Innovation in public sector – Leadership for cultural change

Innovation is mandated in all parts and at all levels of the public sector. A culture of innovation is needed, but how is it cultivated and what role does leadership play?

Av Linn Meidell Dybdahl, BI

The public sector urgently needs innovation to meet tomorrow’s expectations. More and more demanding citizens ask for efficient and user-friendly services, preferably delivered yesterday. Public sector innovation strategies are being written all over the world and a lot of people have learned the lingo of innovation. Yet, innovation is more than theory, innovation is also action and implementation. 

Thomas Hoholm is Head of Department and Associate Professor at the Department of Strategy and Entrepreneurship at the BI Norwegian Business School. He shares the latest research and relevant insights based on his long experience with healthcare management education. 

Acknowledging the challenge 

– Let’s get one thing clear, innovation is not easy. By definition, innovation is uncertain and controversial. In the public sector, there is also an inescapable tension between bureaucracy and expertise on the one hand and innovation and change on the other. 

– When we practice innovation, we are in fact destroying and recombining knowledge and practices. This creates anxiety, as many people fear not mastering innovation or not having a role in its outcome. This requires change management and good relational practice. Furthermore, public sector innovation often includes redistributing tasks and rewards, explains Hoholm. 

With innovation comes the risk of failure, disturbance and hard work, but if the result contributes to transforming the public sector to answer the societal needs of tomorrow, isn’t it worth it? 

Opening a crack for change 

But is innovation possible when everyone is busy handling day to day operations, serving the current needs of the public? Over the last 6 years, BI Norwegian Business School has trained more than 1000 healthcare managers through an innovation and leadership programme. 

– All these managers say they lack the time for innovation, and many lack backing from their managers. They feel that they neither have the resources needed nor the 

innovation eager employees they need, says Hoholm who has been teaching the programme from the start, supervising the participants when they carry out applied innovation projects at work. 

However, during the programme, Hoholm has experienced that the very same leaders realise that there actually is more room for action and support for innovation than they originally believed. It is possible to train people and change the culture of organizations towards being more innovationoriented. 

The foundations of innovation culture 

Hoholm argues that innovation culture is an oxymoron (self-contradiction), in that cultures represent, rather stable sets of values, artefacts and practices. They are changing very slowly, and therefore an innovation culture is not easily maintained. 

Still, there may be degrees of innovation culture, identified by three different characteristics:

– First, innovation culture requires appropriate tools, interdisciplinary skills, incentives, and keeping people accountable for contributing to innovation. Second, what Amy Edmondson coined ‘psychological safety’ is necessary. Unless people feel able to raise their voice without fear of social punishments, it becomes hard to test new things, admit and learn from failure, or criticize ineffective solutions. Third, innovation-oriented cultures are often stimulated by ‘boundary workers’, people spanning and communicating across boundaries, professional, organizational or sectoral, says Hoholm. 

Creating change by starting small 

Hoholm does not believe in grand scale change programs where the organisation gathers to talk about innovation and decide to become innovative collectively. Instead, he calls for low-risk steps by learning and practicing the tools and skills needed – then the culture will follow. 

– Culture is shaped through action – by doing things differently, says Hoholm who is also involved in D-box, National Center for Transforming Public Services, a recent partnership initiated by Design and Architecture Norway, AHO and BI. 

So, one step leads to another. But when innovation processes catch the wind, is the whole organisation ready to go onboard and sail the ship of change? 

Beware of hindrances from the top 

The question is: Do people in top management provide support for innovation? 

Hoholm has a real life story to share. 

– Two employees were asked to take on an innovation project. After some frustrating months without much progress, they gradually understood that the top management had other agendas, and were therefore holding the project hostage, to buy time in order to make difficult decisions. 

For the top management to commit fully to one project, they may need to abandon other projects. These are typically politicized processes, largely invisible to project or middle managers. Hoholm thinks these things happen quite frequently, both in the private and in the public sector. 

– Employees are asked to take innovative action, formalize this in terms of routines and systems, in order to mobilize necessary decisions and resources for realizing the innovation. Their managers may either give them their full support or hold back because they maintain their own choices. When aware, it is easy to understand: The top management has to balance portfolios of activities, while innovators often have just this one project they need to focus on, says Hoholm. 

More openness about these things may produce more productive frictions and discussions, which may be good for all parties. 

Leading fearless organizations 

If innovation culture is found in the three characteristics stated above, Hoholm argues that leadership needs to demonstrate three qualities to nurture innovation culture. 

– First, leaders need to be more transparent about issues of power, openly presenting more of their priorities and decision making. Second, they need to be fully trustworthy when it comes to backing trial and error learning. It is easy to encourage innovation in good times, the real test is how they support employees and facilitate open learning after a fiasco. Third, good innovation leaders are humble and create time and arenas for collective reflection. 

Not all innovation projects should be realized, but they should always lead to valuable collective learning, Hoholm points out. 

Thomas Hoholm’s reading list for eager innovators:

The first source is an accessible and practitioner-oriented book, the second and third are research papers in top scientific journals. 

Edmondson, A. C. (2018). The fearless organization: Creating psychological safety in the workplace for learning, innovation, and growth. John Wiley & Sons. 

Langley, A., Lindberg, K., Mørk, B. E., Nicolini, D., Raviola, E., & Walter, L. (2019). Boundary work among groups, occupations, and organizations: From cartography to process. Academy of Management Annals, 13(2), 704-736. 

Criscuolo, P., Salter, A., & Ter Wal, A. L. (2014). Going underground: Bootlegging and individual innovative performance. Organization Science, 25(5), 1287-1305. 

Foto: BI.