
The discussion of funding for innovative ventures also
addresses the question of the funding of (long-term) preventative
measures. It touches at the heart of what British innovation
guru and author Charles Leadbeater calls ‘smoke alarms and fire
engines’: in a number of domains of our societies, we would
rather purchase more fire engines to put out fires than make the
social, organisational and (much smaller) financial investment
to help people put smoke alarms in their apartments (Guardian,
2009). We are somehow avoiding, at a systems level, investing in
the preventative solutions that could radically improve the lives
of our children and of older people and the environment. An
example of an organisation that has addressed such a preventative
challenge is Shack and Slum Dwellers International (SDI), an
umbrella organisation for national federations representing
the urban poor. SDI was originally built on the foundation
of member organisations from Asia and South Africa but
now covers 34 countries globally. SDI has responded to the
problem that people who live in shacks and slums are often
evicted and that their main challenge is not education or health
– it is to have a safe place to live. SDI therefore tackled the
root of the problem, helping dwellers to meet their immediate
housing needs. The way that SDI did this was to support
local communities to negotiate better relationships with local
and national government, build confidence and capacity to
undertake negotiations themselves (and even to build their own
homes) and, finally, to connect with other communities from
which they could gain learning and support (Gillinson et al,
2010).
Where is the public leadership that addresses such problems
and identifies and channels resources not just into innovative
new approaches but into system-wide scaling and adoption?
82
Political context
Out of the mental iron cage

This chapter was introduced with the case of the UK education
department, which extended licences to schools to innovate
even though, in most cases, the barriers to innovation were in
fact non-existent. We’ve seen that on a number of counts the
context of public organisations ought to almost totally inhibit
innovation. And yet, public sector innovation still occurs, all the
time. Might the political and structural context of the public
sector be more of a mental iron cage than a true barrier to
innovation? Are many of the perceived limits in our own heads
as public administrators and civil servants?
Or perhaps most public sector innovation is just not very
radical, and it is through incrementalism over a sustained
period of time that real public sector transformation occurs
(Bessant, 2005; Moore, 2005). Stone is placed on top of stone,
and, some day, looking back, we are able to acknowledge real
achievements. Some public sector reforms undoubtedly can be
judged that way, just as the emergence of e-government did
not herald revolutionary new services overnight but slowly,
sometimes even clumsily, delivered improvements in access to
public services until we one day realised that we had witnessed
a decade-long technological revolution. The same is often the
case in the private sector (Kanter, 2006).
In fact, in the UK Department for Education case that
introduced this chapter, schools were highly conservative in
terms of the proposals they put forward, believing perhaps
that those that really would challenge the government’s (then)
prescriptive approach would simply not be approved. Whether
UK schools were in fact deliberately limiting their own creativity
in order to increase the likelihood of approval will of course
never be known. But such an incremental pace of change may
harmonise better with the mechanisms of governance (including
the budgetary processes), and perhaps with the nature of politics
and government as a social stabiliser (Mulgan, 2009).
What is certain, however, is that the external drivers of
change that I considered in the Introduction call for more
radical innovation – and a permanent state of alertness to new
solutions. Long-term future challenges in areas such as ageing,
83
health, immigration and the environment are sufficiently

serious as to call for more disruptive, systemic changes in our
approaches to prevention. This entails that politicians and top
government administrators must acknowledge and act on their
responsibility to tune the political-structural context more in
favour of innovation. There just may not be enough time to
wait for incrementalism.
How to do it
This chapter has emphasised that the contexts of public
organisations play a key role in setting the scene for innovation,
and can work either as barriers or as driving forces for innovation
capacity, depending on how the system is structured. Some of
the potential barriers include inflexible regulation, lack of (or
negative, zero-sum) competition, absence of long-term risk capital
and a political climate that is increasingly focused on the short
term and is averse to risk. However, public organisations can play
a proactive role in shaping their external environment in order
to enhance their capacity to innovate. From the discussion in this
chapter we can take away at least three concrete initiatives that
might help to increase the innovation capacity of the public sector.
Establish innovation legislation
There is a need to create more freedom to innovate, cutting

away legislation, administrative regulation and operating
procedures that stand in the way of smarter approaches. To
the extent that this is not always possible, politically feasible
or entirely desirable, opportunities to formally dispense with
existing legislative limitations should be created. Innovative
organisations should be able to apply for political approval in
order to test new methods, processes and services. There are
already examples of such agile and flexible arrangements in the
Netherlands, the UK (Bhatta, 2003) and Denmark. If it turns
out that such dispensation is unnecessary in the first place, all
the better. As a public innovation leader, one might ask:
84
Political context
• Which political or contextual framework conditions (legislation,

regulation, formal procedures) inhibit or further our organisation’s
ability to innovate?
• Which of these contextual factors might we get rid of entirely? Which
ones could we adjust?
• If we could dispense with certain legislation or administrative regulation
and procedures, what would have the greatest positive impact on our
ability to create and implement new valuable approaches?
Create public innovation incubators
Earmarked venture funding for innovation – within selected

sectors – can help to give a last, important push to realise
the good ideas that grow among public managers, employees
and private and social entrepreneurs. Government agencies
might establish separate funds of risk capital; or private and
philanthropic organisations may partner with government to
help fund projects that may not be politically acceptable to
the wider public, due to their risk profile. Public innovation
incubators could be established, perhaps as joint ventures with
enterprises, research institutions and the third sector – supported
in part by risk-friendly co-funding. One might ask:
• Are there critical areas that we believe should be addressed, but where
we cannot identify public funding sources, for instance due to their
risk profile?
• What might be the opportunities to collaborate with external actors
to set up ‘innovation incubators’ that could embrace innovation in
such a higher-risk environment?
Explore the innovation space
Politicians and public top executives must agree to pursue

innovation, in spite of the barriers posed by the context and
nature of politics. Given the 24/7 media cycle, the political
culture in many countries is becoming less and less tuned
into long-term and perhaps risky innovation processes. But
innovation sometimes demands radical new solutions. It may
also demand a long-term, continuous effort, lasting several years,
85
including idea generation, experiments, prototypes, tests and

focused implementation, before new solutions are finally realised
and generate the intended value. Whether it be increased risk
taking or longer-term efforts, it requires mutual loyalty from
the political and administrative leadership, and a true strategic
perspective. Visionary politicians and top-level managers must
be willing to commit to innovation. Either they must mutually
agree on the ‘innovation space’ – what is the available arena to
try and experiment with new solutions? Alternatively, the top
administrator must be willing to proactively define that space by
exploring its boundaries. The key questions for public leaders
are:
• Which specific challenges or opportunities should we address through

long-term strategic innovation efforts?
• How might we create a common political-administrative platform to
actively address these challenges?
• What is the commitment to innovation at the political level –
what kind of conversation are we having about the organisation’s
innovation space?
• What is the top administrator’s role in trying new solutions without
necessarily waiting for a formal political mandate, thus exploring the
boundaries of the innovation space?
Political-structural context is the setting against which

organisations formulate their objectives, strategies and means
of implementing them. How does strategy relate to innovation?
That is the topic of the next chapter.
86
FOUR
Strategy
‘Public strategy is the systematic use of public

resources and powers, by public agencies, to achieve
public goals.’ (Geoff Mulgan, chief executive, Nesta,
2009, p 19)
In the mid-2000s, the leadership of the Danish Ministry of

Taxation decided to fundamentally transform the organisation’s
relationship with citizens and business. Inspired by international
discussions and experiences on the future of tax administration,
not least within the OECD, the top executives asked: what if
we believed that the vast majority of our users want to pay their
taxes correctly and on time, but don’t always know how? What
if only a very small percentage of them really want to avoid
compliance?
Adopting such a perspective would entail a fundamental shift
in how the ministry was governed, and how the organisation
viewed success. If success depended on helping people to comply
with the tax code, rather than on catching people not complying,
that would have fundamental consequences for all aspects of the
organisation’s activities. From running an organisation focusing
mainly on control (and on process), the leadership would have
to build an organisation focusing mainly on creating results
and outcomes. It would have to shift from seeing all users as
essentially identical, to seeing users as occupying number of
very different segments that required very different types of
engagement: a ‘light touch’ based on information and guidance
for the majority of tax-abiding Danes, focusing on behaviour
87
change, and a ‘heavy hand’ for the minority of non-compliers,

focusing on punishment.
The tax ministry’s top management chose to take a leap
of faith and embrace the new approach. At the heart of this
transformation was a new compliance strategy that ultimately
reached such importance that the organisation characterised it as
a ‘fundamental philosophy’. The ministry achieved productivity
increases of nearly 25%, increased accessibility, service and
transparency for citizens and business and built a compliance
effort that helped to deliver better outcomes. Since around
2012, while continuing to successfully deliver broad-based
online services to citizens and businesses, the ministry went
through a series of challenges that led to a major reorganisation
and decentralisation of its key functions. In retrospect, a key
lesson learned was that the rapid increase in productivity via cost
reductions probably outpaced the ability of the organisation to
transform its internal governance. As one manager said recently,
there was not the digital capability ‘under the hood’ required to
successfully sustain the deep transformation that was envisaged
from the start. Today the ministry has invested in significantly
more internal digital skills, including large numbers of data
scientists. Another interesting lesson was that, in the pursuit
of efficiency, the ministry probably went too far in reducing
bureaucratic oversight and control. A sobering reminder that
simply dismantling hierarchy does not necessarily lead to better
performance.
Still, in spite of the setbacks, the main and sustained results
achieved would not have been possible without a long-term
strategic effort, and the digital innovations and organisational
and cultural change necessary to underpin it which are now
again a main focus of the organisation. Leading tax and customs
authorities across the world have, to varying degrees, taken
similar approaches, spanning from Australia (the first mover
in this compliance) to New Zealand, the UK and Canada.
Interestingly, some of the most progressive public organisations
in the world are tax services.
Strategy is the tool that defines the organisation’s objectives
and the means to reach them, giving managers and staff direction
in their work. Strategy is the next level in the innovation
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Strategy
pyramid, because it plays a key role in bridging the top-level

political and contextual circumstances to the specific objectives
and means to achieve them in the organisation. This chapter
discusses the following questions:
• What are the key strategy concepts?

• Why are strategies for innovation important?
• What is an innovation strategy, and how does it help
organisations to approach their innovation efforts?
• What is strategic innovation? How can public organisations
build innovation portfolios and manage the process of
determining the challenges and opportunities on which they
need to innovate the most?
Key strategy concepts

When it comes to innovation, the role of strategy often gets
confused. What is the link between strategic objectives and
‘strategic’ innovation efforts?
First and foremost, we have to make the distinction between
the organisation’s overall strategic objectives, and strategies that
explicitly deal with innovation. Overall strategic objectives
should state the core business and the positive change that the
organisation wants to make in the world. So, for instance, the
Danish Ministry of Taxation has a strategy of collecting the
amount of revenue that is mandated by law, in order to fund the
Danish welfare state – no more, no less. This is a core objective
of the organisation; really, its main reason to exist. It is also a
measurable objective: the ministry collects data about the gap
between the amount of Danish kroner it should be collecting
and the amount it is actually collecting. The strategic goal,
obviously, is to narrow that gap until it is near to zero.
Second, we must recognise that there are two ways of looking
at innovation and strategy together – one more internally
focused, the other externally focused.
• Innovation strategy is similar to an HR, communications or IT

strategy, since it concerns the how of innovation, choosing
approaches and building skills and capacity internally in
89
the organisation. For instance, the Region of Copenhagen

commissioned the Danish Design Centre to help build an
innovation strategy for the health system – comprising five
major hospitals and around 40,000 staff. The project, which
drew on design methodology, involved visually mapping
‘how ideas travel’ from conception to implementation across
that complex institutional system, and using the ‘as-is’ map
to propose ‘to-be’ approaches that could enhance the overall
innovation capability. The strategy suggestions included the
establishment of a central innovation hub, embedding service-
design teams locally at hospitals, continuing an innovation
competition among staff and ensuring the training of senior
managers in innovation and design.
• Strategic innovation is an effort that addresses the what: it
concerns identifying and making actionable concrete
challenges that need to be addressed with innovative solutions
that will ultimately create the desired value. As discussed in
Chapter 2, innovation is what we call those activities that are
intended to bridge the gap between our strategic ambitions
and the realisation of value (Figure 4.1).
For instance, during the first few years of massive strategic

transformation, the Danish tax administration ran a large number
of key projects that sought to identify and create new solutions
that could make its compliance strategy a success. An example
could be a new method of segmenting tax-payers between
compliers and non-compliers, thus driving the day-to-day
Figure 4.1: Bridging strategy and value
Strategy
Where do we want to go?
Innovation
Which new solutions might
help us get there?
Value
Are we getting there?
90
Strategy
actions. Another example is a PhD project that the organisation

ran jointly with MindLab that sought to answer the question:
how is tax compliance (desired behaviour) created in small and
medium-sized companies, and how might the tax authorities
act in smarter ways to help more businesses comply? A third
example was the development of a new and improved, easy-
to-use online interface that makes filling out tax forms much
faster and smoother. A fourth initiative was the development of
a dedicated website for young people, tailored to their particular
life situation with multiple changes in income level and living
situations as they move from education into work.
Why are strategies for innovation important?

To consider working strategically with innovation, organisations
must have a strategy that describes in some degree of detail what
they want to achieve, and how (Mulgan, 2009). A sound strategy
should also state the organisation’s theory of change: how are the
selected means supposed to help to achieve the stated objectives
– what is the causal link between activities and outcomes? Such
clear strategies are far from always the case, however, and, if
they are not, formulating an overall strategy is the place to start.
Even if they do have a clear public strategy, very few public
sector organisations today have an explicit strategy for how to
address innovation. Governments around the world, however,
are building innovation strategies at different levels, and with
different scope. A string of new national strategies include public
sector innovation as an objective.
In 2009, US President Barack Obama launched a national
innovation strategy that stated that ‘Innovation must occur
within all levels of society, including the government itself ’,
and went on to say that the Obama administration would use
innovation to improve government programmes (Executive
Office of the President, 2009). In Finland, the 2008 national
innovation strategy took a ‘broad-based approach’, in recognition
that government had so far not been sufficiently innovative, and
proposed that ‘An implementation process for extensive and
innovative public sector cooperation programmes’ be undertaken
(Finland Ministry of Employment and the Economy, 2008).
91
Subsequently, Finland has built a set of powerful initiatives to

advance more experimentation in the public sector, including
a bold 2017–18 test of universal basic income among a group
of 2,000 citizens.
In Norway, a Design Pilot programme launched in 2009,
a government-funded initiative executed by the Norwegian
Design Council, focused on how design approaches can lead
to innovation in both public and private organisations. This
programme has been continued by subsequent governments
and the newly merged Norwegian design and architecture
organisation, DogA – since 2016 with a special focus on service
design in the public sector.
The UK government’s Innovation Nation White Paper, also
from 2008, outlined how strategic investment in people and
skills, science and technology, including government regulation
and procurement, could help the country to become the best
place in the world to run an innovative business or public
service. In Australia, as discussed earlier, the state of Victoria
adopted a wide-ranging Innovation Action Plan. In Denmark,
the government’s Globalisation Strategy from 2006 stated the
objective of creating the most innovative public sector in the
world, among other things backed by a PhD programme for
public organisations. Additionally, the Ministry of Economy and
the Interior established a Centre for Public Sector Innovation
(COI) in collaboration with Denmark’s regional and municipal
authorities. And in 2016, Denmark appointed the world’s first
Minister for Public Sector Innovation.
Although many of these broad national strategies and initiatives
sound very good, the picture may not necessarily be so rosy at
department and organisational level. As the NAO (2009) noted
in its detailed account of UK public sector innovation, ‘Few
central government organisations have considered strategically
where they need innovation or how to encourage and support
it.’
The ambition of these different efforts is to do away with
some of the randomness that has characterised public sector
innovation, replacing it with a significantly more conscious and
systematic approach. Strategies thus link with innovation in at
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Strategy
least two ways: as the how of innovation (approach), and as

guidance on the what (content).
Approach: innovation strategy

An innovation strategy is essentially a strategy for how an
organisation wants to work with innovation. Implementing an
innovation strategy could be part of the organisation’s human
resources strategy. Or it could be a strategy of its own. It addresses
a number of the elements of innovation capacity that are treated
in this and the following chapters of the book, and can include
answers to questions such as: how do we deal with our external
environment, and collaborate with non-governmental actors
to innovate and deliver services? What kind of organisation
will help us to increase the likelihood of getting more and
better ideas, and how do the recruitment, development and
assessment of our staff help to foster innovation? Which specific
competencies, skills and tools do we need, and how can they be
made accessible to those that need them? How do we want to
systematically engage with end-users to power our innovation
process, what are our tools, and how do we measure the level
and value of innovation? What kind of talent and leadership do
we need?
For instance, the US government has stated that it will
emphasise open and social innovation as part of its strategy. The
Finnish government wants, among other approaches, to adopt
‘demand led’ innovation, which translates to user involvement.
In Finland they also link their innovation efforts closely with
performance management programmes already in place.
Which alternative approaches to strategic innovation are
available? In The Public Innovator’s Playbook, Eggers and Singh
(2009) propose five different strategies for driving innovation,
ranging from highly internally oriented approaches to very
externally oriented ones. The type of orientation is dependent
on the primary source of innovation. According to Eggers and
Singh, the five options that public organisations can choose
are Cultivate, Replicate, Partner, Network and Open Source.
The authors argue that the two latter are rarely (as yet) seen in
practice in government.
93
Another suggestion for addressing innovation strategy

originates with Lars Fuglsang, an academic at the University of
Roskilde in Denmark, who has suggested a model that combines
some of the sources of innovation we explored in Chapter 2
with how the organisation leverages the sources for innovation.
Like Eggers and Singh, Fuglsang (2006) distinguishes between
sources that are external to the organisation and sources that are
internal. However, his approach treats the leverage, or ‘power
to innovate’, separately. The two dimensions are:
• Sources of innovation: External (R&D, technology, efficiency

pressures, citizens and other stakeholders) versus internal (the
organisation’s own managers and staff).
• Power to innovate: Individuals/individual organisations versus
collectives, groups or alliances of organisations.
These two dimensions result in four different types of approaches

or procedures for how an organisation can address innovation
(Fuglsang, 2006) (Table 4.1).
The four approaches should not be viewed as fixed roles but,
rather, as expressions of strategic motivations that an organisation
can choose flexibly.
• Entrepreneurial innovation is closely related to Joseph

Schumpeter’s innovation perspective: the focus is on the
dynamic individual or company that seeks to create something
entirely new or to identify errors that can be corrected. In
the societal domain, such individuals and organisations are
often known as social or societal entrepreneurs or innovators.
Table 4.1: Strategic approaches to public sector innovation
‘Sources of innovation’
‘Power to Internal External
innovate’ (management and staff) (R&D, technology, other
organisations, citizens, etc)
Collective Institutional innovation Strategic-reflexive innovation
Individual Entrepreneurial innovation Open innovation
Source: Adapted from Fuglsang (2006)
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Strategy
In the public domain, the ‘entrepreneurial spirit’ was a key

perspective in the classic work on reinvention of government
by Osborne and Gaebler (1992). As a starting point,
entrepreneurship is individual and internal, since the power
for innovation is the individual’s curiosity and engagement.
• Institutional innovation concerns organisations that seek to

innovate from their own internal sources. Even though many
public sector organisations are under significant pressure, and
while society becomes increasingly complex, they are also
often characterised by high degrees of path-dependency and
inertia (Pollitt, 2003; Mulgan, 2009). Not least, public sector
organisations will often be prone to leverage their innovative
efforts internally, through their own staff’s experience and
tradition. The result might not be more than incremental
improvements – but innovation none the less (Bessant, 2005).
• Open innovation builds on Henry Chesbrough’s writings on

that topic, as well as user-led innovation (von Hippel, 2005).
In Chesbrough’s view, modern organisations increasingly have
to engage in interaction with shifting actors and stakeholders
(2006a; 2006b). At the same time the innovative resources in
today’s global knowledge society are much more distributed,
including (as discussed above) among academics, citizens,
private enterprises, consultancies and think tanks, third sector
organisations, and at the political level. Open innovation
could be considered a natural approach in politically governed
organisations in democratic societies. However, in many
countries the public sector is open only to certain types of
input. In Northern Europe and Scandinavia, for instance,
labour unions and industrial associations have typically been
very close to government, taking formal roles in a variety
of decision-making processes, while linkages to end-users
and to academia have been weaker. As Eggers and Singh
(2009) point out, ‘network’ and ‘open source’ approaches to
innovation in government are still rare.
• Strategic reflexive innovation is, according to Fuglsang, both open

and collective, and seeks to combine a systemic approach to
95
the external environment with a more reflexive perception of

one’s own organisation. In this view, the ability to consciously
reflect on innovation efforts is an important sign of a more
mature and potentially effective approach to innovation and
change (Senge, 2006; Scharmer, 2007). The starting point in
the strategic-reflexive mode is external relations and sources
of change, coupled with a collective (organised or structured)
approach to innovation. The approach thus encompasses
both formulation of externally directed strategy and internal
resources and competencies. Meanwhile, strategic-reflexive
innovation also depends on more temporary and fragile
social structures that are more fluent and determined by
circumstances. Strategic-reflexive innovation as a mode
for organisations to address transformation and change is
particularly interesting in a public sector context because:
–– it is critical towards internal organisational norms,
traditions and procedures while opening up to the external
environment;
–– it focuses on long-term stability and order through active
utilisation of external inspiration;
–– it suggests that end-users (citizens) and other external
stakeholders should be committed to taking part in the
innovation process, in a mode of co-creation.
As I emphasised in the Introduction to the book, there is not one

‘best’ approach to public sector innovation. However, as the 4P
‘innovation space’ model illustrated in Chapter 2, and as Fuglsang’s
categories here show, there are a range of options available when
it comes to approaches to innovation. Public organisations need
to know that there is a broader scope of approaches than what is
usually thought today, where most of the innovation efforts seem
to be entrepreneurial or, at best, institutional.
It is one thing to have a strategy on a piece of paper; but it
is quite another to make it a living part of the organisation,
embedding its ambitions in daily practice. How might that be
done? A number of tools can be helpful in implementing an
innovation strategy. As discussed in Chapter 1, the government
of Victoria, Australia launched an ambitious new innovation
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Strategy
strategy – the VPS Innovation Action Plan – through, among

other things, an innovation festival. At the Danish Ministry
of Integration, which established its strategy in 2008, the
starting point was a comprehensive analysis, or audit, of the
innovation activities already taking place. With the backing of
the permanent secretary, and with staff dedicated to the job,
consultants assisted with a series of interviews and studies. This
was quickly followed up with workshops that involved a broad
cross-section of managers and staff to discover innovative ways
of working in practice. The process concluded with a major
innovation camp that involved everyone in the department
trying out new modes of collaborating and working together.
The camp was documented thoroughly with photos and a
detailed narrative of the process, which helped t create a lasting
buzz in the organisation. The strategy was built at the same time
as it was implemented.
Content: strategic innovation

Strategic innovation has to do with what the organisation chooses
to do in pursuit of its objectives. It is a question of prioritising
where innovative solutions are most needed, and channelling
appropriate resources in that direction (Hamel, 2000).
When the municipality of Fredericia in the region of Jutland
in Denmark launched the project ‘Radical Innovation in Local
Government’ in the summer of 2009, its leadership went all
the way. First, they declared that they wanted to select the five
most pressing and wicked problems the city faced, addressing
themes ranging from preventative healthcare to primary school
education to climate change. Second, they would dedicate
the city’s entire central development budget to tackling those
problems and allow a year and a half for the process. Third,
at the end of that period, they expected to see at least 10
radical suggestions for how to tackle those challenges. They
then decided to essentially short-cut the political framework
conditions and, for a time at least, take politics out of the public
sector innovation equation. They agreed that politicians and
union representatives would stay entirely clear of the process, to
allow maximum freedom for divergent and possibly controversial
97
ideas. They then set out on a journey to involve managers,

employees and citizens intensively in the process, with the
assistance of a host of external advisors to facilitate the work.
The administrators would then invite the politicians back into
the process, to decide on which of the radical solutions should
be implemented.
One of the most powerful and long-lasting results of
Fredericia’s innovation initiative was a radically different way
of addressing home care for older people, titled ‘Live longer in
your own life’. Through the project, the municipality realised
that older persons really didn’t wish for government-paid home
care; they would rather care for themselves if only they could.
In response, the social services administration shifted resources
from in-home cleaning and assistance to physical training and
other support measures to rehabilitate older citizens. Through
the training, significantly more people were now able to do
their own cleaning, cooking, shopping and other chores, and
the municipality could accomplish significant savings (initially
of Danish kroner 8 million) on home services while the citizens
were more satisfied with their life-style and renewed freedom
(Monday Morning, 2010). The programme spread rapidly across
others of Denmark’s nearly 100 municipalities and its basic
premise of focusing on rehabilitation was adopted into national
law. Fredericia’s approach is a clear-cut example of strategic
innovation – implying a conscious, systematic and focused
approach that at the same time is open, exploratory and (let’s
admit it) a bit risky.
Managing strategic innovation
The strategic management challenge to public leaders is to shape a

process that couples the overall strategic cycle of the organisation
and with all other relevant cycles, including the measurement
and (not least) budgetary cycle. We have already seen how
strategy, innovation and value are connected; Figure 4.2 also
includes the budgeting process – arguably the best-managed and
understood process in most public sector organisations.
Public organisations that actively design and manage their
processes like this are widespread; however, most organisations
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Strategy
Figure 4.2: Coordinating the strategy and innovation processes

Strategic objectives
(strategy process)
Innovation
(project process)
Value
(measurement process)
Budgets
(allocation process)
V
V
V
V
with some type of project organisation in place have good

possibilities for moving further in this direction. The order in
which organisations mature to this model seems to be as
depicted in Figure 4.3.
Figure 4.3: Maturation of innovation strategy

Budgetary process (which all public organisations have in place to some degree)
 Strategy process (which almost always exists in some form,
at least as the setting of objectives)
 Innovation (or project) process (existing in some of
the more advanced organisations)

Learning process (basic metrics in most
organisations, outcome-based metrics and
learning dialogue in a few)
Identifying innovation priorities
How do we deliberately pick the strategic priorities that need

to be addressed with all the force of innovation available to the
organisation? A process in three simple steps might be helpful:
• Diagnosis. What are our main strategic challenges, and on

what time frame? This may require scenario exercises, back-
99
casting or other strategy tools. What are the ‘weak signals’

that may turn into real challenges? As Wharton School
professors Day and Schoemaker (2006) have pointed out,
an organisation’s peripheral vision, its ability to capture fast-
moving change at its outermost boundaries, is critical to
building effective strategic responses to new challenges.
This is, among others, the role of the CGEE, the strategic
forecasting unit of the government of Brazil. Other strategic
challenges may be of a more internal character.
• Gap analysis. The second step concerns matching. Gap analysis
matches strategic challenges against current innovation
efforts. Do we have explicit, concerted activities in place
to prepare for, or actively address, the strategic challenges
that have been identified? If not, how might we allocate the
people and resources to kick off new initiatives or enhance
existing efforts, to start dealing more effectively with the
challenges? Such a gap analysis could be made using a grid
like the one in Figure 4.4. In point A we are confident that
we are tackling the challenge with the necessary creative
efforts. At point B we could probably divert the efforts to a
more appropriate focus, while point C is not of particular
Figure 4.4: Gap analysis
Strategic challenge
High
D A
C B
Low Innovation
Low High efforts
Source: Bason (2007)
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Strategy
interest. Point D, however, is where our alarms go off: we

need to build a portfolio of innovation efforts to tackle the
challenge, and fast.
• Build an innovation portfolio. Strategic innovation is the ability
of the organisation to build a portfolio of innovation efforts
that address the identified gaps (Hamel, 2000; Bason, 2007).
As the city government of Fredericia, Denmark has done, it
is a question of coupling big problems with big and concerted
efforts. Few organisations take on everything at the same
time. Strategy-driven public organisations have a relatively
clear view of what they are engaged in (typically in the form
of projects) and what their estimated time frame is, and they
may also have a sense of the degree of certainty that they will
identify new solutions. This sort of overview could take the
form of an ongoing innovation management process, where
various types of innovation projects with various time-scales
and degrees of (outcome) uncertainty are maintained.
As I discussed in Chapter 2, the distinction between ‘innovation

efforts’ and ‘traditional development projects’ may not be
very clear. Some change initiatives are rather incremental
improvements, some are ‘new to us’, while yet others are radical
or ‘disruptive’ (Christensen, 1997; Bessant, 2005). Their place
on the dimensions in the 4P model I have described can be
hard, if not impossible, to know in advance. When we speak of
strategic efforts to innovate more radically, the efforts typically
display the following characteristics, which I will examine
further in the co-creation section of this book:
• They do not just address ‘solutions’, but challenge underlying

assumptions, problems, strategies, approaches, resources and
relationships.
• They pull together all relevant stakeholders in an open
conversation about problems, insight, opportunities and
‘innovation vectors’ or ‘directions’, allowing for a large degree
of divergence in the process
• The outcome of the process is new ideas and concepts, which
may then be prototyped, refined, matured and decided for
implementation.
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Figure 4.5: Innovation effort portfolio

Time
SC 1 Strategic
challenges
SC 2
SC 3
Innovation
efforts SC 4
High uncertainty
Medium uncertainty SC 5
Low uncertainty
Daily Short term Medium term Long term

Weekly < 1 year < 3–5 years < 10–20 years
These efforts are sometimes called ‘mysteries’, ‘front end of

innovation’, ‘double diamond’ models or ‘pre-jects’ because
they take place before more traditional stage-gate project
development and implementation is put in place.
Ongoing (tactical) activities should usually not be part of
the portfolio. Some efforts are relatively short term (typically
in central departments), others are medium term (this often
characterises activities in agencies) and yet others might be quite
long term (and might be dealt with in special commissions,
government-sponsored think tanks, foresight and innovation
units and so on).
Some organisations in the private sector have created this kind
of innovation or ‘business development’ portfolio in a pocket
format and distributed it to all employees. This gives everyone
the opportunity to see and understand what the company
is doing to actively develop new business opportunities and
products. The purpose is to raise awareness and organisational
alignment around innovation efforts, and to help employees to
see where they might contribute. Public organisations could
do the same.
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Strategy
Planning innovation?
The way in which I have addressed innovation and strategy in
this chapter is, at face value, highly rational. However, public
sector organisations need to embrace divergence, and with that
comes a degree of uncertainty and risk. Everything cannot be
planned and analysed up front. Taking strategic innovation
seriously may very well also entail letting a more interpretive,
ambiguous mode of work flourish. MIT professors Richard
Lester and Michael Piore define interpretive as the opposite of
analytical: ‘Interpretive managers seek not to eliminate ambiguity
but rather to work with it and through it, using it as a resource
out of which new discoveries and insight emerge’ (Lester and
Piore, 2004, p 97). Interpretation is in their eyes the ‘missing
link’ of innovation. Certainly, the mode of interpretation, while
existent in many organisations, is hardly recognised or captured
in today’s operating mode (Martin, 2007; 2009). Interpretation
is also related to co-creation, which is essentially a process for
how to orchestrate both analytical and more interpretative modes
of knowing and decision making that I will describe in much
more detail in the next section of the book.
Anders Drejer, a business professor at the Aarhus School of
Business’s Strategy-Lab has distinguished between strategic
planning and strategic innovation (Drejer et al, 2005) (Table 4.2).
Table 4.2: Planning versus innovation
Strategic planning Strategic innovation

Analytic Creative
Focused on performance indicators Focused on new insight
Internally focused (‘inside-out’) Externally focused (‘outside-in’)
Logical-linear Iterative and heuristic
Strategy for today forecasted to Strategy for tomorrow back-casted
tomorrow to today
Expand existing business model Alternative business models
Create more value for existing users Create value for new users
Assumes that the future looks like the Assumes that the future is dynamic
present
Follows rules and traditions Breaks rules
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What may be most striking about the contrasting elements in

Drejer’s model is how accurately its left-hand side matches the
current operating mode of most government organisations. The
great management thinker Henry Mintzberg has even pointed
out that ‘strategic planning’ is an oxymoron (Mintzberg, 2009).
How to do it
This chapter has considered the role of strategy and innovation.
The barriers are significant: many public organisations are highly
task and mission oriented, with no clear overall strategy to drive
their efforts. Only a few organisations have as yet established
a strategy for what innovation means to them, much less
established a formal innovation portfolio. ‘Strategic planning’,
oxymoronic as it might be, is often the order of the day.
However, the flip side of this picture is that, across the globe,
some governments are now launching innovation strategies,
many of which describe both the what and the how of their
relationship to innovation. They are following some of these
steps.
Create an innovation strategy
Top executives must choose how the organisation wants to

approach innovation, selecting among different strategies and
approaches. Cutting-edge organisations are moving towards
more networked, open and strategic-reflexive approaches to
innovation – looking to co-creation and design approaches.
Top management must be able to formulate and communicate
the innovation strategy to staff, involving management and
employees in the strategy process. Key questions are:
• What are relevant ways for us to work with innovation?

• How might we increase our capability to innovate?
• What are the skills, tools and methods we want our employees to
possess, in order to increase their ability to generate better ideas and
implement them?
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Strategy
Manage strategic innovation
First, determine which of the organisation’s strategic challenges

should be placed at the centre of the innovation efforts, for
instance using the three-step approach suggested in this chapter.
Second, put in place a coherent management process for
identifying, maturing and deciding on which innovation efforts
to put in motion. It is necessary to ask:
• Do we have a comprehensive, updated overview of our innovation

portfolio, balancing short-term projects versus long-term bets?
• Is the portfolio widely communicated, known and understood in the
organisation?
• Do we have mechanisms in place to track progress and to support
project managers?
• Are we aware that innovation is never entirely a planned process,
and that we have to allow for an emergent, interpretive mode of
operating?
Strategy is nothing without consequence for the running of

the organisation, and for its concrete actions. Organising for
innovation is the topic of the next chapter.
105
FIVE
Organising for innovation
‘The most influential people in public policy and

management reform in the future may not be
experts or people in ostensible leadership roles,
but rather those who create new spaces and places
for more complex, interactive and inclusive policy
conversations.’ (Martin Stewart-Weeks, former
director public sector, Asia-Pacific, Cisco, 2010, p 12)
Some years ago, Anne Lind, the Director General of the Danish
Board of Industrial Injuries, appeared on Tuesday evening news
television to face citizens whose cases had been managed by her
agency. The gist of the news story was that the Board, a state
agency, was not sufficiently professional in assisting people in
their injury settlement process, adding to their distress in an
already vulnerable situation. The low point came when one
of the citizens in the television studio pointed out that she
had been required by the Board to see her doctor concerning
the exact same issue – twice. All Ms Lind could do, on live
television, was apologise. On her return to the agency, Anne
Lind immediately asked the responsible manager why they had
sent a citizen to the doctor twice. Having checked the case,
returning again to Ms Lind, the manager reported that in fact
the agency had not sent the citizen to the doctor more than
once for the same treatment. The other time it had been the
local municipality. Recounting this story to other public top
executives, Anne Lind said: ‘That was the moment I realised
that not only do we have to innovate, we have to do it through
collaboration with other actors and levels of government.’
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Organisations are where resources are allocated and distributed,

development processes are initiated and innovation can achieve
momentum. Public organisations can combine opportunity with
the resources of managers and staff into concrete processes, into
action and value. The organisation is also the locus for cross-
governmental collaboration, and it is where new knowledge and
learning can be managed and leveraged. Organisations constitute
the third level of the innovation pyramid.
This chapter discusses some of the key organisational features
that are closely related to the open and strategic-reflexive
approaches to innovation that I presented in the last chapter,
and that offer a broader avenue for innovation in government.
The focus is therefore to a rather high degree on cross-cutting
organisational issues. The following questions are central:
• How can public sector organisations build the ability to

effectively collaborate to innovate with other organisations
across and beyond the boundaries of government?
• What role can the support of innovation labs play to enable
and facilitate innovation?
• How can public organisations leverage digitisation as a
powerful enabler of both specific public solutions and more
open cross-sector collaboration in the context of innovation?
The case for innovation collaboration

When the Danish government set out to build a new strategy
for how to reduce carbon emissions while at the same
time generating new business opportunities and growth,
the innovation process involved five different government
departments. This strategy had to be sufficiently ambitious
to put Denmark on the map as serious and innovative in the
field of combating climate change. However, the interests in
this agenda of the Ministry of Economic and Business Affairs
(business growth) were almost directly opposite to those of the
Ministry of Climate Change (CO2 reduction), which again
were in potential conflict with the Ministry of Science and
Innovation (more resources for research).
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Today, hardly any of society’s wicked problems can be solved

through the isolated efforts of a single authority. It is becoming
increasingly difficult to attain public objectives in a complex
and turbulent world. So, although strategies are implemented by
organisations, the actual policy or service design must inevitably
be the result of multiple departments, agencies and other actors
working closely together in new ways, achieving their results
through others, not only on their own.
As a consequence, there has been a surge in interest for
‘joined-up’, ‘collaborative’ or ‘networked’ government as a
way of responding to the need for increased coordination and
unity of policy development and service delivery (Pollitt, 2003;
Eggers and Singh, 2009; Mulgan, 2009; Bason, 2014). Sticking
to thinking and acting through isolated organisational silos has
time and again been identified as one of the main barriers to
innovation in the public sector (NAO, 2006; 2009; Eggers and
O’Leary, 2009). Although the functional departmentalism of
classic governmental bureaucracy has its advantages in terms of
(relatively) clear responsibilities and accountability, it also holds
a number of disadvantages. According to Geoff Mulgan, who
as a speech writer for UK Prime Minister Tony Blair coined
the term ‘joined-up government’, some of the key challenges
of the traditional silo structure are that:
• It becomes difficult to see and address problems that don’t

neatly fall within organisational boundaries.
• Government efforts may be skewed away from activities like
prevention, since the benefits may fall to other departments.
• At worst, it may incentivise public organisations to dump
problems on each other.
• Over time, departmental silos will reinforce the tendency
common to all bureaucracies of devoting more energy to
protecting their turf than to serving the public (Mulgan,
2009).
Governments’ need to collaborate across agencies and

departments is one thing. The degree to which the public
sector can flexibly interact and make relevant and valuable
arrangements in the interplay with private and other non-
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governmental actors is also a key component of the public

sector’s innovation capacity. The public sector is a powerful
societal force: in terms of the scale of service delivery, as a
source of funding private firms through public purchasing, as
an initiator of new systems, services and product development
and as a partner of social movements and enterprises that take
on difficult societal problems. What kinds of collaboration
does it take to fulfil the ambitions of more open and reflexive
approaches to innovation?
Collaboration around creation and execution of government
policies and services can thus take place across the public,
private and third sectors – or in a combination of them all.
Some, like Murray, Caulier-Rice and Mulgan (2009), argue
that entire new business models are arising in the cross-section
of the three sectors, essentially giving rise to a ‘fourth sector’.
For instance, the Danish business strategy on climate change
involved innovation collaboration through a series of workshop
sessions between the public (ministerial) bodies involved.
That process was supplemented with systematic insight and
participation from private firms, institutional investors and
industry and environmental organisations. The strategy itself,
which was adopted in the autumn of 2009, involved setting
up a governance structure in partnership between government,
business, academia and third sector organisations to fund and
incentivise some of the strategy’s key initiatives. This partnership,
the Climate Consortium, proved to be an effective joint platform
for developing and marketing Danish responses to the climate
challenge – perhaps an example of such a ‘fourth sector’ business
model (Climate Consortium, 2010).
Public–public collaboration
A number of avenues are being pursued to find new models
for internal public sector collaboration on innovation – from
more or less informal networks to project organisation to
new organisational structures and virtual organisations driven
by e-government solutions. All such initiatives are designed,
in one way or another, to help overcome what Eggers and
O’Leary (2009) have characterised as the silo trap: the inability
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of government bodies to share information and collaborate

effectively across organisational boundaries. In some cases
this becomes a matter of life and death, as in the instances of
breakdown of crucial information flows within and between
US intelligence agencies immediately before the 11 September
2001 terrorist attacks.
Project organisation
Even though many public organisations still have not embraced

a formal project organisation, cross-cutting ad hoc project work
is one key way of driving public–public innovation, leading
to what one might term an adhocracy (Mintzberg, 2009). As
discussed in Chapter 4, working professionally with strategic
innovation also means identifying types of innovation activities
(a portfolio) – and that portfolio typically consists of projects.
But what about organising projects across government silos?
Danish professor and project management expert Hans
Mikkelsen (2005) calls such project organisation of innovation
collaboration the grey zone, because it usually concerns activities
that are not neatly placed in one organisational silo but, on
the other hand, are not entirely placed outside the silos. Grey-
zone activities are characterised by strong mutual dependency
between the units responsible for development; the need for a
common understanding of the interplay; multiple stakeholders,
each with their own interests and motives; uncertainty about
both objectives and means; and, finally, limited knowledge of
and experience with the problem. The challenge thus becomes
to orchestrate innovation activities, much in the same way as a
conductor leads a symphony orchestra. This is the process of
harmonising ‘the different activities of many stakeholders in a
joint activity, which is continuously able to shift focus and actors’
(Mikkelsen, 2005, my translation). The challenge of creating
a project organisation (and in particular a cross-cutting one)
in government is that it will typically need to exist alongside
traditional hierarchical organisation or, in Mintzberg’s (2009)
terms, the ‘machine bureaucracy’.
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Sourcing ideas across public organisations
We saw earlier how the notion of open innovation and

strategic-reflexive innovation characterises organisations that
seek outside sources of ideas. Authors of Wikinomics: How Mass
Collaboration Changes Everything, Tapscott and Williams (2006),
have formulated the need to open up to outside sources of
innovation as follows: ‘Companies that don’t source a growing
proportion of new product and service ideas from outside their
walls will find themselves unable to sustain the level of growth,
agility, responsiveness, global savvy or creativity they require
to compete in today’s environment.’ Similarly, thinkers like
Charles Leadbeater (2009a), Clay Shirky (2008) and Eggers
and Singh (2009) highlight the potential of online platforms
such as blogs, wikis, tags, prediction markets and peer-to-peer
networking to help transform how organisations collaborate.
As I will also discuss in later in this chapter, and particularly
in Chapter 9, this applies to how government can open up to
outside stakeholders such as citizens, businesses, academia and so
on, but of course it also applies to how government collaborates
internally. While it is still to be seen to what extent cross-
cutting collaborative platforms might eventually break down
the internal silos of government, there certainly seems to be a
momentum. For instance, as illustrated in the health scenario
project mentioned in the Introduction, online sharing of the
project process was a key too. And as we saw in Chapter 1, as
part of its Innovation Action Plan the government of Victoria
set up online collaboration tools to allow for more public–public
innovation processes to take off.
New technology aside, many public sector organisations
participate in forums where they could potentially learn
about new ideas and practices. Organisations such as the
UN, the OECD, the G20, C40, ASEAN and the EU bring
public organisations together regularly and systematically. In
every significant policy field there are associations, networks,
conferences and seminars, and knowledge is shared. Often,
however, such conferences are mostly about ‘downloading’
information rather than exploring new solutions through
dialogue, which means that not much new insight or innovation
112
is likely to arise (Scharmer, 2007). And most of the formal

international activity is clearly focused on negotiation and
brokering, not innovation (some would say the opposite).
Sometimes, however, international inspiration can lead to radical
new thinking. For instance, as mentioned earlier, the Danish
Ministry of Taxation was strongly influenced by OECD working
groups on compliance strategies. Building on experience from
countries like Canada and Australia, the Danes initiated a
paradigm shift in their approach to compliance, moving away
from an activity-based (control) paradigm to an outcome-based
(compliance) paradigm.
Executive forums
In some countries, top-level forums and activities have been

put in place to soften the ground for increased innovation
collaboration, fostering new networks and generating the trust
and willingness to explore ways of working together. In the
US, the intelligence community’s top managers meet regularly,
powering networks and collaboration across the host of
agencies that are responsible for the country’s security, no doubt
motivated not to let events such as those of 9/11 ever take place
on US soil again (Eggers and Singh, 2009). In the UK, the Top
200 central government officials hold two annual conferences,
interspersed with a series of topical, smaller-scale seminars. In
Denmark, the Forum for Public Top Management collected
around 300 executives from state, regional and local government
to develop a joint ‘code’ of good public governance (Danish
Ministry of Finance, 2006). According to the participants, the
Forum was a strong mechanism for breaking down barriers
between the country’s vertical levels of government and enabling
more collaboration.
Super-departments
Another approach for joining government has been to simply

establish larger units that can address a broad policy field
more comprehensively. In the UK, the establishment of the
Department of Business, Innovation and Skills (BIS), was an
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attempt to further integrate the areas of enterprise development

and business regulation with universities and higher education,
and with innovation policy for both the private and public
sectors. Finland has experimented with merging the Ministry
of Trade and Industry, the Ministry of Labour, and parts of
the regional department into a new Ministry of Employment
and the Economy. In Denmark, a Ministry of Welfare was
established for a period, integrating departments of social and
home affairs to better manage the entire portfolio of efforts that
are largely operated by local government.
Joint units
Cross-cutting collaboration on innovation and development

activities by setting up special joint units is another approach.
As Mulgan (2009) points out, shifting UK governments have
in various ways tried to establish structures or processes, such
as the Social Exclusion Unit and the Climate Change Office,
to address the challenges of executing government priorities
across departments. In Finland, the government has organised
key national challenges around a small number of cross-cutting
strategic goals with their own budgets and political authority,
with a lead minister appointed to oversee the execution of each
high-level goal. In Denmark there are numerous examples,
including the Ministry of Finance’s Digital Task Force, staffed
from several government departments and regional and local
government, and the Branding Task Force and Virk.dk, which
coordinate ‘nation-branding’ and enable business-to-government
(B2G)digitisation, respectively. Of particular relevance to the
innovation agenda, in 2013 the Danish government set up a
cross-sectoral unit, the Centre for Public Sector Innovation, or
COI, as a joint effort across all three levels of the Danish public
sector: state, regional and municipal. MindLab, a unit that helps
to run cross-ministerial innovation activities, is another example
that I will consider in the next chapter, which focuses on the
rise of innovation labs.
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Public–private innovation
In some countries, the private sector is considered better at nearly
everything – not least by the people employed there (Pollitt,
2003). In others, for some reason, only government can be
trusted to take care of old people or to run a hospital. Mostly, it’s
a question of tradition, culture and coincidence how the political-
structural setup in a country plays out in favour of or against close
collaboration between the private and public sectors. However,
it seems to be accepted that one dimension of public–private
collaboration is that the public sector can fund other actors than
government to provide innovative new services on its behalf
(Osborne and Brown, 2005; Harris and Albury, 2009).
Public sector organisations are full of skilled and engaged
people. But the public sector’s GDP share makes up only
somewhere between a fourth and half of most modern
economies. Could there be competencies in other parts of the
economy that might help the public sector with fresh thinking
and relevant solutions? To strengthen the public sector’s
innovation capacity is also to expand that capacity with the
relevant skill sets of other sectors, powering innovation through
the combination of multiple disciplines. As Professor John
Bessant of the University of Exeter has pointed out, ‘there is a
strong case for learning across the two sectors, not just in terms
of transferring well-proven lessons (adaptive learning) but also for
“generative learning”, building on shared experimentation and
comparison of experiences around discontinuous innovation’
(Bessant, 2005, p 35).
The public sector is not new to procurement or to
collaboration with the private and social sectors. For instance,
organisations such as the US military and NASA have for decades
utilised private suppliers to innovate on everything from the first
Jeep to the Space Shuttle. What might be new, and increasingly
necessary, is the focus on creating products or services in a way
that generates new solutions to complex societal problems and
at the same time helps to foster revenue, growth and jobs in the
private sector. As Mariana Mazzucato has argued convincingly,
there is a need to rethink the power of ‘entrepreneurial states’
to drive innovation in society by making qualified, ambitious,
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long-term bets on new innovative approaches (Mazzucato,

2014). This goes for R&D and technology investments, but
arguably also for many other types of strategic government
investments (for instance in social, environmental or cultural
resources) that have an ambition to generate both public sector
and private sector innovation. A label for this could be Public–
Private Innovation, or ‘PPI’.
Boxing Future Health, the case example that opened this
book – using the design of future scenarios to enable new
collaborations and the creation of new markets in the healthcare
space – is an example of a public–private innovation programme.
The initiative is as ambitious as it is open ended and thus
probably represents the more radical end of the spectrum of
how to unleash the potential of innovation at the intersection
between the public and private sectors. However, more specific
and shorter-term approaches are also available. I will give such
an example below.
Joint ideation: designing bugs out of hospitals
How could we eliminate healthcare-associated infections

in British hospitals? This was the challenge that an alliance
of the Department of Health, the NHS and the UK Design
Council, an independent industry organisation, threw at private
companies. Based on design research, a conversation between
patients, health managers and staff, designers and businesses led
to new insight into where bugs in hospitals come from and
how infections might be reduced dramatically. The answer,
according the Design Council, was almost ‘ludicrously simple’:
to reduce bugs in hospitals, create, make and buy furniture that
is easy to clean (Design Council, 2009b). Through a process
that the Design Council called Research, Define, Specify and
Buy, furniture designers and manufacturers were brought into
the mix and through a tendering process a number of designs
were prototyped. They soon went into production and found
their way into UK hospitals, with the promise of a cleaner
and safer hospital environment. One solution was a cool-
looking and easy-to-clean patient’s bedside chair, designed by
the people behind Virgin Atlantic’s Upper Class airline seats.
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Another solution was a mattress made with a special fabric that

turns blue when a crack occurs, enabling nurses and porter
to quickly identify damaged (and therefore potentially dirty)
mattresses and replace them. The innovative elements of this
procurement process guided by the Design Council are several,
and are more generally applicable as key dimensions of public–
private innovation:
• Identifying and challenging the problem up front, rather than

moving straight to specifications.
• Carrying out a creative pre-procurement conversation with
all stakeholders, including highly concrete observations of
staff and user behaviour and context.
• Bringing in business from the start, and managing the process
of procurement under existing national and EU regulations.
• Handling intellectual property rights in a way that satisfies all
partners in the process.
• Providing sufficient seed capital for fast prototyping and
testing, keeping contenders in the process.
• Making business sufficiently comfortable that there is a market
for the products or services they will ultimately innovate and
produce.
Figure 5.1, which builds on my definition of innovation,

illustrates some of the key elements in such a creative conversation
about innovation throughout the public procurement process.
Figure 5.1: Public–private innovation
Idea Implementation Value
Uncover the Prototype and Purchase and apply

problem (research) test (specify) (buy)
Involve end users Procure and complete Partnership and

and other stakeholders dialogue around
Produce and deliver service delivery
Ideate and
conceptualise (define) Harvest value
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A commissioning process that specifies the required outcomes,

but not the means used to achieve them, can be used to
encourage more innovation from suppliers (UK Government,
2008; NAO, 2009).
Challenges to ‘PPI’
Barriers, however, still remain. Finding a path through

innovative procurement processes that can be managed by
government agencies themselves, or orchestrating effective
networks and partnerships, is a challenge. Whenever there is
actual collaboration, it is often in much more classical forms, that
is, traditional outsourcing. And even here, there are challenges
in getting the traction that might bring in outside competencies
to solve existing tasks more efficiently, at higher service levels
and with better outcomes. There are a number of reasons why
the outsourcing of public services is usually not very innovative,
and they mostly have to do with context. First are principles
of equality. There may be a tendency to believe that because
citizens must be equal before the law, all service offerings must
also look and feel the same in terms of organisation, process and
delivery. More novel models offered by private suppliers may
either be impossible within existing law, or they may not come
close to winning public tenders because they unsettle the status
quo. Lack of hard evidence of the effectiveness of new models
can of course also be a barrier. Second are legal concerns. Public
organisations must ultimately take responsibility for legality and
consistency of delivery. Authoritative decisions can (usually) not
be left to private service suppliers; public organisations must
guarantee objective, independent decisions and assessments.
Here there are clear limits to the innovation space. Third are
politics. Procurement of new and smarter hospital furniture is
relatively uncontroversial. Procurement of private services in
care for older people, in public security or in hospitals is, at
least in some countries, much more sensitive to the political
culture and public mood. In some situations citizens and parts
of the political spectrum can be fierce opponents of bringing in
outside competencies with a (real or perceived) profit motive.
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The political nature of the public sector can quickly kill off
public–private collaboration.
Public–third sector innovation

The organisation of collaboration between the public sector and
the third sector (non-governmental and voluntary organisations)
is tightly linked with the notion of social innovation. Social
innovation can be defined as innovation for the social and public
good (Harris and Albury, 2009), or as new ideas (products,
services and models) that simultaneously meet social needs and
create new social relationships or collaborations (Murray et al,
2010). The field of social innovation and social entrepreneurship
is, like public sector innovation, gaining momentum (Ellis,
2010). Countries like Canada, Singapore and Australia boast
Centres for Social Innovation, which in different ways seek
to empower, involve or drive public, private and third sector
organisations to create more value for society. Some centres,
like the Toronto, Canada Centre for Social Innovation, are
hubs providing physical infrastructure and creating network
relations between a wide variety of social entrepreneurs and
non-governmental organisations. Others, like the Australian
Centre for Social Innovation, employ a variety of methods to
tackle specific challenges, including co-creation methods.
Increasingly, governments are recognising the key role of
social innovation. For instance, the European Commission,
the executive of the EU, which for many years has focused
on the role of civil society in social innovation, has increased
its deliberations on how social innovation might be enhanced
throughout Europe through, among other resources, the EU’s
structural funds. Social innovation was therefore a key part of
proposals from a Business Panel to the Commission’s future
innovation strategy (European Commission, 2009).
The case for social innovators
The rise of this interest within government is sign of a

recognition that non-governmental or ‘third sector’ organisations
play a key role in society. And rightly so. By some estimates,
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non-governmental organisations account for around 10%

of national economies in developed countries (Münster and
Münster, 2010). The voluntary and third sector takes on a
number of key societal challenges, ranging from running
programmes for the socially marginalised to fostering health
through preventative programmes and sports. In the Catholic
and Southern countries in Europe, third sector organisations
manage many social tasks that in other countries, not least
in Northern Europe and Scandinavia, are considered a core
business of government. Similarly, in the US and in the UK,
third sector organisations are relied on, sometimes increasingly,
to deliver value where government is not, by choice or tradition,
active.
Governments collaborating effectively with social innovators
in the third sector have in many ways the same incentives for
collaborating with business – but also different ones in some
respects. Because third sector organisations are values based
and normative, rather than profit maximising, they have both
additional potential, and other types of barriers than firms.
First, to get the best ideas to tackle wicked social problems we
need everyone to contribute – and savvy social entrepreneurs
may have a wider scope of action, come from more diverse
backgrounds and be motivated not only by values but also by
their competitive environment to come up with more radical
ideas than might come from government bureaucrats. In many
instances, the mere fact that social innovators are not subject to
the rules and mindsets of bureaucracy drastically increases the
likelihood that they will come up with innovative ideas. Being
entrepreneurs without the shackles of bureaucracy, they don’t
wait, they just do it. Of course the challenge is that they may,
as we saw in the examples above, run into government rules
anyway. Could there be a potential for government agencies to
mimic the organisation, spirit and practices of social innovators?
Second, social innovators are close to the citizens. One of the
key challenges of many public organisations is how to get citizens
and businesses involved directly in the innovation process. To
most social innovators, a deep emphatic understanding of the
underlying, implicit or explicit unmet needs of citizens is at the
very heart of their work. For government to remain legitimate
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and relevant, it must also support those who make a difference

in people’s lives at the local level.
Third, a critical challenge for any innovator, whether in
government or beyond, is to not only get the ideas but turn
them into practice. Social innovators often possess the skills
and dedication to get their visions implemented. Not only
can government learn from that, but government can benefit
from creating mutually positive alliances and partnerships with
organisations whose ideas have already stood the hard test of
meeting reality – but who may need the power and scale of
government to make the solutions available to many more.
Network governance approaches that involve third sector
organisations as a natural part of the operational structure of
government could be a way forward, as I will discuss below.
The social innovator’s paradox
However, the links between third sector organisations and

public or private source of funding and support are often weak
(Harris and Albury, 2009; Westley and Antadze, 2009). These
organisations find themselves in a vulnerable environment,
having to compete for often short-term resources in the form
of grants or contracts or from sales. While important social
innovation may spring from these organisations, and while
they may solve critical societal tasks, they are, paradoxically,
without a safety net themselves. We saw in Chapter 3, how
the Dance United social enterprise was at risk of losing the
funding it needed to sustain and scale its efforts. In the context
of the innovation capacity of the public sector, the key question
becomes: how can government become sufficiently aware of the
potential of the third sector as a source of innovation, and how
might government much more effectively collaborate with third
sector organisations about innovation and governance, getting
rid of regulation, collaborating on services and helping to diffuse
innovation? The UK in particular has experienced a substantial
growth in awareness of the third sector’s role in the economy.
Organisations such as the National Endowment for Science,
Technology and the Arts (Nesta), the Young Foundation, the
Social Innovation eXchange (SIX), the Innovation Unit and
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the government-sponsored Innovation Exchange have played

key roles in facilitating and brokering social innovation through
networks and support to third sector organisations while also
collaborating with government.
Digital innovation in government

On the small island of Lyø, off the coast of Denmark, citizens
were upset that they had no access to life-saving emergency
medicine on weekdays after 2.00 pm, or on weekends. Without
a resident doctor on the island, citizens would just have to
wait, their lives on the line. But doctor Lars Kensmark came
up with an idea: what if he established a medicine closet with
an electronic lock that could be opened from a distance? What
if patients could use their mobile phone to picture-message
(MMS) him to document how much medicine they had taken
and he could manage the dosage online? The service, Medical
Island Alert, became fully funded at state level; the regional
authorities subsequently extended the solution to other small
island communities with no resident doctor (Farmakonomen,
2006; Danish Ministry of Finance, 2010).
New information and communications technology is a
powerful driver of public sector innovation – both small scale
and large scale. From the medical solution on the island of Lyø
to the Dutch e-Citizen charter that establishes citizens’ rights
in the age of e-government to the global open government
movement to provide data to the people, the internet, mobile
telephony and wireless services and social media are paving new
avenues for public sector innovation.
Digital government or e-government is no longer new, as such.
From the introduction of computers and basic communications
networks in internal government administration of the
1980s to putting citizen services online in the late 1990s and
2000s, digital has become a pervasive part of the business of
government, essentially expanding the toolbox available to
policy makers (Hood and Margetts, 2007). However, the
promise to citizens has not always been delivered. For instance,
one study showed that only in 16% of cases did e-government
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projects lead to improved or faster service for citizens (NNIT

and Computerworld, 2006).
What we are witnessing today is increasingly a systems-
level transformation of how government works, including
large-scale B2G payment systems, automatic ‘intelligent’ tax
transactions with citizens, new digital mobile services as well
as the emergence of machine learning and artificial intelligence
(Stewart-Weeks and Johnston, 2007). Government is using new
technologies to leverage its organisation and authority in new
ways, often harvesting productivity gains as well as improving
services (Dunleavy et al, 2006; Hood and Margetts, 2007;
Gillinson et al, 2010). We are also seeing entirely new forms of
citizen engagement, driven by social media platforms (Howe,
2008; Shirky, 2008; Leadbeater, 2009a; Puttick et al, 2014;
OECD, 2017). The promise is to finally shift from internally
focused ‘institutional’ digitisation to externally focused ‘strategic-
reflexive’ models that serve citizens better. There are many
visions and labels for the future of e-government. British public
administration professor Patrick Dunleavy has labelled it ‘Digital
Era Governance’ (Dunleavy et al, 2006), while the Australian
government calls it ‘Government 2.0’ (Government 2.0
Taskforce, 2009). The UN speaks of ‘Connected Governance’,
IBM proposes ‘m-government’ (as in mobile), and broadband
equipment giant Cisco proposes ‘Government at the Edge’.
Cisco, in this work, points to the power of using networks
as a platform for harnessing distributed intelligence and
empowerment, fuelling innovation and connecting people,
knowledge and services. Such a ‘participative web’ may
become a central feature of the way government works – its
organisational boundaries growing vastly more porous and
thus enabling edge centricity: centralisation and decentralisation
simultaneously (Stewart-Weeks, 2010).
Whatever the label, around the world, public authorities
are scrambling to harvest the promise of radial productivity
and service gains, simultaneously enhancing transparency and
democratic legitimacy through the new technological solutions
(Dunleavy et al, 2006). Countries like Sweden, Denmark,
Norway, the Netherlands, the US, the UK, Canada, Australia
and South Korea are frequently ranked as the top countries on
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various measures of e-government maturity (United Nations,

2008). Some of the key features of the new face of e-government
are social media, mobility and systems-wide integration.
In the following I will consider two different perspectives
on digital innovation in government. First, technology can be
a core part of new solutions, such as when government uses
a new technology to improve efficiency or service delivery
or to create better outcomes. New technology adds to the
available possibilities for policy and service design. Second, new
technology can be a tool for government to run more effective
innovation processes, such as when government officials use a
social media site to engage in mutual dialogue across geographic
or organisational boundaries, or to interact with citizens to
come up with new solutions.
New technology as part of the innovation
YouTube, Flickr, Facebook, LinkedIn, Twitter, blogs, wikis. The

list of new social media platforms is long and growing by the
day. From Generation Y, or the Net Generation, those born
between 1977 and 1997, to established knowledge workers and
to senior citizens, digital connectivity is becoming part of life
(Tapscott, 2009). It is also generating new social problems that
pull government into new roles. As Clay Shirky powerfully
demonstrates in his book Here comes everybody: How change
happens when people come together (2008), social media can lead
to new pressures on government. For instance, in a widely
exposed case, pressure from citizens via social media forced
the New York Police Department to take action over a stolen
mobile phone, squarely against normal New York City police
procedures.
Government can also leverage social media as a platform for
co-producing services with citizens. As we saw earlier, Lewisham
in the UK has built the successful, widely recognised Love
Lewisham site to enable citizens to help keep city streets clean,
leveraging web media with mobile photo messaging. A similar
non-governmental service, Fix My Street, relays citizens’ photos
and location information to city councils across the UK. As of
2018, the site and its service was available on five continents.
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In the southwestern US, the city of Albuquerque has created

a similar service, enabling reporting and removal of graffiti to
take place within 24 hours (IBM, 2010). A corresponding site
in Australia is of course titled ‘It’s Buggered, Mate’.
At the University Hospital of Aarhus, Denmark, cancer
doctor Jesper Stentoft has joined Facebook to become online
friends with his young patients. According to Mr Stentoft, the
ability to follow his patients’ activities up close on the social
network enables him to plan treatments much better, in a way
that interferes as little as possible with their lives. ‘It allows me to
not place the next blood check right on top of midterm exams’
(Kristeligt Dagblad, 2009). In 2008, the Danish Consumer Policy
Agency built a social media platform as a service to parents
with online kids. On the site, parents could discuss what media
behaviour is acceptable (When should I allow my child to open
a Facebook account? What is an appropriate age to get a mobile
phone? How should I handle my kids’ online shopping and
gaming?). Rather than letting public staff provide the service,
citizens are empowered to provide the service to each other.
Government provides a platform for citizens to co-produce the
service.
Large-scale integrated services

Service Canada is an integrated, online service system for all of
Canada’s citizens, covering government major programmes in
areas such as education and training, health and immigration.
Some of the largest productivity increases seen in government
have been driven by digitising large-scale systems in areas such
as employment services, taxation and payments. In countries
such as Australia, the US, Denmark and Canada, more than half
of citizens file their tax returns online, at a cost to government
per e-filing of half or less (Dunleavy et al, 2006). The potential
cost savings from digitising citizen-to-government interactions
are huge, as they are for B2G services. In Denmark, the
Agency for Government Management has harvested more than
€150 million in savings alone by digitising all business payments
to government. Collaborating with private partners to find
the optimal technical solutions, the agency leveraged national
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legislation to make digital invoicing mandatory. The agency

received the e-Europe award (today the European eGovernment
award) for its achievements.
Opening up government
The potential of the internet to enhance the transparency
of public services is, by nature, massive. The US is paving
the way in several fields. The former Obama government
leveraged the web to show how public expenditure via its
major economic stimulus package was channelled to citizens
and neighbourhoods, all the way to street level. SeeThroughNY
is similarly a site that accurately displays how New York State
residents’ tax dollars are spent, down to individual payroll
information for more than 1.5 million government employees.
Government contracts are also uploaded, and benchmarking
data for the state is shared publicly (SeeThroughNY, 2018). And
the US government site www.data.gov provides open machine-
readable data for citizens, businesses and public institutions
such as schools to use. One can only guess at what kinds of
break-through innovations might arise from the creative efforts
of thousands, if not millions, of people once they get hold
of the relevant data. In the Netherlands, the e-citizen charter
established 10 digital rights of citizens, at the heart of which
are commitments to ensure that citizens’ rights and duties are
transparent and that government pledges to use citizen feedback
to improve services. Borger.dk is a Danish site that integrates
information about all public services in one joint portal, thus
underpinning coherence and transparency. Through a personal
login, citizens can view the government’s information about
them. On healthcare, Denmark also runs sundhed.dk (health.dk),
focusing specifically on individual health records. And a similar
site, Virk.dk, is a unified portal for private business, providing
links to all relevant government services, covering more than
1,300 types of reporting and also functioning as a platform for
digital invoicing.
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New technology as an enabler of government’s innovation processes
There are at least three different approaches to leveraging new

technology to power the process of innovation: collaborative
platforms, idea boxes and crowdsourcing.
• Collaborative platforms
Tweeting civil servants? Perhaps not surprisingly, at a conference
in Melbourne, Australia on the future of e-government most of
the participating public servants were actively using the social
medium Twitter to comment on and discuss the proceedings
as they took place. That is now a widespread experience
when attending public sector seminars and conferences. The
collaborative web has been embraced not only by the Net
Geners but increasingly by civil servants too. Twitter is but
one of the increasing range of options, ranging from internal
blogs to LinkedIn groups that enable new forms of online
communication. Communicating on entirely open, public
platforms has the drawback that no one wants to discuss critical
themes that the general public or the media might find of
interest. Given the often confidential nature of governmental
development processes, collaborative nets for public servants are
therefore usually limited to a single department, or at least to the
relevant set of public agencies. For instance, a key initiative in
the government of Victoria, Australia’s Innovation Action Plan,
is the creation of the VPS Hub, an open technology platform
providing the virtual space for collaboration, resources and cross-
sector initiatives. At agency level, the Danish tax administration
has established a site on the closed online platform Yammer, a
tool for ‘enterprise microblogging’. As an agency site, it can be
used only by tax authority employees. Whether to enable only
intra-agency dialogue or, like the VPS Hub, to enable cross-
sector processes, is one of the questions that public managers
must address. Another is how to enable such platforms to be
perceived as ‘real work’. For instance, the Yammer user interface
(now part of Microsoft) originally looked a lot like Facebook,
making it seem familiar and easy to use. The potential drawback,
however, is that employees misinterpret the site as more of
a social network than a professional one. At the Danish tax
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ministry, one employee who was invited to log on immediately

asked the administrator to revoke her licence once she saw the
interface; she didn’t want to be seen using social media at her
workplace.
• Idea boxes
Online platforms or ‘inboxes’ where employees and managers
can submit their ideas are increasingly widespread in public
departments and agencies. As mentioned in Chapter 2, in the
US the Transportation Security Administration (TSA) has
launched a secure intranet site called Idea Factory that enables
employees to submit their ideas online. Similarly, part of the
Victoria government’s VPS Hub is an Innovation Zone that
enables staff to lodge problems and seek solutions from across the
VPS. The challenge with such platforms is not, of course, getting
them up and running, or even obtaining ideas. For instance,
according to Eggers and Singh (2009), by the end January 2009
the TSA’s Idea Factory had received nearly 8,000 ideas. The
challenge is to make sure the ideas are selected, qualified and
brought into play in a process where they can grab the attention
of the relevant managers, and that employees receive prompt
feedback about what has happened to their suggestions. Of
course, some ideas may be ripe for implementation right away,
while others may be relevant in a much longer-term perspective
and be placed on ‘standby’ until the right opportunity arises. At
TSA, employees are invited to comment and to vote on ideas
that are considered worthy of being pursued further. Without
such explicit processes in place, and the resources to manage
them, the promise of idea boxes cannot be harvested.
• Crowdsourcing
As I will discuss in detail in Chapter 9, ‘insourcing’ ideas
from people outside the organisation can be a powerful way
of increasing divergence and tapping into the knowledge
and insight of a much, much wider audience (Howe, 2008).
Online platforms can invite citizens, businesses and other
stakeholders to submit their ideas and suggestions, which can
then be further developed. For instance, governments and
organisations in Singapore and Australia are already successfully
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running ‘innovation challenges’ where they invite employees as

well as the wider public to suggest their best ideas in areas such
as enterprise policy (government of Singapore), public policy,
services and efficiencies (VPS), and social innovation (The
Australian Centre for Social Innovation). Another way to utilise
the crowd in a smaller, focused way is to use mobile technology
as ‘probes’, where selected users can be asked to respond quickly
to questions about their activities and submit (for instance)
mobile media messages to the researcher-innovator.
As the paragraphs above have demonstrated, the internet,
digitisation and social media are opening a plethora of avenues
for creating more effective government that connects more
directly to citizens’ needs – and even brings them into the
innovation process. The innovation challenge to public managers
is to identify ways in which the new tools of technology can be
drivers of renewal, producing productivity increases, enhancing
access and citizen satisfaction, while helping to drive better
outcomes. Digital government is central not just in building
innovation capacity. It is a cornerstone of crafting new solutions.
How to do it
This chapter has considered how government can build capacity
by organising for innovation. There are obvious barriers to
creating innovative public sector organisations: the persistence
of functional, organisational silos, the lack of places – physical
or virtual – where innovation can be nourished and the random
application of e-government and new technology that can drive
new solutions or enhance internal processes. We have, however,
also seen that new, cross-cutting collaboration models and
leveraging new digital solutions intelligently offer ways forward.
The following to-dos can help get the innovative organisation
off the ground.
Innovation partnerships
Orchestrating strategic partnerships between public authorities

and private, third sector or other public organisations holds a
potential for tackling society’s ‘wicked problems’ with much
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greater competence, power and focus than any one organisation

is capable of. There seems to be a significant potential in
public–private innovation at the very front end, orchestrating
a design-driven conversation about problems and solutions,
while running a ‘classic’ procurement process. The public leader
should ask:
• How capable are we of collaborating effectively across organisational

boundaries within the public sector, both when it comes to generating
new solutions and when it comes to implementing and producing
them at scale?
• To what extent are we harvesting the potential value of innovative
procurement processes and of collaborating much more closely with
social innovators?
E-innovation in government
Utilising the tools of new technology is an extremely central

opportunity for public sector innovation; however, public
organisations are now shifting from using digitisation mainly
to generate efficiency gains, to radically improving services for
citizens and businesses. In making such a shift towards more
service-oriented solutions, public organisations must realise
the potential in new mobile technology and communication
forms such as texting, chat, mobile photo and video, social
media platforms, GPS devices and so on. For a public leader
the question becomes:
• How does new technology enable us to create new and more effective
solutions, and which technologies are most relevant to our specific
challenges?
• Am I fully aware of how new technology, and in particular the
internet and social media, can power our internal collaboration – and
what have we done to start using them?
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SIX
The rise of labs: prospects and pitfalls
‘A heart is not judged by how much you love; but

by how much you are loved by others.’ (The Wizard
of Oz, 1939)
Joseph Schumpeter, the business and entrepreneurship columnist

for the UK weekly the Economist, has characterized the rise of
innovation labs in the public sector under the heading ‘Test tube
government’ (Economist, 2014). With some surprise he notes that
public institutions are now ‘liberating’ key staff from their daily
routines and encouraging them to invent the future. Quoting
a range of examples from across the globe, including the
UK’s Behavioural Insights team, the New Orleans Innovation
Delivery Team and Denmark’s MindLab, Schumpeter discusses
whether what is happening is merely a fad; that these teams
are ultimately ‘jargon-spouting irrelevancies’. But, his piece
concludes, perhaps it is worth while: ‘Reforming government
is hard and often boring work. The innovation labs are making
it a bit faster and a lot more interesting’ (Economist, 2014).
In other words, it is the experimental, exploratory nature of
public sector innovation labs that is worth recognising. The
mere fact that these units are able to coexist, and in some
instances even thrive, within the presumed hostile environment
of bureaucratic administration, merits some respect.
In Chapter 4, on strategy, we saw how building a portfolio
of innovation activities is a way to give structure, content and
direction to strategic innovation. A prerequisite, of course, is
the ability of the organisation to actually work in projects, and
manage them. So what about creating, building and sustaining
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the process skills needed to run the innovation efforts, bringing

all relevant stakeholders into the mix? The competencies and
mindsets needed for systematic innovation are not the same as
those required for stable, daily operations and service delivery
at the front line. They aren’t even the same as those needed for
traditional, linear project design and ‘stage-gate’ implementation.
Might we therefore need new approaches, skills, models and
tools beyond what most trained civil servants usually possess?
Might we even need to create dedicated ‘safe’ spaces and
opportunities for collaboration on innovation across units,
departments and sectors? Those are some of the assumptions
behind the establishment of innovation labs in public sector
organisations that governments have embraced with increasing
scope over the past decade.
This chapter* explores the emergence and challenges of
innovation labs, and addresses questions such as:
• What defines and characterises innovation labs?

• How are labs emerging and spreading globally?
• How can labs be designed?
• What are the key stumbling blocks which labs must
overcome?
I have run a public sector innovation lab, MindLab, over the

course of nearly a decade, and have assisted numerous initiatives
to establish and grow labs internationally, and so the following
account of labs necessarily draws on my personal experiences,
including insights from my PhD research of design projects,
many of which were run by labs. Additionally, in my current
position at the Danish Design Center we actively use design
methodologies in our work to catalyse innovation in business
and government, which offers a number of learnings. Finally, I
include the growing set of international studies and analyses of
the rise (and sometimes fall) of labs.
* This chapter builds in part on Bason, 2014 and 2016.
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The rapid emergence of labs

There seems to be no doubt that government innovation
labs, or design studios, continue to be on the rise. By one
account there are now at least 35 innovation labs in public
sector organisations across the globe, up from none at the
turn of the century (Tonurist et al, 2017), while others set
the number as high as 100 (Nesta, 2015). In spite of a few
setbacks, most significantly the closing of the ambitious Helsinki
Design Lab and the discontinuation after only 18 months of
the Australian government’s lab DesignGov, the tendency is
towards a proliferation of dedicated units, teams and spaces for
systematic work on public and social innovation. Labs are being
embedded in government structures at all levels, ranging from
international organisations such as the European Commission
and the World Bank to countries including the US, Germany,
Denmark, the Netherlands, Portugal, the UK, Chile, Brazil,
Singapore, the United Arab Emirates (UAE) and New Zealand,
to cities ranging from New Orleans and Boston to Copenhagen,
Seoul and Mexico City (Bason, 2014, 2017; Puttick et al, 2014;
OECD, 2017; Tonurist et al, 2017).
Perhaps it is not so surprising that reformist and ‘modern’
public administrations like the Dutch, Danish or British chose to
try out such new organisational structures in the 2000s and 2010s.
These countries have in various ways always been pioneers, for
instance in driving digital public services. It is perhaps more
surprising that Mexico City – Latin Americas oldest and largest
capital – has chosen to ask a cultural entrepreneur to head its
new innovation team, or that the European Commission’s
scientifically minded Joint Research Centre has established an
ambitious policy lab combining behavioural insight, foresight
and design. Add to this that German Chancellor Angela Merkel
has recruited senior sociologists and psychologists to run a high-
level innovation team embedded inside her Federal Chancellery,
and it appears that innovation labs are emerging from the most
unlikely of places. We are also seeing the OECD beginning to
play a highly constructive (and legitimising) role in providing a
backbone, or infrastructure, for labs to interact at a global level
with the authority and resources that its Observatory for Public
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Sector Innovation can bring to the table (OECD, 2017). From

the philanthropic sector, Nesta, the UK innovation foundation,
and Bloomberg Philanthropies have in numerous ways catalysed
the rise of labs with funding, research, knowledge-sharing,
training and other supportive activities.
What is an innovation lab?

Innovation labs are entities that are established to assist people
in one or more organisations in the process of creating and – to
varying extents –realising new ideas. We find lab organisations
in private businesses as well as in government organisations. The
European Commission has proposed that innovation labs are
characterised by some common traits, including:
• involvement of users at all stages of development (co-

creation);
• multiple partners from private and public sectors;
• bringing together different disciplines and approaches from
design, science, technology and business;
• a dedicated space (real or virtual) for experimentation and
developing new ideas (Thenint, 2009).
Other and expanded characteristics of labs have since been

proposed by, among others, the UK innovation foundation
Nesta (Puttick et al, 2014; Nesta, 2015) and the OECD (OECD,
2017). For instance, Nesta characterises labs as dedicated teams,
units and funds to structure and embed innovation methods
and practice in government. And the OECD describes labs as
‘dedicated spaces for investigating and experimenting through
trial and error to understand better what works in public service
design and delivery’ (OECD, 2017, p 153).
Innovation labs can also be characterised as creative platforms.
Danish academics Søren Hansen and Henning Sejer Jakobsen
(2006) say that the creative process must be lifted away from the
‘swamp’ of everyday activities, which are often characterised by
routine, fear of failure, prejudice, bureaucracy and rules. They
point out that in order to thrive, creativity needs its own place. It
has to be lifted high above ‘the swamp’ on the four pillars of trust
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(in each other, and in the creative process), concentration (ability to

be present and aware), motivation (leveraging personal ambition to
become selflessly and positively involved) and knowledge (allowing
for new combinations of perspectives and disciplines).
There are many labels for labs: i-teams, i-labs, X Labs,
Innovation Units, Innovation Studios, Centres for Social
Innovation, Future Centres, Public Spaces, Living Labs, Social
Innovation Labs, Dream Spaces, Creative Platforms and Idea
Factories, to name a few. And they can take many forms:
physical or virtual, public, private or third sector, or cutting
across multiple organisations and sectors.
Towards a typology of labs?

As labs are spreading globally, the need to map and structure
the landscape has become more pressing as a way to facilitate
ongoing knowledge sharing and the emergence of a global lab
community. The first ‘map of labs’ was created in 2014 by the
DESIS Lab at Parsons School of Design and published online
and in my book Design for Policy (Bason, 2014). At the time it
included 17 labs. Since then more mapping exercises have been
carried out, and as mentioned there is even an online map
curated by Nesta1 which features more than 100 labs.
According to the research carried out by Nesta and Bloomberg
Philanthropies on ‘i-teams’ (Puttick et al, 2014), labs work on
a wide range of issues, from reducing murder rates to making
it easier to register a business to improving school performance
to booting economic growth. Further, the Nesta analysis shows
that labs fall into one of four categories, or types:
• creating solutions to solve specific challenges

• engaging citizens, non-profits and businesses to find new
ideas
• transforming the processes, skills and culture of government,
or
• achieving wider policy and systems change.
They may be funded fully or partly by government, or may

depend on a host of different sources of income, or may
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themselves have funds to disperse to innovation activities. For

instance, Nesta’s own Innovation Lab in the UK invests in
specific ‘challenges’ that are then addressed through competitive
bids.
Innovation labs are thus organisational instruments for focusing
creative efforts and skills. Many innovation labs are both ‘think
tanks’ and ‘do tanks’. At their best, they are powerful platforms
for co-creation, for experimentation and for identification of
new opportunities. Innovation labs are also often places that
embrace service design and design thinking, where intuitive and
interpretative styles of thinking may be practised more explicitly
in balance with more logical and analytical styles (Thenint,
2009; Bason, 2014).
One role of innovation labs can be to help anchor innovation
efforts more broadly through networks that have the purpose
of facilitating innovation and renewal across units of the
organisation. In Norway, the local government of Arendal built
an internal network of innovators that accomplished a massive
organisational change process, championing decentralisation,
liberating managers and staff from rigid job descriptions,
introducing values-based leadership and developing service
quality through end-user involvement (FO, 2005). In Denmark,
MindLab originally hosted an Innovation Agent network of
about 50 project managers across three government departments,
including 15 agencies. In Chile, the Laboratorio de Gobierno
ran a major campaign in 2017, including 29 workshops across
11 of the country’s regions and involving 1,200 civil servants
in sharing knowledge and experience. Additionally, it has
established a standing network of 500 civil servants on a digital
platform called Innovadores Publicos.
Likewise, in the private sector, global enterprises such as
Procter and Gamble (P&G), IBM and SAP have worked to
disseminate innovation practices throughout the organisation
by spreading design specialists across departments and units. For
a number of years, P&G ran its own physical and facilitated
innovation space, the Clay Street Project. In 2017, SAP opened
a new user experience lab in a fashionable neighbourhood
in Copenhagen. And IBM has launched an ambitious new
design studio in Austin, Texas. Innovation labs can thus play an
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important role in distributing innovative competencies across

the organisation.
A distinction concerning innovation labs can be between
pure ‘creative platforms’ that are physical spaces with
facilitation services, which mainly focus on group creativity,
and ‘strategic innovation units’, which are more closely tied to
top management and engage in longer-running innovation and
design efforts, often carrying out their own research as part of
the process (Hattori and Wycoff, 2002).
Based on the past two decades’ development in the lab
world, I’ve taken the liberty of adding to the work of Hattori
and Wycoff to suggest a third generation labs, which I have
titled ‘Outcome focused’ and which further underline the
characteristics it takes for labs to achieve real-world impact.
An important example is that the current generation of labs
generally recognise that they need to work both outside-in
(user focused) and inside-out (employee, organisation and
management focused) in order to achieve change. These three
generations of labs to some extent mirror the development I
witnessed and contributed to at MindLab. Table 6.1 illustrates
some of the key dimensions of these three types of labs.
In practice, many innovation labs display a mix of the
three generations: third-generation labs building on second-
generation characteristics, which in turn build on the practice
and experience of the first generation. Some innovation labs
may also be more classic R&D or research entities, without
some of the dimensions of experimentation and creative
working methods that characterise others.
Governing labs: a model

In 2017 I was asked by a group visiting at the Danish Design
Centre to provide some ideas about what it takes to set up an
innovation lab in the public sector. I shared the model shown in
Figure 6.1 in order to provide a framework for our conversation.
The figure suggests some of the key dimensions that make up
an innovation lab, all of which need to be taken into account
when establishing it, including:
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Table 6.1: First, second and third generation labs
First generation Second generation Third generation

(Creative platform) (Strategic innovation) (Outcome focused)
Physical creativity centre Innovation resources part of business units Resources centralised AND part of business units
Focus on ideation Focus on strategy and value-creation Focus on strategy, operations and value creation
Employee-oriented User-centred User AND employee oriented
Training and facilitation Team-oriented innovation culture Involvement of project teams AND senior management
Individual/small group recognition Recognition of teams Recognition of teams AND their leaders
Creativity tools Tools scalable to entire organisation Tools openly available to wider society
Management passively supportive Management actively involved Top management takes ownership
Source: Hattori and Wycoff (2002); own adaptation
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Figure 6.1: Governance model for an innovation lab
GOVERNANCE
AND FUNDING
INTERNAL EXTERNAL
RELATIONS RELATIONS
METHODS
TECHNOLOGY
SPACE
ORGANISATION STAKEHOLDERS
COLLEAGUES CITIZENS
CULTURE LEADERSHIP BUSINESS
• Governance and funding structure: Who makes decisions on the

lab’s development, project and task portfolio, management,
funding and so on?
• Methods, technology and space: What kinds of innovation
approaches and technologies do we expect the lab to utilise,
and what kind of dedicated space should it have? What do
we want the physical space, and its location, to say about the
mission of the lab?
• Organisation, colleagues, culture: This is the internal relational
dimension. How should the lab itself be organised, what team
with which competencies and track record should occupy it
(and how big?), and what kind of internal culture do we wish
the lab to build (and possibly spread)?
• Stakeholders, citizens, business: This is the more externally
oriented relational dimension of the lab, and concerns issues
like what stakeholders are critical for the lab to engage with.
How should the lab involve and engage citizens and business?
• Leadership: Finally, one of the most critical decisions when
establishing a lab is recruiting someone to run it. Should it
be an internal candidate or an external one? To what extent
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should the lab director have ‘fresh eyes’ and perhaps limited
or no experience of working in government? What kind of
professional background do we feel would give the leader the
skills as well as the legitimacy to run the lab?
As an advisor to several of the efforts to establish labs

internationally since around 2010, I have seen many good,
reflected and effective decisions being made when it comes
to creating a lab set-up. But I have also seen some that turned
out to be failures – in some instances it nearly felt like failure
by design. To draw on some of the lessons from a short-lived
lab, I highly recommend reading the account by Alex Roberts,
an Australian civil servant involved in the 1.5-year prototype
DesignGov, who has carefully unpacked the learnings in a
blog aptly titled Establishing, Running and Closing a Public Sector
Innovation Lab (Roberts, 2014).
Future of labs: three stumbling blocks along the Yellow

Brick Road
What makes the emergence of labs the more surprising is that
in spite of their search for predictability, stability and control,
governments are taking active steps to create something which,
it is hoped, will help to create new ‘solutions’ to problems,
without decision makers knowing in advance what those
solutions might look like. As Zaid Hassan, one of the strong
advocates of the ‘lab revolution’ rightly suggests, ‘we cannot
generate new systems, new structures, and new realities that
are verifiable prior to their coming into being’ (Hassan, 2014).
None the less, leading government administrations, and their
political leaders, are taking a bet that if they build labs, the right
solutions will come.
Just like the adventure of Dorothy, the Kansas girl being flown
away to the kingdom of Oz, the leaders and staff of the new
cadre of innovation labs are walking merrily along their Yellow
Brick Road towards a destination still unknown.
From my own experience and research, and building on the
growing research and writings on the topic, I believe that labs
do in fact have a chance not only to help to address current
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complex problems, but perhaps to contribute to shaping the

visions of the destination. We are seeing evidenced impacts
ranging from much more powerful digital user experiences
for citizens to more empathetic and outcome-oriented health
services for patients and precise nudges that shape large-scale
behaviour and saves public costs.
However, if the almost limitless promise of labs is to be
delivered upon in the years and even decades to come, there are
at least four critical stumbling blocks that they must address, and
that, if left unchecked, can disrupt or even kill innovation teams.
Betting on personality
‘There is a mysterious aspect to the act of creation’, argues Zaid

Hassan, author of The Social Labs Revolution. The same might be
said of the individuals running innovation labs. Is there a risk that
they are cast as superhumans who will end up embodying the lab
as much or more due to their personal brand or image than due to
the quality of the team or unit. Probably a particular profile and
style of leadership – or quite possibly, as Nigel Jacob, co-director
of Boston’s lab suggests, a spirit of entrepreneurship is needed to
run labs effectively (Staszowski and Brown, 2016). However, does
that mean a risk that labs will become too reliant on one or a
few individuals, and will not be sustainable once the founder and
leading figure departs? And what about the call for ‘subject matter
expertise and in-house leadership’, an issue flagged by former
Lab @ OPM director Abby Wilson in her account of running
the US Office of Personnel Management’s team (Staszowski and
Brown, 2016)? This raises questions such as:
• What are appropriate organisational designs for the labs

themselves – if one wishes to ensure continuity and
sustainability?
• What is the optimal team configuration, given the particular
tasks?
• How can one ensure space and opportunity for new leaders
to emerge as next in line?
• And perhaps also, how can the leader and/or key people be
motivated and retained for the long run?
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Lack of connectivity
A key issue for many labs that are built on the premise of
‘challenging’ or ‘disrupting’ the system that they are somehow
part of is how to maintain this delicate position without either
failing to contribute anything novel, or perhaps acting or being
too radical for the system to accept. A case of the latter was
the UK Department for Education’s Innovation Unit, which I
mentioned in Chapter 3. It was probably too ahead of its time
when it was established and was shortly thereafter dismissed
from the ministry as ‘a foreign body’, according to one close
observer. In recognition of this, many of the contributors point
to the need to work very systemically as a lab. For instance,
former MaRS Solutions Lab director Joeri van den Steenhoven
proposes that labs must work on policy change, on new concrete
solutions and on building capacity for change among the lab’s
key stakeholders. These issues raise questions such as:
• What should be the nature of interactions and relations

between labs and the internal and external environments of
which they are a part and/or where they are expected to
make an impact?
• How can a lab governance structure be created that ties it
sufficiently (but not too much) into the existing decision-
making arenas and processes within its host organisations or
sponsors? What is the ‘not too hot, not too cold’, ‘Goldilocks’
style of governance that makes the fit feel right not only for
the lab itself but for the wider organisation(s) and decision
makers?
• What are, as such, the concrete lab activities that engage and
enable system-wide connectivity, and what balance should be
struck between ‘deep’ engagements with a few stakeholders
versus ‘wide’ engagements across the board?
Lack of legitimacy
Guy Julier, an academic at the University of Brighton, reflects

on the blog ’Mapping Social Design Research and Practice’ that
the design for policy discourse risks promoting design as an end
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in itself rather than a more precise set of sensibilities, approaches

and tools that can be applied in particular and more or less
useful ways in public and government contexts. Julier says of
this stumbling block, which ultimately concerns the legitimacy
of design and the wider notion of public innovation labs:
design somehow has its own agency, regardless of

the people, things and environments in which it is
enacted. A long history of design promotion has
struggled to explain what designing is on the one
hand, while describing design as a value-added
quality on the other. The latter always runs the risk
of mythologizing and over-generalizing what it is.
(Julier, 2014)
If we understand legitimacy as a question of perceived desirable,

proper or appropriate actions, then the question is whether
innovation labs can survive if they are not able to articulate, in
language understood by public decision makers, what they do
and why. However, it is one thing to lose legitimacy through
lack of clarity or precision in explaining typical ‘lab’ terms
such as ‘innovation’, ‘design’ or ‘prototypes’ in ways that are
meaningful in the context of public administration. It is another
to lose legitimacy more generally by failing, as my former
colleague, then deputy director of MindLab, Kit Lykketoft,
suggests, to recognise that it may well be that the way in which a
lab conducts its activities (the ‘how’) matters more than whether
the activities generate tangible results (the ‘what’) (Bason, 2014).
Provoking as this may be, those more intimate with the workings
of government will probably recognise that perceptions of right
and wrong, good and bad, success and failure are not necessarily
deeply anchored in empirically proven, real-world change. Chris
Vanstone, of The Australian Centre for Social Innovation, once
quoted a civil servant as saying exactly this: that government
performance measurements need a priori to show success and
thus are obviously not strong sources of legitimacy. ‘Trust-
building’, in its truest sense, as former Lab @ OPM director
Abby Wilson suggests, may be more important. For those labs
struggling to demonstrate long-term impact at scale, this could
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come as a relief. What matters, though, is whether a significant

proportion of the powerful people in positions to shut down
the lab actually love it.
Labs: journey or destination?
I started this chapter by suggesting that governments are

investing in innovation labs to help them arrive at hitherto
unknown destinations. However, on reflection, two thoughts
spring to mind.
First, perhaps the destination is not so unknown. There
seems to be a universal, emerging agreement that the future of
government needs to be more adaptive, flexible, individualised,
citizen-centred, and that a more networked and ‘co-productive’
form of governance is likely to replace, or at least ameliorate, the
new public management as we know it today. So we do have
a sense of the shape, or at least the underlying characteristics,
of the systemic solutions that governments are asking labs to
help build.
Second, innovation labs are somehow also part of the solution
in and of themselves. To paraphrase Schumpeter in the Economist
(2014), with some help from US President Barack Obama,
innovation labs demonstrate that government can in fact not just
be ‘cool again’ – they can offer hope that change for real people
and real communities is possible. An inspiring example is Sarah
Schulman, a serial lab practitioner, founder of the consultancy
InWithFor and currently based in Canada, who argues that
labs ultimately can help to catalyse social movements. Or Nigel
Jacob, from Boston’s New Urban Mechanics, who believes that
‘we still have to figure out how to do this exactly, but there is
a future in which government services become the examples
of good design and not bad design’ (Staszowski and Brown,
2016, p 67).
By showing that public leaders are ready to put resources
into something ostensibly uncertain and experimental, but
often powerful at engaging with citizens and stakeholders, labs
may contribute to rebuilding some of the trust with citizens
that has been lost. If nothing more, innovation labs, positively
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interpreted, show that governments do care about us. At best,

they help transform our lives.
How to do it
Public organisations must identify the tools that address their
needs for making innovation happen in practice. A basic
project organisation is often a first step. The establishment
of dedicated innovation labs may be a next move. ‘Third-
generation’ innovation labs are units that contain a critical mass
of innovation competencies, while they also distribute skills to
decentral units. They are able to focus on strategy, operations
and the generation of value at the same time; they balance
user and employee involvement and they are able to ensure the
ownership of top management.
Labs for public sector innovation are, at their best, designed to
directly and effectively enhance the innovation capacity of the
organisation, and support or facilitate activities by engaging staff
and external stakeholders in co-creating solutions. The questions
to ask might be.
• Are we sufficiently professional in organising and executing the

innovation projects we need?
• If innovation is important to us, how do we invest in enhancing our
organisational capacity to achieve more of it?
• Might a dedicated unit help us to leverage our innovative resources
even better, and how could such a unit in practice fit with our
organisation and deliver value?
• Which problems would we want an innovation lab to take on?
• What kind of leader and team would be ideal for our innovation lab?
Note
1
Available at nesta.org.uk/blog/world-labs
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SEVEN
People and culture
‘An innovative organization engages everyone

throughout the organization in the task of developing
and implementing new ways to reach the organization’s
goals.’ (Robert D. Behn, lecturer, Harvard University,
1995, p 221)
When I was leading MindLab, we asked the project managers

and staff we had assisted with innovation projects a number of
questions about their experience of working with us. When
assessing the projects they had taken part in, the vast majority
said that they would, to a high degree, apply our methodologies
of co-creation and citizen involvement again in future innovation
efforts. We took these responses as a powerful indication that a
culture change was beginning to take hold.
Organisations don’t innovate, people innovate. The
organisation is the context in which people come to work
every day, hoping to make a positive mark on the world. But
people are, ultimately, carriers of the beliefs and practices that
determine an organisation’s culture – and that directly influence
innovation capacity (Behn, 1995; Osborne and Brown, 2005).
Much public sector reform focuses on reorganisation.
However, merely shifting the boxes of public sector structure
around, sometimes assembling larger boxes, other times splitting
them into smaller units, doesn’t truly address how people run
government. It doesn’t necessarily affect the process of how
solutions are developed, or how people interact. It is relatively
easy to visualise and shift boxes around. It is not so easy to
visualise complex processes or cultures, and devise ways to
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change them permanently. For all that organisational structures,

open collaboration, dedicated innovation units and digitisation
can do, not much permanent change will happen if the culture
and everyday habits of those working in government do not
change. Because innovation, by definition, entails something
‘new’, it also has the implication that it cannot be taken for
granted (Mohr, 1969). Innovation must be everybody’s job,
and the challenge is to stimulate culture and behaviour that
reinforces it (Behn, 1995; Borins, 2001a). The challenge for
the public manager is thus to balance between the seemingly
opposite leadership styles of driving operational excellence and
exploring the ‘mystery’ of entirely new paradigms and solutions
(Osborne and Brown, 2005; Martin, 2009). And there is no
lack of literature that points out the particular resistance of
government organisations and their employees against change
(Mulgan and Albury, 2003; Mulgan, 2007).
This chapter focuses on the people who are ultimately the
carriers of innovation capacity in the public sector, constituting
the fifth and final level of the innovation pyramid that I
introduced in Chapter 1. The chapter addresses the following
key questions:
• What is required of public employees in order for innovation

to succeed?
• Is it really necessary to eliminate ‘a culture of zero error’,
or can stable, high-quality delivery thrive alongside a strong
drive to innovate?
• How can a culture of innovation encompass both security
and risk?
• What role does diversity management and strategic
competence and talent development play in strengthening
innovation capacity?
The future of work

In the well-known children’s films about Thomas the Tank
Engine, the success criteria for the main characters, small
locomotives on the imaginary island of Sodor, are quite clear.
They are measured according to their precision, efficiency,
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People and culture
discipline and hard work. They are punished for making fun,
arriving late or committing an error. The manager, Sir Topham
Hat, dressed in his bow tie and jacket, sees that everything is
under control and deals out praise when appropriate, but often
also ends up scolding the engines for being too playful and
naughty. In the well-ordered and structured society of Sodor,
as in industrial society, the manager always knows best. Enter
the hyper-complex, conflict-ridden and turbulent society of
the early 21st century. Knowledge is deeply specialised, work
processes are fast and complex, everything is becoming digitised
and, as a rule, the employees know more about problems and
potential solutions than the manager ever will be able to.
Meanwhile, the ability to ‘manage’ innovation becomes even
more critical. In the view of some thinkers on innovation,
this implies that we need less management. In The future of
management, Gary Hamel (2007) argues that ‘while the tools of
management can compel people to be obedient and diligent,
they can’t make them creative and committed’.
The way that government operates is being transformed
from the inside through the way that public employees work.
Empowered by technology, new approaches to human resource
management and leadership, and driven by the values of a
Net Geners, Generation Y (Millennials) and Generation Z,
government employees are increasingly mirroring their private
sector peers in taking on new work forms (Tapscott, 2009).
Just as in globalised enterprises, some public organisations
are leveraging virtual ways of working in order to enhance
productivity and create additional flexibility. As Hamel argues,
hierarchies are good at coordinating the work of many people,
aggregating effort; but they are not very good at inspiring people,
mobilising effort.
Continuous reform has become a staple of many public sector
organisations. This implies that work forms and processes must
change as well, from a traditional mode of work to a more
modern or ‘flexible’ configuration (Table 7.1). This is not a
new insight, although its application is as relevant as ever (Mohr,
1969; Bason, Csonka and Ejler, 2003).
Workers in flexible work organisations are considered a
resource and a source of innovation. Modern organisations are
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Table 7.1: From traditional to flexible work arrangements
Traditional Flexible
Management Employees ‘an attachment to Employees a key resource
type the machine’
Hierarchical structure Flat structure
Invisible HR Professional HR
Fixed work and employment Flexible work and employment
terms terms
Management through rules Management through
and control objectives and values
Work Narrow jobs Broad jobs
organisation Low degree of autonomy High degree of autonomy
Individual work Teamwork
Achieving formal qualifications Competence development
Source: Bason et al (2003)
characterised by a (relatively speaking) flatter organisational

structure, professional human resource management and flexible
work arrangements (for instance in terms of time, place and
tasks). Delegation, responsibility, teamwork and competence
development are at the centre of work organisation. As Robert
D. Behn (1995) has pointed out, innovative organisations are
characterised by broad, as opposed to narrow, jobs, where workers
are given better insight into the overall strategic direction of the
organisation and where ‘the responsibility for thinking about
how best to accomplish the organization’s mission is spread
throughout the organization’.
Innovation capacity is thus tightly linked to the ability to
create, develop and maintain organisations that carry the traits
associated with flexible work. The challenge is to counterbalance
this against the tendency in public agencies to fight a turbulent
external environment and create a degree of internal stability
through bureaucracy and control (Wilson, 1989; Pollitt, 2003).
This is the public leader’s challenge.
Employee-driven innovation
One of the key concepts of the ‘innovation landscape’ that was
introduced in Chapter 2 was the role of innovation triggers
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People and culture
and employee-driven or ‘everyday’ innovation (Patterson et al,

2009). The underlying thinking was that, in order to build
innovation capacity, organisations must leverage the collective
insight, tacit knowledge and inherent creativity in all employees,
not just certain managers, project teams, R&D staff or dedicated
innovators.
How can employees in a wide sense be involved in the
innovation process? Among the pioneers of the idea of
employee-driven innovation is the Danish Confederation of
Trade Unions, LO, which conducted a major survey of the topic
in 2006, including private and public sector workplaces. The
study showed that among the features that promoted innovation
were deep engagement of employees in the innovation process,
the openness of management to taking on new ideas from
workers, room to experiment and fail, and ongoing competence
development and life-long learning (LO, 2006; Høyrup and
Møller, 2012). According to Sanford Borins, as many as 50%
of government innovation is initiated from ‘ordinary’ employees
and middle managers (2001c). Other accounts are much less
optimistic, with the UK NAO mentioning a figure of only 8%
of front-line workers playing a part in innovation (Eggers and
Singh, 2009). Why is employee-driven innovation so valuable?
There are at least three reasons:
• Valuable knowledge. First, employees (and in particular, front-

line employees) often hold detailed experience and first-hand
knowledge about the processes, tasks and end-users they work
with, which is essential to include in the innovation process.
For instance, in the Danish Companies and Commerce
Agency, an employee-driven process was put in place to
enable multidisciplinary teams of administrative staff, systems
developers and professionals to meet weekly, exchange ideas
based on their experience and feedback received from
business, and come up with new solutions. Their systematic
collaboration led to new systems development and the
improvement of work processes, which again increased
user satisfaction and generated productivity gains. The staff
now see their role as being problem-solvers just as much
as administrators (LO, 2006). In public organisations, the
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knowledge held by employees is often not only of internal

relevance. As a consequence of growing complexity and the
need for cross-governmental collaboration, staff often build
relations with other authorities, and they obtain insights
about problems and solutions in other organisations. They
also harvest insight about what triggers complaints from
citizens and business, not only as a consequence of their
own actions, but often also as a consequence of actions and
programmes run by other agencies (Behn, 1995). But how
often does a public employee relay an idea for a novel solution
to another agency?
• Ownership. Second, employees’ engagement in taking part

in systemic change is obviously crucial. Involving them in
the organisation’s ideation process creates ownership to see
change through (Behn, 1995; Eggers and O’Leary, 2009).
In the Love Lewisham case that I considered in depth in
Chapter 3, it was clear that the environmental department’s
initiative to launch a new government service would
have failed if it had not got the communications and IT
departments on board. Connecting with colleagues who are
instrumental in implementing potential solutions – up front
– is, however, often neglected. At MindLab we therefore
always insisted on involving other key units in the internal
organisation of our collaboration partners, even though they
sometimes didn’t see the point. Why involve colleagues?
They might run off with our ideas.
• Job satisfaction is an innovation engine. Third, innovation is driven

by meaning, creativity and positive relations, which thrive in
environments where people feel trusted, respected, listened
to and taken seriously. Such traits cannot be commanded
(Hamel, 2007). An innovative work environment is also
an environment with a high degree of job satisfaction.
Still, many innovation efforts in government are markedly
top-down. Although (as I will discuss in Chapter 12) top
management must take responsibility for championing
innovation, innovation is essentially a bottom-up process.
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People and culture
Innovation culture, error and risk

When researchers at the Aarhus School of Business in Denmark
examined innovation processes in local government, they
interviewed a worker who exclaimed, ‘There’s innovation
happening all the time. People are drowning in innovation.
There’s so much innovation going on that people hardly
have time to do their real work’ (quoted in Bason, 2007; my
translation).
Innovation culture is a culture where a group of people’s
shared values, customs and assumptions are conducive to new
ideas and organisational change (Osborne and Brown, 2005;
Eggers and Singh, 2009). One key challenge in building
a culture of innovation is to recognise the equal validity of
innovation and operational activities. Innovation can be
perceived as a barrier to ‘real work’. Conversely, ‘real work’
can be a barrier to innovation. The 2006 NAO analysis of
innovation in UK central government showed that the second-
largest barrier to innovation was resistance to working in new
ways and experimenting with new solutions (NAO, 2006). The
same conclusion was reached in a similar study conducted for
the Danish Ministry of Finance (Danish Ministry of Finance,
2005).
Employees can find it difficult to think of operations and
innovation processes within the same context; it must be a key
role of leadership and communication efforts in the organisation
to attract attention to both types of processes, and to incentivise
them (Behn, 1995). Co-creation approaches are, as we will see
in Part Three of the book, key to orchestrating a collaborative
process that integrate the two views (Martin, 2009; Bason,
2017).
Misunderstanding failure
A central constituent of innovation culture in government is

how error is perceived. As Cole and Parston (2006, p 138) point
out, ‘Traditionally, public service organisations have had little
incentive to spend time and money on “experiments” that may
fail, because that failure may affect people’s lives’. Let’s consider
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some of the common misunderstandings about the public sector

as an error-free zone that pervade public perceptions and, in
turn, internal organisational cultures.
‘Minimising risk is a public sector speciality’

No. Although people often believe that public organisations are
particularly sensible to risk, high consistency and a minimum
of errors is important for many private firms too. Think of
highly innovative organisations in fields such as biotechnology,
aerospace, oil and gas, engineering and nuclear power. Across
a variety of industries, there doesn’t seem to be a contradiction
between innovating and ensuring a low level of error.
‘All failure is equal’

No. One can distinguish between many types of error, including
the simple but central distinction between ‘dumb’ and ‘smart’
errors. Dumb errors happen when someone fails at a process that
is well known and that they should be able to do without making
mistakes. Smart error happens when someone deliberately tries
something new, and fails. Here, failure is part of the learning
process, and essentially just a step towards success. But because
public organisations often put into place process regulations and
incentives designed to eliminate dumb error, they inadvertently
create an organisational culture and practice that also seeks to
avoid smart failure. Setting up safe spaces and environments
where experimentation and learning is encouraged, for instance
through dedicated innovation labs, is one way of addressing
this issue and getting more of the smart failures that we need.
As I will discuss also in Chapters 10 and 11, prototyping new
solutions in order to ‘fail early to succeed sooner’ can power
fast learning and innovation (Bason et al, 2009; Brown, 2009;
Gillinson et al, 2010).
‘Risk isn’t a strategic issue’

To the contrary. Failure in virtually any social system is inevitable
– it’s just a question of how large an investment we’re willing to
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People and culture
make to try to avoid it. For instance, while US doctors and nurses
surely do all they can to minimise failure, have access to more
resources than any other healthcare system in the world and are
readily punished by insurance claims and lawsuits, according to
the US Institute of Medicine there are still up to 98,000 deaths
annually due to preventable medical error at American hospitals.
It is really not a question of whether to fail or not. It is a question
of where in the organisation’s processes is it OK to experiment
and take a risk (and finding appropriate ways to do that) – and
where is it not (and finding ways and means to, nearly, eliminate
failure). The acceptable failure rate is a strategic question of
consequence to innovation capacity that public managers must
be able to answer. Sometimes, accepting more failures can make
sense. An example is the Danish Companies and Commerce
Agency, which used customer surveys to determine what might
be the acceptable level of failure in the forms registering newly
formed companies. The Agency used this input from business
to bring the required proportion of correctly filled-out forms
from almost 100% to just 95%, thereby harvesting a massive
productivity improvement, reducing the time it took to register
a new company from more than 20 days to just four days (Bason,
2007).
Reliable processes
There are two dimensions to this aspect of an innovation culture.

First, building recognised and reliable approaches to the process
of innovation itself. Second, optimising the key processes that
(as discussed earlier) must be highly stable and, to the extent
possible, error free, for instance through methods of employee-
led process optimisation. In other words, maximising smart error
and minimising dumb error.
How can innovation be made into a systematic and well-
described process that is known and recognised widely in the
organisation? Creating innovation labs to be stewards of the
innovation process, building the discipline of innovation into
formal educational and competence development activities
and providing practical tools and guides to support innovation
projects are all means of professionalising innovation processes,
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paving the way for making them as much a part of the

organisation’s DNA as operations are. Another powerful enabler
is choosing a clear innovation framework and training all senior
managers and project developers in that framework, and making
the language and content of that framework an embedded part
of the organisation’s conversation. Over a number of years, the
Danish Broadcasting Corporation (DR), inspired by the BBC,
did just that. It not only established a Concept Factory as the
in-house innovation lab, it sent all mid-to-senior executives to
Silicon Valley to be trained in the ‘NABC’ (Need, Approach,
Benefit, Competition) innovation methodology by the Stanford
Research Institute (SRI). At home, DR built its new media-
and programme-development activities around the NABC
methodology, for instance by making it mandatory to report and
pitch all new ideas to management using the NABC approach.
Subsequently, the methodology became embedded in the very
fabric of how the organisation developed new business.
Conversely, organisations need to build robust processes
for their core operations, and to work to ensure continuous
learning and improvement. The value of this is two-fold:
first, it can provide the confidence and stability to focus also
on the innovation process, taking a step back from the well-
functioning machine of operations to think strategically about
future opportunities and challenges. Second, it can deliver direct
productivity and service gains. Over the years, many such tools
and methods have been developed and implemented in both
the private and public sectors, including TQM, ISO 9000, lean
management, and Six Sigma. These approaches or philosophies
of increasing quality by eliminating waste and minimising
variance are usually most relevant to agencies and institutions
with high case loads, reasonably coherent tasks and a potential to
increase ‘churn’. In Denmark, large agencies such as the Board
of Industrial Injuries and the Immigration Service have achieved
sustained productivity gains of at least 20% while shortening
case-handling times markedly. In the UK, the Department for
Work and Pensions has equally implemented lean management
with success. Across the US, and increasingly in Europe,
hospitals are recognising the power of lean management to
minimise unintended errors, enhancing patient safety and
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People and culture
at the same time improving work conditions for (especially)

nurses and porters. As I mentioned in Chapter 4, while the
Danish Ministry of Taxation was highly innovative in adopting
its compliance strategy, it simultaneously failed to put in place
appropriate processes to ensure that all of its key operations were
sufficiently stable.
Building the capacity to innovate and to operate efficiently at
the same time is no easy feat. And certainly the tools needed are
not the same. The process of innovation lives off divergence, the
ability to take a longer route to ultimately arrive at the desired
outcome with maximum impact (Brown, 2009). The process of
standardised production lives off convergence, the ability to narrow
the variance of outcomes to a minimum so as to ensure quality.
The one focus may overpower the other. As famed and highly
innovative US manufacturer 3M discovered when the company
adopted the Six Sigma approach, the tight logic of operations
can quickly take over and create a culture of incrementalism
rather than of more radical innovation. Six Sigma nearly killed
3M’s innovation machine, before the company found a better
balance between creativity and efficiency (Business Week, 2007).
As Martin (2009) has proposed, and as I discussed in Chapter 2,
design thinking represents an approach to balancing between
managing divergence or, as he puts it, exploring ‘mystery’ in
order to innovate (maximising validity) and exploiting the
algorithm of convergent, efficient mass production (maximising
reliability).
Delegation through value-based management
Trusting middle managers, institutional leaders and staff to do

their work well, delegating responsibility and limiting formal
control are, as discussed earlier, key traits of the modern work
organisation. These characteristics cannot be ascribed to
all public organisations, but they are at the core of building
a culture of innovation (Behn, 1995; Bason et al, 2009).
Recognition of competence at the relevant level and providing
mechanisms for feedback and learning on the basis not of simple
control, but of conversations about results and outcomes, are
key. Basing management on clear and recognised values, and
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acting transparently on them, is a tool for enabling delegation

and enhancing responsibility. Values-based management may
not (and probably should not) replace central control entirely,
but leading the creation of common perceptions of right and
wrong can be a powerful enabler of the freedom to think and
to experiment within the framework of those values. The
question then becomes, of course, what values to promote.
An innovation culture must start from whatever core beliefs
characterise the organisation, but must also attempt to stretch
them in directions such as continuous learning, experimentation
and creativity (Senge, 2006).
Formulating such new values can be a strong signal that
innovation is considered important. For instance, a Danish
municipality made one of its value statements ‘We encourage
risk’. Another, related, example is one of our values at MindLab,
which is ‘We experiment to achieve results’.
Diversity as driver of innovation

In The Ten Faces of Innovation, Tom Kelley (2005), of design
firm IDEO fame, shows how a wide variety of employee roles,
ranging from ‘the anthropologist’ to ‘the director’ and ‘the set
designer’ are crucial to innovation. Innovation often takes place
through a process of combining known elements into something
new and more valuable. The more diverse perspectives that
are brought to bear on a problem, the greater the variety of
potential solutions. Diversity powers innovation.
Understanding diversity
When the Danish tax authorities hired a new project manager

from a private insurance firm, they also hired an innovator.
When he was charged with turning around customer service
at a call centre, he could bring in an entire set of expertise
and experience from running similar services, only in private
business. Within a short time span, he and his team had helped
to reorganise work processes, trained managers and introduced a
learning organisation – resulting in better service, a radical drop
in complaints and higher productivity. Introducing just that one
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person into a complex, difficult organisational environment was

enough to trigger significant positive change. Wilson (1989,
p 229) similarly points out that the very act of bringing in a
manager with ‘outside’ experience can be enough to catalyse
innovation.
Diversity can also happen at a larger organisational scale.
After the 11 September 2001 terrorist attacks in the US, the
Danish police’s secret service branch recruited a large number
of professionals to increase the analytical capacity of the
agency. Almost overnight, a professional culture dominated by
vocationally trained police officers was mixed with the cultures
of political scientists and social researchers. The expanded
competence pool became a driver of innovation, opening up
the organisation to external stakeholders and generating new
methods of research, foresight and investigation (Bason, 2007).
Diversity is an expression of the variance in social and cultural
identities between people in an organisation. Identity might
be connected with gender, race, national origin, religion,
age, profession and so on. One can distinguish between the
characteristics that people are born with (gender, age, ethnic
background, disabilities and so on), and characteristics that are
more fluid and changeable over time, including education,
religion, professional experience, language, personality, values,
individual needs and so on. Diversity is therefore not only a
question of visible differences, but also about a diverse group of
people’s relationship to notions of learning, innovation, creativity
and value in an organisation (Brandi and Hildebrandt, 2003).
There is no lack of research that confirms that organisations
with a more diverse staff, including diversity that reflects the
surrounding society or marketplace, achieve better results than
more homogenous organisations. For instance, Harvard Business
School’s Thomas and Ely (1996) point out that ‘organizations
become effective in fulfilling their missions if employees are
encouraged to tap their differences for creative ideas’.
However, diversity may be hard to manage. And diversity may
be hard to achieve in organisations that are very homogenous, as
many public sector organisations are, in terms of dimensions such
as gender, age and profession. The homogenous professional
silos of government agencies may, on the one hand, be perceived
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as guarantees of legality and consistent case management; on

the other hand, they may not be conducive to the divergence
of ideas and solutions necessary for innovation (Mulgan, 2009).
A central feature of this book is the emphasis on collaborative
design approaches and citizens’ involvement as enablers of co-
creation and public sector innovation. To lead co-creation,
competencies within ‘classic’ disciplines of public administration
and professions must be combined with ‘new’ disciplines such
as qualitative social research and design thinking (Kelley, 2005;
Bason et al, 2009; Brown, 2009; Bason, 2017) (Figure 7.1):
• Public management and organisation: Understanding the

dynamics and internal workings of politically governed
organisations, possibly knowing the organisation(s) and
internal stakeholders involved.
• Design: The ability to leverage design thinking to orchestrate
the key activities in the design process, and using applied
design skills to visualise and prototype solutions.
Figure 7.1: Public sector innovation competencies

Public administration
Law
Economics
Political science
...
Social research Design thinking

Anthropology Design
Ethnology Co-creating Architecture
Sociology Communication
Psychology ...
...
Profession
Medicine
Nursing
Pedagogics
Social work
Engineering
Technology
...
Source: Adapted from Bason et al (2009)
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People and culture
• Social research: The skill set to conduct in-depth ethnographic

research, applying the appropriate methods and tools to
harvest insight into citizens’ and other end-users’ practices.
• Professional expertise: Depending on the type of project, it
might also be necessary to involve the relevant professionals
(nurses, doctors, teachers, social workers) and possibly
systems developers such as IT specialists, human resources
and communications in the core innovation team.
One can compare such transdisciplinary collaboration to a

world-class football team, everyone possessing highly specialised
and differentiated skills, moving at the same time, each doing
their best (Kelley, 2005; Bannerjee, 2009). In this book’s section
on co-creation (Chapters 8–11) I will look more closely at the
features and processes that social researchers and designers can
bring to the innovation process – and how that process might
be orchestrated.
Strategic competence development

In the Introduction to this book I touched on changing
demographics and the ‘war for talent’. That war may have
seemed far off during the depths of the financial and economic
crisis, nearly freezing the outflow of staff from public sector
organisations and multiplying job applications to vacant public
positions. However, in most modern economies, due to
demographic change alone, the public sector will be in dire
need of new talent in the years to come; as the pace of economic
growth is increasing again, the option of higher-paying jobs in
the private sector is once more becoming attractive.
The public sector therefore faces a double challenge to
leverage talent to drive innovation: to increase its attractiveness
to new talent in a competitive market with fewer young entrants,
and to enhance the competence development of existing staff in
the direction of more innovative ways of working.
The first challenge may be as much a question of branding as
one of content. Public organisations offer meaningful jobs that
often focus on making a substantial difference in people’s lives.
In fact, the kind of meaning and content that many private
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firms are desperate to convey to future staff in lavish employer

branding schemes pretty much ‘comes with the package’ in the
public sector. However, few public organisations are good at
communicating it. And not least, the idea that welfare delivery
and services are also calling for innovation is hardly a part of
the communication. At MindLab, when we advertised publicly
for new staff who would help to ‘Challenge the public sector
from the inside’, the ads generated hundreds of responses, many
from private sector employees, a number of whom would
state in interviews that the job description ‘simply spoke to
me personally’. Similarly, when the UK Government Digital
Services (GDS) was set up in the early 2010s to in-source digital
competencies into a central team in Whitehall, it turned out
not to be a problem to attract talent. In a recent job advert, Arif
Harbott, a manager at GDS, wrote, ‘I have worked in many
private sector organisations but government is one of the most
exciting and rewarding places I have worked: for its scale, the
complexity of problems, and the difference we make to people’s
lives’ (GDS, 2017). It is amazing, the energy and enthusiasm that
people can show for transforming public services when they are
called to be part of such a mission.
The second question of how to strategically develop
competencies for innovation within the public sector has to do
with identifying which managers and staff are (or should be)
in need of new tools and methods to orchestrate or take part
in the innovation process. A coherent innovation strategy that
clarifies where innovation capacity needs to be enhanced can
be the platform against which competence development needs
are assessed.
What could be the delivery modes for competence
development? A powerful way of demonstrating what
innovation and innovation competencies are about is, obviously,
to be sure to involve the relevant internal stakeholders directly
in the process of innovation and co-creation whenever relevant
and possible. However, just ‘show it, don’t tell it’, may not
be enough. It can be difficult driving a coherent innovation
process while at the same time training the participants in all
the theories, methodologies and tools involved. At MindLab,
our experience was that civil servants who participate directly in
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innovation projects do come away with improved competences

– but not enough to be able to run the entire process themselves
the next time around. The same has been the experience at
the Danish Design Centre, where we have matched design
firms with businesses to help them drive innovation projects.
Here, more is needed than simply taking part in the project
for the in-house managers and staff of the business to really
‘get the methods under their skin’. More formal approaches,
such as systematic training, may therefore be necessary. At
MindLab we thus decided to deliver a focused course on
innovation and citizen involvement as an integrated part of
three ministries’ project management course, cutting across
more than 15 departments and agencies, training in design
thinking and ethnographic research methods. The course
was supported by a permanent network of innovators and
an online methods toolbox. A similar approach was taken
in Australia: as part of Victoria’s VPS Innovation Action
Plan, the government launched a host of initiatives to power
competence development. The actions included Innovation
Transfer, a secondment programme for VPS staff to the private
and community sectors, and Innovation Skills, an effort to embed
innovation skills in recruitment, learning and development and
performance management. It also created an online Innovation
Toolbox (a collection of innovation tools, resources and best
practice guides) and, finally, the Action Plan established
Communities of Practice, which were opportunities to form
groups of mutual interest across the VPS. In the UK, the Design
Council developed a mentoring and peer learning programme
for public managers on design-led innovation, Public Services
by Design. The Social Innovation Lab in the county of Kent,
UK (SILK) pioneered a comprehensive set of tools (a ‘methods
deck’) and an educational programme for public project
managers. And in the UAE the government established a multi-
year, comprehensive competency development programme in
partnership with Cambridge University to train hundreds of
civil servants in innovation and design methodologies.
Other tools that can prove effective in supporting strategic
competence development for innovation include ensuring a
diversity of staff on innovation projects, leveraging e-learning
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and online tools and organisation-wide talent-development

programmes.
Incentives
In Singapore, innovation incentives have been built into the
performance management appraisal and reward scheme; it builds
on a benchmarking system where the individual teacher can see
his or her own performance against peers, and how to improve.
For extraordinary performance, the monetary incentive is up
to four month’s salary. The evidence suggests that teachers’
performance and innovative capability is enhanced through this
incentive structure (Cabinet Office, 2009).
To many, the question of incentives is central to driving
organisational change. For instance, the Finnish government
declares in its innovation strategy that in support of public sector
innovation activity, ‘clear incentives linked to the Government’s
performance management’ will be created (Finland Ministry
of Employment and the Economy, 2008). And in its review
of innovation in the UK central administration, the NAO
points out that individual and organisational targets must create
incentives that focus leaders and staff ‘on continuous and radical
improvement and which are outcome based (as opposed to
prescribing how they do their jobs) so as to give flexibility in
allowing for innovative responses’ (NAO, 2009).
Agreeing that incentives are probably important is, however,
not the difficult part. The difficult part is to pinpoint what
kinds of more extrinsic motivations might be created to help
build innovation capacity. Not many countries have found the
magic bullet as Singapore’s school administrators seem to have
done. What are the most powerful motivations in the public
sector? Monetary rewards, or recognition and accelerated career
development?
Dominating paradigms of what is considered ‘good’ can be
powerful drivers of the kind of behaviour the organisation
wants. For instance, if nurses are rewarded mainly for efficiency
and not for providing care, no wonder policy makers find it
difficult to provide ‘citizen-centred service’.
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People and culture
Some public organisations have successfully rewarded

innovative staff with money. For instance, at the US General
Services Administration, a handful of staff members were
able to share a substantial cash award because they were
instrumental in new solutions that generated savings of as
much as USD25 million (Eggers and Singh, 2009). However,
such programmes would often not, for political reasons if not
anything else, be possible in public sector organisations. They
might also not be desirable, as support for public services, as well
as public service cultures, is tightly connected with notions of
neutrality, fairness and equity.
The problem is usually the opposite: that not only is the
individual or organisation not rewarded for a substantial saving,
but the typical response in the public sector would be for
whatever funding authority to actually take the entire saving away
as part of the regular procedure of the budgetary process. This
leaves a negative incentive for innovation, as there is no sense
in spending the time and energy to achieve savings just to see it
all disappear into the big black box of the treasury.
Probably a balanced approach, where at least three key
motivations are applied in concert, would be the most sensible:
• Building incentives for innovation into organisational,

team and individual metrics and targets, thus embedding
innovation as part of the regular performance review process
alongside other relevant targets.
• Tying at least some part of salaries, reasonably sized bonuses
and career development to the metrics, as many public
organisations already do.
• Celebrating and valuing innovative thinking and results
publicly, through awards and other forms of recognising
departments, teams or individuals – awards such as Harvard’s
Innovations in Government, the European Public Sector Awards
and Bloomberg Philanthropies’ Mayor’s Challenge are examples
of good models.
A final incentive for innovation may be the simplest of all:

there is nothing as demotivating as experiencing that your
ideas are not recognised and taken seriously. True innovators are
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ultimately motivated by succeeding in taking on big challenges

and tackling wicked problems. The ability of organisations
and managers to not just support and invite new ideas, but to
consistently pick them up and act on them, is perhaps the most
powerful motivator of all.
How to do it
To many, the culture of public sector organisations is key to
explaining why innovation in government is difficult. Barriers
include a top management-driven approach to innovation and
change, and a culture that punishes failure of all sorts. Large
bureaucracies, whether they be central departments, agencies
or institutions like hospitals, schools and care homes are often
characterised by homogenous staff with strong professional
identities but perhaps a lack of exposure and openness to other
skills and perspectives. Competence development is rarely very
strategic, and the incentives to contribute to innovation are
sometimes meagre or even negative.
This chapter has addressed how modern work organisation is a
powerful enabler of innovation, also in the public sector. We’ve
seen a number of approaches to building innovation capacity
through people and culture, dealing with risk and managing
diversity, skills and incentives actively to promote innovative
behaviour. Public managers must pay special attention to four
sets of efforts.
Employee involvement and innovation culture
Employee-driven innovation (EDI) is fostered by modern work

organisations. From state agencies to day-care institutions,
employees hold a massive potential for submitting new creative
ideas and solutions – if only they are asked. It is the public
manager’s responsibility to systematically involve the staff in
the strategic development of the organisation and to create a
culture where inquiry and involvement is natural – also across
professional boundaries and organisational silos. The public
manager must ask questions such as:
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People and culture
• To what extent is everyone aware that they too can contribute to

innovation?
• Are we systematically harvesting ideas from across the organisation,
and how do we ensure that they are taken seriously and transformed
into real organisational change and value creation?
Diversity
A diversity of educational backgrounds, age, gender and

ethnicity are – if well-managed – drivers of innovation in
all types of organisations. Generally speaking, public sector
organisations are not very diverse. They can most likely boost
their innovation capacity significantly by taking a much more
proactive approach to increasing diversity in a broad sense,
reflecting more of the surrounding society in their staff make-
up, including from the private and civic sectors. In addition to
the range of ‘classic’ diversity parameters, recruiting individuals
with skills in fields like technology, design and anthropology can
be strong innovation drivers. Key questions are:
• Is the composition of our staff conducive to innovation? If no, which

profiles and skills might we need?
• Are we actively seeking to benefit from diversity by inviting everyone
to be part of the creative process?
Strategic competence development
The effort to attract, retain and develop staff with the right
skills and competencies in the face of a renewed ‘war for talent’
is crucial for the future ability of public sector organisations to
become more innovative. Taking a more active and creative
approach to their activities and making it visible might in itself
make many public organisations more attractive to future talent:
• Do we have an attractive brand, and are we able to recruit the

employee profiles we need to become a high-performing and
innovative organisation?
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Innovation incentives
Most public employees haven’t chosen their careers because of

the fat salary. However, experience shows that employees in
public organisations can be motivated by results-based salary and
other benefits, provided that the incentive model is the right
one and, probably, team based. In the US and Singapore, some
public organisations give cash rewards. In Denmark, studies have
shown positive results from using performance pay based on
group outcomes among social workers. There is no excuse not
to work actively with creating positive incentives for generating
ideas and making innovation happen. So we have to ask:
• What are the positive incentives in our organisations to embrace a

higher level of risk and help generate and drive through new ideas
and solutions?
• Can we do more to make it attractive for employees and managers
to contribute actively to fostering innovation and positive change?
• How might we, in concrete terms, celebrate when employees have
taken on big, audacious challenges and made a significant attempt
at addressing them?
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PART THREE
CO-CREATION
ORCHESTRATING
CO-CREATION
CITIZEN DESIGN
INVOLVEMENT THINKING
MEASURING
TO LEARN

EIGHT
Design thinking in government
‘Design thinking can remind public servants to ask

the obvious: What’s it like to check in to a hospital,
call the police or collect the dole?’ (Tim Brown, chief
executive and president, IDEO, in Design Council,
2009a)
When the city council of Sunderland, UK engaged with

LiveWork, a service design company, to find new approaches
to helping economically inactive people into work, it also
engaged in an entirely different development process. Over
the course of the project, the designers spent three months
following 12 people to gain a deep insight into their lives, and
more than 280 people were involved in idea-development
sessions. Building on design approaches such as ethnographic
research, service journeys, fast experimentation and prototyping,
LiveWork helped the city council to identify a range of possible
solutions that could get people more efficiently on a path back
to work. The key solution became a platform that built on
the resources within the existing local network of community
organisations in fields such as mental health, drug rehabilitation
and caring. LiveWork found that these community groups
already had relationships with citizens in need – relationships
that could be leveraged at not just the beginning but at every
stage of citizens’ paths back to work. The organisations could
function as an ‘activity coalition’, serving as mentors, providing
resources and helping citizens along each step of their journey
back into work, in collaboration with established Jobcentre Plus
employment services (Livework, 2006; Gillinson et al, 2010).
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The application of design thinking – the intellectual and

practical foundation of the co-creation process – is expanding
rapidly in the public sector. From the design of open learning
environments in French schools to transforming staff–patient
interaction and designing bugs out of UK hospitals to reshaping
services to injured Danish workers, design thinking is a core
driver of innovation in government. Scholars and practitioners
alike have claimed that design is the ‘midwife of innovation’
(Design Council, 2009a; iLipinar et al, 2009; Bason, 2014;
Staszowski and Brown, 2016; Bason, 2017).
This chapter introduces the co-creation section of this book,
which consists of four interrelated themes: design thinking,
citizen involvement, the co-creation process and learning
through measurement. The present chapter considers how
design and, in particular, design thinking offer a new approach
to leading innovation in the public sector. It asks:
• What is design, and what is its relevance to public sector

innovation?
• What are the key characteristics of design thinking, and how
does it relate to other perspectives on design?
• What might be the central credos of design thinking in
government?
• Are there challenges in applying design thinking within the
public sector, and if yes, what are they?
Design, innovation and the public sector

In October 2009, the Wall Street Journal did something rather
unusual: it published a book review about design. Within a few
months, three new management books on the potential of design
thinking had hit the bookstores, apparently spurring the editors to
think there was something that the world of business needed to
know about. Roberto Verganti’s Design-driven Innovation (2009),
Tim Brown’s Change by Design (2009), and Hartmut Esslinger’s
A Fine Line (2009) all argue that applying the intellectual and
practical tools of design is an efficient means of paving the way
to innovation. These books, along with Rotman School’s Roger
Martin’s The Opposable Mind (2007) and The Design of Business
172
(2009), reflect a strong current in the business sector, where

design thinking and design-led innovation are widely recognised
as a key driver of competitiveness and value creation.
Advocates of design even have the numbers to prove it. A
study by the UK Design Council showed that design-aware
companies outperformed the market by 200% over a 10-year
period (Dubthaigh and Barter, 2006). More recently, the
Design Management Institute’s study of the value of design has
documented a similar scale of value: during the period 2005 to
2015, design-led companies have maintained a significant stock
market advantage, outperforming the Standard and Poor’s Index
by an extraordinary 211% (DMI, 2018).
As mentioned in Chapter 7, the Design Council has
applied its tested and tried design tools by acting as adviser
not just to enterprises but also to the public sector, proposing
that public services by design are a new route to innovation in
government (Design Council, 2009a; Fora, 2009). Sitra, the
Finnish Innovation Fund, created the Helsinki Design Lab
to help tackle real-world problems faced by government by
bringing designers together with public sector content experts.
And today, governments across the world are embedding design
methodologies inside their structures in the shape of innovation
labs (Bason, 2014; Puttick et al, 2014; OECD, 2017).
To many public sector employees, design is still about the
creation of ‘stuff’ such as furniture, fashion and life-style artefacts.
For the past many years I have been teaching newly appointed
directors in the EU institutions in Brussels an executive training
module called ‘Public Innovation by Design’. Here, I always
spend the first session on expanding their view of design from
physical things to a much broader conception of the term. It
quickly turns out that most agree that strategies, organisations
and systems can be designed; that services and policies are
designed – or at least, the process of establishing them can be
conceived as a design activity. This would be in the vein of
Herbert Simon (1969), who proposed that ‘design’ is opposite
to ‘science’ as it is concerned with the artificial, as opposed to
the natural world. Simon stated that ‘everyone designs who
devises courses of action aimed at changing existing situations
into preferred ones’ (quoted in Kimbell, 2010). Designs are thus
173
attempts at addressing problems – or, as the midwife metaphor

suggests, at delivering something new into the world. A design
might handle the problem of how to contain a liquid in a smart
container, or it could tackle the challenge of getting reliable
foetal heart-rate monitors to the developing world. Increasingly,
designers find themselves creating fewer products and more
social solutions.
In fact, a hand-charged foetal heart-rate monitor was a recent
winner of the world’s largest design prize, the INDEX:Award
by a Copenhagen-based organisation that is leading the way
towards the new shape of design. The motto of INDEX is
‘Design to improve life’ (INDEX, 2009–17). In the same vein,
industrial designer Emily Pilloton, founder and chief executive
the US-based design firm Project H, encourages designers to
shift their focus from consumerism so as to help create societal
change, saying that designers ‘need to stop talking big and start
doing good; to put the problem-solving skills on which we
pride ourselves to work on some of the biggest global issues; to
design for health, poverty, homelessness, education, and more’
(Pilloton, 2009).
As the late John Heskett, author and professor at the School
of Design at Hong Kong Polytechnic University, has said, design
‘is the human capacity to shape and make our environments
in ways that satisfy our needs and give meaning to our lives’
(Heskett, 2002). Verganti (2009) condenses this definition even
further, saying that ‘Design is the creation of meaning’. Liz
Sanders and Pieter Stappers (2008) sum up this underlying shift
in the role of design as a shift from ‘traditional’ design disciplines
to ‘emerging’ design disciplines (Table 8.1).
Table 8.1: The new shape of design
Traditional design disciplines Emerging design disciplines

Visual communication design Design for experiencing
Interior space design Design for emotion
Product design Design for interacting
Information design Design for sustainability
Architecture Design for serving
Planning Design for transforming
Source: Sanders and Stappers (2008)
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Given that the role of government in people’s lives is often

to create meaningful change, whether it be in social services,
education or health, this shift in the design industry offers us
something important: the approaches and tools that can help
us consciously to create the meaning and value that we want
citizens, businesses and other actors in society to experience.
Defining design thinking

As should be clear, design comes in many different shapes
and sizes. How does design thinking fit into the picture? Bill
Moggridge (2009), who co-founded the design firm IDEO and
was director of Cooper-Hewitt National Design Museum, has
suggested a hierarchy of design that distinguishes between the
following levels:
• General awareness of design, which concerns how we as

individuals relate to design in our own lives.
• Specialist design skills, which has to do with the design
discipline and the methods of educated designers, such as
graphic design.
• Design thinking, which is concerned with the design process
and how it can guide collaboration across different disciplines.
• Design research, which is the academic subject of researching
the world of design.
My emphasis in the following is mainly on design thinking –

partly on specialist design skills. It addresses a number of the
key tenets of the emerging design disciplines that Sanders and
Stappers (2008) highlight. Although there is no uniformly
accepted definition of design thinking, at least two interrelated
approaches may be pinpointed (Kimbell, 2010).
First, design thinking can be characterised as the discipline
of melding the sensibility and methods of a designer with what
is technologically feasible to meet people’s real-world needs
(Brown, 2008). This definition highlights the tools and concrete
practices of forming teams, running specific design projects,
powering organisations and creating innovative new products or
services, much like LiveWork did for Sunderland City Council.
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Second, design thinking can be viewed as an ‘attitude’ (Boland

and Collopy, 2004) or a way of reasoning. As I discussed in
Chapters 3 and 7, Martin (2009) characterises design thinking as
the ability to manage and move between the opposing disciplines
of analysis, involving rigour and ‘algorithmic’ exploitation,
on the one hand, and synthesis, involving interpretation and
exploration of ‘mysteries’, on the other hand (Table 8.2). At the
heart of design thinking is thus the balancing, or bridging, of two
cognitive styles: the analytical-logical mindset that characterises
most large organisations and professional bureaucracies, and the
more interpretative, intuitive mindset that characterises the arts
and creative professions. As we saw in the Introduction to the
book, where public servants worked with creative scenarios for
the future of health, interesting things happen when these two
mindsets enter into a conversation. The one uses analysis to
build robust future scenarios. The other creates tangible, physical
immersive experiences that build empathy and engagement to
act in the face of alternative futures. In that context, Martin
highlights the capacity for abductive reasoning – detecting and
following a ‘hunch’ about a possible solution, bridging the
gap between analysis and synthesis. In Martin’s view, such
‘integrative’ thinking is the essential core of design thinking
(Martin, 2007; 2009).
Although these two definitions taken at face value appear
different, on further examination they mostly support each
other. Behind the practical orchestration of ‘design thinking
projects’ lie a set of principles and a style of thinking that Tim
Brown also acknowledges explicitly, referring to Martin’s The
Table 8.2: Design thinking: Bridging the gap
Analysis Synthesis
(Splitting) (Putting together)
Rational Emotional
Logical Intuitive
Deductive Inductive
Solutions Paradigms, platforms
‘Thinking it through’ Rapid prototyping (think through doing)
Single discipline Multiple disciplines, T-shape
Elegance Impact, value, diffusion
Sources: Inspired by Bannerjee (2009), Brown (2009) and Martin (2009)
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Opposable Mind: ‘design thinking is neither art nor science nor

religion. It is the capacity, ultimately, for integrative thinking’
(Brown, 2009). Likewise, Martin takes Brown’s view of design
thinking to heart and applies it as a key definition (2009, p 62).
The distinction between the two definitions, blending design
practices with a way of thinking, is therefore quite blurred, and
I will treat them in this book as broadly in tune with each other.
Just as we saw the opposites of strategic planning and strategic
innovation in Part Two of this book, the opposing characteristics
of analysis and synthesis are striking. It is also striking how
clearly most public sector organisations do not allow for many
of the elements in the right-hand column of Table 8.2.
Introducing design thinking into the public sector is thus
likely to be a challenge. Lawyers, economists and political
scientists are expert analysts but are rarely comfortable with
more interpretive thinking styles. Emotion and intuition is
hardly recognised as a basis for decision making. Nor should
it perhaps be, in itself. But much decision making – especially
at the political level where it is fuelled by the dynamics of the
media – is in fact often quite intuitive and emotional, even
though we may not like to admit it. As management thinker
Henry Mintzberg (2009) has pointedly argued, ‘judgement’ is,
at the end of the day, what managers have to rely on. Second,
the point with design thinking is not to throw analysis or logic
away, but to consciously balance the two modes as part of the
innovation process. As Roger Martin describes convincingly in
The Opposable Mind, the test of a first-rate intelligence is, in the
words of novelist F. Scott Fitzgerald, ‘the ability to hold two
opposing ideas in the mind at the same time and still be able to
function’ (Martin, 2007). This is a competence and an approach
that needs to be much better understood and practised by public
managers at all levels.
A model of the design thinking process

What does a process drawing on design thinking look like?
To design new approaches that more powerfully address the
desired results, we need to deliberately orchestrate a process
that captures the contributions of both understandings of design
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thinking, and shifts from the present to the future. This implies
an iterative process encompassing the following dimensions
(Figure 8.1):
• Knowing the present in concrete terms through design research,

often applying the tools of ethnographers, harvesting deep
knowledge about people’s lives.
• Analysing the present state of affairs by structuring our
knowledge and generating the abstract analytical categories
that help us to see individual dimensions or parts.
• Synthesising from the different parts to potential new,
holistic solutions, interpreting the findings and generating a
divergence of ideas and concepts, shaping possible approaches
that take account of complexities at an (abstract) systems level.
• Creating the prototypes of solutions that can be tested
and assessed for their practical usage with end-users, and
implemented.
For each overall dimension in such a process, there can be

a number of discrete steps and methodologies. For instance,
when LiveWork helped Sunderland City Council to create new
approaches to help people back to work, it started by taking an
extremely concrete look at the everyday practices of the people
Figure 8.1: The design thinking process
ABSTRACT
Analysing Synthesising
PAST AND FUTURE

PRESENT
Knowing Creating
CONCRETE
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in question, following 12 of them closely over a long period

of time. Based on this process, LiveWork analysed the rich
ethnographic data and other inputs, applying a more analytical
mode, trying to reach a better understanding of the present
state by understanding its individual parts. LiveWork then
involved hundreds of people in interpreting, or synthesising,
the information into distinct findings. Finally, new service
proposals were created with people, leading not just to a new
system design but also to the discrete activities that could power
the redesigned service journey in practice. I will describe this
design-thinking process and its concrete methodology in detail
in Chapter 9, characterising it as a process of co-creation.
Since its application within the public sector is relatively
recent, there is not yet much hard evidence of how the design-
thinking process works. For instance, there seems to be no
consensus on when and how to most appropriately bring end-
users (citizens, businesses) into the mix. As Brown (2009) has
pointed out, there is no precise roadmap. Instead, ‘There are
useful starting points and helpful landmarks along the way’, and
the process is ‘best thought of as a system of overlapping spaces
rather than a sequence of orderly steps’. Likewise, the optimal
configuration of transdisciplinary collaboration between various
public professions, as part of the design process, is not very well
understood.
However, there is a rapidly growing body of convincing case
examples from public sector innovation labs and social innovators
such as the UK’s Policy Lab, Lab@OPM, La 27e Region,
Norway’s DogA, MindLab, and from service design firms such
as IDEO, ThinkPublic, Engine, LiveWork, and Designit, 1508
and FUTU of Denmark. There is increasingly a proven track
record of design thinking adding real value, spanning from
government agencies such as the UK National Health Service,
the US TSA, the Department of Veterans Affairs and even the
Danish Prison and Probation Service. International institutions
such as the UN, the European Commission, the OECD and
the World Economic Forum are showing a rapidly growing
awareness of the value of design to both public and private
organisations. Design thinking in government looks set to stay.
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Four credos
How do the definition of design thinking and the design process
translate into key principles and actions? In the spirit of the US
designer and social innovator Emily Pilloton, founder and chief
executive of Project H Design, who is committed to creating
‘impactful design that enables lives’ by bringing design into
teaching and skills development, I will highlight four credos of
design thinking that help to capture the essence of how the
approach can help to drive public sector innovation.
Credo 1: See everything as an experiment
What if government viewed any new intervention in the

world as an experiment? In spite of the growth of evaluation
practices and ‘evidence-based policy’, and in spite of elaborate
implementation strategies, plans and systems, do we ever really
know in advance whether a new public policy or service is
going to work in a highly specific context? If we don’t, we
involuntarily end up experimenting with the entire population
(Harris and Albury, 2009). Might we instead have to learn in
smarter ways, reshaping stage-gate projects into iterative and
more open-ended, reflexive learning processes (Senge, 2006)?
‘Even if your ambition is big, make it small’, said one noted
design thinker at a seminar. Public organisations must become
much better at embracing the notion of ‘failing forward’:
practising and experimenting deliberately in small scale, making
the ‘smart errors’ that feed learning. As Tim Brown (2009) says,
‘fail early to succeed sooner’.
One thing is to allow experimentation early in the innovation
process. Another is to view daily practice in the same way that
an experiment would be viewed. Google, the information search
giant, almost always launches new products, such as its e-mail
software Gmail, in ‘beta’. In tech language this means that it
is not yet the final version and customer input is welcomed to
help improve the final product. What might be the consequence
of viewing all government programmes as ‘beta’ versions that
should continually be refined, or even regularly redefined?
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Could regulation even be designed to be more flexible and open

to ongoing change in the face of rapid digital transformation?
Clearly, as discussed in Chapter 2, in a political environment
it can be difficult to allow time and space for small-scale
prototyping and iteration. Public managers need to insist to
politicians that it makes sense to do at least some rudimentary
real-world testing before major programmes are designed,
decided and implemented (Christiansen, 2014). In addition,
they must secure resources and competencies to actually do the
prototyping – which, incidentally, they did in the LiveWork
project in Sunderland. One approach could be to collaborate
with social innovators, who, as was discussed earlier, may have
a wider margin to experiment, at least in the early stages of the
innovation process.
Credo 2: Challenge the status quo
Former partner in the consultancy CPH Design Anna Kirah

(2009) calls it ‘whydeology’: when you confront a problem
and examine possible solutions, keep asking ‘why?’ When you
run out of things to ask ‘why’ about, you’ve probably found
the solution you are looking for. Using the word ‘why’ is not
something government officials are particularly trained to do.
Rather, the instinct of most of us is to use the word ‘because’.
Challenging the status quo is also about allowing ourselves to
imagine a different future. Because it is future oriented, design
thinking helps us to ask questions like ‘what if …’ and ‘might
we …’ (Kelley, 2005; Brown, 2009). By reframing questions,
it guides us to make sure that we are doing the right thing
(solving the right problem) and not just doing things right
(applying existing tools to solve what we think is the problem).
Because design as a discipline is about addressing problems
within constraints, focusing on outcomes, many designers
almost automatically begin a new task or project by challenging
conventional thinking. And this is where innovation begins.
If one asks a designer to design a chair, she may suggest that
instead she should design a ‘sitting instrument’. In the new
Copenhagen Metro stations, this has meant that there are no
chairs or benches, but instead simple, slanted structures that
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you can lean on comfortably for a few minutes until the next
train arrives.
Credo 3: Value the citizen
As a general rule, designers are concerned with practical

problems and practical uses. Because the design process starts
with concrete situations in the present, and proceeds by being
concrete in the future, design is concerned with people,
practices and their context. What do people do today, what
seems to work and what doesn’t? What could be done to
change things, and how would a new approach, product or
service function in practice? Placing people’s wants, needs and
situations at the centre of the creative process is a powerful way
to generate the insights that allow us to create with people,
not for them (Sanders and Stappers, 2008; Bason, 2017).
Creating with people enables us to understand how their place
within the social fabric can be leveraged as a positive force
for change. As Gillinson et al (2010) point out, there are two
benefits to focusing on people, and seeing them at the heart
of social networks: first, it builds people’s social relationships
into the heart of the way services are designed, in recognition
that ‘it is the quality of human interactions that makes them
effective’. Second, it views people’s relationships not merely as
a constraint, but as a valuable resource. At MindLab, a project
we did with the Danish Business Agency to identify how
entrepreneurs with high-growth potential might be helped to
accelerate their business development, proved this point: the
entrepreneurs had no relationship with, or interest in receiving
assistance from, the public system of business support (it was,
perhaps unfairly, viewed as un-cool and without sufficient
expertise). However, they were keen to listen to their more
successful peers. Our solution: to facilitate a system of networks
among entrepreneurs that would help them to leverage these
relationships, and build new ones where younger start-ups with
high potential could benefit from peer mentoring and coaching.
At the Danish Design Centre we now run a major incubator for
start-ups, called Innofounder, hosting about 40 new businesses
annually. The programme, which we implement jointly with the
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Copenhagen Institute of Interaction Design (CIID), is strongly

based on design methodology and includes a broad group of
mentors who coach the entrepreneurs after a peer mentoring
model.
As I will explore in more detail in the next chapter, designers
are often assisted by ethnographers and anthropologists (some
label themselves design anthropologists) to harvest detailed
qualitative data from people through fieldwork such as
observing, participating, probing and interviewing. This type
of ethnographic research can be an eye-opener, as it helps us to
focus on the subjective, qualitative and emotional factors that are
often the most important in driving outcomes. At MindLab, we
called this a process of harvesting ‘qualified inspiration’.
Credo 4: Be concrete
Applying more specialist design skills in the innovation

process helps to keep it concrete. Designers can visualise and
build physical or virtual prototypes to make problems and
potential solutions tangible. For instance, design consultancy
Zago helped the UN headquarters in New York to visualise
the meaning of the CO2 per capita figures in the reporting
from the UN Intergovernmental Panel on Climate Change.
To make the relative CO2 production tangible to visitors to the
UN headquarters, Zago displayed the per capita production of
selected countries as bean bags. Needless to say, countries like
the US and China were endowed with giant (9-foot tall) bean
bags, while countries with lesser output per head were displayed
with beanbags the visitors could easily sit on. Zago was also
instrumental in helping former US Vice President Al Gore with
the powerful and illustrative graphics in his documentary An
Inconvenient Truth (Zago, 2010).
In a perhaps even more difficult context in terms of level
of abstraction, MindLab helped the Danish tax ministry to
visualise the concept of ‘how citizens perceive their legal rights’.
The task was to gain a deeper understanding of how citizens
subjectively feel about factors relating to the tax authorities
like fairness, equality before the law, transparency and security.
We curated three contemporary artists to each create a work
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that could trigger reflection and dialogue among citizens, and

between citizens and civil servants. The finished works were
used as visual prototypes and presented for a group of citizens
in a facilitated art reception, where the project team could
harvest their impressions and dialogue. The output was used in
reshaping how the ministry measures citizens’ perception of legal
rights. One of the works (a video installation) became part of
the curriculum for training new tax and customs staff.
The power of visualising sizes, relationships and impacts in
a different form than MS Excel spreadsheets should not be
under-estimated. By anchoring abstract figures, relationships
and practices in the shared experience of something concrete,
visualisation enables exactly the kind of transdisciplinary
collaboration that is central to co-creation. It also enables better
dialogue and consensus building between professionals and
citizens. An example of a concrete and highly effective design
tool for capturing both analytic and interpretive modes is the
service journey, which, among others, LiveWork used in their
work for Sunderland City Council. Essentially a sequential map
of the individual steps and interactions in a citizen’s ‘journey’
through a government service process, service journeys focus
both on the ‘objective’ efforts made by the system to conduct
service and regulation, and on the key subjective emotional
experiences of citizens on their travel. Service journeys are
described in more detail in the next chapters.
Paradoxically, while the population and, to a significant
extent, politicians are highly influenced by such visual and
physical tools, bureaucrats hardly ever produce them as part
of their own policy- or service-development process. At most,
graphic designers are called in for final communication of the
result. That misses the point. Visualisation is a powerful creative
tool throughout the design process.
These four credos are only a first stab at articulating what
design thinking might mean for government. Although many
organisations are beginning to embed design thinking in public
services, we have a long way to go.
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Challenges to design in government

In spite of the arguments in favour of design thinking in
government, a number of challenges and barriers remain. One
is the question whether design thinking is simply a fad. As
Lucy Kimbell of Oxford’s Saïd School of Business has pointed
out, ‘In popular culture, everyone might be a designer but in
management practice, it seems, everyone should be a design
thinker’ (Kimbell, 2010). Kimbell proposes to take the ‘thinking’
out of the design discussion and focus more empirically on
how design is practised (‘design-as-practice’), seeing design as
a situated and distributed accomplishment in which a number
of things, people and their doings and sayings are implicated.
Similarly, in my own recent work I have taken to speaking more
generally about design and viewing design thinking as a variant
that is suited for communicating the implications of design to
management (Bason, 2017).
However we define it, design as a practice in government
has consequences both for public servants and for designers.
The first obvious challenge is for public managers and project
managers who are charged with innovation projects to start
considering themselves not (only) as civil servants but as design
thinkers. What will it take for an experienced policy maker in
central government, or a head nurse in a hospital, to embrace
that role?
People with a formal design background themselves may have
difficulty working trans-disciplinarily, understanding sufficiently
clearly how their own skillset matches with those of lawyers,
economists, teachers or health professionals. Designers (also)
need ‘T-shaped’ competences, combining the ‘vertical’ ability
to deeply master a skill with the ‘horizontal’ ability to connect
and collaborate effectively with other professions (Kelley, 2005;
Brown, 2009). The designer has to be comfortable working not
only with other designers or engineers but with people with
a very different mode of working than themselves. Another
dimension, as Kimbell (2010) points out, is that if design must
be viewed as a practice situated in a concrete context, then
designers working in government will encounter a relatively
unfamiliar territory of law, bureaucracy, administrative processes
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and the political nature of policy development and decision

making. Designers may be those who are the first to lose patience
with the drawn-out and seemingly endless timelines of public
sector decision-making processes. How to keep motivation,
enthusiasm and momentum going in such an environment?
Another challenge is for the project manager–designer to shift
from the more familiar role of being ‘the solver of problems’
to being the one who empowers others to discover new
approaches. ‘Designers in the future will make the tools for
non-designers to use to express themselves creatively’ (Sanders
and Stappers, 2008). As I will explore further in Chapter 10, the
co-creation process is essentially orchestrated, not led or managed.
The designer must perceive herself more as a coach or steward,
less as a director of the process.
Designers must also recognise that wicked problems are,
by definition, not finally ‘solved’ anyway. Likewise, designs
are played out long after the designers have exited from the
process. In her work on design, Lucy Kimbell introduces a
second perspective that she labels ‘design-in-practice’, and
that addresses this point: designs, even when they are physical
objects, keep on ‘living’ in other contexts and uses: ‘When
the designers have finished their work, and the engineers and
manufacturers have finished theirs, and the marketers and
retailers have finished theirs, and the customer or end-user has
engaged with a product or service artefact, the work of design
is still not over’ (Kimbell, 2010). Kimbell’s argument is that
through their engagement with a product or service over time,
users continue to be involved in constituting what the design
is. This of course raises the question of how the designer can
help to make the design as valuable as possible throughout this
‘downstream’ process. This argument is strikingly close to Eggers
and O’Leary’s (2009) argument that we need to integrate policy
design with implementation.
Applying design thinking to public services and policy making
is not going to be easy. It is still considered radical in most
countries. But if public managers really, really took the four
credos to heart, it could be the beginning of a revolution in
government.
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How to do it
Introducing design as an approach to innovation in government
is likely to be a long-term process. Although more and more
examples are emerging from the work of leading design firms,
social innovators, public agencies and innovation labs, we are
still witnessing the early stages of what could become a paradigm
shift in how we conduct policy making and drive public sector
reform. However, public organisations not only lack the skills
to start practising design to power new policy and service
innovation, they largely lack the basic awareness that design has
something to offer. Placing design thinking, and design practice,
more squarely at the heart of how government is shaped in
the 21st century is therefore first and foremost an exercise in
creating a consciousness of what it is, and what might be its
potential. The following elements could help to pave the way.
Educate in design thinking
In addition to a more general awareness of the public sector

innovation landscape, project managers must be educated in
design thinking. The more experimental, iterative, challenging,
people-centred and tangible nature of design processes must
become a part of the core curriculum of how we educate project
managers in public organisations. More fundamentally, together
with the basic innovation terminology introduced in Chapter 2,
we should build curricula on design thinking and co-creation
into all levels of education that lead to public sector careers:
executive programmes, graduate and undergraduate modules
in public administration, and in training for professionals in
key fields such as healthcare, education and social work. In
the UK, the Design Council launched a mentoring and
coaching programme for public managers, and the NHS has
trained professionals systematically in innovation processes,
drawing extensively on the ideas behind design thinking.
The UAE is currently placing hundreds of public managers in
executive training courses, including in design, with Cambridge
University. And Nesta, the UK innovation foundation, has
created an Innovation Skills team that focuses strongly on design
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methodologies in training public managers. One of the team’s

initiatives is the States of Change platform, which brings global
experts in innovation and design to public organisations world-
wide. To a public manager, the question becomes:
• Have I articulated why and how design thinking can be an

appropriate way of helping us to drive our innovation efforts?
• Do my staff have access to training or skills development in the field
of design, for instance design thinking and service design?
Institutionalise design thinking
The principles of design thinking should be built more

explicitly into the project models that are used by public sector
organisations. Formal process models for ‘how we do things’,
giving a mutual frame of reference as to where the team is in
the process and what the activity is, can be a helpful tool to
underpin trans-disciplinary work. Another approach is to create
method descriptions and disseminate them to project teams.
• To what extent might we institutionalise design thinking in the

formal processes we already have in place?
• Could we inspire our staff through creating (or even better, sharing
existing) tools to assist them in running design-led activities?
Recruit and source
Designers should increasingly be hired to be part of project

teams on a range of other assignments than ‘traditional’
graphical work and product design. To the extent that more
public organisations establish innovation labs or dedicated
innovation teams, designers should be a natural part of the
competence structure, bringing ‘emerging’ design skills into
play. Finally, public organisations should be much more open
to including strategic design firms on their shortlists when they
put development projects and research out to tender.
188
• Could it be helpful for us to hire designers as part of our effort to

create a more innovative organisation? If so, how do we ensure that
they will thrive and become part of our professional environment?
• Have I, as a public manager, considered whether service design firms
or design researchers could be relevant bidders the next time we tender
for a new development project?
Design thinking is a way of understanding the foundations of

co-creation. Citizen involvement is a way to power the process,
gaining insight into how people live their lives, and how that
matters to public services. That is the theme of the next chapter.
189
NINE
Citizen involvement
‘Suspend judgement and connect to wonder.’

(C. Otto Scharmer, professor, MIT, 2007, p 133)
‘You have to be healthy to be able to manage a work injury

case.’ This statement by an injured citizen became a significant
trigger of change for the Danish Board of Industrial Injuries.
The agency, which assesses insurance claims made by citizens
who have sustained an injury (physical or mental) at work, was
a professionally run government organisation. It had a sharply
formulated strategy, effective performance management systems,
had digitised much of its internal and external processes and
had implemented lean management, speeding up case flows
and increasing case quality. However, the results were surprising
when the agency, in collaboration with MindLab, conducted in-
depth ethnographic field studies of just four citizens with a work
injury, observing their meetings with state and local government
officials and videotaping citizens at home telling their case stories
from beginning to end. Some of the agency’s efforts had the
reverse of the intended effect: an on-site ‘travel team’ that could
settle cases quickly was perceived by the citizens as confusing
and made them feel uncomfortable. A temporary, token
insurance payment to offset the often quite long case duration
triggered frustration because citizens mistakenly thought it was
the final insurance settlement. With the permission, the Board
used the video footage to analyse and create better approaches
to the specific problems they experienced, reorganising service
processes and communications. It also used the video snippets to
create an imperative for additional systemic change throughout
191
the organisation, engaging both top executives and front-line

staff in the process.
When civil servants learn about the citizen’s experience,
from the citizen’s point of view, it is often a significant eye-
opener (Bason, 2007; Bason et al, 2009; Bason, 2017). Even
the most professional and service-minded organisations can have
major blind spots, for the simple reason that they are not the
people whom they serve. Placing citizens at the centre of the
innovation process is to see one’s efforts from the outside-in
(Boyle et al, 2010). It is to recognise that citizens are experts in
their own lives and nobody – nobody – else can claim that role.
But it requires us to suspend our own judgement of people
and how they experience the world, and allow ourselves to
connect to their personal experience, seeing it for what it really
is (Scharmer, 2007). This is what I call professional empathy.
Over the last decade or so, new approaches to placing the
citizen’s perspective at the centre of government innovation
have opened the eyes of public managers to the reality ‘out
there’. Public organisations, such as the UK Cabinet Office,
the German Chancellery, the government of Portugal, French
regions, US federal agencies and Danish central government
have started bringing in anthropologists and designers. Although
they represent two very different skill sets they supplement each
other in capturing the perspective of end-users. Bureaucrats are
also venturing out to see real-world practices for themselves.
For instance, the European Commission’s Directorate-General
for Innovation and Entrepreneurship in Brussels requires that
managers spend one week every year at a private enterprise, to
get a first-hand impression of daily life in the kinds of companies
that they support and regulate. At MindLab, we made a point
of always bringing our civil servant colleagues with us when we
conducted field research, immersing them in the context of the
services that they regulate or deliver.
This chapter considers the theory and practice of citizen
involvement in the innovation process. Building further on
the principles and credos of design thinking from the previous
chapter, we will examine the following themes:
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Citizen involvement
• What value can citizen involvement bring to the innovation

process?
• What is ‘professional empathy’?
• What are the three myths of citizen involvement?
• How can citizen involvement be organised and conducted in
practice through disciplines such as ethnography and design
anthropology?
What is the value of citizen involvement?

Some of the key insights that conscious, explicit citizen
involvement can give to decision makers, and that can be
powerful drivers of innovation, are illustrated by these questions:
• What is valuable? A better understanding of which elements of

current or future public interventions are valuable to citizens
in terms of service and outcomes, pinpoints the relevant
contribution of government in a given context.
• Can less be more? Insight into what might not be valuable
to citizens at all may lead to decisions to terminate existing
services or to avoid creating new ones that would have
negligible effect.
• How do we create synergy? Helping decision-makers to see how
the regulations, programmes and interventions for which they
are responsible fit into the context of people’s lives, and how
they relate to the host of other interactions they have with other
public organisations, businesses, family, communities and so on, can
enable the creation of much smarter, ‘holistic’ interventions
where the interplay between public bodies (and others) is
truly experienced as ‘joined-up’ from the perspective of
citizens or businesses.
• Where is co-production possible? As will be discussed later,
citizen involvement can help to identify where citizens or
communities themselves have the resources to undertake
part of the job that government is currently carrying out,
or wish to be carried out. This can lead to redesign of the
fundamental governance model.
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These types of value are triggered from the direct, concrete

insight into how citizens live their lives and experience their
interactions (or lack of interaction) with government in that
context. As Gillinson et al (2010) and Dorst (2015), among
others, have pointed out, it is often by taking their relationships
with citizens as the starting point, and redefining or reframing
them, that public organisations can create more radical
efficiencies, generating better outcomes at lower cost.
Interestingly, it is striking how little it often takes to generate
the ‘professional empathy’ that is the basis for such insight.
About professional empathy

How could the involvement of as few as four claimants become
a powerful change agent for the Board of Industrial Injuries? By
bringing the rich context and reality of actual claimants, real
people, into the heart of the organisation; and precisely because
the type of knowledge that the video footage introduced
allowed for interpretation, for an emotional connection and
for an intuitive recognition, or knowing, of what is right.
Involving citizens in the innovation process is thus not about
increasing democratic participation or legitimacy through the
act of involvement in itself. It is about finding better solutions to
achieve politically defined visions of the future (and sometimes,
although it may be controversial, even discovering what those
visions should be). Even though citizens may often be very
motivated to contribute with their time and expertise, and
indeed may experience that their participation in a co-creation
process is meaningful and empowering, that is not the main
point. The point is that public sector organisations desperately
need citizens’ participation in order to better understand what they
experience, to learn how experience could be improved and behaviour
might be changed.
Managers and staff of government departments and agencies
are hardly representative of the population. But they may very
well forget that. As a manager in a UK central government
agency said to a group of visiting policy makers from Denmark,
‘If you ask our colleagues here who they think about when they
develop a new service, the answer would be “a white male in his
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Citizen involvement
mid-forties, with a higher education, living in London”.’ Civil

servants are rarely themselves users of the services they supply or
regulate. Few social case workers have tried being an alcoholic,
homeless or having a handicapped child. Not many officials who
regulate or service private businesses have ever run an enterprise.
At a presentation that I gave to a group of health professionals
in managerial positions, many of them said they that knew what
it was like to be a patient because they had themselves been ill,
and had gone to the hospital too, at some point. I then asked
how many of them had tried to be a Somali immigrant female
patient with no Danish language skills. The group, consisting
only of ethnic Danish persons, fell silent.
What we need to know as public innovators is: ‘Who are
we developing this for, how do they live their lives, what is
important to them, and what motivations, practices, relationships
and resources do they have that may help or impede the
outcomes we are seeking to achieve?’ We also want to know:
‘Have they themselves identified solutions that we could learn
from or implement directly?’ (von Hippel, 2005).
How do we find the answers to such questions?
First, we must experience at first hand what it is like to be
at the receiving end of public services. As C. Otto Scharmer,
author of Theory U, points out, managers in both public and
private organisations usually ‘outsource the legwork’ of knowing
citizens or customers to external consultants or researchers. But
there are core areas, including innovation, where government
staff themselves must be a highly active part of the process; they
must learn through their own first-hand experience, not through
someone else. Without a direct connection to the context of a
situation or interaction, we cannot see and feel the real issues,
problems and potentials (Scharmer, 2007). For instance, when
MindLab helped civil servants to venture into the field so as to
better understand how business people subjectively experience
the administrative burdens placed on them by government, they
obtained a first-hand emotional connection with what it means.
When a senior accountant in a company broke down in tears
in front of the research team because the interview triggered
memories of a traumatic experience of government tax control
195
10 years earlier, it helped to make clear what government red

tape can mean to people in practice.
The second part of the answer is that we must create new
solutions with people, not for them (Sanders, 2006; Sanders and
Stappers, 2008; Polaine et al, 2013), orchestrating the process
on the basis of the credos of design thinking. Ultimately, it is
people who are at the receiving end of public policy, regulation,
administration and service delivery. As discussed earlier, we may
call them ‘users’, ‘clients’ or ‘customers’ (Tempoe, 1994). But
‘citizens’ is a better term (Bason et al, 2009). As discussed in
Chapter 3, citizens have particular expectations, obligations,
rights and powers. However, it is also important to remember
that the role of citizen is but one of many roles that we all
have, every day. We are also fathers, mothers, sisters, brothers,
children, workers and lovers. We are citizens too, but that may
be something we think about only on election day, when we
check our tax return or at the school’s parent–teacher meeting.
Or when we become trapped in government bureaucracy, or
become highly dependent on certain services, our identity is
suddenly re-cast as citizen, client or even victim. Our current
thinking in public services means that highly vulnerable people
and families are rarely able to effectively end their dependence
on public support.
Paradoxically, government either takes up very little
space in people’s consciousness (and thereby much less than
administrators think), or very much of it (and thereby almost
define themselves in terms of their relations with government).
Knowing how specific interactions are experienced by people
is fundamental. We must therefore never forget that it is by
seeing and knowing people and the wholeness of their lives, as
they experience them, that we discover the insights that might
lead to new innovative approaches.
The three myths of citizen involvement

Throughout this chapter I will argue that citizen involvement
is a powerful enabler of public sector innovation. But what do
the sceptics say? I once gave a presentation to an international
workshop organised by the Austrian Ministry of Finance.
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Citizen involvement
During our talks, I shared how we at MindLab used video-taped

interviews with citizens, and how one agency was currently
using raw footage from such interviews as part of its change
efforts. An Austrian official was deeply disturbed, although I
underlined that we had obtained citizens’ approval to use the
material: to him, it was unthinkable to use videos of citizens for
inspiration, as part of analysis or to inform decision making.
There are quite a lot of objections, and even fear, about the
involvement of citizens in the co-creation process. The ‘fear of
video footage’, or any kind of media alternative to written text,
is just one kind. At MindLab, we typically encountered three
types of arguments against the active involvement of citizens in
public sector innovation (Bason et al, 2009).
The fear of ‘citizen dictators’
By involving citizens or business representatives through

field work or in workshops, allowing them to express their
experiences and ideas, aren’t we depositing our decision-making
authority with them as well? The answer is, of course, that we
are not involving citizens formally as part of a decision-making
process, but as contributors to an innovation process. Ultimately,
decisions are reached through deliberative democracy, and in
most innovation projects by presenting solutions and options
to steering committees or political bodies that make the final
decisions. In addition, the purpose of involvement, as we saw
above, is usually not to ask citizens about which ideas they have
or like, but to explore which ideas will work.
Citizen involvement requires too many resources
Doesn’t it take too long, and isn’t it too expensive? As the UK

Customs and Revenue (HMRC) customer insight unit said,
however, ‘If you think knowing your customers is expensive,
how expensive do you think it is not to know them?’ Or, as
I discussed in Chapter 8 on design thinking, it may be worth
while to fail early in order to succeed sooner. The cost of just
developing solutions behind a desk, ‘rolling them out’, as if
implementation is like a carpet one can just roll out over the
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landscape of front-line workers, and then realising through

citizens’ complaints, rising costs and lack of results that the
solution didn’t work, is much, much more expensive in
economic, human and political terms. Citizen involvement is
a cost-effective means of ensuring that new solutions really do
meet users’ needs, and that they hit the target in terms of service
improvements and better outcomes.
Citizen involvement creates unrealistic expectations
Now that we’ve involved them, and we’ve generated new ideas
and solutions together, don’t citizens expect something to
happen? This is a valid argument. When people allow researchers
to access their home or workplace, or choose to spend time
participating in a workshop, they have a legitimate expectation
that it will serve a purpose. On the other hand, most citizens
and business owners understand that there is no guarantee that
just because a group of civil servants may think an idea is good,
it will not be judged the same way by top management or, at
the end of the day, by politicians. What is necessary, then, is to
clarify expectations. That usually isn’t hard to do. At a workshop
at MindLab for business leaders across more than 20 companies,
we started the session by saying that while we were pleased that
they had chosen to spend the day with us, we couldn’t promise
them that any of the ideas developed that day would be turned
into practice. What we could promise them, however, was to
take the process and their input seriously – and to report to
them what, if any, ideas we would continue working on. They
nodded almost simultaneously, and we went to work.
Co-creating, co-producing
Citizen involvement is, at its core, about a paradigm shift in
the relationship between people and government. The shift
originates from the increased need to focus on how behaviour
can be affected to drive outcomes, and from the external
pressures on government to perform. More fundamentally, it
is a shift from an underlying public sector tradition of expert-
driven creation and delivery, to a mode of co-creation and
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Citizen involvement
increased co-production (Hartley, 2005; Boyle et al, 2010).

While co-creation is about the development, or creation, of new
solutions with people, co-production is about the leveraging
of people’s own resources and engagement to enhance public
service delivery. In other words, co-creation concerns how new
solutions are designed; co-production concerns how they are
executed (Figure 9.1).
It should be said that some research does not distinguish
explicitly between ‘creation’ and ‘production’. For instance, in
a study of co-production Boyle et al (2010) emphasise that the
new paradigm is characterised by the transformation of ‘the
perception of people from passive recipients of services and
burdens on the system into one where they are equal partners
in designing and delivering services’.
The shift towards co-production and human-centred governance
Most public organisations supply services based on the same

blueprint, or governance paradigm, that has lasted for 30 years
or more, while the population’s educational level and access to
resources, including new technology, have changed dramatically
(Osborne and Brown, 2013; Hartley, 2005; Leadbeater, 2009a).
Figure 9.1: Towards a new paradigm

Co-creation
Professionals Co-production
produce
Experts
create
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At the same time, the problems and challenges in society have

become more complex and long term – from the rise in obesity
and chronic disease to climate change. This means that the need
for and potential of new forms of co-production is on the rise:
• In healthcare, we have witnessed a shift from focus on ‘curing

diseases’ to ‘enabling quality of life’.
• In employment policy, the effort has shifted from ‘finding
people a job’ to ‘enhancing employability’.
• In enterprise policy, government regulation is viewed less
as just a barrier, and more as an opportunity for increasing
competitiveness. As academic and former US Secretary of
Labour Robert B. Reich has described, intelligent regulation
and incentive structures can help businesses to adapt quickly
to a green economy (Reich, 2009).
The social sector is perhaps seeing the most remarkable shift

towards recognising citizens’ resources and potential, rather
than mostly viewing citizens as victims of social injustice.
For instance, the state of Oregon in the US has successfully
introduced personal budgets for mental health patients (Cabinet
Office, 2009). In Victoria, Australia, in 2002 the government
created a Department for Victorian Communities, which was to
be an advocate for an approach to the development and delivery
of policies focusing on communities of interest and places,
through the medium of communities of location. In other
words, it was to do something in and with communities. The
organisation was simply designed to co-create and co‑produce
solutions with communities and citizens – and turned out to
be able to do this rather successfully (Hess and Adams, 2007).
In Denmark, the city of Vejle has reduced local immigrant
ghetto crime rates by 60% by engaging with citizens through
positive (appreciative inquiry) approaches, recognising their
resources and giving them great freedom to implement new
solutions. The city of Vejle won the 2009 Innovation Prize of the
Danish Association of Local Government for the project (KL,
2009). In Brazil, Restorative Circles, a community-based justice
movement supported by the Ministry of Justice, has helped to
reduce violent crime dramatically through new approaches
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Citizen involvement
to conflict resolution in crime-ridden neighbourhoods. For

instance, after introducing conflict resolution in a school, their
approach helped reduce a drop of 98% in the numbers of student
arrests that led to court appearance (Gillinson et al, 2010). In
my own PhD research I found a string of examples of combined
productivity improvements and positive changes in service
experiences and outcomes for citizens through shifts towards
governance models that were more reliant on co-production.
The shift towards co-creation and co-production takes place
at different rates and in very different forms across government.
In Chapter 5, on organisation and digital innovation in
government, we saw how social media holds obvious potential
as a platform for co-production. When government leverages
its information advantage to enable citizens to get in touch
with each other about similar problems or opportunities,
co‑production can take place. Providing mobile tools like
portable lung monitors to patients for in-home care forces a
shift in the citizen–government relationship, casting patients,
nurses and doctors in new roles. Letting unemployed persons fill
out their own online CVs and providing job-search databases is
now standard in most modern labour market services.
Non-technological processes, such as joint care in hospitals,
where patients are treated in batches and collectively empowered
to take part in the recuperation process, dramatically shortening
hospital stays, are also expressions of co-production (Bason,
2007; Cabinet Office, 2009). Given the key challenges of
increasing citizen expectations, ageing and scarcer resources,
co-production appears like a highly attractive way forward.
Successful co-production designs promise productivity gains
with no reduction in service experience, or most likely even
an increase, since citizens tend to value something that they take
an active part in producing.
As mentioned above, the broader theme of co-production
is a shift in the public governance paradigm towards a more
networked and collaborative mode of governance (Hartley,
2005). It goes beyond the scope of this book to treat the theme
in detail, but in my book Leading Public Design: Discovering the
Next Governance Model (Bason, 2017) I suggest that we are
seeing the emergence of four distinct governance characteristics,
201
enabled by practices of co-creation and the utilisation of

design methods, which I call human-centred governance. The
particularly defining characteristics are:
• Relational, in terms of a distinctly human and often longer-

term perspective on the role of the public organisation and its
impact on the outside world; often this implies a fundamental
reframing of the kind of value that the organisation is
supposed to bring to citizens and society.
• Networked, understood as a model of governance that actively
considers and includes a broad variety of societal actors to
achieve public outcomes, including civic actors not often
considered in past governance models.
• Interactive, exhibiting increased awareness and more explicit
use of (physical and virtual) artefacts in mediating purposeful
interactions between the organisation and citizens and other
users and stakeholders.
• Reflective, which is to say driven by a more qualitative,
emphatic, subjective and complex understanding of the
organisation’s ability to enact change.
I argue that human-centred governance does not replace existing

governance modes such as traditional bureaucratic governance
or the new public management, but it does challenge current
ways of working when these characteristics are blended into
current organisational structures, cultures and processes. The
challenge for organisations that take citizen involvement and
co-creation seriously will be to also take the consequences of
new insights for their governance seriously, to the point where
they are willing and able to undergo more systemic change. It
is still rare that we see such shifts happen; but with a dedication
to co-creation it is increasingly a possibility.
Involving to co-create
How can we identify new opportunities for co-production,

and design exactly the right technological and social systems
and ‘choice architectures’ to achieve the desired outcomes?
Co‑creation with citizens seems like the only feasible answer.
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Citizen involvement
Before we turn to the overall co-creation process in the next

chapter, however, let’s examine what forms citizen involvement
could take (Figure 9.2).
One can distinguish between two purposes of involvement:
involving citizens as informants, helping to understand what the
present (or past) situation is, and involving citizens as co-creators
of a new future. One can also distinguish between involving the
few (say, from four to 50 people) and the many (hundreds,
thousands or, in principle, millions, through crowdsourcing). I will
focus on how non-traditional methods for data collection and
citizen involvement can give us different kinds of knowledge
and insight as drivers of public sector innovation.
Figure 9.2: Four types of citizen involvement
CREATING A
NEW FUTURE
Co-creation Crowdsourcing
workshops
FEW MANY
Qualitative Quantitative
research surveys
INFORMING ABOUT
THE PRESENT STATE
Source: Adapted from Bason et al (2009)
Informing about the present state

Since the early 1980s and the rise of new public management,
most public departments and agencies have spent some effort in
trying to measure citizen satisfaction through either quantitative
surveys or qualitative research, or even both. The surveys
have often taken the form of paper-based or, more recently,
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electronic questionnaires with some mix of closed and more

open-ended questions (Pollitt, 2003). If any qualitative research
was undertaken, it may have involved case studies and personal
interviews and/or focus groups. However, ethnographic
research, such as participant observation and ethnographic
interviews, has not, until recently, been in the methodological
toolbox. And civil servants and public sector professionals have
not, typically, been immersing themselves in the first-hand
experience themselves (Bason et al, 2009).
In order to move from just understanding the present and
citizens’ stated needs, we need to employ other methods than
usual. While traditional surveys and focus groups tend to capture
what people say they want and do, ethnographic research and
design methods help to uncover what would actually benefit
people by grasping the world from their perspective, emphasising
what they do, the context they do it in and connecting the ‘text’
and ‘context’ (Rubow, 2003). For instance, 40% of shoppers
entering a super market say that they always buy organic
vegetables, but a peek into their full shopping bags shows that
only 15% of them have actually done so.
Finding your inner anthropologist
We have to dig deep under the superficial information on

which we often base our decision making, and introduce a
different way of knowing and different types of insights (Martin,
2007). As public innovators, we must introduce exploration and
wonder into our toolbox. The anthropologist is prepared to
take the time and effort to be a part of people’s daily lives and
to look for what is surprising, seeing the extraordinary in the
ordinary (Kelley, 2005; Brown, 2009; Polaine et al, 2013). The
method and focus always follow the premises and experiences
of the people studied. As professor at Copenhagen University
Kirsten Hastrup states, the ethnographic researcher doesn’t talk
first, but is there to find out what questions it makes sense to ask
(Hastrup, 2003; see also Marcus, 1995; Bernard, 2006).
Ethnographic research, the anthropologist’s research method,
helps us to see actual behaviour patterns and explore implicit
needs, uncovering rich subjective and contextual data that in
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Citizen involvement
turn can feed into the co-creation process. While traditional

ethnographic field research could take months or years, highly
condensed ‘ethno-raids’ of days or even hours are increasingly
used by researchers to accommodate the tighter time frames of
both public and private organisations. At MindLab, we rarely
had the luxury of being able to undertake very long research
phases; however, even with a short ‘raid’, useful insight can
almost always be generated.
Ethnographic research focuses on understanding the world
from the perspective of the study objects. The process can be
extremely open, such as ‘documenting a day in a person’s life’;
or it can be more focused, such as ‘mapping the citizen’s journey
through a specific public service’; and finally it can be challenging,
by testing explicit hypotheses about what is perceived to be the
problem. This ongoing dynamic interplay between opening,
closing and challenging is part of what makes ethnographic
research such a good fit with design thinking and the iterative
process of co-creation. The approach becomes an active learning
process; a process with the purpose to change the researcher’s
perspective and understanding of the different contexts and to
create new ground for reflection (Hasse, 2003)
To give a sense of what the ethnographic research might
entail, here are four types of research that have demonstrated
their value to public sector organisations (Bason et al, 2009).
• Observation (shadowing)
This is the simplest and most open form of field research,
where the method is to observe a person or a physical place
over time. Whatever takes place is captured. Even though the
idea is to be a passive observer, the anthropologist is aware that
she, through her very presence, becomes part of the context
of the observed. Whatever is observed is, in the end, subject
to two dimensions of subjectivity: the selective focus of the
ethnographic researcher and the interpretation. So observation
is never ‘objective’, but is a perspective of what people
themselves experience and what is usually not reflected upon.
But it can be a source of wonder, and might generate a wide
range of questions to be explored. Video, audio, photo, written
notes are typical means of capturing data from observation
205
studies. For instance, part of the Danish Board of Industrial

Injuries’ citizen injury project was to observe meetings
between citizens, local government representatives and agency
staff. During the meetings the observer noted all dialogue
and actions, capturing the exact moments when something
that was done or being said by the officials triggered negative
responses from citizens. This enabled the researcher, after the
meeting, to explore further, through direct interviewing, why
a citizen had had certain reactions.
• Contextual interviews
Qualitative interviews are already used in much of the public
sector. However, the contextual, or ethnographic, interview has
several distinguishing characteristics. First and foremost, it takes
place in the setting (context) people actually live or work in.
Second, the interview guide is quite open, addressing a broad
thematic level rather than specific questions. Although there is
some structure and preparation, the interview aims at following
the interests of the citizen, emphasising flexible, in-depth
questioning and seeking illustrative stories and descriptions. This
allows for a broader and richer dialogue with the interviewee.
For instance, it could ask for a tour of the company and to be
shown sites or people who are mentioned in the interview. Or
it could ask the interviewee to show a folder, or demonstrate
an IT system or some other resource that is mentioned. When
MindLab researched how government control is perceived by
small business, our researchers purchased rubber boots and full-
body work outfits to visit a pig farmer on the small Danish
island of Femø, videofilming the interview and being shown
around not just the office but also the farm. Why go to all the
trouble? Because people’s experiences are often tightly linked
to the environment in which they live and the daily practices
that are important to them.
• Retrospective review
Here the focus is to uncover a chronological narrative about an
event or series of events. The interviewee is asked to tell the
story, recreating the dynamic of the past. The researcher probes
by asking ‘What happened then?’ or ‘What happened before
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Citizen involvement
that?’ The value of this form of interviewing is that it enables

the researcher to discover surprising transitions or breaks in a
series of events that it might be hard to capture without such
an open format. The interview can also uncover how events
triggered subjective experiences and emotions, for instance
by asking ‘when that happened, how did it make you feel?’
The retrospective interview is a key tool in charting the service
journeys that citizens or businesses experience in interaction with
the public sector. It can be extremely powerful to hear, in the
citizen’s own words, how a service process was experienced.
• Cultural probes.
When MindLab was asked to help a team of civil servants
to understand the drivers and motives of highly successful
entrepreneurs, we asked selected business owners to send us
photo (MMS) messages via their mobile phones, documenting
their daily work and thoughts. At regular intervals we would
text small tasks to them, such as ‘Take a picture of something
that symbolises your ambitions for the company’, or ‘Take
a picture of something that makes you proud’. The business
owners would then take a picture of a situation or object,
‘tag’ the picture with a brief message (why did they choose
exactly that image?) and MMS it to MindLab’s project manager.
Cultural probes are various tools, ranging from mobile phones
to journals or disposable cameras that enable informants to
document their daily lives. The advantage of probing is that it
can be done by people themselves, and so it is potentially a cost-
effective means of harvesting large amounts of data. An obvious
challenge, and a source of bias, can be that people are more
motivated to document what they find interesting or positive
about themselves – and may not want to contribute problematic
or critical material.
From observing how senior citizens live their lives to better
sustain independent living, to engaging primary school students,
parents, teachers and administrators in photo-documenting
what is wonderful about their school, ethnographic research
helps to capture (and sometimes engage) citizens in new ways.
The purpose is to gain exactly the kind of rich, contextual,
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emotional and intuitive form of knowledge that can supplement

our analytical modes of ‘knowing’.
Quantitative surveys
As a tool to provide rich citizen input into the innovation

process, triggering the ‘qualified inspiration’ that we so
desperately need, quantitative surveys are not the most effective.
However, quantitative data can obviously be required at various
key stages in the innovation process, answering questions such
as ‘how many citizens are in the target population in the
first place?’ or ‘given what we now know, how many people
would this solution be relevant for, and what would it cost?’
These are questions that most innovation projects will need
to answer sooner or later. In combination with ethnographic
research, mining existing databases, drawing on statistics for
a population or conducting surveys can be a very relevant
supplement. Quantitative data can also be visualised by skilled
designers – often using digital tools – and made into inspiring
representations that can provide new insight.
Creating a new future

Using ethnographic methods to understand reality and see
problems and opportunities through the eyes of citizens is only
the beginning of the process of innovation. The next challenge
is to transform the empirical findings into insights and new
future concepts through a process of co-creation.
As I will discuss in more detail in the next chapter, the task is
to orchestrate a process that involves a wide range of people. For
the purpose of the present chapter, I will mainly consider more
specifically how citizens can be involved (and how they perhaps
shouldn’t be involved).
Co-creation workshops with citizens
When speaking of citizen involvement in public sector

innovation, most people think it is about asking citizens for
their ideas. But, as should be clear by now, ‘involvement’ is
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Citizen involvement
more fundamental than that: it is about understanding how

people live their lives, what is important and meaningful to
them, and then exploring what kind of changes might add more
value. Citizens are usually not experts in public sector regulation
or administration. They can’t and shouldn’t be expected to be
better than public professionals at identifying the technical or
legal solutions that could address their needs or problems. (An
exception is be lead users, a concept that I will examine later
in this section). However, citizens can be extremely good at
helping civil servants to understand whether a proposed solution
might work for them in practice. Co-creation workshops
are about involving citizens in meaningful, concrete ways to
actively explore possible futures together with all other relevant
stakeholders. A key method here, inspired by design practice,
is to introduce prototypes of potential solutions that citizens can
relate to and provide feedback about.
For instance, when MindLab worked with the Danish tax
authorities to create new solutions for a next-generation
online tax service, the developers thought that a mobile (SMS)
texting version would be something citizens would like. If the
tax agency had asked citizens through a standard quantitative
questionnaire, many would probably have answered that it
would be neat to have their tax return at their fingertips while
on the move. But instead of conducting a survey, we sketched
a visual ‘storyboard’ that, like a movie script, showed scene by
scene how the SMS tax service might work in practice. When
citizens were taken through this simulated service experience,
and probed about how they would in practice use their cell
phone, sitting on the subway or in the car with their salary
statements, stock transcripts and so forth, entering the data on
their mobile phone, the service suddenly wasn’t so attractive.
With this feedback, systems developers chose to postpone the
solution, saving millions that could be returned to taxpayers,
or channelled to other and more pressing development needs.
In another co-creation workshop, leading companies – ranging
from multinationals to small, successful start-ups – engaged with
policy makers to develop a coherent strategy for how the Danish
government’s national innovation policies could become more
business oriented. In preparation for the workshop, MindLab’s
209
team had generated five fictitious company profiles, based on

vast amounts of quantitative and qualitative data about business
segments, experiences of current innovation policies and
programmes, and market challenges. In the workshop, teams
consisting of both business representatives and civil servants were
given the company profiles and asked to explore what their key
needs were, and what government could do to strengthen their
innovation ability. Through the facilitated workshop, companies
and policy makers jointly identified opportunities, generated
several hundred ideas, prioritised the solutions and developed
concrete concepts. The output was a catalogue of policy
initiatives that the civil servants could examine further and build
into the strategy. Often, it is much easier and more valuable
for citizens and businesses to relate to something concrete and
tangible that they can provide feedback on, rather than being
asked to propose solutions to complex problems from scratch.
Lead users
Have some citizens and businesses become so expert at using

public services that they begin to adapt their own behaviour in
advanced ways, or to modify the public solutions, to fit their
needs? If so, they are what MIT professor Eric von Hippel,
author of Democratizing Innovation (2005), calls lead users. In the
private sector, lead users are not only the early adopters of new
products, they also modify or develop entirely new ones. In
some fields, such as medical equipment, research shows that
users such as doctors and nurses innovate more (and more
radically) than companies (Lettl et al, 2008). The challenge
becomes to connect lead users, or user-innovators, with the
businesses that can further develop and produce the products
at scale.
In the public sector, there are other dynamics to the lead user
concept. First, the public sector delivers services and enforces
regulation, some of which isn’t necessarily something the
people have demanded in the first place. We’ve already seen
that this challenges the rather one-dimensional notion of ‘user’.
Second, there often isn’t a market incentive to develop a new
and potentially costly public service. However, even though
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Citizen involvement
they may not modify or invent public services, there is still some
potential in the lead user concept:
• Engaged citizens
People who engage extraordinarily in public service provision
become ‘expert citizens’, and can provide a more substantial,
considered input. Examples could be members of parent–teacher
boards in schools, members of boards of retirement homes,
volunteers in social organisations, social entrepreneurs (whom
we addressed in Chapter 5). When ethnographers studied how
the motor vehicle registration process worked in Denmark,
they found that while ordinary citizens encountered lots of
confusion in their registration or de-registration process, car
dealers (who were expert users) had adapted in various ways to
the intricacies of administrative inertia and bureaucratic forms.
This gap between what ‘ordinary’ users did and what ‘experts’
did could be used to identify potentials for improvement.
In the health sector, a woman with a rare cancer discovered
that while there were no other patients in Denmark with that
particular diagnosis, there were several in the UK and the US.
She gathered the resources to create an online patient network
for that type of cancer, sharing experiences across the globe with
treatments and coping with the disease.
• Systems solutions
Companies develop systems and processes that help them to meet
public sector requirements (Seddon, 2008). One example could
be the quality control systems in food processing companies,
which entail the same kind of control that public authorities
carry out. Might food safety agencies learn from practices at
leading companies, and could such practices be adopted by
the agencies as part of their routines, or could they be spread
to other firms? Another example, which we encountered at
MindLab, was how to help qualified foreign workers to move
to Denmark. A key challenge in that field, MindLab discovered
through interviews with human resources managers in major
companies, was that there was no single place where a foreign
worker could go online to see – step by step – what to do in
order to meet formal government requirements when moving
211
to Denmark. Moreover, much of the available information (and

the forms) was in Danish. However, as a response, some of the
multinational firms had, over time, built their own online to-
do guides as a service to prospective foreign staff. The Danish
government could, in principle, buy or borrow such a guide
and make it its own.
We need to adapt the concept of the lead user to the
particular context of the public sector. But that does not
mean it that doesn’t have value as an approach to discovering
existing solutions that may just need a twist to be borrowed by
government and provided on a much broader scale.
Crowdsourcing
As I also discussed earlier, private enterprises are increasingly

opening up their innovation processes along the concepts of
‘open innovation’ and ‘open business models’ (Chesbrough,
2006a, 2006b). Some do it by systematically spinning off
ideas and business opportunities as development projects go
through the innovation ‘funnel’, essentially poking holes in the
otherwise hermetically sealed funnel, as if it were a Swiss cheese.
Others take an even more radical approach. Some years ago,
pharmaceutical giant Eli Lilly launched Innocentive, a website that
offers rewards for solutions to R&D problems that are posted
online. Consumer goods giant Procter & Gamble’s Connect &
Develop strategy has successfully connected the company’s own
product development teams with external researchers, thereby
massively expanding the company’s innovation capability. Philips,
the Dutch electronic consumer goods producer, has equally
turned its development approach on its head, transforming its
secretive culture, and has symbolically torn down the fences
around its main research facility, creating a dynamic campus
right next door for high-growth enterprises and collaborators.
The idea with crowdsourcing, which plays on ‘outsourcing’,
is to invite the masses to join in the creative process, typically
enabled by some type of internet-based platform (Howe,
2008). Rather than seeking out lead users, which may resemble
looking for the proverbial needle in the haystack, could it be
more effective to simply publicise problems or challenges and
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Citizen involvement
allow potential innovators to make themselves heard, suggesting

their solutions? Tapscott and Williams (2006) argue that the
potential of involving millions of people through the internet in
collaborative ideation and innovation is huge. They emphasise
four dimensions of mass collaboration: openness, peering,
sharing and acting globally. Fora such as Innocentive are, in
Tapscott and Williams’ words, ‘the first virtual trading floors in
an emerging global idea bazaar’.
A few front-running public and social innovators are now
embracing the potential of crowdsourcing for the public good.
As mentioned in Chapter 5, The Australian Centre for Social
Innovation (TACSI) established a nation-wide innovation
contest titled the Bold Ideas, Better Lives Challenge, which
invested AUD 1 million in crowdsourcing new ideas for radical
social innovations. People and organisations were encouraged
to participate through ads in major newspapers and on the
TACSI website. TACSI would then invest in maturing and
implementing up to 10 of the most innovative ideas. Likewise,
Singapore runs the Enterprise Challenge, where the government
invites citizens and businesses to suggest ideas for improving the
public service, and awards grants to prototype and test them.
Bloomberg Philanthropies has helped to trigger new ideas in city
governments globally through its ambitious Mayor’s Challenge,
with a prize sum of USD 5 million for the best idea at city
level. And the UK’s Nesta Public Services Lab has similarly
invited innovation through competition. By encouraging
large-scale external participation in their innovation efforts,
these organisations are opening up to not just a few people, but
thousands or millions of potential contributors.
In spite of these examples, one wonders why we don’t see
more major government-run websites quite like Innocentive that
post public problems and offer rewards. There may of course
be ethical or political considerations involved – how much
should a solution for a (usually free) public service be worth?
Isn’t it part of a citizen’s obligation to contribute ideas that
they may have? None the less, it seems a bit paradoxical that
businesses, which are in a competitive environment, open up
their innovation processes in quite radical ways, while public
organisations, most of which are not competing and not subject
213
to intellectual property concerns, do not. It may simply be that

the competitive pressure that private firms are under forces them
to a much quicker adoption of new innovation models that at
first seem challenging or even frightening (are we putting our
company’s future in the hands of R&D people outside the firm?).
One public initiative that captures at least part of the idea
of crowdsourcing is the US government’s data.gov initiative,
first started under the Obama administration, which opens up
thousands of government databases to the public domain and
provides online tools to process them. By giving data back to
America’s people and businesses, the hope is that they will find
innovative ways of using them, either privately or commercially.
Another dimension of crowdsourcing for innovation is the
potential in social media, where citizens don’t just propose
ideas but develop their own platforms and solutions and start
using them, more or less independently of the public sector.
An example is Fix My Street, the independent website that I
mentioned in Chapter 5.
Finally, as James Surowiecki (2004) points out in his classic
The Wisdom of Crowds, aggregated information among groups
of citizens or consumers can in many instances lead to better,
faster and more objective decisions than individuals are capable
of. Could public sector innovation capacity be boosted by
new forms of smart involvement of the masses, using online
platforms? In a very low-tech way, existing fora for citizen–
public sector interaction such as parents’ or relatives’ boards for
schools or handicap institutions are potentially platforms for
innovation. However, often they are rather bogged down with
day-to-day administrative matters and budget discussions, not
living arenas for neutral dialogue on reshaping public services.
The purpose of many such boards is often representation and
legitimacy (which of course is valid enough), not innovation.
But the potential may be there: what would happen if all of
such boards were energised to be local innovation platforms,
co-creating new solutions in a collaborative spirit with
administrators, citizens and professional staff?
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Citizen involvement
When citizen involvement meets the design process

As illustrated in Figure 9.3, the methods I’ve reviewed apply
in various ways to the design thinking platform I showed in
Chapter 8, combining the design process methods with citizen
involvement.
I will discuss the model in the context of the co-creation
process in more detail in the next chapter.
Figure 9.3: Forms of citizen involvement in the design process
Testing Asking for ideas

hypotheses
Seeking out
lead users
Joint
workshops
Analysing Synthesising Crowdsourcing
Knowing Creating Involving citizens

Probing
in prototype tests
Ethnographic Conducting
interviews live experiments
Observation
How to do it
This chapter has shown how to involve citizens in the public
sector innovation process. Placing citizens at the centre of the
innovation process holds a number of challenges for public
managers and staff, who have to learn to put their own
professional backgrounds and experience on hold and allow
themselves to discover a different reality than their own. We
often lack the recognition that there are other ways of involving
citizens, and we lack the tools to do it. Rather than define
problems for citizens, we must examine problems with them.
Paradoxically, the fields where we often perceive and defend
citizens as weak and in need of help, such as social or health
215
services, are the fields where we are not yet good enough at
systematically listening to them. Public managers have a special
responsibility here, to step out of the more collegial culture
in many professional environments, such as schools, day-care
institutions, care homes and hospitals, and to insist on exploring
how citizens experience the public sector. This takes courage.
When citizens are invited into the public organisation, ‘People
get nervous’ (Parker and Heapy, 2006). The key to-dos of citizen
involvement, which public managers must take to heart, are the
following.
Involve citizens for deep understanding of experience
The potential of discovering new ways of generating value, and

of driving more radical change in public sector organisations,
starts and ends with citizens and businesses. The approaches
described in this chapter show how ethnographic research and
design methods can help public managers to obtain a different
type of knowledge, and thus a much more concrete but also
intuitive understanding of people’s experiences, challenges and
resources. Involvement brings us closer to ‘the users as they are
used’ through interactions with government. Public managers
must recognise their responsibility to lead this process of end-
user involvement and co-creation, and ask questions such as:
• What is the case for increased citizen or business involvement in the

way we create new approaches in our organisation?
• How might we start taking the first concrete steps to immerse
ourselves to better understand how citizens experience what we do
with (or to) them?
• Have we identified possibilities for educating some of our staff in
methods for citizen involvement?
• Who might be our pioneers in venturing out to conduct citizen-centric
research?
Have the courage to see and act on citizen-centric knowledge
There is no point in using the resources to involve citizens in

public sector innovation if it doesn’t have consequences. But
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Citizen involvement
when people get nervous, the most obvious choice is to not

allow the new kind of knowledge that is generated by qualitative,
in-depth research to become a serious part of the decision-
making process. The best way to overcome this barrier is to
allow the raw data material – video or audio clips of interviews
with citizens, quotations, visual mappings of service journeys
– to speak for itself. The real challenge is to let the reality of
citizens become a direct input into the process, in balance with
quantitative data and a host of other considerations. In essence,
this is an orchestration challenge, which I will take a closer look
at in the next chapter.
• Do we have the courage to actively use context-rich qualitative data

as an explicit input to our decision-making process?
• Are we prepared to explore the wider consequences of insights from
citizen involvement, including reframing our purpose and embracing
a new governance model?
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TEN
Orchestrating co-creation
‘Co-creation is to overcome a world of pain.’

(Pam Nyberg, design principal, Whirlpool Corp,
30 August 2009)
Since around 2007, a new term has entered the Danish

government’s efforts to drive regulatory reform and make it
easier to start and run a small business: burden-hunting. Widely
reported in the business press, civil servants ventured out to
conduct on-site field research, engaging with company owners,
finance officers and accounting staff to better understand what
it is like to own a business and to be at the receiving end of
bureaucracy and red tape (MindLab, 2008). These civil servants,
from across three different government departments, had been
trained by MindLab in ethnographic research techniques and,
through a process of co-creation, invited companies to be part of
the development and testing of new policy and service solutions.
In March 2009, when the strategy was finally presented to the
public by (then) deputy Prime Minister Ms Lene Espersen,
the event took place in the rugged facility of a medium-sized
Greyhound-type bus operator that had itself been subject to an
on-site visit by the burden hunters. A number of the innovative
policy initiatives launched that day, including a new single
account number for all payments to public agencies, would not
have been possible without the burden hunters’ efforts. The
approach was so successful that in 2010 the Danish Ministry of
Finance proposed that a new programme to identify and remove
administrative burdens for citizens should also build, to a high
degree, on the ‘burden hunter method’.
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Co-creation is the explicit involvement over time of people

to identify, define and describe a new approach (Scharmer,
2007; Sanders and Stappers, 2008). Building on the foundation
presented in the two previous chapters, co-creation is about
orchestrating a design process with citizens, businesses and other
stakeholders. This entails reconceptualising citizens not as subject
but as equal partners in design and delivery, and recognising
people as assets (Sanders and Stappers, 2008; Gillinson et al,
2010; Boyle et al, 2010). For the public manager or project
manager, the key challenge is how to effectively facilitate the
process, recognising that ‘the entire journey from idea to results is
fraught with danger’ (Eggers and O’Leary, 2009, p 85). How can
we reap the benefits of this emerging paradigm of public sector
innovation? This chapter zooms in on the following questions:
• What are the individual elements of a co-creation process,

from systematically questioning problems to idea generation
to selection, prototyping, iteration and, ultimately, scaling
and learning?
• How can these single elements in the process be orchestrated
in practice?
• What is the potential of co-creation as a new paradigm of
public sector innovation?
A process for co-creation

In Chapter 2 I considered the process of moving ideas from
exploration of ‘mystery’ over implementation to the creation
of value: starting with hundreds or even thousands of ideas,
moving them through the knowledge funnel towards selection
and maturation of those ideas that work and might even be
turned into a reliable method of delivery at scale (Martin, 2007).
We’ve also seen how the innovation process itself can be opened
up in the form of more collaborative ways of working, and
how political context, strategy, organisation, people and culture
can limit or foster the capacity to create and execute ideas to
generate value.
In this section of the book, I’ve considered how design
thinking provides us not just with an overall way of balancing
220
analysis versus synthesis, but also with four credos that in more
concrete terms can guide the process of innovation in a new
direction: more experimental, iterative, concrete and citizen-
centred. And we’ve seen the various new forms that citizen
involvement can take, in particular inspired by ethnographic
research methods.
How can we combine the fundamental assumptions and credos
of design thinking with the methods of citizen involvement
in a coherent, orchestrated process of co-creation? I suggest
an approach involving the seven activities of framing, knowing,
analysing, synthesising, creating, scaling and learning, which expands
on the models I introduced in the two previous chapters (Figure
10.1).
In this chapter I consider each element in detail. It is
important to note that, as a process, they do not necessarily fall
into a neat, sequential order. To the contrary, co-creation entails
a continuous openness to the possibility that the order will shift
or overlap, and that it may well be necessary to revisit activities
that have already been addressed once or twice (Brown, 2009;
Figure 10.1: The co-creation process
Identifying insights
Idea generation
Visualisation Concept
development
Pattern Analysing Synthesising

recognition Selection
Prototyping
Knowing Creating Testing

Citizen-centred
research
Implementing
Project
scoping Scaling
Challenging Learning
the problem
Framing
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Halse et al, 2010; Polaine et al, 2013). As the arrow in Figure

10.1 suggests, co-creation is an iterative process overall – and so
it goes for each of its sub-elements.
Framing
Innovation doesn’t start with an idea. It starts with thinking
in a different way about the problem or by identifying a new
opportunity.
Challenging the problem
A key activity of the co-creation process is to understand

what the problem or opportunity might be about. Some call
this phase the ‘fuzzy front end’, or simply the ‘front end of
innovation’. This is where the fundamentals of the process are
determined, ‘fuzzy’ signifying a high degree of early uncertainty
and complexity (Koen et al, 2001; Sanders and Stappers, 2008).
This is where the design credo of ‘challenging the status quo’
comes into play.
In their work on radical efficiency in public services,
Gillinson and her Innovation Unit colleagues show that it is when
individuals and organisations gain an entirely new perspective
on their challenges – in particular through new insights and new
understanding of ‘customers’, that services can be redesigned to
be different, better and lower cost, generating true paradigmatic
innovation and savings of up to 60% (Gillinson et al, 2010).
These kinds of gains are not the result of mindlessly cutting a
few percentage points of government budgets annually. They
are the result of casting away existing ‘mental maps’ of what we
are delivering and how we do it, replacing them with new ones.
This means that the framing of the problem has to start with
people, their needs and the outcomes we are seeking. However,
the culture and practice in many public sector organisations is
to readily accept what ‘the top’ – whether that is politicians or
top management – defines as the problem or the task (Bason,
2007; Eggers and Singh, 2009). For a public innovator it is
necessary to immediately ask questions like why is this important,
why is it a problem and whom does it affect? even though a report,
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a memo or a policy statement seems to provide the answer. In

that sense, we have to think of the role of the innovation team
as the ‘loyal opposition’, just like the role of the innovation lab
that I discussed in Chapter 6. Loyalty and an understanding
of political motivations and priorities must be balanced versus
rigorous questioning and reframing.
The kind of innovation challenge obviously differs immensely
depending on the type of problem or opportunity. In Chapter 2
on the innovation landscape I introduced a typology of the value
and type of public sector innovation, distinguishing between
four innovation types: administrative, service, policy and
democracy innovation. Each type involves particular framing
challenges – but all benefit from involving multiple actors in the
process of problem definition. The task is to be aware of what
kind of innovation challenge is being addressed.
Administrative innovation happens close to operations, and
might involve implementing a lean project, a new IT system or
some other type of change in work flows or organisation. The
framing challenge here can be to identify the (true) champions
of the project, resources and motivations for the change and
what kinds of resistance or scepticism there might be throughout
the affected parts of the organisation.
Service, policy and democracy innovation might be initiated from
external demands, by government, by top management; it may
be employee-driven or it may arise from citizen-centric insights.
No matter what the source, it is not always clear who the end
recipients of the policy or service are. Wicked problems that are
not clearly defined, where the nature of the problem in itself is
open for debate, where there are multiple possible solutions and
(not least) where the problem will most likely never go away
characterise many public sector innovation challenges; framing
becomes a key discipline to help us see old, intractable problems
from new perspectives.
Creating problem trees and establishing theories of change are
useful techniques for challenging the problem. Problem trees
help to identify the root causes of the problem and identify its
key consequences. Theories of change are a way of mapping
the expected chains of causality in current or planned public
programmes and interventions. A key question to ask is: who
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is ultimately going to benefit from this effort, and how? As

other activities in the co-creation process are carried out – in
particular citizen involvement – new insights may emerge that
help us to further reframe the starting point.
An effective process of loyally challenging the problem
needs the right mix of people. A kick-off workshop where a
broad, diverse group is involved in systematically discussing the
definition of the problem can be very helpful. At MindLab we
sometimes did two kick-off rounds: one where the core team
tried to come to grips with how we felt the problem could be
framed, and one where we invited a larger group to help us see
it from more perspectives.
Project scoping
Once we understand what kind of challenge we are addressing,

it is time to design the co-creation process. Given the open-
ended nature of innovation, there are obviously limits to how
precisely the process can be scoped. However, it is usually
possible to lay out an overall time frame, key activities and (not
least) who is involved and how many resources it will roughly
require. Another scoping activity is to collate the necessary data
to determine a baseline of the current value being provided by
the organisation to the target population, to the extent this is
at all possible. Such a ‘value baseline’ or ‘balanced scorecard’ is
necessary for determining whether the innovation has produced
the intended value or not, for instance by increasing productivity,
service experience or outcomes (at the latest, it should be
established immediately before a solution is implemented).
Establishing the core team is key, as this identifies the overall
group of actors – internal and external – that must be part of the
co-creating process. Stakeholder analysis can be a starting point,
as can ‘snowballing’ methods of identifying actors to include in
various phases of the project. The project team should include a
diverse set of disciplines and professions – among them a mix of
public administrators, professionals, social researchers and design
thinkers, as described in Chapter 7.
Often, it is most efficient to keep the core team very small,
in particular in the earlier phases of the innovation process,
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in order to allow for optimal interaction and communication

between team members, energising the creative process. Such
teams should not, as a rough guideline, exceed more than six
to eight people.
The broader group of involved actors, which will become part
of the co-creation process as it unfolds, should be chosen to
reflect a consideration of both internal and external resources.
What is particularly important to balance in determining
this wider involvement is essentially two needs: to include
the stakeholders who are crucial to ensure ownership and
implementation throughout the process (Attwood et al, 2003;
Ackoff et al, 2006), and the people who can help to increase
divergence through the diversity of backgrounds, experiences
and expertise they possess.
The broader group should, for instance, include managers
and staff in the host or client organisation, key individuals
from other public bodies that have a stake in the project, social
innovators from third sector organisations, external experts and
academics. Explicitly identifying such ‘wild cards’ that could
contribute to the project with new angles and perspectives can
in itself be a driver of innovation. Note that I am not suggesting
that citizens, business representatives or other recipients of a
policy are necessarily asked to be part of the entire co-creation
process. Sometimes they can be, but more often than not they
are invited into the process at very specific stages, particularly
in the ‘knowing’ and ‘creating’ phases.
Knowing
Really seeing the world as other people experience it, not as
our mental maps might have constructed it, is a key part of
the co-creation process. As we saw in Chapter 9, getting to
know the problem through a citizen-centred lens requires real
curiosity and willingness to spend time with the people whom
the service or policy concerns. The co-creation element of
this activity essentially is about obtaining new insight through
conversations with people.
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Citizen-centred research
This is where the in-depth qualitative research and citizen

involvement that I described in detail in Chapter 9 comes into
play, grounding the creative process in a deep understanding of
citizens’ lives and the contexts in which they are lived. Before
applying the tools of ‘professional empathy’, however, we must
start by asking: what do we know already? We have to chart the
existing knowledge landscape, data and evidence, and identify
the key blind spots that we may have. We must be aware of what
we don’t know, and of what makes us curious.
If there is one thing that many public organisations are good
at, it is assembling data. Accessing existing data and information
in public databases, as well as previous analyses, evaluations and
other reports through rigorous desk research must be done at
the earliest phase of the project (van Wart, 2008). As mentioned
above, this type of data can also feed into the establishment of
a ‘value baseline’.
Looking beyond the organisation – checking whether other
public agencies hold data that might be relevant – is a key task
at this stage. Information is often not regularly exchanged across
government departments and agencies – which may partly be
due to legislative limitations on data exchange, but may also have
simply to do with organisational blind spots. For instance, when
two public managers from Australia visited Denmark on a study
trip, they interviewed two different but related government
agencies with overlapping target groups. To their surprise, the
Australians realised that each agency held data of key relevance
to the other, but didn’t share it systematically – yet. Sometimes
it really is necessary to have an outside view so as to gain a new
perspective on one’s own practices.
Another approach is to involve external experts with deep
practical or academic knowledge and experience in the field in
question, or in seemingly unrelated fields in the private sector,
and to harvest their input (Bessant, 2005). Such external views
or insights may have very significant relevance. In their research
on the drivers of more radical efficency Gillinson et al (2010)
emphasise that new insights from other sectors, or finding old
ideas in new places, are among the strongest catalysts for creating
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different and better outcomes. Harvesting such knowledge, once

potential contributors have been identified, can, for instance, be
done through ‘expert interviews’ or joint workshops.
In spite of mapping existing knowledge and identifying gaps,
there is one thing that these exercises cannot do for us: they
won’t tell us what we don’t know we don’t know. Often, the
insight needed to innovate is answers to questions we didn’t
realise we were asking. For example, when the Danish Business
Agency wanted to know how it could accelerate the growth
of small and medium-sized businesses, it thought it was asking
‘How do we help these businessmen to make more money?’
Through qualitative research, using in-depth interviews,
observation studies and cultural probing, it turned out that
the question the Agency needed to ask was: ‘How do we help
these people to realise their dream?’ Realising a dream was
the main motivating factor for these entrepreneurs, and it was
when the co-creation project revealed it that the agency could
first design and implement an effective and relevant service
process.
No matter what the amounts of quantitative data, international
best practice, insight from other agencies and cutting-
edge research that are available, there is often no substitute
for venturing out into the field and observing, listening,
participating, exploring and letting ourselves be surprised by the
complexity and humanity of people’s experiences. This cannot
be replaced by numbers, and it cannot (only) be outsourced.
Flip back to Chapter 9 to see how it might be done.
Analysing
In the co-creation process, the analytical phase is essentially about
transforming data into structured knowledge. In this section I
am assuming that the data concerned is highly qualitative, having
been generated through ethnographic research. However, there
can (and should) of course be a wide range of other kinds of data,
from mining databases, conducting surveys, reviewing academic
literature, checking existing evidence, running crowdsourcing
exercises and so on, that feeds into the process, basing the new
insights on the sum of available knowledge.
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The process of analysing rich, qualitative data must be

collaborative. The team that has collected data at first hand must
also be the team that organises it into meaningful categories and
expressions.
Pattern recognition
Many ethnographers and some participatory designers call the

process of structuring data pattern recognition. The term is quite
precise: we must try to reveal the deep underlying patterns and
structures of beliefs, behaviours and experiences that our data
holds. What are the findings that emerge? Mapping qualitative
field data is a bottom-up process that is not guided by strong
hypotheses or assumptions (Bason et al, 2009). It is guided by
the inner coherence and meaning in the material that has been
collected. The approach is inductive, not deductive (Nachmias
and Nachmias, 1992). We must allow ourselves to be surprised,
even baffled by the data and the patterns they reveal. We have
to suspend judgement. Even so, we must at the same time
recognise that any process of analysis is subjective, and that there
will necessarily be an element of personal interpretation. The
key is not to ignore this, but to be aware of our own biases and
prejudices as a condition of the process – and thus take account
of them.
From ethnographic, qualitative field work, there will typically
be at least 50 to 100 significant statements (in the form of notes,
photos, sound or video clips) from each interviewee. Each
member of the research team contributes this material, in a
format that is practical such as print-outs of interview transcripts
(cut up into individual statements or sentences), photos, cards
representing key video clips and so on. Computer software for
qualitative research, such as Atlas.ti or NVivo, can be used to tag
the data and help systematise, sort and search. Often, however,
a more hand-held approach is more effective, especially if there
aren’t more than 5 to 10 interview sources.
The research team then maps all the individual statements
and experiences, for instance on a large whiteboard, and starts
a process of structuring them into mutually exclusive groups or
patterns. This typically involves a lot of dialogue and discussion
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between team members about the meaning and significance

of individual bits of data. It takes time; usually not less than a
full day, sometimes more. The key is to carry out the exercise
collectively and to do it in an intensive session, not spread out
over time. This dilutes the analytical edge and it becomes more
difficult to remember vivid details from the field work. The
result of such a pattern recognition workshop is essentially a
map of key clusters of statements, where each is labelled with
some overall theme that addresses what the finding is about.
For instance, when we at MindLab categorised how citizens
experienced round table meetings with state and local civil
servants, a cluster was titled ‘Confusion about the purpose of
the meeting’, and all relevant statements about this topic would
be clustered.
Sometimes there are different ways of structuring the
patterns. One might be themes, one might be steps in a service
process and one might be how certain groups (user segments)
experience a service or public intervention. Thus, it may be that
several maps are made, each ‘slicing’ the data differently, leading
to multiple angles or innovation paths.
The themes that have been identified are then brought
into play in the next step, further visualising the findings and
interpreting what they imply for the organisation, creating
insights.
Visualisation
A key contribution of design skills in this phase of the co-creation

process is to visualise people and processes, helping decision
makers to see citizens and services in context and facilitating
collaboration across agency and professional boundaries.
Most government organisations stick to abstract (quantitative)
segments of users/customers/citizens – leaving them with a
rather one-dimensional picture of what characterises their
target population. Visualising people can be done by building
personas out of the individual data about individuals that has
been harvested, where possible combining it with quantitative
data from existing databases or from surveys (Pruitt and Adlin,
2006; Bason et al, 2009).
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Personas are holistic, rich archetypal descriptions of the

citizens, businesses or institutions that the agency serves. A
persona thus expresses the values, beliefs, practices and daily
life of the person or business. It may also express quantitative
measures such as age, how much time the persona spends on
average on a service, their typical personal income, how many
persons in the segment in total (if known) and so on. Most
important, the persona will display the kinds of findings that are
harvested from qualitative research: what motivates him or her,
what benefits are there from the given service or intervention,
what are the resources and barriers at the personal level? A
persona is made living and personal by giving the persona or
organisation a relevant name.
As an analytical tool, the persona can be highly effective in
bridging the gap between quantitative segments and the more
emotional and (not least) memorable qualitative knowledge.
Personas can be used actively in the innovation process to
develop new solutions and even to test them: ‘Would this be
a relevant solution for John? How would John’s own resources
help us to achieve this goal?’ ‘Does he have challenges or barriers
that we need to take into account?’ The dialogue over potential
solutions and desirable futures becomes much more alive,
creative and, not least, concrete (Madsen and Nielsen, 2008).
Often, not only decision makers at central level but also front-
line workers who interact with citizen daily quickly recognise
personas, engage in developing and adjusting them, and start
speaking about them as real people. Personas simply help to
place citizens at the heart of the innovation process.
Another reason why it is key to involve front-line workers in
the creation process is that the ownership they develop over the
personas can feed into how they manage daily service delivery
as well as professional development. For instance, when a public
library in Aarhus, Denmark created personas through substantial
engagement of its front-line staff, the staff subsequently used
them regularly to discuss service strategies and for training
(Bason, 2007).
There is an argument that personas may not always be an
appropriate substitute for ‘real people’ (Bason et al, 2009). Why
seek to reduce the richness of people’s lives into archetypes in
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the first place? One argument can be the need to attach personas
to quantitative segments, thus matching descriptions with the
key question of ‘how many are they’, and the associated ‘what
would the cost and benefits be to introduce this service to this
persona?’ An argument against using true personal portraits is
anonymity. For purely inspirational purposes, however, ‘real
people’ may be better. I once discussed this with a concept
developer at DR, the Danish Broadcasting Corporation, who
said that personas tend to make reality a bit too ‘round and
vague’. But innovation needs sharpness. He then drew two
figures on a whiteboard, the persona being all blurry. The ‘real
person’ he drew much sharper. And then he drew a balloon
on a string in the person’s hand. ‘See, suddenly this person is
interesting. The balloon is surprising. And surprises are great
innovation drivers.’
Another key visualisation tool that also emphasises citizen-
centric processes is service journeys. A service journey is a visual
map of individual service interactions with government over
time, with the citizen’s actions and experiences at the centre
(Parker and Heapy, 2006; Bason et al, 2009; Bason, 2017). At
MindLab, service journeys were an indispensable tool in most
of our public service design projects. In my current work at
the Danish Design Centre we work systematically with service
journeys as a foundation for our business transformation
programmes. A number of features in service journeys are:
• Displaying a service process from an outside-in perspective,

placing people using (or not using) the service at the centre,
recognising that it is the individual’s interaction with public
services and experience of the service that is of interest.
• Capturing the entire service process chronologically from A
to Z, showing all steps along the way, sometimes down to
hours or minutes.
• Including all actors of any relevance (positive, negative or
neutral) to the process, thus placing the service interactions
in social context.
• Focusing not only on what happens in individual steps or
interactions, but on how it is subjectively experienced – how
it feels.
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Service journeys are at their most powerful when they map

what actually happens and how it is experienced from the
citizen’s perspective, really visualising the complexity and
context of service interactions. However, service journeys
can also be shaped as the ‘ideal journey’, in terms of how
we (today) think it looks, or how we would want the future
process to look and feel. It can be quite revealing to compare
ideal and practice, identifying surprising gaps and differences,
and addressing them. As I will consider later in this chapter,
creating future ‘ideal’ service journeys is essentially a concept
development tool.
What about the public sector (internal) side of the journey?
Of course this can be mapped as well, as is often done in lean or
business process re-engineering projects. As part of a co-creation
process, however, there should always (also) be an outside-in
perspective.
How are service journeys established? They are established
through rigorous interviewing of citizens or organisational
representatives, as well as with the relevant public employees
and other stakeholders. Methodologically, service journeys
are uncovered using retrospective techniques, but also through
observation studies and longer-term fieldwork, triangulating
with known regulation, formal descriptions of administrative
processes and service provision and so on. It should always
be ensured that the service journey is validated through
several sources, and it should be taken into account that
local implementation of a service process may vary greatly.
Sometimes it may not be possible to establish a ‘standard’
process, and several different journeys, either differing in
personas, geography or type of service provider, must be
created. Service journeys and personas often work well
together, because it is possible to show vividly how specific
people experience different service flows.
For instance, in the ‘Land of Rules and Regulations’ project,
the Dutch government mapped the key ‘administrative
burdens’ and service experiences that citizens have with public
bureaucracy, combining a ‘map’ of citizens’ journeys with
rich descriptions of the human living the actual journey. The
Dutch even added clear quantitative measurements to their
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descriptions of nine particular citizens, each with own their

challenges and journeys. According to the analysis, for instance,
an unemployed single mother spends 71 hours and 59 minutes
per year handling seven different authorities’ information and
interaction requirements, including letters, phone calls, meetings
and so on. A family with a handicapped child clocks up more
than 125 hours of dealing with red tape. In comparison, a
‘regular’ Dutch citizen spends just 27 hours and 42 minutes on
government regulation per year (Ministry of the Interior and
Kingdom Relations, 2006).
Finally, because service journeys can map not just interactions
but also the entire context and other actors, they describe the
system as well as relationships. Thereby they can help us not
only to redesign interactions but to consider the entire system
architecture. This can help us to create smarter interventions that
strengthen outcomes. Are there other actors than we thought
who might have an impact on service experience and outcome?
When we at MindLab visualised the service journey of citizens
with a work injury it turned out that the partner or spouse was
a key source of advice. Should the Board of Industrial Work
Injuries not think, then, about how it could (also) communicate
with the partners, if they have a big say in the decisions made
by the injured?
Personas and service journeys are visualisation tools that
can give direction and substance to the co-creation process.
Should citizens themselves be involved here? Perhaps not when
describing personas. Citizens may feel that personas reduce
them to archetypes, and some elements may feel clichéd, even
though they are based on rich triangulated data. To validate and
further develop service journeys, however, involving citizens
or other users can be highly relevant. They can contribute by
adding further precision, or by expressing what emotions and
behaviours were triggered by certain interactions. For instance,
as I discussed in Chapter 9, when the service design firm
LiveWork carried out its employment project for Sunderland,
England, the resulting redesign of the system of employment
was possible because the starting point for LiveWork was the
citizen’s perspective (LiveWork, 2006).
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Identifying insights
To identify insights is essentially to bridge the gap between

analysis and synthesis: how should we interpret our findings,
what do they mean to us, what do they imply for what we
are seeking to achieve as an organisation? Where does it hurt?
When Pam Nyberg, design principal at the appliances firm
Whirlpool, said at a seminar that ‘co-creation is to overcome
a world of pain’, part of what she meant, I believe, is that the
process is tough to lead. But part of what is painful is also to
really see the implications of people’s experience, context and
practice on what one is already doing. A strategic design firm
in Copenhagen says that if its clients don’t cry when shown
the research results (much of which are based on ethnographic
research and design thinking), it hasn’t done its work properly.
Perhaps it shouldn’t be a criterion of success to get our public
sector colleagues to cry, but it should clearly be a measure of
success that the insights generated through user research and
analysis matter (Bason et al, 2009).
Who should be involved in interpreting the significance of
the findings, and turning them into insights? It certainly should
be the top- and medium-level decision makers and strategists,
who ‘own’ the objectives, tasks or strategies of the organisation;
they can help the team to understand how the findings relate
and perhaps clash with official objectives and visions. It should
certainly also be practitioners, those who carry out service or
regulatory activities, and who have most likely in some way or
another been involved in the data collection phase; they can
interpret what the findings mean practically. When MindLab
helped the Board of Industrial Injuries to create new approaches
for citizens with a workplace injury case, we involved both
the manager of the particular service unit and the staff who
attended the on-site round table meetings. As MindLab
presented the findings, mainly in the form of one- to two-
minute video ‘snippets’ from citizen interviews, the officials
were the key drivers in identifying exactly where the ‘strategic
meat’ was. The process illustrated the power of the outside-in
view, represented by the video material. While watching an
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interview, one workshop participant spontaneously burst out:

‘Wow, this is an eye-opener!’
The insights that we gain might be called ‘innovation tracks’.
Like multiple train tracks, they lay down potential directions
towards the distant future horizon.
Synthesising
Synthesis is about putting together, generating not just ideas but
growing, shaping and qualifying coherent, possible avenues or
‘tracks’ for innovation. Synthesis is about recognising what the
desirable future solution might look and feel like. UK innovation
broker The Innovation Unit has put it quite precisely by stating
that ‘best practice’ is no longer enough – what we need is ‘next
practice’ (Digmann et al, 2008). Academic C. Otto Scharmer,
author of Theory U (2007), might formulate it like this: ‘We
must sense the future as it emerges’. And, as discussed, Roger
Martin of the Rotman School has emphasised that leaders must
embrace abductive thinking – the ability to have a ‘hunch’ that
something might work, and to engage in a process of discovery
(2007, 2009). Several processes are involved in the synthesis
phase: idea generation, concept development and selection.
Because it involves a more intuitive and interpretive way of
working, synthesising isn’t an exact science – perhaps even less
so than other elements of the co-creation process.
Idea generation
Allegedly, in the midst of the financial crisis, in 2008–09, US

Chairman of the Federal Reserve, Ben Bernanke, held so-called
‘blue sky’ meetings – a term he used for brainstorming sessions
with the purpose of soliciting unorthodox ideas from any
participant. Not surprisingly, this was a time of unprecedented
challenges, and even central bankers were in need of a major
dose of creativity (Time Magazine, 2009). Idea generation, or
ideation, is probably the single activity most associated with
innovation: collaboratively developing new creative ideas,
applying imagination and energy to describe possible futures.
And sticking up lots of coloured Post-Its on a wall.
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MindLab’s ‘The Mind’, a 100 square foot white, oval room

lined entirely with whiteboards, was an iconic manifestation of
this notion. The room had no corners, so there was no excuse
not to participate in the creative process. Even if idea generation
isn’t an exact science, it certainly is a discipline, and it can be
done in quite systematic ways (Kelley, 2005). It is impossible
to do credit to the field in this short subsection, but I will
highlight a few of the principles and methods that I have found
effective in driving public sector innovation – while addressing
the key barriers too. Some of the most important principles
underpinning the process of ideation are identical to the basic
rules of brainstorming, such as:
• Ask ‘What if …?’ or ‘How might we …?’

• Suspend judgement.
• Go for quantity, not quality.
• Build on each other’s ideas.
In the public sector, this means that we are already up against

several challenges.
First, in the analytical-logical world of many public
organisations, suspending judgement is almost counterintuitive.
Civil servants are usually trained to be professional sceptics,
weighing arguments for and against, assessing cases and
managing risk.
Second, going for quantity means allowing ourselves to throw
entirely crazy, unproven and ‘unrealistic’ ideas out there, right
in front of our colleagues or, even worse, in front of staff from
another ministry, department or agency. The ideation process
thrives on divergence, not convergence, and we must allow
enough time, energy and effort to truly explore the corners
of our imagination, as it bears down on a particular challenge
(McKinsey Quarterly, 2008). Karl Ulrich, a professor of operations
and information management at the Wharton School at the
University of Pennsylvania, has conducted research that shows
that ‘diminishing returns to scale’ of more new ideas don’t kick
in until after between 150 and 200 ideas (Ulrich with Terwiesch,
2009). In other words, to be sure that the quality of ideas is as
high as possible, as judged by the innovation team itself, the
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group has to develop at least 150 distinct ideas. When I mention

this to public officials, they often look at me as if I’m crazy. But
then we carry out a fast and structured brainstorming exercise,
and in half an hour they can generate the first 100 ideas, or
more.
Third, public officials are adept at managing risk rather
than leading innovation (although some might argue that
we aren’t too competent about the risk bit either). It is a bit
scary to articulate an idea that could involve numerous risks
both in implementation and in final execution. It might even
be more than scary: it might be perceived as unprofessional.
As discussed earlier, the culture and values in many public
organisations are often not geared towards the creative process.
How does the discipline of brainstorming radical ideas come
to be perceived as being just as professional as drafting new
legislation? The best answer is, I believe, that it has to be treated
and carried out as a professional discipline that, just like any
other professional endeavour, requires time, focus and, first of
all, practice. In Innovation in the Making, Danish academic Lotte
Darsø (2001) describes how the key dimensions of relationship
(trust, communication), concepts (for instance visual models,
mutually understood metaphors), knowledge (both theoretical
and practical) and absence of knowledge (such as not knowing
that something is impossible, asking ‘stupid’ questions) are all
ingredients of the ideation process. Innovation competence is to
master all four dimensions and create an environment of mutual
trust in which they can play out (Darsø, 2001). The role of the
competent facilitator is to apply the methods and processes that
mix these dimensions in an optimal way.
Here are a few methods that can help public organisations to
add power to the process of generating radical new ideas:
• Mind setting
To kick off a creative process it can be necessary to help people
to shift from their analytical mode of thinking to a more
intuitive mode. Mind-setting exercises are essentially aimed at
helping to put people in the ‘right frame of mind’ or even the
‘right emotional state’ in the context of the topic or problem
that is addressed. An objective can be to generate empathy
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about the situation or challenge. For instance, in a workshop

for a pharmaceutical company about how to market a new
anti-asthma drug, the facilitator asked the group of executives
to each breathe through a straw for two minutes. The exercise
made them acutely aware of how it feels to suffer from asthma,
and helped them think more broadly about ideas for marketing.
Another example is a workshop held at MindLab, part of crafting
the Danish policy on climate change and business growth,
where we placed a huge block of melting ice in the middle of
the room, amid the tables with work groups. We wanted to
remind the public managers of what was at stake.
• Thinking inside a different box

Rather than trying to think ‘outside the box’ (where is that
anyway?), ideas can be stimulated by establishing a different
box to think in. That is what Great Ormond Street Hospital in
the UK did when it looked to Formula One pit stop teams to
learn how to carry out extremely fast handovers in the operating
theatre. A top pit stop team fuels and changes tyres on a car in
around seven seconds. The doctors at Great Ormond Street
Hospital asked how that process might be applied to their own
reality. Watching, mapping and videotaping the Ferrari pit stop
team’s efforts at first hand in Italy, the doctors saw the process
as similar to the effort of surgeons, anaesthetists, and intensive
care unit (ICU) staff to transfer the patient, equipment and
information safely and quickly from the operating theatre to
the ICU (American Society for Quality, 2010). By engaging
in a collaborative effort with the Ferrari team, the hospital not
only designed a more effective handover process, it also reduced
error rates significantly.
• Conscious obstacles
In the early 1970s, Danish filmmaker Jørgen Leth was asked
by (now) internationally acclaimed director Lars von Trier
to remake scenes from one of his first and highly aesthetic
films, while obeying certain very specific rules or obstacles.
The resulting documentary, The Five Obstacles, follows Jørgen
Leth’s travails as he deconstructs his beautiful film under the
strict supervision of von Trier. The documentary illustrates that
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the creative process is driven forward not by freedom, but by

obstruction. Just as designers thrive on challenging boundaries,
filmmaker Jørgen Leth’s creativity was stimulated as he tried to
tackle increasingly the obscure obstacles posed to him by von
Trier, such as filming a scene of his tuxedoed self eating a three-
course dinner in the middle of a Calcutta slum. Similarly, we can
propose explicit obstacles to help drive the ideation process. For
instance, what would happen if a certain public service process
could be only digital, with no personal contact at all? Or what if
a case-handling process that today takes nine months on average
had to be done in less than one month? What if the rate of error
in a hospital was to be zero? Consciously establishing obstacles
reinforces divergent thinking, helping us to explore the frontiers
of what we thought was possible (Brown, 2009).
• Temporary anonymity
Cross-agency collaboration in the public sector is becoming
more and more necessary as the governance model becomes
increasingly networked (Hartley, 2005; Goldsmith and
Eggers, 2004; Mulgan, 2009). But, as discussed, it is also
often an innovation killer. So, how can we help people to
forget what silo of government they represent, giving them
back the freedom to propose a ‘stupid’ or ‘dangerous’ idea? A
powerful enforcer of ideation processes across organisational
and professional boundaries can be to make every participant
temporarily anonymous. Software such as Group System’s
Think Tank and other non-commercial solutions can enable
groups of individuals to brainstorm from their laptop computers,
instantly documenting and viewing each other’s ideas, without
being able to discern who has entered which idea. This frees
up much energy and creativity to take all ideas at face value,
allowing civil servants from one department to build and expand
on ideas that perhaps originated from another department, or
allowing a junior civil servant to strengthen the suggestion of a
senior executive and vice versa. Simple as it may seem, taking
the hierarchy and power structure out of the collaborative
effort can be tremendously liberating. At MindLab, we used
the method both in more analytical processes and in pure
brainstorming; and we involved from three to seven different
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ministries in the process simultaneously. The officials could

develop on each other’s ideas, across policy areas, in a spirit of
collaboration and professionalism: let the best solutions win, not
the most powerful ministry or highest-ranking official. Creating
anonymity across public bodies is like infusing an artificial dose
of liberty to engage in each other’s domains, to ask the ‘stupid
questions’ and even to have fun doing it. It might even be the
first step to building a more fundamental sense of trust among
the participants, paving the way for next steps and perhaps
venturing into less anonymous collaboration.
• Innovation labs
As discussed in Chapter 6, innovation labs, as physical or virtual
platforms for creativity and ideation, can help to set the scene
for the co-creative process, and provide the thought leadership,
skills, tools, spaces and technologies that can power ideation.
In terms of enhancing the ‘professionalism’ of the ideation
process, this is probably one of the potentially biggest benefits of
dedicated innovation labs: imagine that there is actually someone
in your organisation who treats innovation just as seriously as
a discipline, in theory and practice, as you treat the budgetary
or legislative process. Whether it is to help design a two-hour
workshop or a three-month process of citizen involvement,
innovation labs can provide the experience, tools and resources
that make it possible. Just as human resources departments,
at their best, support and strengthen the organisation’s ability
to recruit, retain and develop people, and just as financial
controllers underpin the ability to conduct economically
responsible governance, innovation labs increase the capacity
to drive strategic innovation, including through co-creation.
• Physical and emotional space

No matter whether an innovation lab is available or not, physical
space can help to set the scene for ideation, as a creative platform,
like I described in the previous section. Taking people out of
their daily business, lifting them out of the ‘swamp’ of daily
routines, signifies that they are now entering a dedicated, creative
process, and can help to increase motivation, commitment and
concentration (Kelley, 2005; Hansen and Jakobsen, 2006).
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Introducing a sense of fun and ‘serious play’ can help to stimulate

creativity. For instance, toy maker Lego has developed an entire
idea- and concept-development tool that uses Lego bricks for
vision and strategy processes. Building the organisation’s future
service concept collaboratively with yellow Lego bricks instead
of writing a memo might generate a bit more enthusiasm.
Rehearsing the future
I’ve highlighted only a small fraction of the possibilities for

running an ideation process. Just search online for ‘creativity
tools’, and around 185 million links will appear, many of which
contain entire toolboxes.1 There is no lack of online resources;
the challenge is to select the best and to consciously orchestrate
the process.
It almost goes without saying that the format for much of the
ideation work I’ve described above is the workshop. Gathering in
workshops rather than in meetings, and producing something
tangible, through a collaborative process, rather than exchanging
views or positions, can be foreign to many. At MindLab, we
proposed to a senior director in a ministry that we could facilitate
part of a cross-ministerial steering group meeting that he was
chairing, in order to ensure that all dimensions of the problem
were covered. We said that we would run the meeting as a
workshop and bring Post-Its along. That was the point at which
the manager said he really didn’t see the need for any facilitation
at all. Given that later stages of our joint project would involve
somewhat more radical processes, such as bringing ethnographic
research and video clips into play as part of the decision-making
process, this was not a good start. We decided to schedule a new
meeting, where we shared our methods and work processes in
detail with the director, providing case examples for illustration.
His reaction was something along the lines of ‘Oh, is that what
you do?’ and not only did he allow for a more open process
in the steering group, including workshops, but also for the
showing of key video material at a later high-level meeting.
One of the most effective drivers of new ideas might therefore
simply be the ability to meet and work together effectively in
a different way. Establishing a simple template for designing
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workshops that combine various creative process tools is the

first fundamental step to applying creativity systematically in
the organisation. Creative workshops should be celebrated as
occasions for shaping the future together. Often we make sure
to take plenty of pictures or video footage during the process,
capturing the feel and energy of the collaboration, sending the
best shots and clips back to the group soon afterwards.
A powerful way of viewing ideation workshops, which is
emphasised by researchers at the Royal Schools of Architecture
and Design in Copenhagen, is to see each workshop as a ‘design
lab’ where the participants, through collaboration, not only
imagine different futures but start creating them by the very
act of imagination (Binder and Brandt, 2008). Building on this
perspective, Brandt and other colleagues from the design school
characterise such sessions as ‘rehearsing the future’ (Halse et al,
2010). Once you have been part of seeing and making explicit
how things could be, you are already more prepared to also be
an active part of that future. Workshops are in many respects
the engine of the co-creation process, driving it forward, setting
the scene for collaboration. The power of workshops as a form
of working and creating together in the public sector cannot, I
think, be over-estimated.
Selection
Throughout the various ideation stages, moving through

the innovation ‘funnel’ from hundreds of ideas to the three
concepts we want to pursue, a screening process takes place.
The reason why we need many ideas, perhaps 200 or more
for each really good one, is that our assessment of the quality
of an idea changes as we begin to describe it in more detail.
What sounds like a great idea when it is described as a one-liner
may not seem so convincing when it is presented as a more
elaborate one-pager (Ulrich with Terwiesch, 2009). And again,
the innovation team may be entirely disenchanted when it sees
a thorough 10-page business case. Conversely, what does not
sound particularly hot at first may, upon further scrutiny, be a
sound proposal. Because ideas, over time, can change places in
this hierarchy of ‘innovation quality’, we need many of them.
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But we also need agreed and transparent criteria for selection.

Because design thinking prescribes an iterative, more open and
flexible process than traditional ‘stage-gate’ processes, a selection
is not necessarily final. We can iterate, revisit the previous step,
grabbing discarded ideas and giving them another chance, or
combining them in new ways.
What are good criteria for evaluating ideas? Of course it
depends. But a few of the most common criteria are:
• Is the solution realistic – how likely is it that this can be done

in practice, given constraints such as time, resources, skills,
political concerns? Would it work for the people or businesses
(personas) who we think are the target group?
• What would be the potential impact (value) of the idea if we
implemented it? To end-users? To our organisation and staff?
• How strong is the available evidence that this solution will
work in practice?
• Strategic match: to what extent does the idea really address
our core strategic objectives and goals?
• Quick win: is this something we could do extremely fast,
and would it provide us with some positive response and
branding, paving the way for longer-term efforts?
Often it can be helpful to draw a coordinate system, placing

the two most significant criteria on the axes and posting all the
ideas in the resulting matrix. It could, for instance, be on the
two dimensions of ‘realism’ and ‘potential impact’. This quickly
gives a picture of which ideas may be worth continuing to work
on (the most obvious ones being ‘high impact, highly realistic’,
and the least interesting ones being ‘low impact, not realistic’).
Selection can also be done by asking the team to place their
ideas on a dart board, placing favourites close to the bull’s eye,
or it can be done by dot-voting, giving the team members dot
stickers and asking them to vote for favourite ideas (again on
the basis of a mix of specified criteria).
Perhaps the single most important point about the selection
process is never to throw ‘old’ ideas entirely out, but to save
them for later. For instance, even though the Danish tax agency
wasn’t able at the time to implement some of the solutions
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that MindLab helped it to develop in a number of workshops

with citizens about personal digital services, the agency kept
all the resulting raw ideas and draft concepts as an inspirational
catalogue for future use. When budgets became available the
following year, a number of the ideas were then fed back into
the project pipeline.
Concept development
Growing ideas from simple, individual words or short one-liners

to mature, well-described and valuable solutions is what concept
development is about. A concept is a coherent set of solutions,
activities and benefits that are based on one particular ‘pitch’
or fundamental idea. A concept is tightly connected to the
findings and one or more key insights. An example of a public
service concept was ‘Capturing the dream’, the overarching
title for the project that MindLab carried out with the Danish
Business Agency, and which I mentioned in Chapter 8. The
concept built on the finding that owners of small and medium-
sized enterprises don’t primarily run their businesses to become
rich; they do it to live out the dream of building a success. The
essence of the solution was that the public agencies in charge
of supporting these businesses on their path to growth would
have to meet the men and women not as capitalists out to
make a buck, but as people trying to realise a personal dream.
Starting with the concept of ‘Capturing a dream’, MindLab
and its partner, strategic design firm 1508, was able to shape a
new communications and service process for the entrepreneurs.
The language of ‘concepts’ is almost entirely absent in
the public sector, even though it could easily be applied to
descriptions of how to change an administrative process, a
service process, a policy, or a to form of citizen participation. A
concept is a way to structure the objective, content and value
proposition of a solution.
Some organisations have established a more or less fixed
concept model, which means that a concept or new business
model must be described according to a specific template or
structure. For instance, Menlo Park, California-based SRI
International has pioneered the NABC model (Needs, Approach,
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Benefits, Competition), which establishes four categories that

an innovative business proposition must be structured around.
As discussed earlier, public organisations such as the British
Broadcasting Corporation (BBC) and Danish Broadcasting
(DR) have to various degrees adopted the NABC model.
The advantage of such a model is that once it has become an
organisation-wide approach or language for describing solutions,
everyone knows how to use it, not just for concept descriptions
but also as a basis for decision making. In politically governed
organisations that are not as close to operations as BBC and DR
are, the NABC framework may need to be modified because it
is based on the assumption of a competitive context; however,
modified versions or other types of standard conceptual frames
may be extremely helpful in helping to embed a practice and
culture of innovation and concept development in the fabric of
the organisation. The Business Model Canvas, popularised by
Alexander Osterwalder, a consultant, is another such concept
that operates at a higher order, namely that of an entire enterprise
(Osterwalder et al, 2010).
Concepts can be built around key personas, if they were
identified in the earlier, analytical phase of the co-creation
process; this has the advantage that the concept description
specifies how and to what extent it will service or help the
different personas.
Any concept needs to state what benefits or value it proposes.
In public sector innovation, that means specifying expected
value across the four bottom lines. What kind of productivity
improvements will happen (or will productivity drop?). In
what way will the concept, if implemented, improve the
service experience for citizens, businesses or other end-users?
What are the proposed outcomes of the solution in the short,
medium and long term? Are there democratic effects, in terms
of increased or decreased citizen participation, transparency
or public legitimacy? The ability to succinctly and precisely
describe a well-grounded value proposition is not necessarily
easy in a complex, conflict-ridden and ambivalent political
context. But it is none the less the standard that a good public
sector innovation concept should live up to if it is to form a
meaningful basis for decision making.
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Creating
The credos of design thinking give us a few more tools to
sharpen our concepts before final decision and implementation.
Through an iterative process of prototyping, testing and further
adjustment, we are able to ‘fail faster to succeed sooner’, learning
through smart errors in relatively controlled environments.
Prototyping
Tom Kelley, co-founder of IDEO, has said, ‘You can prototype

just about anything’ (quoted in Tidd et al, 2005). Applying the
process of prototyping to public sector innovation processes
isn’t just about using a different word for known practices such
as pilots. It is, in my experience, about a radically different and
more practical way of exploring future approaches at an early
stage, and of shaping them in ways that allow fast, small-scale
testing, iteration and learning.
In the public sector, a prototype can be a model of a new
administrative process, a service journey or a policy initiative.
What characterises prototypes, drawing on the principles
of design thinking, is that they are highly tangible, either as
graphical illustrations or as virtual or physical models or spaces.
Service journeys, as I’ve considered earlier in this chapter, are
essentially service process prototypes. They are often made
visible through graphically illustrating all steps, interactions,
events and experiences that make up a service. Another
approach is to not illustrate the service as a diagram, but to
illustrate it as a story. The story could simply be a text describing
what happens and how it feels, using the tools of science fiction
literature to create a ‘story from the future’ (often scenario
planning is associated with such stories). A more visual approach
to prototyping future services is to build a storyboard, like a
Hollywood movie might be illustrated by graphic designers
before the filming begins. Specialist graphic design skills are
certainly helpful here – but not always necessary. Anyone can
draw a story using stick figures and short explanatory sentences
from the key actors in the story – enough for others to get an
idea of the key steps and events.
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Services can also be enacted. When we at MindLab ran a

workshop with US design firm Zago to explore new solutions
to climate change, the workshop participants played out different
scenarios by miming them. In this process of enactment, which
Zago calls ‘body slamming’, the participants are cast into not just
imagining a future but physically living it. In the workshop one
of the groups believed that people would be motivated to use
more mass transit, thus reducing CO2 emissions, if only buses
were more comfortable and individualised. So they enacted a
day in a person’s life, waiting at the bus stop, catching a smart
new electric minibus and experiencing the higher service level
of CO2-free collective transit of the future.
Sometimes physical models are the answer. For instance,
when American Red Cross worked with IDEO to explore
new ways of making temporary field clinics for blood donors
more comfortable for doctors and donors, they built a full-
scale prototype of the new portable facility that they imagined.
One of the new service processes, drawing on citizen-centric
insights about what motivates people to give blood, was that
donors would be given a card at the entrance to the facility
where they could write their personal story and share their
emotional reasons for giving blood. The cards were then placed
on a bulletin board near the entrance, sharing these personal
stories. According to IDEO, the objective was to design the
‘emotional experience’ of the donors (Brown, 2009).
Digital services are also easy to prototype. Graphical sketches
or ‘mock-ups’ of websites can be drawn by hand, illustrating
the layout, user interface and specific functions. More advanced
drafts can be drawn in MS PowerPoint or graphical programmes
like InDesign. However, it can be a good idea to consciously keep
the prototype looking ‘raw’ and unfinished. Our experience at
MindLab was that the rougher a draft is, the easier it is to engage
citizens or other users in a dialogue about how the solution
might look and function. If the mock-up looks too polished,
people will think it is nearly finished and that there isn’t much
room for changing it anyway.
What about prototyping policy? When a policy initiative
consists of a number of elements such as regulation, expenditure
programmes or particular services, the way in which each
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of those elements will play out in a real-life setting can be

prototyped in its own right, using the approaches sketched out
above (Bason, 2014). Policies might also be prototyped through
future scenarios: what would the world look and feel like if the
policy were realised? Which alternative futures might it help to
create? This is one of the ways in which we believe that our
project on health futures 2050 at the Danish Design Centre will
create value for policy makers.
It is usually extremely helpful to involve citizens as part of
the prototyping process, obtaining their feedback and testing
the ground for different options. A key strength of prototypes is
that they allow for common understanding and dialogue about
a proposed solution not only across internal disciplines and
hierarchies, but also between ‘system’ and ‘users’. Sometimes the
user feedback is not to build the service at all. For instance, when
the Danish Labour Market Authority prototyped a new digital
self-help service where unemployed citizens could schedule
appointments with case workers online, it turned out that citizens
had no need for such a service. Two workshops with carefully
selected groups of unemployed people helped innovators to gain
a much better understanding of their real needs. As it turned
out, fitting appointments into a packed calendar wasn’t really the
challenge that the unemployed were typically facing (when you
are unemployed there is one resource you have in abundance:
time). But they did lack an online service that could sum up
the activities they had agreed with the case worker, job-search
strategies and to-dos. So, instead of building the self-booking
appointments system, the Labour Market Authority chose to
first create an online resumé and reference tool – utilising the
resources of the unemployed more optimally.
Testing
In addition to being fast and cost-effective to carry out, a major

strength of prototypes is that they usually don’t create a lot of
the types of questions and challenges that pilots and real-life
trials do (Mulgan, 2009). Because pilots involve only part of the
population, there will often be a question of citizens’ rights and
equality before the law. However, since prototypes cannot take
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account of all the relevant context factors that may be involved,

and since there will be unforeseen elements in a real-life setting,
moving from prototypes to ‘live’ pilots on a small scale, for
instance in geographically selected sites, may still be a relevant
next step. Some public organisations go about their pilots in a
highly systematic way, establishing randomised controlled trial
set-ups to gain a strong evidence base that a new programme
works (or not). This has been a tenet behind the programmes
run by the Behavioural Insights Team in the UK, and similar
units focusing on ‘nudging’ and behavioural insights elsewhere.
A key challenge here is to be able to conduct and learn from
pilots fast enough to be able to implement the new ideas before
they become redundant. Another challenge is not to design
pilots to simply ensure success; too often, stakes become so
high that a pilot must not fail, and so there is no learning. As
Mulgan (2009) rightly points out, anything genuinely innovative
is almost certain to go not quite according to plan.
Implementing
Once we (none the less) are sufficiently confident that a new

approach will work, it is time to put it into practice. As I
highlighted in Chapter 2, successful implementation is what
bridges the generation and selection of ideas with the ultimate
creation of value. The discipline of implementation has received
extensive interest in the management literature, probably for the
simple reason that it makes all the difference between wanting to
do something in an organisation and actually making it happen.
To a large extent, implementing innovative new solutions in the
public sector, like in the private sector, is a change-management
challenge.
It is not the purpose of this book to cover in any detail the
vast knowledge about implementation and organisational change
processes; however, a few key points should be made that are of
relevance to the public sector organisation and the co-creation
process.
First, one of the central insights about co-creation that can
hardly be overstated is that if you go through the process of
creating a new solution with the people who are going to use
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it, the chances of successful implementation and value creation

increase dramatically (Attwood et al, 2003; Ackoff et al, 2006;
Binder and Brandt, 2008; Eggers and O’Leary, 2009).
Second, there really is not too early a stage to involve
people throughout the organisation who will at some point
play a role in implementing and realising the potential new
approach: digital systems developers, trainers, human resource
professionals, communication staff, front-line managers and
workers, and so on. The level of involvement may vary over
time, but you will want them on board early.
Third, in spite of high involvement, implementation can still
be extremely challenging. It requires leadership and direction.
A classic book like John Kotter’s Leading Change (1996) can
be helpful in planning and engaging in both small- and large-
scale change projects. In an intriguing article, ‘The Irrational
Side of Change Management’, Aiken and Keller (2009), of
consultancy McKinsey and Co, , argue that change processes
are viewed in one way by management and in a very different
way by the people on whom it impacts. Understanding
the kind of rationality at work among staff is a prerequisite
for managing the change process well. They highlight nine
‘counterintuitive’ insights which can help to increase the odds
of implementation success. The insights are ordered around
the four overall change management ‘best practices’ of telling a
compelling story, role modelling, creating reinforcing mechanisms and
capacity building. A common thread across these dimensions is
the need to understand the uniquely human social, cognitive
and emotional biases that can impede change efforts. A much
better recognition of how people interpret their environment
and choose to act is necessary (Aiken and Keller, 2009).
It is one thing to implement a solution within one
organisation – be it large or small. That in itself can be difficult
enough. However, in the public sector, at least when it
comes to central departments, and sometimes in agencies and
institutions also, the idea or concept will not be implemented
in the same organisation that created it in the first place. A
classic example is of a department that formulates a new policy
initiative that some dozens or hundreds of institutions must
take up and turn into reality. This essentially requires hundreds
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of near-simultaneous implementation processes to take place –

transforming someone else’s idea into practice. Another example
could be of a department or agency that identifies an innovative,
valuable practice in one institution and subsequently wants all
other institutions in the sector to adopt the same practice. In
public sector innovation terminology, we call this scaling, and it
is one of the toughest challenges we have.
Scaling
Scaling is a slightly misleading term, because it carries with
it a connotation that it’s an easy thing to do. It isn’t. Scaling
isn’t a mechanistic process, like blowing air into a balloon and
watching it expand accordingly. Scaling – ensuring wide take-up
of innovative new solutions across geography and time – depends
on people. Even if one public organisation has successfully
demonstrated that a new practice, approach or method is highly
valuable, there is no guarantee that it will ignite the interest
of anyone else (Moore, 2005; Harris and Albury, 2009). In
fact, this even counts for colleagues within the same institution.
At a school in northern Zealand, Denmark, two enthusiastic
teachers very successfully introduced the concept of innovation
and creative processes for children in the lower grades – to the
point where a class successfully did an independent presentation
for the city’s mayor and a room of more than 100 civil servants.
When the teachers were asked whether others in the school
had been inspired and got on board with the same methods and
practices, the answer was negative.
Scaling, however, is no worse than other labels such as
‘dissemination’, ‘take-up’, ‘replication’ or ‘diffusion’. All are
terms that seek to capture the key question: how do we move
from successfully doing something new in one setting, to doing
it in all relevant settings? As Jean Hartley (2005), who prefers
‘diffusion’, has stated: ‘Whatever the language, there is still a
lot to be learned about how diffusion takes place, and how and
why innovations are adapted to different contexts and cultures.’
There are a number of barriers to scaling, which need to be
understood.
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• Lack of ‘pull’ incentives

As I discussed in some detail in Chapter 4, because only few
public organisations operate in full-blown competitive markets,
the incentive to pull and actively adopt new solutions is usually
not as strong as in the private sector (Moore, 2005). Scaling
requires not only that an innovation is well documented. It
requires that others in a position to leverage that innovation
to the advantage of their own organisation and its constituents
hear about it, understand it, like it, are motivated to try to adopt
it, are able to create the internal coalitions to actively translate
and adapt the solution within the organisation, and can muster
sufficient enthusiasm and resources around it – in spite of the
fact that the idea came from somewhere else. The intrinsic and
extrinsic incentives to pull new solutions in from the outside
are not always strong enough; and few organisations are actively
scanning the horizon for others’ ideas, taking an open approach
to innovation and having the leadership and culture to adopt
new solutions effectively.
• Lack of ‘push’ incentives

Conversely, there typically is no market-driven incentive to
spend the necessary time and resources to push a new solution,
trying to convince others that there is real value to gain by
using your idea. If a public manager in one organisation spends
one third of her time for half a year ‘selling’ an innovation, and
a few others adopt it, what would be her benefit, other than
possibly the satisfaction? As Tom Kelley has highlighted, car
maker Volvo, the company that invented the modern three-
point seat belt, chose to share the invention with everyone
who was interested. Why didn’t it patent the invention? The
company considered it too important for traffic safety to keep
it for itself (Kelley, 2005). What if more public organisations
thought in that way?
• Lack of codification
There is no strong public sector tradition of conceptualising and
codifying solutions, whether they be technological solutions,
processes or professional in-person services, so that they can
be easily shared and transferred. Part of this could be due to
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limited use of professional knowledge management systems;

another could be that there is no incentive, since scaling isn’t
considered a relevant scenario. While a national bank might
be interested in codifying solutions and processes so that they
could be scaled in connection with mergers, acquisitions or
international expansions, many public organisations don’t have
those types of incentives.
How can we do it, then? To scale innovation it is necessary
to use a wide range of instruments, combining the different
tools in the way most appropriate to the task. Let us consider
the range of approaches.
Legislation
Legislating to ensure that all relevant actors adopt or comply

with a certain solution seems like the obvious answer; however,
it is but one tool among many. Under certain conditions, it
is obviously the right tool. Geoff Mulgan and David Albury
(2003) have pointed out that this is particularly the case when
there is solid evidence that the solution can work independently
of the local context; and when sufficiently strong administrative
systems for enforcement are in place. In Denmark, for instance,
the drive to spread the innovation of digital B2G payments,
getting 100% of business transactions with government online,
was ultimately driven by legislation and centralised control.
However, many ideas would be too small, too dependent on
organisational context and conditions, not sufficiently evidenced
or otherwise not suited to enforce by law.
Creating demand
It is easier to scale innovations that are in demand. And scaling

through a pull dynamic, rather than the traditional push dynamic,
is usually the most effective. Haven’t we seen enough pamphlets,
websites and best-practice guides produced, to no end (Harris
and Albury, 2009)? Serious consideration must be given to the
different types of incentives for organisations and individuals to
become ‘willing adopters’ (Moore, 2005; Mulgan, 2009). One
obvious point, then, in the spirit of co-creation, is to ensure that
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at least some of those ultimately responsible for using or taking

over the innovation are themselves involved in the innovation
process (Harris and Albury, 2009). Being part of the process
not only creates a sense of mutual ownership, it allows people
to start thinking at a very early stage about how the solution
might work for them in their particular setting, enabling them
to begin ‘rehearsing the future’ (Binder and Brandt, 2008;
Halse et al, 2010). It builds the foundations on which later
scaling must stand. However, it is often not feasible to involve
more than a fraction of potential adopters of a public sector
innovation in the process. Some after-the-fact approaches may
also be necessary. Can we take in specific measures that make
adopting the innovation particularly desirable for everyone else?
Are the benefits for us (for instance central government) of
adoption by others so great that we might share some of the
potential rewards up front, as icing on the cake? Involvement of
some of the potential adopters can uncover what might work
as incentives, and help to provide a realistic assessment of what
it would require to generate a real demand. If the involvement
of those who are intended to use the innovation is not feasible,
it is a good idea to conduct interviews or field work with the
target organisations, so as to understand their context and
motivations. Prestige and recognition (and competition) might
be equally powerful drivers of demand as monetary incentives;
what matters the most, and would work the best in the specific
case, is up to you to discover.
Documenting results
Needless to say, the value of successful innovative solutions

must be stated convincingly. There must be strong and clear
descriptions of what is the change, how was it brought about,
what it required and how it created value on one or more of the
four public sector bottom lines. Quantitative data that generate
the sense of ‘hard facts’ are good; but powerful stories about
the enthusiasm, energy and satisfaction that the solution will
deliver can be at least as convincing. Go for stories that include
the numbers (Heath and Heath, 2007). Should an innovation
live up to the rigour of ‘evidence’ (such as extensive evaluations
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or randomised control trials) to be sufficiently credible? That

might be very helpful and relevant; but it might well also be
that the immediate feedback and learning already generated by
the host organisation are sufficiently convincing to allow others
to get on board, knowing that positive outcomes aren’t finally
‘proven’; the context may change before the studies are finalised,
or citizens may even be left to suffer while bureaucrats await
‘hard evidence’. Given the complexities of ‘wicked problems’,
there are limits to how much we can place trust in evidence
(Mulgan, 2009; Bason, 2017).
Sponsors and champions
For public sector innovations to be sustainable at scale, they

often need sponsors and champions. It is necessary to identify
organisations with the resources and critical mass either to
implement the innovation itself at scale, or to actively help
others do so. Sometimes the task is to find strategic matches
and develop partnerships between organisations with great ideas
(but few resources to leverage them) and organisations with
fewer ideas (but the power, channels and capacity to make them
happen). This is often the model advocated in the realm of social
innovation, where (non-governmental) social entrepreneurs seek
private or government sponsors to carry their solution to scale
(Mulgan et al, 2006). But sponsorship is just as relevant in pure
intra-government innovation. An example is the Danish digital
transfer system for B2G data transactions that was mentioned in
Chapter 5. The Danish tax authority had created and worked
on the solution for nearly a decade, achieving a penetration rate
to the target population (all Danish enterprises) of only around
5%. The responsible manager then identified an opportunity to
shift this innovation portfolio to the Ministry of Finance; a few
years later, now with the backing of the law, the penetration
rate was close to 100%. The Ministry of Finance simply had a
more powerful position on the issue and was able to leverage
political backing for the necessary legislative measures to scale
the solution effectively. (This story also illustrates the old
insight that it is amazing what can be accomplished if one is
willing not to take the credit for it.) In particular, more radical
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innovations can require the necessary momentum and critical

mass. As Osborne and Brown (2005) point out, more classic
public bureaucracies may in fact be better at carrying through
system-transforming innovation than smaller institutions in a
market setting. If the task is long-term scaling of a significant
innovation, it might even be relevant to establish an entirely new
organisation or unit to do it.
Roadshows
Professional practitioners will (usually) be more willing to adopt

something they see other fellow practitioners do with success.
This implies that there is only one thing to do if one wants
professionals such as teachers, doctors, nurses and social workers
to take on a new solution. Show it, in person. Roadshows
where the originators of the innovation demonstrate the
solution(s) are a powerful tool. One-way presentations at a few
generic conferences aren’t enough, though. There has to be a
real effort to make sure that the right people participate, and
the meetings must be framed for interaction, real engagement
and learning. Visual tools such as video demonstrations can also
be helpful, as can websites and online resources that people can
browse after the event. The challenge here, as discussed above,
is of course to allow the time and resources for the people who
‘own’ the innovation to actually promote it actively. Another
challenge is scope; there is a limit to how far around a country a
‘roadshow’ can go; what could work in a relatively small country
like Sweden is not as easy to carry out in the US.
Communicating through professional networks and trade

associations
Since there is a limit to how wide roadshows can go, other

professional channels might have to be employed. Often
front-line professionals are members of unions or professional
associations, and these organisations may have greater reach
and deeper resonance with those that need to know about
the innovation than a public authority has (Mulgan, 2009). It
can be a very effective means of at least spreading knowledge
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of an innovation to utilise the communication channels that

have already been used by the target group, and that might
be recognised as a highly legitimate and credible source of
information. For more hands-on dialogue and interaction there
may be professional forums or subgroups where people meet and
where it would be natural to share an innovative new approach.
Recognising managers as knowledge engineers
Strong and visionary leadership has regularly been highlighted

as key in ensuring the adoption of something new. Professor
and knowledge management guru Ikujiro Nonaka has
pointed out that mid-level managers (and in the public sector,
institution heads) often play a crucial role in connecting top
management’s strategies and objectives with the daily challenges
and opportunities facing front-line workers (Mulgan and Albury,
2003). Because of this unique position, mid-level managers can
potentially act as knowledge engineers, identifying how a solution
can be tinkered with and adopted in a way that will actually work
(Sanger and Levin, 1992; Nonaka and Takeuchi, 1995). The
point here, of course, is that for an innovation to be successful
it must not only potentially contribute to the organisation’s
strategic goals, it must also be practically applied. And practical
application (getting stuff to work) is something that engineers
are very good at. To engage mid-level managers as knowledge
engineers could mean to involve them meaningfully in the
innovation process (for instance, in prototyping/testing), or to
build networks where they can be introduced to the solutions(s)
at an early stage, receive information, training or advice and
subsequently share experiences of the adoption process. A key
point is to allow the managers the flexibility to create their own
subversions or adaptations of the solutions, generating ownership
and laying the foundation for more sustainable scaling, driven
by such champions.
The big challenge with scaling, then, is to understand
that it takes a lot more than a website and pamphlets – and
that legislation may not be the answer. In between these
two extremes there are a variety of tools that, used wisely in
combination, may do the trick.
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A slightly heretical thought on scaling: what if we, in

many instances, will never truly be able to achieve the scale
of innovative public solutions that we want? What if public
organisations simply do not want to adopt best practices, but
would rather shape their own ‘next practice’? Could it be that
the best way of generating the motivation and enthusiasm and
mustering the needed resources is essentially to nurture the
innovation ecosystem of consciousness, capacity, co-creation and
courage in all public organisations? Rather than spending too
much energy on ‘diffusing’ centralised solutions, should we leave
institutions free to (within the boundaries of the law) create
their own, from the bottom up? Even if that would sometimes
mean reinventing the wheel? As Harris and Albury (2009) have
argued, might it make sense to decentralise innovation resources,
which sometimes seem abundant at central level, and allow local
institutions more freedom and give them better tools to innovate
for themselves?
We at least have to be realistic about what can be scaled in the
absence of the strong innovation demand that is generated by
highly competitive market pressures. Even so, as many private
businesses painfully realise, employees still often maintain a ‘not
invented here’ attitude. For instance, it took global consumer
business Procter & Gamble years of work and hard metrics
and incentives to achieve a culture where it was accepted that
innovations could come from outside the organisation via its
famed Connect and Develop strategy. No wonder that public
sector organisations, who are usually at no immediate risk
of losing market competitiveness or share price value, or of
bankruptcy, find it hard to successfully adopt solutions created
elsewhere.
Learning
Innovation is an iterative learning process – at systems,
organisational, project and individual levels. As I discussed in
Chapter 5, innovation approaches that are ‘strategic reflexive’
and that emphasise openness and learning may hold significant
potential for public organisations. The same applies to the
process of co-creation. Perhaps we are not satisfied, at face value,
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with the concepts that we developed in the ‘synthesis’ phase. Or

maybe our prototype tests led to a reframing of the problem, or
illustrated the need for further research (Bessant, 2005).
The learning cycle
Learning, in a co-creation context, is the process of assessing

whether we are actually getting closer to the approaches that
will effectively address the problem or opportunity at hand.
Obviously, learning goes on throughout the process; but at some
stage we must reflect more formally and be prepared to chart
the direction again. Too often, government projects are pressed
for time and resources, and the option of iterating, moving
back to one or more of the previous elements of the process,
is not available – or is not believed to be available. However,
there can be tremendous value in even a quick revisiting of the
users’ context through follow-up interviews, or in refining and
retesting a first prototype, improving it further until live test or
scaling. The innovation process ends up looking less like a linear
‘knowledge funnel’ and more like a circular ‘knowledge cycle’.
Ultimately, learning is about whether the approach worked as
hoped. Once it was implemented, realised and (possibly) scaled,
was the desired value created, and can the value be ascribed to
the new approach to some degree? On the four public sector
bottom lines of productivity, service experience, results and democracy,
how do we fare? Is the approach successful on at least some
of the bottom lines without being harmful on others? Before
turning to the methods of measuring innovation (next chapter),
let’s briefly consider the potential of co-creation for generating
radical new value across these four bottom lines.
Co-creating radical efficiency?
Co-creation is not just about finding approaches that deliver

better services or generate intended outcomes. Co-creation is
about enabling public organisations to innovate and generate
new value for less. A recent study illustrates that this is possible.
Against the backdrop of the financial crisis, the budget crunch
and mounting calls for radical reform of government, the UK-
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Figure 10.2: The iterative cycle of the co-creation process
Note: The shading illustrates the gradual maturation of ideas.
based Innovation Unit asked: what are the most convincing

global examples of public service organisations achieving radical
productivity gains while maintaining or enhancing services and
dramatically improving results and outcomes? If they can be
found, what might we learn from such examples, and are there
lessons that are more or less universal? In early 2010, the results
were ready. From South Africa to India to the US, the more
than 120 case examples showed that it is in fact possible to have
a rather large piece of cake and eat it too. There were four key
components that generated radical efficiency solutions in public
services (Gillinson et al, 2010):
• New insights, for instance from collecting new data, from

involving citizens, from getting a new colleague, from other
sectors, from mining data, or simply from uncovering old
ideas in new places.
260
• New customers, which implies reconceptualising who the

organisation is truly serving. It might, for instance, involve
shifting an understanding of users to ‘partners’, rather than
‘recipients’; or, as in the case of the Danish Business Agency
mentioned earlier, which harvested massive productivity and
service gains, reconceptualising ‘clients’ into ‘customers’.
• New suppliers, which could entail finding service providers
in entirely different fields, such as when a Swedish hospital
partnered with a hotel chain to run patient hotels, or
engaging citizens as co-producers.
• New resources, which are assets or tools like people, buildings
and technology, such as a new digital crime-mapping tool
applied by the Chicago police.
The authors point out that what can really enable ‘radical
efficiency’ are new perspectives on the challenges (upper part
of Figure 10.3). It is new insights and new resources that,
when combined with new customers and new suppliers, are
catalysts for different, lower-cost and better outcomes. From
the Restorative Circles in Brazil, which introduced conflict
resolution in schools and poor neighbourhoods, to the Chicago
police’s CLEAR programme, it was by connecting in entirely
Figure 10.3: The radical efficiency model
New New
insights customers
New perspective
on challenges
New perspective
on solutions
New New
suppliers resources
Source: Gillinson et al (2010)
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new ways to stakeholders and users that radical new solutions

were shaped.
These insights are important in the context of co-creation
because they show that it is only by placing people – citizens,
communities, businesses, families – and their relationships at the
very centre of our thinking that we can radically reimagine and
redesign public services. Co-creation offers a set of approaches
that can help us not only to recognise when we’ve succeeded
in reaching surprisingly radical new solutions – but actively to
work to create more of them. It is by understanding people, and
by ‘rehearsing the future’ with them, that we can make a serious
stab at achieving the better society that we strive for.
How to do it
This chapter has provided a comprehensive guide to the
co‑creation process, from framing to scaling and learning. A
common thread has been how to get people – colleagues,
citizens, experts – involved in meaningful and effective ways
throughout the different dimensions of the process. There is
no ‘right’ model for orchestrating co-creation, or for whom to
involve, how, and when. However, it has been the ambition to
give a concrete sense of the activities involved.
The barriers to orchestrating the process are mainly questions
of lacking consciousness (public servants are not even aware that
there is a different way to develop new approaches), lack of
tools (people are not trained in how to conduct co-creation in
practice) and lack of enabling resources or platforms (there’s no
one to help overcome the barrier of trying it for the first time).
How can you get traction with your process of co-creation?
Some of the key points are the following.
Apply methods that leverage design thinking and ethnographic skills
Because co-creation and, in the end, innovation is about doing,

the process I’ve described in this chapter is quite method heavy.
Either key project developers within the organisation have
to learn a number of the approaches, methods and tools I’ve
reviewed, or outside expertise must be brought in. Often, a
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combination of one’s own ‘innovation experts’ and some degree

of external support from designers, management consultants,
academics and others can work well. What is crucial, though,
is never to subcontract the entire process to someone outside the
organisation, depositing key experiences, insights and learnings
to people who will never have to live with the outcomes of
the process. There should be a very hands-on, engaged and
proactive nature to the way the public organisation’s own
staff is involved; and there must be clear accountability and
engagement at leadership level, ensuring access to the relevant
hierarchies and an ongoing connection to other activities and
innovation processes in the organisation. The public manager
must therefore ask:
• Who are our innovation experts whom we could put in charge of

orchestrating co-creation?
• If we have no design or ethnographic competencies in the organisation,
how could we get some?
Create platforms for support
Because co-creation processes are complex, in that they take

account of a range of stakeholders and introduce new modes
of knowledge, support platforms are necessary. They can take
the form of guides or toolboxes that make access to specific
approaches and methods easy. They can take the place of
innovation labs that can support and ensure a professional and
nurturing environment for the process. As a very minimum, a
professional project organisation is needed.
• Do we have sufficient enabling resources to make it easier for people

to succeed with co-creation, lowering the barriers to getting started
and running the process successfully?
Obtain permission
Co-creation involves using tools and methods that are foreign

to many public sector organisations. Gaining ‘permission’ from
the next level or two in the internal hierarchy to run projects as
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open co-creation processes rather than as traditional, internally

oriented stage-gate models or committee meetings can be a
challenge in itself. Even the workshop format is still unfamiliar
to many, and it may require a bit of managerial massaging to
be allowed to run things this way, rather than as traditional
meetings.
• Who needs to give permission to run co-creation processes (or whom

should we be prepared to convince)?
• What would be the best way to get buy-in from those we need it
from?
Lead the process
Orchestrating co-creation is a leadership task. In my experience,

only where a responsible manager has ‘got it’ and really embraced
the co-creation process is it likely that significant value will
ultimately be harvested. ‘Getting it’ includes facing the pain of
really seeing what doesn’t work today, and having the courage to
embrace divergence, envisaging how different the future could
be, and motivating the staff to stick with the process, even if
the findings may be unpleasant. It is challenging to the ways of
working in government to recognise that by letting go of much
of the process, more can achieved.
• Are the managers involved in the co-creation process prepared to

contribute actively, and are they prepared to take the consequences
of the insights and new solutions that are likely to emerge from it?
The last chapters in this book address the question of leadership

and how it is fundamental to realising public sector innovation.
Before that, however, we will consider how we can drive
innovation by measuring to learn.
Note
1
The number reported in the first edition of this book in 2010 was 50,000.
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ELEVEN
Measuring to learn
‘Productive societies, to sustain themselves, must be

both efficient and creative.’ (Professors Richard K.
Lester and Michael J. Piore, 2004)
Youth Villages is a non-profit organisation, headquartered in the

state of Tennessee, that works on behalf of government agencies
to serve emotionally and behaviourally troubled youth between
the ages of 6 and 22. The organisation provides in-home and
residential programmes that help children and young people to
improve their academic achievement, make a successful transition
to employment and avoid criminal activity. Most of the youth
it serves have cycled in and out of foster care or are involved in
the juvenile justice system. The results of Youth Villages’ efforts
are remarkable: compared with traditional US child-welfare
services, Youth Villages’ in-home programme has a 38% lower
average monthly cost, a 71% shorter average length of stay and a
long-term success rate of 80%. That is twice the national average
(Edna McConnell Clark Foundation, 2010). And from being a
small, Tennessee-based organisation at its foundation in 1986,
Youth Villages today has more than 50 offices in 12 states – a
successful example of scaling innovation.1 Youth Villages has
been widely recognised for its success; by academia in the form
of a Harvard Business School case study, praising it as a national
leader in the field of children’s behavioural health, and by policy
makers, earning recognition from the Obama Administration’s
Social Innovation Fund.
How did the story of Youth Villages unfold to become such
a success? By allowing measurement to drive learning, which
265
in turn improved organisational performance. Continuous

innovation and experimentation was at the heart of its growth
from a single-site non-governmental organisation to a national
organisation. ‘It’s like a science project every day’, said Patrick
Lawler, founder and executive director of Youth Villages, at a
conference. He also highlighted how a key turning point in
the performance of Youth Villages was his decision to have key
staff spend a year studying evidence-based youth services. Their
new insights resulted in the recognition in 1993–94 that Youth
Villages’ effectiveness would be far greater if it used research-
validated in-home services (specifically, Multisystemic Family
Therapy, MST). This entailed working with families, rather
than continuing to work with individual youths in residential
and hospital-based treatment approaches away from home. The
reason? Because, as Youth Villages learned, the systemic causes
of the problem were with families, not with the individual
youths. From the moment the organisation acted on that
research-based insight, by reframing how it related to its users
and then redesigning its core services, it started its remarkable
path to success. The key to Youth Villages’ subsequent growth
was the organisation’s ability to convince government offices that
not only could Youth Villages provide less expensive services
than those provided by government programmes, but also it
could get far better outcomes – as demonstrated by its outcomes
tracking data. One might say, to use Roger Martin’s terms, that
Youth Villages, once having solved the ‘mystery’ of the most
effective approach to its core mission, had successfully leveraged
an ‘algorithm’ that could take its efforts to scale.
With limited resources and rapidly growing needs, public
organisations must invest in activities that create the desired
value for society. To that end, organisations must measure
whether they contribute positively to that change, or whether
they are simply keeping themselves busy. Because innovation
is the link between strategic intentions, on the one hand, and
the creation of better value, on the other, it is natural to view
measurement in that context. We have to understand whether
we are working hard enough to be creative – and yet we must
also understand whether in fact that creativity and innovation
lead us in the direction we want to go.
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Measuring to learn
In considering value, public organisations must have some

sense of their performance on the four bottom lines I introduced
in Chapter 2. With regard to innovation, it is relevant to generate
at least some level of data about the organisation’s capacity to
innovate and about the kind of innovation activities that are
undertaken, so as to better understand the degree to which
those activities lead to the desired outcomes. It sounds simple
on paper. But measuring to manage performance is a difficult
discipline; unlike Youth Villages, few get it right. And it took
Youth Villages over 30 years to get to where it is today.
This chapter discusses innovation measurement in the context
of the wider question of ‘public value’, and how to learn from it:
• The measurement challenge and the 80/20 rule.

• How can one assess an organisation’s innovation potential?
• How can the process of innovation be measured?
• How can one measure the ultimate value of innovation?
• Can performance management catalyse innovation?
What you measure …

It has become conventional wisdom that ‘what you measure,
you can manage’ (Cole and Parston, 2006; Pfeffer and Sutton,
2006). In the best of worlds, relevant, meaningful and timely
measurement is used proactively in an ongoing dialogue to
power learning and drive increased performance, enhancing
productivity and delivering more and better outcomes.
However, the opposite also holds true: what gets measured
is potentially subject to human decisions, actions and even
manipulation, and so there’s no guarantee that you will end up
getting the behaviour you wanted just because you measured
it. Austin (1996) points out that ‘measurement dysfunction’ can
be a significant trap in organisations, with the implication that
staff behaviour and organisational performance don’t improve
at all – perhaps, even, to the contrary. In their work on public
service innovation, Parker and Heapy (2006, p 65) similarly
point out that the right balance has to be struck between the
‘productivity’ bottom line and the ‘service’ and ‘results’ bottom
lines, arguing that in the UK, ‘Existing targets have tended to
267
focus energy on overperformance in operational excellence,

at the expense of underperformance in the transformation
of people’s lives’. As the case of Youth Villages illustrates, the
relevant use of performance measurement and management
can lead to significant improvements in both organisational
performance and the transformation of people’s lives.
Why do we want to measure? To understand the value of our
work so that we can improve upon it, and to be accountable,
informing public policy making and funding priorities. The
challenge, however, is to ensure that measurement in fact benefits
these two key intended purposes, which can be characterised as
informational and motivational (Austin, 1996):
• Informational: Measurements that are valued primarily for the

logistical, status and research information they convey, which
provide insights and allow better short-term management
and long-term improvement of organisational processes. In
the public sector, informational types of measurements have
the additional (and often overarching) objective of enhancing
accountability, making the operations and results of public
bodies transparent to taxpayers, the media and politicians
alike, ultimately making it possible to hold administrative and
political leaders responsible.
• Motivational: Measurement that is intended explicitly to affect

the people who are being measured, to promote greater
efforts in pursuit of the organisation’s goals and to drive
performance.
Austin emphasises that while motivational measurement

seeks to alter behaviour positively, information is, as a starting
point, not intended to influence behaviour, because it seeks
to capture events as they take place, as though people didn’t
know that the measurement system exists. Thus, to the degree
that measurement is used only for informational purposes – for
accountability – it won’t have much impact on performance.
As Mulgan (2009) has stated rather succinctly, ‘you can’t fatten
a pig by weighing it’. In fact, informational measurement may
have unintended negative impacts, because people tend to know
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Measuring to learn
that they are being measured and behave accordingly, even if

they aren’t supposed to (Austin, 1996).
Unfortunately, many public sector organisations place the
greater emphasis on measurements of informational value, and
thus we keep ourselves busy measuring, using more of our
resources on documenting the past and monitoring the present,
rather than learning from them and creating the future. Such
‘metrics mania’ is dangerous (Cole and Parston, 2006). This is
the 80/20 rule that I introduced at the beginning of the book.
It is no coincidence, therefore, that I call this chapter ‘learning’,
even though it will focus quite a bit on how to measure (in
order to learn how to drive performance). The point is that we
should be careful about which measurements, and how many,
we put in place.
Measuring innovation
To many, ‘measuring innovation’ is as much an oxymoron as is
‘innovation in the public sector’. However, as I have attempted
to show throughout this book, innovation isn’t a random, one-
off event, impossible to capture, but, rather, a systematic process,
a discipline that focuses on achieving desired strategic objectives.
Because innovation is at the heart of what government can do
to become more successful, of course the process can also be
captured, understood and improved.
What often confuses people, however, is the question: in what
sense are we speaking of measuring innovation? In this chapter
I will consider three distinct perspectives on measuring and
learning in the context of public sector innovation:
• Assessing the organisation’s potential to innovate. This addresses all

the four Cs of the innovation ecosystem. This is a snapshot
or ‘static’ type of measurement that can inform us about the
status quo: how to strengthen the organisation’s efforts across
the four dimensions of the system.
• Learning from the individual innovation processes. This picks up
on the previous chapter and concerns how some organisations
are trying to measure and improve how they innovate. This is
a dynamic measurement that allows us to learn immediately
269
from doing, and to adjust and change our ongoing innovation

efforts.
• Measuring the value of innovation. This addresses how to
measure the four ultimate bottom lines of innovation that
I introduced in Chapter 2. This is more of a systems-level
measurement that requires some time lag before we can learn
from it. However, once we begin to harvest feedback on the
‘real world’ impact of innovation efforts, we have established
a tremendous learning environment.
The logic of these three types of innovation measurement is,

essentially, a theory of change that reflects the following logic:
• IF we build an innovation ecosystem

• AND we continuously learn from our innovation processes
• THEN we can create more and better value.
A truly innovative public sector organisation would be one that

in fact measures and learns from its performance on all of the
three dimensions described here. I am currently not aware of
any organisation that does this systematically, although some are
certainly trying.
Assessing innovation potential

When the Danish Ministry of Integration chose to create an
innovation strategy, it first conducted a thorough review of the
organisation’s current practices, with the assistance of external
consultants. They asked: what is our innovation potential?
Are we doing enough at all levels to create an environment
that increases the likelihood that we will get more and better
ideas, and that our organisation will be able to implement
them? Another example is the government of the United Arab
Emirates, which has developed a thorough ‘innovation readiness
survey’ among nearly 50 agencies and 14,000 civil servants.
To assess an organisation’s total innovation potential is to
analyse how it is faring on each of the four Cs, or dimensions
of the innovation ecosystem, that make up the framework for
this book. In this sense it is a total baseline for the level of
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Measuring to learn
innovation potential embedded in the organisation, its people

and its processes.
Although we haven’t yet discussed the Courage, or leadership,
dimension (that is the final section of the book), this would be
included as well. Examples of the key elements needed to assess
a public sector organisation’s innovation potential are:
• Consciousness
–– We have a common language of innovation and our people
are able to reflect independently on their own innovation
practices.
–– Managers and staff across our organisation see the same
innovation landscape.
• Capacity
–– Our organisation’s political and legal context allows
freedoms to innovate; for instance, are there exemptions
from legislation that we can access?
–– We have a clear strategy stating our organisation’s long-
term objectives, the means with which to reach them
and how the objectives and means are related in a theory
of change.
–– We have a strategy for how we will work in practice with
innovation.
–– We have an innovation portfolio that we actively manage.
–– We are organised in such a way that we allow for
open, systems-level collaboration with other actors in
government, business and the third sector.
–– We are wired to the opportunities in e-government.
–– We have an environment to support innovation, for
instance a project organisation and/or an innovation lab.
–– We actively manage our people and culture to be a
modern work organisation on dimensions such as values,
involvement, diversity and incentives.
–– We have a pro-innovation culture, both when it comes
to embracing ideation and experimentation and when it
comes to executing the new solutions.
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• Co-creation
–– We have the necessary competencies in fields such as design
thinking and citizen-centred (ethnographic) research.
–– We have an explicit process for co-creation in place, and
the methods and the process itself are codified so everyone
in our organisation can know and use them.
–– We have the appropriate measurement and learning processes in
place, so that we are able to discern when our innovation
efforts succeed, and learn from them when they fail.
• Courage
–– Our managers, from the top executive to institution heads,
embody the leadership values and skills that we believe are
essential for our organisation’s future.
–– Our managers have the courage to lead innovation
processes from their respective levels.
As I have presented these topics they could be answered

like a loose type of self-assessment (say, on a scale from 1 to
5); however, they might also be assessed more thoroughly,
underpinning them with quantitative and qualitative data where
possible, perhaps engaging external consultants as the Danish
Integration Ministry did and the UAE government have done.
Measuring innovation potential is, in itself, a static exercise. But
it could be the beginning of a change process. Taking a snapshot
of how mature the organisation is when it comes to nurturing
and conducting innovation processes is also to identify spots of
weakness that should be addressed, or potentials that should be
released.
Learning from the innovation process

How good is our innovation process? Are we always able to
generate as many high-quality ideas as we need? Is our level of
ambition always high enough? Are our ideas radical enough (are
we allowing for sufficient divergence, at least in the early stages
of ideation?) What about engagement and learning – are we
truly running co-creation processes or are we treating innovation
as something that can be outsourced to someone else?
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Measuring to learn
If an organisation wants to improve a process, it needs a

vehicle to allow it to reflect on it. That vehicle needs to give
some type of feedback on the quality of the process, based on
the perceptions and experience of the key people involved in
it. At MindLab, when we reformulated our strategy in early
2007 we realised that something as fluffy-sounding as a public
sector innovation lab needed some hard-core measurement.
So we institutionalised a mandatory questionnaire, or rather
two questionnaires, to be filled out by the government officials
we collaborated with. One questionnaire was to be answered
immediately after the end of an innovation project, typically at
the conclusion of the testing phase; the other was to be answered
three to six months later, typically after the implementation
phase (but often before any significant scaling). Both
questionnaires included closed (quantifiable) questions as well
as open-ended questions. The first (immediate) questionnaire
obtained feedback on questions such as:
• Did we generate the right input (knowledge, competencies,

skill mix)?
• Did we manage the innovation process professionally?
• Were the co-creation methods, and their combination,
appropriate?
• How did the involvement of citizens and other key people
work?
• Did the output (ideas, concepts) live up to or exceed
expectations?
• Is it likely that the solutions we helped to generate will enable
realisation of the defined strategic objectives?
There are obvious learning points associated with each of

these dimensions. For instance, if it turns out that some of the
methods were not experienced by our partners as appropriate
to the task at hand, that could challenge the legitimacy of the
innovation process. Perhaps we should apply different methods
the next time we encounter a somewhat similar project, or we
should clarify expectations better.
The follow-up questionnaire was submitted from one to six
months later. We ask questions such as:
273
• To what extent were the ideas or concepts taken up and

implemented?
• Were there challenges or barriers to implementation? If so,
what were they and how were they addressed?
• Has any kind of value following implementation been
generated, and if yes, what type – productivity, service
experience, results and/or democracy? What evidence do
you have that this is the case?
• Is there something we could have done differently?
• Is there something that we could do now to move the project
further along?
Often, the most significant learning about the innovation

process is harvested from the follow-up questionnaires. At that
point it is possible to view the process a bit from the distance. It
is also possible (and a very good idea) to not just ask, but go and
see for yourself how the project turned out. If the project has
been implemented, you can venture into the field and observe
the new activities as they happen. In one project, when a project
manager from MindLab ventured out to observe the results of
our contribution in a project for which he had been responsible,
he could see that much had changed as intended, but also that
there were a few points that could still be improved. Our
project manager then took the opportunity to provide instant
suggestions to the responsible manager – and the new changes
could be implemented immediately.
This learning helped us at MindLab to reach the decision that
we should extend our work further into implementation, in
order to help to ensure maximum impact of our efforts.
Measuring the value of innovation

Ultimately, innovation is about creating value. In Chapter 2 I
highlighted the four ‘bottom lines’ of public sector innovation:
productivity, service experience, results and democracy.
Throughout the chapters of the book we have witnessed
numerous innovations that have made a real difference on these
dimensions. We’ve seen radical productivity gains through
the application of new technology and new work processes;
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Measuring to learn
increased service experience through redesign of the service

interactions with citizens and communities; stronger results
through new methods that engage citizens in co-production;
and we’ve even witnessed innovations that utilise new digital
technologies to enhance the transparency of the public sector.
The four innovation bottom lines
To document that our innovation activities work, and to learn

from how they impact on the real world, we need to measure
the organisation’s performance on all the four bottom lines
(Figure 11.1).
As I discussed in the Introduction, however, many public
managers essentially lead into a vacuum: they do not receive
sufficient meaningful, ongoing feedback on whether new
process changes (that might lead to increased productivity),
service programmes (that are intended to increase citizens’
service experience) or policy initiatives (that are supposed to
generate short-, medium- or long-term results) produce the
intended value. And usually, we have only a very vague sense of
whether the impact on citizens’ empowerment, participation,
and rights is positive or negative (even though such democratic
principles are at the heart of governing).
This doesn’t mean that public organisations don’t manage
anyway. Only a minor proportion of what takes place in
government can be truly ascribed to strategy; much of what
Figure 11.1: The four bottom lines of public sector innovation
Inputs Efficiency Outputs Effectiveness Outcomes
Productivity Service Results
Administrative Service Policy

innovation innovation innovation
Democracy innovation
Democracy
Source: Inspired by the National Audit Office (NAO, 2006)
275
happens is the reactive, day-to-day decision making that is part

and parcel of politics (Mulgan, 2009). Measurable ‘evidence’ is
only one of many parameters that public managers rely on for
decision making. Other parameters include the values, decision-
making context, experience and expertise of the staff, individual
judgement, available resources, habits and lobbyist pressures.
A significant parameter will also be the accountability system
within which the managers work.
Sometimes we just keep on doing what we’ve always done,
perhaps because that is the easiest. In fact, it is often much
less controversial to throw additional cash at existing public
organisations and initiatives even though no one really knows
whether they work or not. At Dance United, the dance
company that helps ex-convicts to increase their prospects,
director Andrew Coggins found this extremely frustrating:
‘The challenge is to get government sponsors simply to invest
in what actually works. Formidable sums of money are thrown
at projects that patently do not work but are protected by their
commissioners. The problem is to break into that circle while
at the same time maintaining the integrity of the work.’
We saw earlier that Youth Villages achieved exactly that – to
break the circle and find an ‘algorithm’ that works, sustaining
significantly better results and making growth and scaling possible.
The challenge is, therefore, to place meaningful, ongoing
measurement and learning more squarely at the centre of public
decision making and innovation. For citizens to trust government,
we must make a concerted effort to understand the impact that
our efforts have on the world; in order to learn and to improve our
efforts, we must also make our efforts transparent to politicians,
the media, other decision makers and stakeholders alike.
The performance management paradigm
Results-based management, or performance management, has

received wide interest across modern economies. According to
the OECD (2005), the term characterises ‘A management cycle
under which programme performance objectives and targets are
determined, managers have flexibility to achieve them, actual
performance is measured and reported, and this information
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Measuring to learn
feeds into decisions about programme funding, design,

operations and rewards or penalties.’ More than three-fourths of
OECD member states have taken up performance management
to some degree. Countries like the US, Canada, the UK and
New Zealand have gone relatively far, and have to varying
degrees embodied performance management requirements in
law. Others have taken a more limited approach, in particular
in Continental and Southern Europe, using only a few non-
financial indicators as part of the budgeting process; finally, some
are addressing performance management pragmatically – on a
sector-by-sector basis – including the Scandinavian countries
and the Netherlands.
Performance management has sometimes proved controversial.
For instance in the UK, the Labour government’s Public Service
Agreements were criticised for, among other things, being over-
centralistic, over-managed and introducing too many targets
at too high a level of detail, creating a lack of ownership at
local level (Parker and Heapy, 2006; Mulgan, 2009). (The
programme has since been adjusted in a number of ways.) In
the US, after a relatively long period of phasing in, the 1993
Government Performance and Results Act seems to have been
relatively successful in strengthening an emphasis on outcomes
in federal policy making. As with any other social technology,
performance management can be applied in ways that are more
sensible and helpful than others.
As I discussed in Chapter 4, strategic innovation is to link the
management cycles of strategy, innovation portfolio, measurement
and budgeting in a coordinated way. The portfolio of innovation
activities determines how the strategic goals should be reached,
while the measurement process tells us if they were reached or not.
The budgetary process allocates resources not only to ongoing
business but also to the strategic innovation efforts. In high-
performing public sector organisations there should be a coherent,
systematic cycle of measurement attached to all innovation
efforts; a share of the budget is also allocated to ensuring sound
measurement and subsequent learning (Figure 11.2).
Let us consider in a bit more detail how each of the four
types of value, or bottom lines, of public sector innovation can
be measured.
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Figure 11.2: Innovation and measurement process
Strategic objectives
(strategy process)
Innovation
(project process)
Value
(measurement process)
Budgets
(budgetary process)
V
V
V
V
Productivity
Public sector productivity is a much-debated matter; part of the

debate has to do with whether it can be measured at all; part
of the debate is about why it isn’t any higher and why it always
seems to be lagging behind the private sector; and finally, part
of the debate is about how to improve it.
I won’t go into the two first debates in any detail; in the
context of innovation, what is interesting to consider is
how we might measure a (positive) change in public sector
productivity. According to Mulgan (2009), until the 1990s it was
widely considered in the international accounting community
that public sector productivity never improved. Contrary to
what is apparently conventional wisdom, many public sector
organisations are acutely aware of their productivity. Most
organisations that do any significant volume of case management
know pretty much how long the average case takes; how much
manpower each case consumes; and it have the measures to
register an improvement in cases handled per worker, other
things being equal. Now, case output per staff input is only
one measure of productivity, but it is one that is common and
widely used. Innovating the case process would imply improving
on the productivity ratio, as many organisations have done
in recent years, applying the principles of lean. Productivity
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Measuring to learn
improvements in the range of 20–30% aren’t unusual. The NHS

in England, for instance, has harvested that type of productivity
gains in enhancing patient flows in a number of fields. In
Denmark, hospitals employing the joint care methodology for
knee and hip patients have similarly gained, as the average length
of hospital stays as been shortened from six and a half days to
four (Bason, 2007; Cabinet Office, 2009). When the Danish
government in 2012–14 established a so‑called Productivity
Commission, it found that if every public body performed as
well as its most productive peers, government could save as
much as 10% of total service expenditure, or 5 billion Euros
annually (Produktivitetskommissionen, 2013)
Innovations that apply not only new processes, but also new
technology, often lead to productivity gains. As mentioned in
Chapter 5, the Danish tax authority was for a time able to reduce
its workforce by around 25%, while ostensibly upholding service
levels and legal obligations, by employing advanced digital
services and integrating public tax systems with private databases,
drawing data directly from the payroll systems of companies.
Sometimes registering productivity gains from new innovations
is extremely simple. When the Growth House, a regional public
business advisory body in South Denmark, employed a new service
strategy designed by MindLab, Henrik Jacobsen, the director,
could quickly discern one thing: his advisors were holding fewer
meetings. Because the service process had been redesigned with
the organisation’s clients to better clarify expectations, the staff
were less likely to engage in unnecessary meetings and they could
hold shorter, more productive sessions with businesses instead. Just
cutting one or two meetings per client represented a substantial
productivity improvement, even though Mr Jacobsen couldn’t
place an exact percentage figure on it. (One notes, however, that
such a measurement wouldn’t be very difficult to do, and that
generating this kind of productivity data might in fact be a relevant
metric for the Growth House to work with).
Service experience
Measuring citizen’s subjective service experience can help

to turn the organisation’s focus outside-in and place citizens
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more at the heart of government. As Sophia Parker and Joe

Heapy (2006) state in their work on the citizen–government
interface, performance must be measured in ways that illuminate
the subjective quality of the experience, not just operational
performance: ‘Organisations need to measure what users value,
as well as what organisations and service systems value.’ This is
important not just to achieve a desired level of user satisfaction,
but also because understanding what users value may be an
important key to identifying the kinds of interventions that
will lead, ultimately, to better outcomes. For instance, if users
in employment centres are treated with dignity, respect and
professionalism, might they be more active participants in job
services and hence helped faster into steady employment?
In many public organisations, there is no lack of citizen
satisfaction surveys. For instance, every three years, the Canadian
government systematically measures its public service satisfaction
levels across three levels of government. Similar large-scale
national measurements are in place in Norway. In Denmark,
they are carried out at intervals. The problem isn’t that user
satisfaction isn’t measured, it’s that it may not be measured
in a meaningful way and/or the results aren’t used to drive
performance. In order for service measures to be useful, they
must:
• Measure service outcomes at the individual level. Absent

this information, it is impossible even to begin to understand
the social value of a public programme. And while this may
seem like a cumbersome ‘add on’ to the work of service
delivery, it is no less essential a ‘cost of doing business’
than staff training, ongoing professional development and
the rigorous tracking of process costs – none of which are
controversial.
• Measure both overall (end-)user satisfaction with the service
experience as well as the satisfaction with the individual
key elements or steps of the service process. For instance,
a hospital ward should measure not only overall patient
satisfaction, but also elements like information prior to
arrival, parking, quality of the reception, face-to-face
information and so on.
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• Be conducted regularly so that there is a time-series data

set that can be tracked on an ongoing basis. Otherwise it is
impossible to ascribe a change in service experience to any
particular service innovation.
• Where relevant, be possible to benchmark externally against
similar service activities and results in other sectors and/or
organisations. Most public sector organisations could also,
if they wanted to, compare themselves to private or non-
governmental organisations, or they could benchmark against
sister organisations in other countries.
• Be possible to be ascribed to the individual unit or team in
the organisation that is responsible for providing the service,
and to individual managers’ areas of responsibility.
• Be discussed openly by staff and management on an
ongoing basis; management must create opportunities for a
conversation about service experience, asking questions and
holding staff accountable for service results.
There is, however, a dilemma about measuring citizens’ service

experiences and outcomes. By asking, for instance, about the
‘quality of your service experience’ on a scale from 1–5, are
we measuring what citizens experience, or are we measuring
how well the experience matched their expectations? In the
public sector, expectations are shaped not just by whatever
communications the public organisation might be putting out,
or by what citizens hear through word of mouth. Expectations
of the quality of public services are often hugely impacted
upon by media stories, good or bad, and by the politicians
who want to display a certain picture of the state of the public
sector. Usually this means that roughly half the stories will be
spun positively, and roughly half will be spun more negatively.
How can we deal with service experience in an environment
where expectations are framed with such variance? And how
can we tease apart citizens’ reports about their ultimate service
outcomes (results) from their level of (dis)satisfaction with how
they were treated?
In the Netherlands, employment policy officials have
developed a measurement tool that they feel addresses this
issue. It is what they call the ‘balance model’, which measures
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the balance between expectations and experience through two

different sets of questions directed at citizens before and after they
are engaged in a particular employment service. The challenge
with such a method may be, however, that the expectations–
experience gap, by nature, changes once the service has been
used the first time. The citizen’s ability to tune expectations to
actual experience changes dramatically. In Denmark, surveys
have shown very significant differences between what non-users
of healthcare think about the quality of hospitals (they don’t
think much of it) and what citizens think once they have in fact
used one (they are generally quite satisfied). So it really only
makes sense to measure the expectations–experience gap for
first-time users, while experienced users can be asked the more
straightforward question ‘So, how was it this time?’
The real challenge is to understand what is behind the rather
superficial data that is generated by user surveys: what kind of
context was the survey delivered in, what was it exactly that
triggered the particular experience, and how might it be improved?
To learn the answers to these kinds of questions, surveys are
vastly inadequate. We must return to ethnographic research,
applying qualitative methods and getting a much more tangible
sense of how the service plays out in practice. We must turn to
co-creation.
Finally, a note of caution concerning service experience: how
citizens experience a public service should never be considered
an end goal in itself, just as customer satisfaction for a private
enterprise is only a means to an end (profits usually being the
end). Some public organisations believe that because they focus
on ‘customer satisfaction’, they have identified how to measure
their outcomes. That is not the case. Service experience is an
important but not sufficient parameter for public performance.
The most important performance dimension of any public
service organisation should be results.
Results
I introduced this book by claiming that public organisations are

established with some kind of ‘good’ in mind. Results are, in
essence, about the ultimate good that an organisation is put into
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the world to produce. Results are about creating a better society.

When Youth Villages demonstrates a consistent success rate of
80% in creating better outcomes for troubled youth, far distancing
other organisations in their field, this is what it is about.
At a presentation that I gave to the library association of
Northern Zealand in Denmark, I asked the library managers
what was the ultimate good of the library as an institution.
‘A democratic society,’ was the swift answer. ‘Of course,’ I
thought to myself. The purpose of a library is not to lend out
books (that’s an output). The purpose of a library is to build a
democratic infrastructure of openness, knowledge and learning.
Not a small ambition, but certainly one that could motivate you
to get up in the morning and go to work every day.
Results concern the goals of public organisations, and
measuring them helps us to understand whether they are being
achieved or not (Rist and Kusek, 2004). Results are the short-,
medium- and long-term societal outcomes that public sector
organisations strive to achieve. Jobs, security, health, education,
sustainability and growth are among the kinds of ultimate
objectives that the public sector is charged with achieving.
Often, the challenges and problems involved are ‘wicked’,
without hope of ultimate success (when is a democracy strong
enough? when have we created enough jobs?), but with hope
of making progress (Rittel and Webber, 1973). And how can
we know that we are making any kind of progress? We must
measure our results.
What constitutes good measurement of results – what are
the quality criteria? The sound measurement of results must
be undertaken within a frame of reference – namely, the
organisation’s strategy and, more specifically, the theory of change,
which is the blueprint for making something about the world
better. As discussed briefly in Chapter 4, the theory of change is
a clear description of the causal links between the organisation’s
efforts and the outcomes it seeks to produce. The theory of
change should guide the action that the organisation takes, and
it is therefore the theory of change that should be measured in
order to drive higher organisational performance. This is exactly
the framework that an organisation such as Youth Villages has
been pursuing in order to achieve their remarkable successes.
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According to David Hunter (2010), a performance

management expert and former director of Evaluation at the
US-based Edna McConnell-Clark Foundation (who helped
Youth Villages to clarify its theory of change), such a theory of
change must be:
• Meaningful to key constituencies

• Plausible in that it conforms to informed critical analysis
• Possible within resource and other constraints
• Testable through agreed-upon measurements
• Monitorable, that is, able to provide reliable data for managing
performance.
The first point above is, I believe, the most important. If,
ultimately, the indicators that are measured are not considered
meaningful and helpful to those who are responsible for
measuring them, the data will not be of sufficient quality.
And worse, people will lose motivation and there will be no
incentive to use the data actively and to learn anything from it.
This implies that there must be a line of sight from the everyday
work to the overall strategy and mission that the organisation
is pursuing: employees must be able to see the connection
between their efforts and the organisation’s success; if not, they
aren’t motivated innovate so as to improve their performance
(Behn, 1995).
There is both an art and a practice to establishing good,
results-based management systems. Here, the principles of co-
creation also apply: the best, if not the only, way of building a
results-based management system for an organisation is through
a workshop format, involving representatives of all levels and
areas of the organisation in a common process, establishing
the theory of change, defining what results are and mean to
the organisation, how they are brought about, for whom, and
how they can be measured. At MindLab, for instance, when
we created a new strategy we did it through a workshop
that included all staff and our key stakeholders. We started
by defining our innovation objectives and worked our way
backwards (in terms of causality) to define outputs, activities
and inputs. We work in a similar way at the Danish Design
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Measuring to learn
Centre, with the benefit that our main objective is to stimulate

business growth. Although enterprises sometimes find it hard
to assess the causalities between participating in one of our
design programmes and their long-term results, at least revenue
is something they understand and measure themselves. I will
discuss this process of crafting strategy through an outcomes-
based process towards the end of this chapter.
Without a clear picture of the results that it is put into the
world to create, and without the methods of measuring them,
how can an organisation know whether its innovation efforts
have ultimately made a difference or not? Perhaps they are even
doing more harm than good? As Osborne and Gaebler (1992)
have pointed out: ‘If you do not measure results, you cannot
tell success from failure; if you cannot see success, you cannot
reward it; and if you cannot reward success, you are probably
rewarding failure’ (quoted in Rist and Kusek, 2004). While the
four innovation bottom lines should be balanced against each
other, results play a special role and should really be squarely at
the centre of any measurement effort undertaken by a public
body.
Democracy
Strengthening democracy can be viewed as a result, as in the

case of the public library; but it is also an end, or an innovation
bottom line, in itself. However, it is often perceived as secondary,
as organisations pursue the objectives of productivity gains or
service improvements. However, when creating new public
sector solutions we must of course consider questions such as:
• Are we protecting or even increasing citizens’ equality before

the law?
• Are we increasing public transparency?
• Are we improving accountability?
• Are we changing citizens’ channels of democratic participation
and influence?
Achieving high productivity gains would be pretty easy if we

didn’t have to care about equality before the law, but it entails
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selecting or ‘skimming’ the easier users. We would probably

also achieve efficiency gains by reducing transparency, limiting
documentation or making it exceedingly hard to come by (but
that might be politically unacceptable). We could maybe make a
government form much simpler and easier to read (but perhaps
we should inform citizens of their rights, even if this takes up
space we’d like to use for something else).
Democracy is, however, not a bottom line that should be
viewed as a barrier to productivity or service improvement. In
politically governed organisations, and in a democratic society,
equality, transparency, accountability and participation are
dimensions that can be innovated upon. When the Swedish
government chose to post performance data of healthcare
services on a transparent, online platform, it was clearly not only
a service innovation but also a democracy innovation. When the
US government posts the performance data and rankings of all
federal programmes, it is not just of interest to policy makers and
technocrats, but to citizens. As discussed in Chapter 5, through
digital government, citizens are gaining unprecedented access
to government data (such as US initiatives like recovery.gov
and data.gov) and to their own case files. In some countries,
such as Denmark, citizens can now proactively give government
permission to share their personal data across agencies, where it
is helpful to them. New forms of democratic participation have
been made possible through the internet, allowing for electronic
town hall meetings and ‘crowdsourcing’ such as online idea
generation as input to government. In healthcare, as in the joint
care case example, empowering citizens to take a more active
part in the treatment process can deliver productivity gains as
well.
Public sector innovation is as much about transforming
democracy as it is about transforming public policies and
services. Perhaps we can’t even have the one without the other.
Innovating the bottom lines

The discussion above highlights the question of the
interrelatedness of the different types of value of public sector
innovation: what are our key productivity indicators, and how
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Measuring to learn
do they relate to the level of service we are able to deliver?

What constitutes our measures of service experience, and to
what extent does user satisfaction contribute positively or
negatively to the results we are trying to achieve? Given the
results we ultimately exist to produce, how can we deliver them
with the highest level of productivity? How are we doing on
‘democracy’; are we damaging this bottom line in order to get
more of the others?
Recognising that the kinds of value that a public organisation
can create through innovation are multiple and intertwined is
important. It is also important to seek radically new ways of
getting more of everything. Throughout this book, and in
particular in the previous chapter, I have highlighted the concept
of ‘radical efficiency’, which emphasises how innovation can
lead to different, better and lower-cost outcomes. The notion of
radical efficiency highlights the potential of creating significant
value on more than a single bottom line.
One can thus view the four bottom lines as a two-dimensional
plane or square that can be expanded in all four directions (Figure
11.3). It is a ‘balanced scorecard’ for the public sector (Kaplan and
Norton, 1996). How can we identify the innovative solutions
that, in these times of economic uncertainty and budgetary
Figure 11.3: Navigating the four bottom lines

Productivity
[‘efficiency’, e.g, higher
caseload per employee]
Results
[changes resulting from
Service experience the activities of the public
[citizens’ satisfaction with organisation, e.g, health,
services delivered] employment and growth]
Democracy
[e.g, participation, transparency
and accountability]
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cutbacks, can not only improve service experience, results or

democracy but also, as a minimum, increase productivity?
Public managers and staff must engage with people in the
process of co-creation to radically improve two, three or even
four of the bottom lines – simultaneously.
Using performance data in an ongoing leadership practice

Bureaucracies, once they make up their mind, are pretty good at
creating new systems. Measurement systems and processes are no
exception. But, once the system is in place and the organisation
is regularly harvesting knowledge about its performance, what
then?
The key challenge, of course, is to utilise data about
performance as part of an ongoing leadership practice. Managers
must not only ensure that the performance data that is registered
is accurate and timely. It is a leadership role to communicate
why measurement is meaningful to do, and to create a systematic
dialogue with staff about the organisation’s performance on the
basis of the data (Behn, 1995). Again, meaningfulness must
be at the centre of the dialogue. As Stanford professors and
authors of Hard Facts, Dangerous Half-truths and Total Nonsense:
Profiting from Evidence-based Management, Jeffrey Pfeffer and
Robert I. Sutton (2006), emphasise, it is one thing to believe
that organisations would perform better if leaders knew and
applied the best evidence; it is quite another thing to put that
belief into practice.
Carried out sensibly, the potential of performance management
is to enable continuous real-time learning to help improve existing
practices and to get feedback on more radical changes to policies
or programmes (Rist and Kusek, 2004). This was, for instance, the
case for Youth Villages when they recognised that home-based
programmes would be much more effective than the residential
services they had been providing, and consequently made the
shift to home-based services in their core programming. Pfeffer
and Sutton (2006) recognise that performance data will never be
perfect. But they firmly believe that managers should employ a
practice where they:
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Measuring to learn
• demand documentation from colleagues and staff;

• discuss and challenge the logic behind the data employed by
the organisation;
• view the organisation as a prototype, where tests, experiments
and pilots are encouraged;
• reward learning from experimental activities, perhaps
especially when they fail.
These are essential practices in an organisation that wants to learn

from innovation, and to improve its performance, every day.
Outcome focus as an innovation driver?

Focusing on results – the outcomes of the organisation’s efforts
– is not only at the heart of learning whether innovation is
successful or not. Focusing on results can also be the starting
point of transforming the organisation itself (Rist and Kusek,
2004; Ulwick, 2005; Cole and Parston, 2006).
By taking a results-based view of the organisation, ultimate
value is given a central role. What if a library manager and his
staff asked themselves the following question: ‘What would be
the most effective way of achieving a more democratic society?’
They would be forced to rethink the activities and role of the
library in the local community, perhaps challenging conventional
thinking about what a library should be, which skills its staff
should have and what kind of activities should take place there.
By starting with outcomes, the organisation opens up for a
much broader range of possibilities; that doesn’t mean that it has
to embrace them all; but it has the choice. Mulgan and Albury
(2003) have stated this point rather succinctly, emphasising that
‘Methods which work backwards from outcomes rather than
forwards from existing policies, practices and institutions often
generate a much wider range of potential options.’
The innovation potential is, in other words, inherent in the
(re)formulation of the organisation’s strategy away from focusing
on activities or processes, and towards focusing on results. The
question becomes: with which inputs, tools, methods and
activities would we most effectively achieve the results we want?
The key is to build such a theory of change backwards, from end to
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beginning: establishing the causal links between results, outputs,

processes and inputs. As mentioned, this was how we created
MindLab’s most recent strategy.
Sometimes the result can be revolutionising; David Hunter,
who helped to transform dozens of social organisations through
the lens of results-based management, has pointed out that there
is nothing more powerful for an organisation than ‘holding up a
mirror for them and showing them the implication of outcomes
for what they are doing’ (quoted in Bason, 2007).
As I discussed in Chapter 4, creating a theory of change, or at
least checking what the existing theory is, is often a very helpful
starting point for the co-creation process.
How to do it
This chapter has provided three perspectives on measuring
innovation: measuring capacity and potential; processes; and
measuring the four ‘bottom lines’ of public sector innovation,
including the ultimate results of the organisation’s efforts. The
barriers facing the measurement of innovation and value are
significant; few public managers have a thorough understanding
of what constitutes the types of value that can be the result
of innovation in government; and they usually have no
measurements in place that can help them to get feedback on
the quality of innovation processes. In spite of increased efforts
in recent years to put in place monitoring and performance
management systems, managers still risk leading into a vacuum,
causing them to spend too much time looking back, and
too little looking forward. They are not getting timely and
sufficiently meaningful data on the four types of value that may
be created through the efforts of their staff. The most significant
challenge is lack of learning: without trusted data, and without
a sound management process to establish conversations about
ongoing measurement findings, how can behaviour change
accordingly to improve performance?
Leaders must be fearless in learning from experience. High-
performing, innovative organisations are able to reflect, at all
levels, about their own practices, learn from their successes and
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Measuring to learn
failures, and achieve their results through intentional action.

Public leaders should consider the following.
Know the innovation metrics
Measuring the organisation’s innovation potential across the

four Cs of consciousness, capacity, co-creation and courage can
be helpful as a reference point for improving the organisation’s
innovation ecosystem. By establishing a baseline, it becomes
possible to see how and where to invest so as to increase the
organisation’s ability to create and implement more and better
ideas. In addition, measuring the quality and impact of individual
innovation processes can pinpoint how to improve the way that
innovation is carried out. However, such measurements should
not be done too often, and they should certainly be done in a
way that is as non-intrusive as possible. Perhaps a comprehensive,
quantitative innovation survey could be carried out to establish a
first baseline; but conducting massive surveys regularly to assess
innovation potential is not advisable; creating more bureaucracy
is not in the spirit of innovation. Following a baseline survey,
one could, for instance, pick highly focused questions that
reflect what are considered the most important 5–10 metrics
and include them as part of ongoing employee satisfaction
surveys, management surveys or similar data-gathering activities
– embedding them in the existing data-collection infrastructure.
• How might we capture essential insight concerning our innovation

potential in an effective manner?
• Are there existing surveys where we might add a few key questions?
Improve innovation processes continually
This concerns learning from experience from internally run

projects and investing in building the ability to orchestrate co-
creation effectively.
• What kind of learning processes do we have in place at project,

unit and organisational level, in order to learn from the individual
innovation project processes?
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Measure performance on the four bottom lines
To learn from the innovation efforts, organisations must measure

systematically how their initiatives impact on productivity,
service experience, results and democracy. It is not difficult to
create an impact on just one of these bottom lines; the real
paradigm-changing innovations shift two, three or all four
bottom lines positively, at the same time.
• Do we have good measurement processes in place to measure the

four types of value?
• To which extent are results and outcomes placed centrally in our
measurement system?
Sustain a dialogue about performance
Measurement in itself does not create value. The smart use of

documentation for motivation and learning, or for information
and accountability creates value. To use measurement to drive
organisational performance, managers must lead by example,
making a habit of engaging directly with their staff in an honest
conversation about what seems to work, and what doesn’t. They
must display curiosity, interest and willingness to act on the
findings. In the context of innovation the key question is:
• Now, we tried this because we thought it would lead to such-and-

such results. What in fact happened, and what can we learn from it?
Note
1
As the first edition of this book went to print in 2010, Youth Villages
hosted just 11 offices in as many states.
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PART FOUR
COURAGE
FOUR LEADERSHIP
ROLES

TWELVE
‘Courage comes from the willingness to “die,” to

go forth into an unknown territory that begins to
manifest only after you dare to step into that void.
That is the essence of leadership.’ (C. Otto Scharmer,
senior lecturer, MIT, 2007, p 401)
As New York State Associate Commissioner of Education,

Sheila Evans-Tranumn was among the highest-ranking
African American women in US state government. As the first
academic in her family (she has a double major in English and
mathematics), she represents a remarkable story of overcoming
enormous challenges to achieve a stellar career in public service.
She also embodies a philosophy that speaks very strongly to
innovation – for instance, having emphasised accountability at
all levels of the New York state school system as a key driver
of positive change in the public school system. She firmly
believes that what she tries to accomplish is more important
than her personal position. At a conference on performance
management practices she said, ‘You can achieve nearly anything
in government if you don’t care about losing your job’.
Leading public sector innovation shouldn’t be about risking
your job. But to lead innovation, and in particular co-creation,
is also to be courageous. If we as public managers don’t strive,
every day, to do better than yesterday, why should politicians
and taxpayers endow us with their money and their trust? For
innovation activities to become strategic and systematic, they
must be considered the public manager’s personal responsibility:
part of the professional ethic, of the essence of public service.
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Public managers must be held just as accountable for their

innovation efforts as for meeting the budget. Sometimes that
means mustering the courage to challenge the very system that
holds one accountable.
As Professor Jean Hartley of the Open University has pointed
out, ‘Innovation under networked governance revitalizes the
leadership role of policy-makers in translating new ideas into
new forms of action’ (Hartley, 2005, p 30). This revitalisation
comes at a price, however. Leading public organisations in a
more collaborative, open and inclusive way – to orchestrate
co-creation – makes significant demands on the confidence and
courage of leaders.
The idea that ‘courage’ is necessary for managers to drive
innovation is widely accepted, not least due to the sense
that innovation involves some degree of risk (Bossidy and
Charam, 2002; Attwood et al, 2003; Dyer, Gregersen and
Christensen, 2009; Eggers and O’Leary, 2009). Hamel (2000)
even highlights courage as the most important innovation
leadership attribute of all. The challenge is to consider how
‘courage’ can play out in practice in a public sector context.
For instance, in 2009 the UK Cabinet Office took the initiative
of establishing the Innovators Council of leading figures from
business, public services and the third sector in order to
help to think more radically about innovation in the public
sector (Cabinet Office, 2010). Officials quickly nicknamed
the group ‘Heretics Council’, because the ambition was to
truly challenge how government tackled innovation. The
establishment of the council was, from this perspective, a
reflection on how central government was recognising that
innovation is about personal responsibility and about testing
the perceived boundaries of current practice and thinking.
Interestingly, shortly after taking up her position in 2017, the
Minister for Public Sector Innovation in Denmark established
a set of ‘Challenge Panels’ to propose public sector reform
initiatives. These kinds of bodies suggest that there is a demand
for a new public leadership role.
This chapter presents a framework for considering the new
role of public managers in leading innovation across different
levels of the organisation – and beyond it. Already, we have
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seen a broad range of leadership challenges across the three Cs

of consciousness, capacity and co-creation. This chapter asks:
• What is the essence of the challenge of leading innovation

in government?
• What are the distinct public leadership roles required to drive
innovation at different levels of government?
• Which competencies are required?
Between inspiration and execution

If innovation is new ideas that work, then leading innovation
is to straddle that great divide between getting the idea and
making it part of the organisation’s everyday practice. As Dyer
et al (2009) emphasise, ‘innovative entrepreneurship is not a
genetic disposition, it is an active endeavour’. In this sense,
innovation leadership is played out in a force field between
inspiration, on the one hand, and execution, on the other
hand (Table 12.1). Inspiration thrives on openness, divergence,
motivation and creativity. Execution is the art and practice
of getting things done (Bossidy and Charan, 2002). It thrives
on traits such as structure, discipline, focus and stamina. One
might also think of the difference between inspiration and
execution as the often-evoked difference between leadership and
management: leadership is doing the right thing; management is
doing things right. Or even better, as Henry Mintzberg (2009)
says, pinpointing the nexus of management and leadership:
leadership is management done well.
People who do not provide inspiration, and who cannot
execute decisions, are really just managing a dying organisation.
Table 12.1: Between inspiration and execution
Low execution ability High execution ability

Inspired Creativity Innovation
All talk, no action Change and value
Not inspired Weak operations Stable operations
Downhill Status quo
Source: Inspired by Kollerup and Thorball (2005)
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Operations become weak and unstable, and nothing new is ever

attempted with any degree of success. Dying organisations can
exist for years – at least in the public sector. But no one wants
to work for one, and sooner or later others will be able to
solve its tasks better and more efficiently. Even in government,
dysfunctional organisations (usually) don’t last for ever.
Focusing overly on creativity without considering
implementation leads to an organisation that constantly talks
about the next great thing, but never gets around to choosing
what to do, and doing it. The result is an abundance of creative
ideas, but also frustration and waste. Many years ago, when I
was head of a business unit in the consultancy Rambøll, one
of our project managers interviewed hospital staff about their
ideas for organisational change. An administrative assistant said
that she’d been systematically collecting all her ideas for the past
five years or so. ‘What happened to them?’ the project manager
asked. The assistant pulled out her drawer. ‘They’re all right
here,’ she said, pointing to bundles of Post-Its and notes that
she’d written down over the years. ‘But why didn’t you share
your ideas with management?’ asked the consultant. ‘Oh, but I
did,’ said the assistant. ‘I’ve been bringing these suggestions up at
our weekly department meetings, and we’ve had some very nice
conversations about them.’ ‘And then what happened?’ asked the
consultant. ‘Nothing,’ said the assistant.
Public managers are often relatively good at execution – they
just aren’t very inspired. Managing the status quo, carrying out
decisions, going about day-to-day business is all well enough.
That is how many (some would say the majority) of public
sector organisations are run. However, if we believe that
the key challenges facing the public sector are real – scarcer
resources, ageing, chronic health problems, increased citizen
expectations – then sound management alone is not an option.
The organisation that excels at operations excels at doing things
right. But what if it is no longer doing the right thing?
The only true leadership option is, of course, to strike an
effective balance between inspiration and execution. Martin
(2009) would characterise the two traits as the ability to deal
with validity and the exploration of mystery versus the ability
to deal with reliability and harnessing the optimal algorithm of
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stable operations. For some leaders, this means moving out of

their comfort zone, embracing divergence and change to a much
larger extent than today. Martin (2009, p 160) characterises
this as attaining ‘a design thinker’s stance’, shifting to a better
balance between reliability and validity. For some, this might
mean talking a bit less, and getting a bit more done.
There are many ways of leading within the twin dynamic
of inspiration and execution, however. The leadership role
in innovation depends on type of organisation and function.
Another dimension that certainly plays a key role is where in
the government hierarchy the leader is placed. Let’s explore
four distinct leadership roles that relate to different levels of
government.
A typology of innovation leadership

It should be more than clear by now that innovation in
government is everybody’s job (Kanter, 2006; LO, 2006;
Patterson et al, 2009). That goes for employees, and it goes for
different leadership positions – from the political level to front-
line managers (Behn, 1995). Innovation leadership can arise
from anywhere in the organisation (Gillinson et al, 2010). Each
position of leadership holds distinctive characteristics that can
help to drive innovation across the first three dimensions of the
innovation ecosystem: consciousness, capacity and co-creation.
I have chosen to take a closer look at four particular leadership
positions, and have given them each a label (Table 12.2).
The characteristics associated with each role are obviously not
as distinct as they are presented here; however, I have attempted
to highlight key aspects of the unique contribution that each
level of leadership might bring to the innovation process.
Applied to the four leadership roles, the implication of ‘courage’
is that they must look beyond and above the confines of their
prescribed role.
The visionary: the political leader

What is the role of politicians in public sector innovation? Some
would say that it is to ‘stay away’, interfering as little as possible
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Table 12.2: Summary of innovation leadership roles
Courage Consciousness Capacity Co-creation

THE VISIONARY Formulating Investing in Expecting
[Politician] a vision that innovation administrators to
demands capacity be professional
innovation innovators
THE ENABLER Engaging managers Crafting and Extending
[Top executive] in a dialogue about implementing a licence to
innovation strategies for innovate
innovation
360 DEGREE Applying language Creating Embracing
INNOVATOR of innovation to innovation space divergence
[Mid-level manager] problem-solving
KNOWLEDGE Empowering staff Recruiting and Encouraging

ENGINEER to reflect on own developing a small-scale
[Institution head] practices diversity of experimentation
talent and learning
with the organisation, but expecting loyal, dedicated efforts and

clear results against whatever political agenda and outcomes
he or she is pursuing. Others might say that politicians are the
only true public sector innovators: if, at the end of the day,
they don’t approve of a new idea, it won’t have a chance of
being realised. As Eggers and O’Leary (2009) stress, political
decision making is the ‘stargate’ that any new public policy must
enter through. In this view, politicians thus have the legitimate
right, and expectation, of being directly involved in the creative
thinking going on in the organisation.
The truth may lie somewhere in between. Often, there is a
relatively clear divide between the bureaucratic–administrative
domain of the public sector organisation and the more
ideological–political domain of elected ministers and mayors.
However, the divide may blur, depending on national tradition,
on administrative and political cultures and on the particular
organisation. In countries such as the US, where the first couple
of tiers of top government officials are politically appointed,
the relationship between officials and politicians may become
more intimate; the same is often the case in small government
departments, where by nature the politician is closer and more
involved with the day-to-day running of the organisation. The
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consequences for the conduct and effectiveness of policy making

may be significant (Mulgan, 2009).
From an innovation perspective, what is central is the extent to
which the politician is able to formulate a compelling (political)
vision, from which the organisation can draw its strategic
ambitions. Politicians must formulate the ‘why’ of innovation,
leaving (most of) the ‘how’ to the administration. The political
vision should make the innovation imperative obvious. A classic
example, of course, is President John F. Kennedy’s ambitious
vision of sending a man to the moon and returning him safely
to Earth, which essentially was an extension of a licence to
innovate. Allegedly, immediately after the President’s 25 May
1961 speech announcing the venture to the moon, the NASA
administrator James Webb met with the President in the oval
office. Webb bluntly said, ‘But I don’t know if we can, sir.’
Without looking up from his desk, Kennedy replied, ‘You can
now.’ With the ability to formulate an ambitious vision comes
also an expectation that government officials can be professional
innovators. John F. Kennedy certainly expected this of NASA;
why don’t politicians more often expect that of less prestigious
government organisations too?
Finally, with ambition and expectation comes commitment.
The role of the politician is also to be the organisation’s sponsor
and ambassador, and to seek to secure the resources necessary to
innovate. Politicians (like everyone else) must view innovation as
an investment. Ensuring that government organisations possess
the skills, technology and budgets necessary to develop first-rate
solutions is a task for the politician.
Co-creation as an innovation approach could hold particular
promise for politicians. Often, politicians live in a world where
real-life stories, usually as portrayed by the media, dominate
their agendas. Meanwhile, bureaucrats live in a world full of
statistics and quantitative documentation. Politicians often
care about the individual case; civil servants often care about
scale and representativity. Politicians sometimes get emotional;
officials are usually detached. By bringing more citizen-centric,
qualitative, emotional and intuitive types of knowledge to the
table, the co-creation process might in fact be perceived as even
more relevant and helpful to the themes and agendas that many
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politicians are trying to pursue. Certainly, the communication

style of individual, personal stories is much more natural to
politicians than what they are usually presented with by their
servants.
The enabler: the top executive

No one should expect top managers to also be their
organisation’s foremost innovators. Others in their organisation
may have better ideas (van Wart, 2008; Patterson et al, 2009).
But it is reasonable to expect that the top manager has an
ambition when it comes to innovation. Without ownership
and a will to innovate at the highest level, initiatives lose steam,
resources aren’t made available and potential successes are never
realised. The day-to-day action of the staff is how innovation
is expressed in practice, but top management commitment is
a prerequisite for that action to take place. The top manager
must be the foremost champion and enabler of the innovative
organisation. Like a gardener who tends to the living organisms
in his garden, so must a top executive nurture the organisation’s
innovation ecosystem.
A way to do this is to engage the next tiers of management
in an ongoing dialogue about innovation, shaping a common
language and a consciousness of what innovation means to the
organisation. Such a conversation can be an integrated part of
strategy deliberations; the top executive should ask whether the
organisation is doing enough to ensure that it has the strategies,
organisational design, digitisation, people, culture, methods and
tools to deliver what is expected. Through extensive research,
Dyer et al (2009) have found that the most innovative top
executives are particularly adept at questioning, observing,
experimenting and networking in order to power their own
thinking and inspiration. Through these patterns of action, they
are able to better associate, successfully connecting seemingly
unrelated questions, problems or ideas from different fields.
At the core is dialogue. However, as discussed in Chapter 4,
the challenge is whether the organisation has sufficiently clear,
results-based strategic objectives against which to frame such
a conversation. Most organisations merely describe their role,
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tasks and, possibly, their mission. But if the top executive does
not communicate to everyone where the organisation wants
to go, what is the chance of getting there? This conversation
becomes more relevant, and difficult, due to the complexities
of the public sector context. Politicians and top executives often
don’t know the path ahead. In an op-ed piece, New York Times
commentator David Brooks (2009) points out that public leaders
‘have general goals, but the way ahead is pathless and everything
is shrouded by uncertainty’.
Finally, there is a crucial task for the public sector top executive
to say out loud that innovation is an essential part of the business
of government. When the Permanent Secretary of the Danish
Ministry of Economic and Financial Affairs hosted a reception
for MindLab on a warm June day some years ago, he extended a
licence to innovate. He invited MindLab’s staff to be challengers
of the system: internal critics and a ‘loyal opposition’ to their
colleagues. That is not just an opportunity; it is an obligation.
It is the kind of challenge that any public top executive should
endow his or her institution with, just like JFK did in 1961: ‘I
expect you to create bold, new ideas. In fact, I demand it.’
Top managers play other roles as well. In a country such as
Denmark, the total number of top public managers who run the
state, regional and local administrations is so low (around 120)
that they can be expected to know each other. Certainly, they
would all fit into a medium-sized conference room. These top
managers have a particular role to play in powering collaboration
across government, encouraging their staff to work effectively
together – and even to generate new ideas and solutions through
co-creation processes. In the UK, the top executives in central
government meet twice a year, bringing the key decision makers
together at so-called Top 200 events. Their responsibility for
driving innovation is also recognised; at their autumn session of
2009, for instance, the theme was innovation in government.
The hope for such events is probably not so much that top
executives can harness their innovation skills, but more that
they can network, build a common language and understanding,
enhance relations and trust and perhaps even inspire each other.
Whether the most relevant source of new inspiration is other
agency heads or permanent secretaries is, however, an open
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question. Research does show that public top executives obtain

new ideas from a variety of sources. In a study conducted by
my former employer, the consultancy Rambøll, the top three
sources of inspiration for public top executives across Danish
public organisations were: managers in their own organisation,
their personal professional network, and internal projects and
research. The three least-mentioned sources of inspiration were,
interestingly: politicians, academic research and first-hand input
from citizens or businesses (Rambøll Management, 2006). This
highlights the challenge of helping decision makers to see how
citizens experience their services for themselves, as discussed
in Chapter 9.
Of course, the use of these various sources of inspiration varies
tremendously from person to person; and only very few, if any,
are able to draw from all potential sources in a systematic way.
The Rambøll study indicates that there seems to be very little
explicit ‘horizon scanning’ going on, where opportunities and
challenges are identified and where potential ideas and solutions
are examined on an ongoing basis (Day and Schoemaker, 2004).
The key executive ‘innovation skills’ mentioned by Dyer et al
(2009) don’t get honed. Often, the day-to-day running of the
(often quite large) public organisation gets in the way.
What is perhaps more remarkable is that politicians do not
seem to be a major source of inspiration. One explanation for this
divide could be that in the view of (non-politically appointed) top
executives, there is and should be a clear dividing line between the
ideology of politics and the pragmatic solutions of bureaucracy.
Academia – universities and research institutions – is also not
very strongly represented as sources of inspiration for public top
executives. There might be a more universal point here about
the relationship between academia and decision makers: ‘More
knowledge doesn’t make decision-making simpler, and in any
case it is often ignored, suppressed, or simply mis-interpreted’
(Mulgan, 2009, p 134). The challenge may not so much be
that the research community doesn’t produce concrete, ready-
to-apply solutions for the public sector. There are other actors,
including management consultants, who are often better at
that. The challenge may be that sufficient strategic, scenario-
based social research isn’t being produced that can help public
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managers to see the consequences of their decisions in a long-

term perspective. In an ever more complex and changing world,
public managers need less strategic planning and more strategic
foresight (Kao, 2002; Drejer et al, 2005).
Finally, hardly any top executives seem to have the opportunity
to be inspired by the end-users of their organisations’ efforts.
That is not surprising, given that leaders of large organisations
have much other business to attend to than to meet citizens at
directly. However, if top executives never see and experience
for themselves the reality on which they are working so hard to
make an impact, how can they tap into the entire emotional,
intuitive mode of knowledge that is so necessary for co-creation
and innovation?
The 360 degree innovator: the middle manager

In Myself and Other More Important Matters, Charles Handy, the
Irish management thinker, tells a story about one of his first
personal management experiences as a young oil executive
with Royal Dutch Shell. As a young manager in such a large
organisation, one has virtually no discretionary spending budget.
So you can’t get much done. At Shell, however, the young Handy
discovered that even though he couldn’t contribute to positive
change, he could prevent changes from happening: bored out of
his mind in his posh London job, he single-handedly managed
to stall for several months the building of a new Shell refinery in
the Napoli Bay by throwing the Italian contractor’s application
letter in the trash. (He had been to the bay himself on vacation
and thought it was too beautiful to tarnish with an oil refinery.)
Eventually, the contractor sent letters to everyone at the London
headquarters, and the refinery was built. Although he wasn’t
happy about what he’d done, Charles Handy recognised that
there can be quite some satisfaction in exerting one’s power
to hinder everyone else from getting anything done. In fact,
according to Handy, up to 10% of employees are so dissatisfied
with their organisation that they are prepared to do something
actively to sabotage it (Handy, 2006).
In more modern, ‘flat’ project organisations, such as professional
service firms, the lower ranks, such as project managers, hold
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the keys to performance: they oversee the application of

resources and expertise on client projects, and are often directly
responsible for quality. In Aligning the Stars, Thomas Tierney
and Jay Lorsch show how the leading consultants or lawyers
become the organisation’s stars, essentially driving strategy –
not the management. In these kinds of organisations, power is
(relatively) evenly distributed (Tierney and Lorsch, 2002).
Mid-level managers often wield enormous power to halt the
decision-making process, since, in bureaucracies, decisions must
move up and down through the organisational hierarchy. As a
consequence, mid-level managers are able to stop the process
of innovation dead in its tracks. The flip side of this is that mid-
level management is seldom recognised sufficiently as a key to
achieving innovation, in particular in hierarchical organisations.
Although there may be some element of project management,
hierarchical bureaucracies place much more emphasis on formal
position, and decision-making power is not delegated to nearly
the same extent. Middle managers are in a position where they
are formally charged with generating performance within the
unit for which they are responsible. However, their real role is
broader than that. Although power (in particular of the decision-
making sort) is concentrated at the top of the career ladder,
innovation power rests to a high degree in the middle steps of
advancement. Unpublished research that we did at MindLab
in 2009 among more than half a dozen mid-level managers in
three government departments and associated agencies showed
a multitude of roles in creating opportunities for innovation.
These men and women manage ‘down’ towards their staff, ‘up’
towards their own boss and ‘out’ towards colleagues across their
organisation and towards external contacts within and outside
the public sector. In each of these four management directions,
middle managers can drive or limit innovation. They are
potentially 360-degree innovators, creating links between their
units’ (and their own) insights, resources and capabilities and the
people and organisations surrounding them.
While they may not be the ultimate decision makers, they
are usually the ultimate executioners. Mid-level managers can
not only connect with different resources, innovate through
new combinations or by adopting practices from elsewhere;
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they also ensure that things actually get done. As management

gurus Ram Charan and Larry Bossidy succinctly point out in
Execution, ‘Strategies most often fail because they aren’t executed
well’ (Bossidy and Charan, 2002). The obvious risk for the mid-
level manager is perhaps not that he or she doesn’t innovate, but
that he or she doesn’t facilitate and execute the activities necessary
for other people’s innovations to succeed in the organisation
through a co-creation process. Whether ‘other people’ are users
(as in citizen-centred innovation), staff (as in employee-driven
innovation), external contacts and organisations (as in open
innovation), is less important.
The challenge for the public mid-level manager then
becomes to create a strategic innovation space that allows for
the adoption of innovative approaches and practices, shaping
strong collaboration with internal and external partners, and to
contribute to and empower the staff’s innovation capacity (Behn,
1995) (Figure 12.1).
• Up, towards top management. Creating ’innovation space’

upwards in the organisation through strategic dialogue with
top management, exploring possibilities for innovation,
challenging the political and structural context and identifying
resources (including funding opportunities).
• Sideways, towards management colleagues. Creating cooperation
through sharing knowledge and mutual support, building
internal coalitions and thus expanding the innovation space
further.
• Sideways, towards external stakeholders. Searching for inspiration
and ideas through approaches such as open and citizen-
centred innovation, developing partnerships to implement
innovative solutions. The challenge for mid-level managers
is to really embrace the diversity of ideas that can come from
the outside.
• Down, towards employees. Supporting innovation capacity,
building a culture of innovation, listening to staff and allowing
time and resources for entrepreneurial ideas, allowing for a
significant divergence of ideas and ensuring that solutions
are followed through, activities are carried out and generate
intended results.
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Figure 12.1: The 360 degree innovation manager
‘Create space’
Top executive
Strategic
Enabling
Dialogue-seeking
Colleagues Stakeholders
Public service Curious
Knowledge sharing
mid-manager Collaborative
Collaborative
Solution-oriented
Supportive
‘Cooperate’ ‘Be inspired’

Staff
Motivating
Listening
Communicating
Translating
Executing
‘Make it happen’
Source: Bason (2007)
Like the other leadership roles, mid-level managers must

nurture the ability to inspire while overseeing that concrete,
positive change takes place in practice. However, their particular
360-degree position is unique. Any public sector organisation
looking to strengthen the four Cs of the innovation ecosystem
had better start by taking a hard look at the role of middle
management. The language used, the capacity being built, the
concrete projects and processes undertaken all depend on middle
managers stepping up to the challenge, lifting their perspective
from everyday operations to becoming drivers for desired
change.
The knowledge engineer: the institution head

When a Copenhagen public day-care institution considered
letting parents conduct research within the institution to
explore how pre-school children experienced their daily ‘work
environment’, the staff had significant reservations. Letting a
couple of parents on the institution’s governance board explore
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the children’s social, physical and aesthetic environment could

challenge to their own pedagogical principles and practice.
Further, would such a ‘citizen-centred’ piece of qualitative
research in any way be representative of the whole population
of children? The institution head cut through the discussion,
saying to her staff: ‘If we don’t dare do something like this, we
die’ (Bason et al, 2009).
What this manager did was not only allow user representatives
(parents) and, indirectly, users (children) to become part of the
institution’s innovation process; she also shared with her staff
how passionately she felt about trying something new that could
strengthen their own reflection and improve their practices. She
showed the courage to experiment on a small scale, leveraging
an under-utilised resource such as the parents’ board. As Boyett
(1996) has pointed out, with devolution of competencies and
budgets, the potential of heads of public institutions to essentially
become entrepreneurs increases.
The project turned out to be a success, the parents sharing
qualitative insights from their personal field research into two
selected children’s ‘day in the institution’, and from everyone on
the staff and in the parents’ board getting involved in a process
of co-creating ideas for developing an even better institution.
The individuals who run schools, day-care institutions, care
homes and hospitals are, in most welfare states, the backbone of
front-line service provision. This is the group that recruits and
retains the professional staff who care for children, patients and
senior citizens – every day. As this book has shown again and
again, it is the interactions that offer opportunities for creating
value: co-creation processes are usually most successful when
they are aimed at transforming the public sector’s relationship
with citizens in one way or another. As a knowledge engineer,
the role of the institution head is to connect the abstract,
administrative world of governance, budgets and targets with
the world of daily service provision, empathy, professionalism
and respect (Nonaka and Takeuchi, 1995; Mulgan and Albury,
2003). No matter how innovative politicians, top management
or middle management are, if institution heads and their staff
do not transform ideas into daily practice, citizens won’t notice
any difference (Gillinson et al, 2010).
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However, very few institution heads possess the resources,

methods or tools to engage staff, citizens, user representatives
and other participants in a process of co-creation. Also, they
aren’t always able to recruit and develop staff who can encompass
both the more closed mode of daily operations and the open-
ended nature of innovation processes. The challenge for
institution heads therefore is to build their own competencies
in co-creation, as well as those of their staff, and to encourage
the kind of experimentation that took place at the Copenhagen
day-care facility. Perhaps policy makers at central level should
recognise that to truly scale innovation, this is the place to invest.
About civil disobedience

Sometimes, when it comes to innovation, the best leadership
practice is breaking the rules. Some years ago I conducted a
workshop for public managers in Wellington, New Zealand.
Towards the end of the session, the participants presented the
ideas and concepts they had developed – many of which were
quite inspired and clearly represented bold thinking. One of the
presentations prompted me to say that sometimes, to innovate,
we need a good dose of civil disobedience. Everyone in the room
giggled. Coming from Denmark, where the ‘power distance’
in most workplaces is quite short, and there is arguably a high
degree of pragmatism about rules and regulations, I didn’t quite
get what was the fuss; but someone later that day explained
to me that the very notion of ‘civil disobedience’ was rather
unthinkable in a New Zealand government context (but, she
added, it probably was exactly what the country needed).
This experience has made me think about the role of breaking
rules in innovation – and in particular the role for managers
in breaking the rules. There certainly is something to the
point of asking for forgiveness, rather than permission. It is
sometimes necessary to stretch the rules or interpret a directive
rather loosely in order to do something different. If that kind
of flexibility weren’t there, if it weren’t taken, we’d have a lot
less innovation in the public sector. Obviously, it is also the
kind of action that can get you fired. But, as New York State
Assistant Education Commissioner Sheila Evans-Tranumn at a
310
Copenhagen public management conference has pointed out,

perhaps you really do need to be willing to walk away from your
job in order to achieve great things in government.
How to do it
Leading public sector innovation is the art and practice of
balancing between inspiration and execution, between exploring
mysteries and exploiting resources. This book has suggested
that public organisations must build an ecosystem of innovation
across the four Cs of consciousness, capacity, co-creation and
courage. Without the courage to lead innovation at all levels
of government organisations, the transformative potential of
co‑creation will not be realised. Visionary leadership – the ability
to formulate a compelling future and show in practice how it
might be created – is at the core of leading innovation. Barriers
abound: among them are internal recruiting of most managers;
the complexities of the tasks of leading public organisations; the
sometimes diffuse relationship between public administrators
and politicians; and lack of tolerance for a diversity of people,
ideas and solutions at all levels.
Especially in the public sector, ‘challenging the innovation
space’ seems crucial. This entails taking a broader view of one’s
own role than simply ‘managing’ a department, a unit or an
institution. It takes a more systemic view. Public managers must
step into the role of leaders, shaping the arena for innovation
through their interactions with the political leadership, with each
other across government and with citizens, businesses and other
stakeholders. Formal position is, in most public organisations,
important. Each holds particular innovation opportunities.
To lead public sector innovation is to embrace our different
archetypes of public sector innovation leaders.
The Visionary
The political leader who is able to formulate an ambitious, even

audacious vision, give the organisation direction and ignite the
energy and motivation of the employees. The Visionary must
ask:
311
• Have I formulated a sufficiently clear, ambitious and long-term

vision that will energise the public organisation(s) for which I am
accountable, so that they dare to innovate?
• Have I articulated clearly the outcomes that I consider as concrete
expressions of success?
• I am ensuring that the organisation(s) I am accountable for have
sufficient political support and resources to achieve the objectives I
expect of them?
The Enabler
The top executive of a government department or agency. The

Enabler’s unique contribution is to create optimal framework
conditions for the innovative organisation. At the best of times,
the Visionary and the Enabler work in tandem, ensuring that
the political vision can be realised through an innovative public
organisation. The Enabler faces the following questions:
• Have I clearly extended a ‘licence to innovate’ to the organisation

I am heading, and do my actions show in practice that I mean it?
• Do we as an organisation have a clear strategy, do we have strategies
for how we want to innovate and do we manage our innovation
portfolio?
• Am I sufficiently actively investing in building my organisation’s
innovation ecosystem from top to bottom – and bottom to top?
• Am I engaging my staff in an ongoing dialogue about what
innovation means to us, and how we get more of it?
The 360 Degree Innovator
Perhaps surprisingly, the middle manager in a department or

agency. Often the middle manager is, in practice, one of the
most powerful positions in the organisation. Middle managers
may have very limited discretionary budgets; but they may also
be able to stop any development effort dead in its tracks, if they
choose to do so. For the same reason, they are in a position to
let loose the innovation potential in the organisation, letting go,
embracing co-creation and helping to drive a greater diversity
312
of solutions. As a 360 Degree Innovator in government, the

questions to ask are:
• Am I aware of the position I have in the organisation, and how I may

contribute in a much wider sense to help address the opportunities we
face and tackle our most pressing challenges?
• Who are my 360-degree constituents whom I should be collaborating
with – up, across and down?
• Am I recognising that I can achieve more by letting go, allowing a
process of co-creation to unfold through the active involvement of all
constituents surrounding a particular problem, rather than through
control?
The Knowledge Engineer
The institution head – leader of a school, a hospital, day-care

institution, care home – who encounters citizens and their
challenges, problems, fears, resources and hopes every day.
Borrowing again from Ikujiro Nonakas’s concept, the institution
head must play the role of transforming innovations elsewhere
into workable solutions in his or her own institution. Only
institution heads and their staff understand exactly what it
would take in terms of new skills, processes and organisational
changes, and communication to implement a good idea from
somewhere else. This requires a proactive emphasis on both
employee involvement and innovation. The questions to ask as
a Knowledge Engineer are thus:
• To what degree have we created a modern work environment

where everyone can contribute with their ideas, and see them taken
seriously?
• Are we sufficiently actively seeking out workable, new solutions from
sources outside our organisation?
• How are we ourselves sharing the solutions we have found to be
effective, so that our peers may learn from them?
No matter what the position of leadership in question, leading

public sector innovation boils down to courage: the courage
to embrace and manage the divergence of ideas that we so
313
desperately need if we are to tackle tomorrow’s problems and

capture the opportunities in front of us. If that takes a dose of
civil disobedience, then maybe that is what we need.
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THIRTEEN
Epilogue: from decision

making to future making
‘You never change things by fighting the existing
reality. To change something, build a new model that
makes the existing model obsolete.’ (Buckminster
Fuller, quoted in Ratcliffe & Lebkowsky, 2018,
p 101)
This book has explored the emergence, practice and value of

innovation in the public sector. I have proposed an innovation
ecosystem encompassing the four dimensions of consciousness,
capacity, co-creation and courage, which can power the ability
of public organisations to systematically develop and realise new
ideas for the benefit of society.
With the example of a healthcare project, I opened the book
by suggesting that innovation, co-creation and design are future-
oriented processes that hold potential for involving diverse
stakeholders in shaping new approaches to complex challenges.
And I concluded the last chapter by suggesting four leadership
roles that articulate innovation practices at different levels of
government.
Since writing the first edition of Leading Public Sector Innovation,
I have researched and explored the potential for public managers
in collaborating with designers to discover, generate and realise
meaningful change.
In this brief epilogue to the second edition of the book, I
wish to share the six leadership practices that I have found to
be especially useful to drive innovation in the public sector
and, indeed, in private enterprises too. The six practices have
315
been derived from interviews with 20 public managers in five

countries who have worked closely with design teams on policy
and service challenges. The managers have been at three levels
– top, middle and institution – and so the six practices are
applicable to the administrative level of the public sector as
discussed in Chapter 12.
At the heart of this book is the notion that public sector
organisations are ill-equipped to systematically explore new
and better futures through involving citizens, businesses and
other key stakeholders in processes of co-creation. More and
more organisations are looking to design thinking and design
practice in order to drive innovation. But what does the
collaboration with designers ‘do’ for public managers, and,
equally important: what are the management behaviours that
enhance the likelihood that collaborative design projects will
turn out to be successful?
My research identifies six types of engagements with
design, which can be understood as patterns of attitudes and
behaviours among public managers that were observed when
design approaches were used in the organisations studied. These
engagements are expressions of what happens between managers
and design processes as the latter unfold. The six engagements I
found are the following.
• Questioning assumptions, which includes an a priori tendency

to seek out ways of questioning one’s own assumptions as a
manager, as well as a design-inspired tendency that encourage
and enable a manager to ask new questions about ‘what is
going on’ when her or his organisation interacts with its
users.
• Leveraging empathy, which concerns the propensity of
managers to seek and use ‘empathic data’ generated from
ethnographically inspired design techniques, in order to
initiate processes of change in their organisation.
• Stewarding divergence, which refers to the ability to open,
and keep open, space and time amid an organisation and its
routines to allow a diversity of ideas to emerge, linger and
flourish, while also maintaining for the staff an overall sense
of direction and purpose.
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Epilogue: from decision making to future making
• Navigating the unknown, which concerns the ability of

managers to handle constructively the insecurities and worries
that design processes, with their inherent ambiguities, prompt
in their own minds and in the minds of staff members.
• Making the future concrete, which is tightly connected to the
design practice of prototyping and testing possible solutions
together with end-users, staff and other stakeholders.
• Insisting on public value, which implies an orientation toward
the outcomes of the organisation’s activities and a dedication
to producing multiple kinds of value, such as productivity
gains, and also, very importantly, value for citizens or other
constituencies.
Organisations whose leaders develop the capacity for the six

behaviours can go far beyond the possibilities of conventional
management practice.
The essential difference between conventional management
practice and design-based leadership approaches can be boiled
down to a contrast between management as decision making
and what one could call future making. Management as decision
making is the dominant paradigm across much of the public
sector. In this way of thinking, a good manager is someone
who apprehends a situation thoughtfully, using data, and who
uses data, often subjecting it to some kind of analysis, to choose
the best alternative among the options for action within the
situation. Decision making in this way is ‘evidence based’ and
it has been well established that this makes for better outcomes.
But design methods – which might be better thought of
as future making (as opposed to decision making) – focus
on working together with stakeholders, applying empathy to
understand needs deeply, reframing surface understanding of the
problem and adding to the options for action by generating new
options. Such methods shift the focus in a problem situation.
When stakeholders work together to co-create and evaluate new
options, not much energy or effort is typically necessary in the
end to decide between options, because the option people have
worked on together to create and make better is, by that time,
the clear standout. You could say that decision making, at that
point, is evidence based because the evidence is overwhelmingly
317
supportive of choosing the new and improved option that

everyone has produced together and bought into during that
process. To put it simply: future making recasts management –
or, one might say, leadership – as a collaborative and creative
act, not just an analytical one. It is the power of co-creation, of
innovation, that extends the frontier of possibilities.
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336
Index
Note: Page numbers in italics indicate figures and tables.
Numbers B
3M 157 behaviour see human behaviour
80/20 rule 20, 268 Bloomberg Philanthropies 81–82
360 degree innovators 33, 305– ‘bottom line’ model 59–61, 59,
308, 308, 312–313 275–276, 275, 286–288, 287,
292
A Bourgon, Jocelyne 60
abductive reasoning 176, 235 ‘Boxing Future Health’ project
academia 5, 304 1–3, 116
administrative innovation 223 Brazil 48, 200–201
ageing populations 14 burden-hunting 219
Aiken, Carol 250 Bureaucracy (Wilson, 1989) 6
algorithms 45
Allison, Graham 6 C
American Red Cross 247 Canada 48, 73, 125
analysis 176, 178, 227–228 capacity 28–29, 28, 30, 271
gap analysis 100–101, 100 capitalism 39–40
insights 234–235 champions 255–256
pattern recognition 228–229 change, theory of 91, 283–284,
visualisation 229–233 289–290
anonymity, temporary 239–240 change management 250
Austin, Robert D. 267, 268–269 Chesbrough, Henry 95
Australia childcare 79
co-production 200 Chile 136
crowdsourcing 128–129, 213 citizen involvement 32, 215–217
productivity 12 co-creation workshops 208–210
research and development (R&D) co-production 199–202, 199
48 criticism 196–198
VPS Innovation Action Plan crowdsourcing 128–129, 212–214
(Victoria Public Service, 2010) in the design process 215
23–24, 127, 128, 163 ethnographic research 204–208
Austria 196–197 lead users 210–212
awards 6 new technology 70–71, 112,
awareness 5 124–125
see also consciousness professional empathy 192,
194–196
prototyping 248
types of 203
337
value of 193–194 consciousness 26–27, 27, 62–64,

see also co-creation 271
citizen-centred innovation 51–52 contextual interviews 206
citizen-centred research 226–227 convergence 157
citizen-driven competition 78–79 Copenhagen 90, 181–182
citizens Copenhagen Institute of Interaction
expectations 12–13, 49–50, 198 Design (CIID) 183
needs 18, 49, 120, 182–183 co-production 199–202, 199
rights 17, 74–75, 183–184 cost savings 4, 222
service experience 60, 279–282 courage 33–34, 33, 35, 272, 296
civil disobedience 310–311 see also leadership
climate change 15, 73, 108, 110, creation 178
183 implementation 249–251
Climate Consortium, Denmark 73, pilots 248–249
110 prototypes 246–248
co-creation 7–9, 30–32, 31, creative platforms 134–135, 137
198–199, 199 crime 200–201
innovation potential 272 crises 14–15
political leadership 301–302 see also global financial crisis
process 220–222, 221, 260, cross-sectoral units 114
262–264 crowdsourcing 128–129, 212–214
analysing 227–235 cultural probes 207–208
creating 246–251 culture of innovation 153–158,
framing 222–225 166–167
knowing 225–227
learning 258–262 D
scaling 251–258 Dance United 81, 121, 276
synthesising 235–245 Danish Board of Industrial Injuries
workshops 208–210 107, 191–192, 206, 233,
see also citizen involvement 234–235
codification 252–253 Danish Broadcasting Corporation
Cole, Martin 60 (DR) 156
collaboration 108–110 Danish Business Agency 227, 244
amongst employees 151–152 Danish Companies and Commerce
public-private innovation (PPI) Agency 151, 155
115–119, 117 Danish Confederation of Trade
public-public collaboration Unions 151
110–114 Danish Consumer Policy Agency
public-third sector innovation 125
119–122 Danish Design Centre 90, 137,
transdisciplinary collaboration 163, 182, 231
160–161 Danish Labour Market Authority
see also partnerships 248
collaborative platforms 112, Darsø, Lotte 237
127–128 data analysis see analysis
communication 63, 302 data sharing 226
competencies 160–161, 160 delegation 157–158
strategic competence development demand 253–254
161–164, 167 democracy 60, 68–69, 285–286
competition 69–70, 76–80 democracy innovation 223
complexity 41 demographic change 14
compliance strategy 88 Denmark
concept development 244–245 climate change 73, 108, 110
conscious obstacles 238–239 co-production 200
338
Index
digital government 126 see also new technology

digital innovation 122, 125 digital technology see new
diversity 158–159 technology
efficiency 50 divergence 8, 18–19, 157, 316
expert citizens 211 diversity 158–161, 167
Forum for Public Top documentation 254–255
Management 113 Drucker, Peter 12
geographic competition 79, 80
Globalisation Strategy 92 E
innovation incentives 168 economic crisis see global financial
innovation potential 270 crisis
internal competition 77 edge centricity 123
joint units 114 education 62–63, 67, 79, 83, 164,
Ministry of Integration 97, 270 187–188
Ministry of Taxation 87–88 see also training
co-creation 209 efficiency 50–51, 286
collaborative platforms 127–128 radical efficiency 8–9, 222,
design thinking 183–184 226–227, 259–262, 261, 287
diversity 158 Eggers, William D. 93
idea sourcing 113 e-government 122–129, 130
sponsors 255 Eli Lilly 212
strategic objectives 73, 89, emotional space 240–241
90–91 empathy 316
online platforms 26 employee-driven innovation (EDI)
positional innovation 56 51, 150–152, 166–167
public sector employees 18 employment policy 200
research and development (R&D) enablers 33, 302–305, 312
48–49 enterprise policy 200
resilience 34–35 entrepreneurial innovation 94–95
service experience 282 equality 118
strategic innovation 97–98 error 18, 75, 153–155
super-departments 114 Essence of Decision (Allison, 1971) 6
design 160, 172–175, 174, 185 ethnographic research 204–208
Design Council, UK 116–117, ethnography 183
163, 173, 187 European Commission 119, 133,
Design Management Institute 192
(DMI) 173 evaluation 20
design thinking 31, 172 see also innovation measurement;
challenges 185–186 performance measurement
definitions 175–177, 176 Evans-Tranumn, Sheila 295
education in 187–188 everyday innovation see employee-
institutionalisation 188 driven innovation (EDI)
key principles 180–184 evidence 254–255
process 177–179, 178 evidence-based policy 43
citizen involvement 215 evidence-based youth services 266
recruitment and outsourcing execution 297–299, 297, 306–307
188–189 see also realisation
design-based leadership 315–318 executive forums 113
design-in-practice 186 expectations 12–13, 49–50, 69,
development see research and 74–76, 198
development (R&D) experimentation 180–181
diagnosis 99–100 expert citizens 211
digital government 122–129, 130
digital services 247
339
F heuristics 46–47
hierarchies 149
Facebook 125 home care 98
failure 18, 75, 153–155 “horizon scanning” 304
finance 80–82, 85 Horsens, Denmark 56, 79, 80
financial crisis 10, 11, 235, hospitals 116–117
259–260 housing 82
Finland 91–92, 93, 114, 164, 173 human behaviour 10–11, 42–43
Five Obstacles, The (Leth, 2003) human-centred governance 202
238–239 Hunter, David 284
flexible working 149–150, 150
forums 112–113 I
framing 222–225 IBM 136
Frederica municipality, Denmark idea boxes 128
97–98 idea generation 235–241
Fuglsang, Lars 94 idea selection 242–244
funding 80–82, 85 idea sourcing 112–113
future making 317–318 see also crowdsourcing; sources of
future of management, The (Hamel, innovation
2007) 149 implementation 249–251
G incentives for innovation 164–166,
168, 252
gap analysis 100–101, 100 incremental innovation 53, 54
geographic competition 79–80 INDEX:Award 174
Germany 48, 133 infections 116–117
Gillinson, Sarah 222, 226–227 information sharing 286
global financial crisis 10, 11, 235, information technology 5
259–260 digital government 122–129, 130
globalisation 13, 92 new technology 14, 49–50, 112
Google 180 see also social media
Government Digital Services informational measurement
(GDS), UK 162 268–269
Great Ormond Street Hospital, Innofounder 182–183
UK 238 innovation see public sector
grey zone activities 111 innovation
Growth House 279 innovation culture 153–158,
H 166–167
innovation ecosystems 4, 24–26, 25
Hamel, Gary 149 capacity 28–29, 28, 30, 271
Handy, Charles 305 co-creation 30–32, 31, 272
healthcare consciousness 26–27, 27, 62–64,
“Boxing Future Health” project 271
1–3, 116 courage 35
co-production 200 resilience 34–35
expert citizens 211 innovation efforts 101–102
infections 116–117 innovation frameworks 156
innovation strategy 90 Innovation in the Making (Darsø,
Medical Island Alert 122 2001) 237
productivity 12, 279 innovation incentives 164–166,
risk 155 168, 252
service experience 282 innovation labs 131–132, 240
social media 125 challenges 140–145
Here comes everybody (Shirky, 2008) characteristics 134–135
124 emergence 133–134
340
Index
governance model 137–140, 139 K

typology 135–137, 138
innovation measurement 269–270, Keller, Scott 250
278 Kelley, Tom 158, 252
continuous improvement 291 Kennedy, John F. 301
innovation potential 270–272, Kimbell, Lucy 185, 186
291 knowledge 8, 151–152, 178,
innovation process 272–274, 291 225–227
leadership 292 knowledge engineers 34, 257,
value of innovation 274–286 308–310, 313
“bottom line” model 275–276, knowledge funnel 47, 47
275, 286–288, 287, 292 L
democracy 285–286
performance management Laboratorio de Gobierno 136
276–277, 288–289 Labour government, UK 277
productivity 278–279 labs see innovation labs
results 282–285, 289–290 “Land of Rules and Regulations”
service experience 279–282 project, Netherlands 232–233
innovation networks 136 lead users 210–212
innovation portfolio 101–102, 102 leadership 19–20, 35, 257, 292,
innovation potential 270–272, 291 295–297
innovation process 272–274, 291 civil disobedience 310–311
innovation pyramid 28–29, 28 consciousness 62–64
innovation space 56–58, 57, 85–86 design-based 315–318
innovation strategy 89–90, 93–97, inspiration and execution
94, 104 297–299, 297
coordination 99 performance management
maturation 99 287–289
innovation tools 26–27 typology 33–-34, 299–310, 300
Innovation Unit, Department of 360 degree innovators 33,
Education, UK 67, 142, 222, 305–308, 308, 312–313
235, 260 enablers 33, 302–305, 312
Innovators Council, UK 296 knowledge engineers 33–34,
innovator’s dilemma 80–82 257, 308–310, 313
insights 234–235 visionaries 33, 299–302,
inspiration and execution 297–299, 311–312
297 see also courage
institutional innovation 95 Leading Public Design (Bason, 2017)
institutional surroundings 70–72 8
integrated services 125–126 learning 258–262
internal competition 77–78 learning cycle 259
international collaboration 112 legislation 84–85, 253
interpretation 103 Leth, Jørgen 238–239
interviews 206–207 Lewisham 70–71, 124
‘Irrational Side of Change Lind, Anne 107
Management, The’ (Aiken and LiveWork 171, 178–179, 184, 233
Keller, 2009) 250 “Love Lewisham” 70–71, 124
J M
job satisfaction 152 management 98–99, 105
joint ideation 116–118 future of 149
joint units 114 middle managers 33, 257,
Julier, Guy 142–143 305–308, 312–313
top managers 33, 302–305, 312
341
value-based 157–158 digital government 122–129, 130

Martin, Roger 42, 45, 46, 47–48, see also social media
176–177 New Zealand 79, 310
mass collaboration 112 non-governmental organisations see
measurement 267–269 third sector
see also innovation measurement normative context 68–73
media 13–14 Norway 92, 136
Medical Island Alert 122 Nudge (Thaler and Sunstein, 2008)
Menlo Park 244–245 10
Merkel, Angela 133 Nyberg, Pam 234
Mexico City 133
middle managers 33, 257, 305– O
308, 312–313 Obama, Barack 91
Mikkelsen, Hans 111 objectives 72–73, 89
mind setting 237–238 observation 205–206
MindLab obstacles, conscious 238–239
citizen involvement 182, older people 98
183–184, 192, 195, 197, 198, online platforms 26, 112, 127–129,
209–210, 211–212, 229 136
co-creation 284 see also social media
concept development 244 open innovation 95
employee-driven innovation 152 Opposable Mind, The (Martin, 2007)
ethnographic research 206, 207 177
idea generation 236, 238, 239 outcome focused innovation labs
innovation networks 136 137
innovation space 57–58 outcome strategies 11
innovation terminology 62 outcomes see results
insights 234 outsourcing 188–189
learning 273, 274 ownership 152
middle managers 306
paradigm innovation 56 P
prototyping 247 paradigm innovation 56
service journeys 231, 233 Parsons, Wayne 42
strategic competence development Parston, Greg 60
162–163 partnerships 73, 110, 129–130, 255
workshops 241 see also collaboration
Moggridge, Bill 175 pattern recognition 228–229
motivational measurement 268 performance management 164,
Mulgan, Geoff 109 276–277, 288–289
Myself and Other More Important see also innovation measurement
Matters (Handy, 2006) 305 performance measurement 267–
269
N see also innovation measurement
NABC model 156, 244–245 peripheral vision 100
NASA 78, 301 personas 229–231
National Audit Office (NAO), UK Pfeffer, Jeffrey 288–289
40, 92, 151, 153, 164 philanthropy 81–82
Nesta 134, 135–136, 187–188, 213 Philips 212
Netherlands 51, 126, 232–233, physical space 240–241
281–282 Pilloton, Emily 174
networks 136, 256–257 pilots 248–249
New Synthesis, A (Bourgon, 2011) planning 103–104, 103
60 policy innovation 223
new technology 14, 49–50, 112 political context 68–73
342
Index
political leadership 33, 299–302, see also societal problems; wicked

311–312 problems
political vision 52–53 public scrutiny 75–76
politicians 304 public sector employees 18
politics 16–17, 43, 118–119 public sector innovation
portfolio of innovation 101–102, barriers to 6, 16–21
102 competencies 160–161, 160
positional innovation 56, 73 definitions 39–40, 44–48, 44
potential for innovation 270–272 history 5–7
power to innovate 94 new approaches 10–11
prevention 82 new challenges 11–15
priorities for innovation 99–100 sources 94, 112–113
private sector triggers 48–53, 61
competition 70, 77 types 53–58, 54, 61
innovation labs 136–137 see also value of innovation
lead users 210 public sector organisations
objectives 72 expectations 69, 74–76
production 45 institutional surroundings 70–72
public-private innovation (PPI) objectives 72–73
115–119, 117 recruitment 161–162
success 59 resistance to innovation 6, 17–19
probing 207–208 public value 59, 317
problem solving 43–44 public-private innovation (PPI)
problems 115–119, 117
societal problems 9, 124 public-public collaboration
tame problems 41–42 110–114
wicked problems 9, 42–44, 223 public-third sector innovation
process innovation 54, 55 119–122
processes 155–157 “pull” incentives 252
see also co-creation; design “push” incentives 252
thinking: process; innovation
process Q
Procter and Gamble (P&G) 136, quantitative surveys 208
212, 258
product innovation 55 R
productivity 12, 59, 88, 155, 156, radical efficiency 8–9, 222,
278–279, 285–286 226–227, 259–262, 261, 287
professional empathy 192, 194–196 radical innovation 53, 54
professional expertise 161 “Radical Innovation in Local
professional identity 18 Government” (Frederica
professional networks 136, municipality, 2009) 97–98
256–257 Rambøll consultancy 304
project organisation 111 realisation 8
project scoping 224–225 see also execution
prototypes 246–248 recruitment 161–162, 188–189
“Public Innovation by Design” Reich, Robert B. 10
training course 173 relationships 182
public innovation labs see innovation reorganisation 147–148
labs research and development (R&D)
Public Innovator’s Playbook (Eggers 48–49
and Singh, 2009) 93 resilience 34–35
public management and results 60, 254–255, 282–285,
organisation 160 289–290
public problems 41–44
343
results-based management see versus strategic planning 103–

performance management 104, 103
retrospective reviews 206–207 strategic innovation units 137
risk 154–155 strategic reflexive innovation 95–96
risk finance 80–82, 85 strategy 88–89
Rittel, Horst 42 importance 91–93
roadshows 256 innovation strategy 89–90,
93–97, 94, 104
S coordination 99
sabotage 305 maturation 99
SAP 136 key concepts 89–91
savings 4, 222 strategic innovation 90, 97–102,
scaling 20–21, 251–258 105, 277
Scandinavia 69 versus strategic planning
schools 67, 79, 83 103–104, 103
Schumpeter, Joseph 39–40, 94, 131 and value 90
Service Canada 125 structure see capacity
service delivery 69, 72–73 Sunderland City Council, UK 171,
service experience 60, 279–282 178–179, 184, 233
service innovation 223 Sunstein, Cass 10
service journeys 184, 231–233, 246 super-departments 113–114
Shack and Slum Dwellers surveys 208
International (SDI) 82 Sustainable Development Goals
shadowing 205–206 (SDGs) 15, 52–53
Shirky, Clay 124 Sutton, Robert I. 288–289
shocks 14–15 Sweden 79, 286
Silicon Valley 79 synthesis 176, 178
silo structure 109 concept development 244–245
silo trap 110–111 idea generation 235–241
Singapore 128–129, 164, 168, 213 idea selection 242–244
Singh, Shalabh Kumar 93 workshops 241–242
Sitra 173 systemic shocks 14–15
slums 82 systems solutions 211–212
social innovation 119–122, 255
social media 70–71, 124–125, 214 T
social research 161 tame problems 41–42
societal problems 9, 124 Tapscott, Don 112, 213
see also wicked problems technology 5
solutions 43–44 digital government 122–129, 130
sources of innovation 94, 112–113 new technology 14, 49–50, 112
see also crowdsourcing see also social media
space 56–58, 57, 85–86, 240–241 temporary anonymity 239–240
sponsors 255–256 Ten Faces of Innovation, The (Kelley,
status quo 181–182 2005) 158
Stentoft, Jesper 125 Termansen, Annemette 2
Stockholm 79 Thaler, Richard 10
stopping rules 43–44 theory of change 91, 283–284,
stories 246 289–290
strategic competence development third sector 119–122
161–164, 167 Tidd, Joe 54, 56
strategic efforts 101–102 tools for innovation 26–27
strategic innovation 90, 97–102, top managers 33, 302–305, 312
105, 277 trade associations 256–257
training 62, 163, 173
344
Index
see also education V

transdisciplinary collaboration
160–161 value of innovation 47, 58–59, 61
transparency 78–79, 126 ‘bottom line’model 59–61, 59,
Tyrell, Nigel 70–71 275–276, 275, 286–288, 287,
292
U democracy 285–286
United Kingdom (UK) performance management
competence development 163 276–277, 288–289
crowdsourcing 213 productivity 278–279
Department for Education 67, results 282–285, 289–290
83, 142 service experience 279–282
Design Council 116–117, 163, and strategy 90
173, 187 value-based management 157–158
design thinking education Vejle, Denmark 200
187–188 venture finance 80–82
executive forums 113 visionaries 33, 299–302, 311–312
Government Digital Services visualisation 183–184, 229–233
(GDS) 162 voluntary sector see third sector
healthcare 116–117 VPS Innovation Action Plan
innovation incentives 164 (Victoria Public Service, 2010),
Innovation Nation White Paper 92 Australia 23–24, 127, 128, 163
innovation toolbox 26–27 W
Innovators Council 296
joint units 114 Wall Street Journal 172
performance management 277 Web 2.0 5
social media 70–71, 124 Webber, Melvin 42
Sunderland City Council 171, “whydeology” 181
184 wicked problems 9, 42–44, 223
super-departments 113–114 Wikinomics: How Mass Collaboration
third sector 121–122 Changes Everything (Tapscott and
top managers 303 Williams, 2006) 112
United States (US) Williams, Anthony D. 112, 213
co-production 200 Wilson, James 6
crowdsourcing 214 work, future of 148–150, 149–150,
employee-driven innovation 51 150
executive forums 113 workshops 208–210, 241–242
Idea Factory 128 Y
information sharing 286
innovation incentives 165, 168 Youth Villages 265–266, 276, 283,
innovation labs 24 288
innovation strategy 91, 93 Z
new technology 125, 126
partnerships 73 Zago 183, 247
performance management 277
political context 69
productivity 12
research and development (R&D)
48
risk 155
Unlocking Public Value (Cole and
Parston, 2006) 60
345

Leading Public Sector Innovation - Co-Creating For A Better Society

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LEADING PUBLIC SECTOR

Published online by Cambridge University Press

Second edition published in Great Britain in 2018 by

© Policy Press 2018

British Library Cataloguing in Publication Data

Library of Congress Cataloging-in-Publication Data

All rights reserved: no part of this publication may be reproduced, stored in a

Policy Press works to counter discrimination on grounds of gender, race,

Cover design by My Buemann, Danish Design Centre

Published online by Cambridge University Press

Published online by Cambridge University Press

one The innovation ecosystem 23

Part One: Consciousness

The value of public sector innovation 58

Part Two: Capacity

five Organising for innovation 107

six The rise of labs: prospects and pitfalls 131

seven People and culture 147

Part Three: Co-creation

nine Citizen involvement 191

ten Orchestrating co-creation 219

eleven Measuring to learn 265

Part Four: Courage

thirteen Epilogue: from decision making to future making 315

During my writing, I have noted that innovation in

So, this second edition of Leading Public Sector Innovation

and build the capacity of public organisations to invent solutions

to gain a broad view of public innovation and of the role of

It is an early and unusually sunny morning on Frederiksholms

the dominant culture, by technology, by markets, by political

Highlights from a global movement

• a shift from random innovation to a conscious and systematic

Executing these four shifts within government is the essence of

A brief history of public sector innovation

• Cases and practice

have also seen a growing number of awards and recognitions

point out in If We Can Put a Man on the Moon … Getting Big

Co-creating for a better society

engaging people from other public agencies and institutions,

it, is mainly generated by leveraging new (outside) perspectives

A century of wicked problems

However, new opportunities for addressing key societal

to truly embrace an outcome focus. From online tax services

A double innovation challenge

No one thus seems certain about what the characteristics of

• The productivity imperative

• Growing citizen expectations

2006). Many of them have leveraged new, clever models for

government effectively respond to the intensified media cycle

attention from public sector organisations. From the SARS

• Climate change, sustainability and the global goals

Not up to the job yet

• Paying a price for politics

among public sector organisations are not very high, and

the chief executive of Nesta, Geoff Mulgan, points out in The

of something new, sometimes even before they know what it is.

• Where’s the citizen?

• An orchestra without a conductor

Network, 2016; Bason, 2017). Many public sector organisations