1 The Factors Contributing towards Innovation in Public Sector Organisations Copyright © 2022. Taylor & Francis Group. All rights reserved. Introduction As a result of its increasing importance to organisational leaders, communities, governments and nations, innovation is an increasingly important concept, the rationale behind which is that change, reform and the creation of opportunities are essential for organisational, governmental and national survival, competitiveness, growth, value and even dominance. However, little consensus exists regarding what public sector innovation is, and to compound the issue further, there is a scarcity of management frameworks for informing public sector organisations about innovation processes (Bloch & Bugge, 2013; Parna & Tunzelmann, 2007; Salge & Vera, 2012; Walker, Jeanes & Rowlands, 2002). For these reasons, careful attention should be paid to what motivates or obstructs innovation in the government sector. While numerous studies have examined the factors contributing to innovation, the results of such research have often been vague and indefinite as there is a lack of agreement around any definition of ‘innovation’ or particular unit or tool for its measurement (Delbecq & Mills, 1985; Hage, 1999; Kimberley & Evanisko, 1981). Although the concept of innovation has had various interpretations and paradigmatic approaches, a common understanding throughout the literature is that innovation principally relies upon competence and leadership, as opposed to creativity or invention, which depend upon endeavour and experimentation (Chapman, 2006). Given the vagueness surrounding public sector innovation and the dearth of management tools for understanding and fostering innovation processes in public sector organisations, the conceptual framework developed in this study seeks to offer a theoretical underpinning that will help individuals and organisations better understand the forces at work in innovation in the government sector. Literature Review The more complex a given innovation, the greater the barriers a workforce faces in its implementation (Torugsa & Arundel, 2016). In this regard, Torugsa DOI: 10.4324/9781003191131-2 Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. The Factors Contributing to Innovation 23 and Arundel (2016) argue that, in comparison to a simple innovation, public sector employees encounter increasing obstacles when attempting to realise complex innovations, which while being challenging to execute in highly centralised organisations are more valuable than simple innovations. With this in mind,Torugsa and Arundel (2016) and Moussa (2021a) suggest that a culture of complex innovations in public sector employers can be encouraged through: a b c Developing management competencies. Avoiding barriers through the recognition of sources of innovation. Developing conditions to motivate all individuals in the organisation to innovate. Such a situation necessitates a system of incentives, in addition to ensuring the resources required to invest in innovations. Further, the culture of a given country will go a long way in determining how innovations will develop, for example, new ideas and processes instead of improvements to existing systems. Copyright © 2022. Taylor & Francis Group. All rights reserved. Barriers to Organisational Innovation Given that a significant number of barriers can hinder innovation, especially in the public sector, this section will examine the barriers that exist to the creation and development of a culture of innovation in the public sector. Some bureaucracies depend upon old organisational models to determine their modes of communication, compliance, order and control, rather than taking on board novel, creative organisational models that seek to cultivate commitment and improve communication amongst organisational members (Moussa, 2021b). However, effective and productive innovation is unable to thrive in traditional bureaucratic models (Golembiewski & Vigoda, 2000); thus organisations following such models are frequently inefficient and stifle efforts that could stimulate innovation. In a similar vein, encouraging public sector innovation requires the acceptance of processes that help to dismantle classic, bureaucratic models (Borins, 1998, 2000a, 2000b, 2001; Vigoda-Gadot et al., 2008). According to Mulgan and Albury (2003), there are several barriers that could potentially hinder processes and systems of innovation in public sector organisations in the UK: (a) delivery pressures and administrative burdens – in the public sector, service managers are generally understood as being unable to conceptualise innovations or do things differently with regard to service delivery since the majority of their time is consumed with responding to organisational pressures (Matthews, 2009); (b) poor rewards or incentives for innovating – governments continually ignore the necessity to develop systems of incentives for the promotion of public sector innovation; and (c) constraining cultures or organisational arrangements despite technologies being available – individuals and organisations may oppose rapid or wide-sweeping changes that run counter to their organisational cultures. Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. 24 The Factors Contributing to Innovation Similarly, Borins (2001) and Mulgan and Albury (2003) pinpoint significant barriers responsible for hindering processes of innovation, albeit not exclusively in the public sector: pressures regarding service delivery and administrative burdens (e.g. demanding workloads and service delivery requirements resulting in minimising the potential for innovation) and obstacles within bureaucratic organisations (e.g. attitudes, behaviours and activities that run counter to processes of innovation). Further barriers are recognised by Vigoda-Gadot (2003) as short-term budgets and planning; a lack of rewards and incentives for innovation; a culture of risk aversion; deficiencies in risk and change management; and an inability to terminate poorly performing programmes or organisations. Taking a different approach, Koch and Hauknes (2005) identify barriers such as the inherent tension between organising and innovating by taking an organisation’s size into account. Manimala, Jose and Thomas (2006), in examining large public sector organisations in India, identify a number of barriers to innovation: A dearth of systems of analysis, a lack of initiatives, a failure to acknowledge innovations in non-primary issues, poor understandings of change management processes, informal team building, a lack of emphasis on dissemination and commercialisation, deficient systems of rewards and recognition, inefficient procedures, poor preservation of documentation, a lack of access to the latest technologies, vague strategies on linking innovations with career development, unrecognised contributions by support functions, little support from bosses or supervisors, inadequate systems for championing and managing ideas and a lack of facilities for pilot studies. This compelling evidence informs our first proposition: Proposition 1: Key potential barriers, such as short-term budgets, inadequate problem-solving skills and opposition to change have a negative impact on an organisation’s ability to innovate in the public sector. Copyright © 2022. Taylor & Francis Group. All rights reserved. Understanding Notions of Leadership Researchers have utilised various approaches and paradigms to examine the impact of leadership on innovation. Burns and Stalker (1961) published their ground-breaking work 50 years ago, which sought to integrate the concepts of innovation and leadership. Since then, it has become commonly accepted that leaders are a critical factor in promoting innovation and creativity (e.g. Montes, Moreno & Garcia-Morales, 2005; Mumford, et al., 2002).Various studies highlight organisational leadership as an essential factor for positive organisational outcomes and that there is a direct association between leadership and organisational performance at the individual, team and collective levels (Bass, 2008; Clark, Murphy & Singer, 2014; Kaiser, Hogan & Craig, 2008; Lussier & Achua, 2013; McDermott, Kidney & Flood, 2011; Sarros, 2009; Yukl, 2012). Vroom and Jago (2007) define innovation leaders as those motivating others towards collaborative work to achieve new, noteworthy results. Appreciating employees’ work values ethic (WVE) can help augment their productivity and commitment (Muenjohn & McMurray, 2016). In addition, leaders set priorities and shape Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. The Factors Contributing to Innovation 25 decision-making and have the authority and dedication that can improve organisational performance. With all this in mind, the leadership behaviours enhancing individuals’ innovative behaviour and creativity have thus far been unidentified, making them an exciting locus of research (Khalili, Muenjohn & McMurray, 2015). ‘Design leadership’ is understood to play an important role in innovative behaviour; however, it is still a relatively novel, highly debated concept. According to Muenjohn and McMurray (2017), WVE and ‘design leadership’ have a significant effect on leadership behaviour and the four dimensions of workplace innovation, respectively (McMurray & Dorai, 2003). In a survey of 154 teams working in Chinese and Indonesian enterprises,Yoshida, et al. (2014) found that servant leadership enhances employee creativity and team innovation through encouraging identification with the leader. Through empirically examining the influence of leadership style and innovation in American and Japanese research-intensive sectors, Osborn and Marion (2009) discovered that transformational leadership is significantly associated with lower innovation. Whereas Cheung and Wong (2011) analysing different service sectors in Hong Kong found a positive correlation between transformational leadership and employee creativity, in addition to showing that such a positive relationship is greater when a higher degree of leader encouragement exists. In a survey of German research and development (R&D) employees working in high-tech medical engineering, electronics, semiconductor, software, chemistry or biology industries, Eisenbeiss and Boerner (2013) observed that employees show more creativity under transformational leadership. Finally, in a cross-cultural study of 951 organisations in different industries across eight countries, Engelen, et al. (2014) highlight that transformational leadership at the organisational level positively influences innovation. The identified studies inform the development of our second proposition: Copyright © 2022. Taylor & Francis Group. All rights reserved. Proposition 2: Key leadership behaviours, such as fostering self-awareness, effective coordination and decisiveness, have a positive impact on an organisation’s ability to innovate in the public sector. Organisations’ Climates for Promoting Innovation There is a plethora of reasons why organisations struggle to build the capacity to be innovative. Therefore, a major challenge for practitioners is the development of systems, processes and environments for fostering both innovation and creativity. In this sense, developing a supportive climate for enhancing the innovative behaviour of employees is a necessity. When employees ‘feel good’ about their organisation’s environment, they perform their tasks to a higher level, and, in turn, leaders anticipate that they will display innovative behaviours and creativity (Tan, Smyrnios & Xiong, 2014). The literature conceptualises organisational climate in various ways, one of which is focusing on individuals’ perceptions regarding organisational characteristics; in this regard, Schneider (1990) interprets organisational climate as employees’ perceptions of events, Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. Copyright © 2022. Taylor & Francis Group. All rights reserved. 26 The Factors Contributing to Innovation practices and procedures, in addition to the types of behaviours that are rewarded, encouraged and anticipated in an organisation. Another school of thought perceives organisational climate as an organisation’s objective property or attribute, wherein organisational life exists independently of organisational members’ perceptions (Ekvall, 1996). Climate has also been construed with regard to its impact on organisational (e.g. problem-solving, decision-making and communication) and psychological processes (e.g. committing, creating and motivating) (Ekvall & Ryhammer, 1999). In addition, research on organisational climate has shifted focus from a general conceptualisation to different aspects of organisational climate for different purposes, e.g. a climate for safety (Flin, et al., 2000), for service (De Jong, De Ruyter & Lemmink, 2004), initiative (Baer & Frese, 2003) or innovation (Ekvall, 1996; Hunter, Bedell & Mumford, 2007; Scott & Bruce, 1994). Depending on their priorities, organisations may have different climates within their midst, in that one organisation may have a service climate in the service division, an innovation climate in the R&D department and a shared overall climate of organisational citizenship and behaviour (Schneider, Gunnarson & Niles-Jolly, 1994). Consequently, a number of climates have emerged for evaluating the different dimensions supporting innovation and creativity (Amabile, et al., 1996; Ekvall, 1996; Isaken, et al., 2001; Siegel & Kaemmerer, 1978). According to Bamel, Budhwar and Bamel (2013), a significant amount of research into organisational climate is empirical and quantitative, such as Von Treuer and McMurray (2012), who adopt a social constructionist (objectivist) research design, or Hassan and Rohrbaugh (2012), who utilise a general psychological climate (subjectivist) approach. Glisson and James (2002) and Reichers and Schneider (1990) argue that organisational climate is observable through organisational culture, while Schein (2004) understands organisational climate as only a small part of organisational culture, one which may be modified through adjusting certain practices and processes. Such ‘local micro-climates’ may affect behavioural characteristics, knowledge-sharing and workplace innovation (Moffett, McAdam & Parkinson, 2003;Van den Hooff & de Ridder, 2004;Von Treuer & McMurray, 2012). Bamel, Budhwar and Bamel (2013) argue that while organisational climate is limited to the workgroup, organisational culture may be connected to workgroup, departmental or organisational levels. According to Ren and Zhang (2015), challenge stressors are positively associated with idea generation, and hindrance stressors are negatively associated with idea generation, suggesting that the influence of stressors on idea generation could be better understood if we analyse whether the stressor is a challenge or a hindrance. In addition, a climate of organisational innovation has a positive impact on both idea generation and implementation, inferring that a climate of organisational innovation is significant to innovative behaviours, particularly in the implementation stage (Ren & Zhang, 2015). However, while a climate of organisational innovation is beneficial for innovative behaviour, the outcomes of such a climate of innovation may depend on hindrance stressor levels. Thus, the present study recommends that employers Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. The Factors Contributing to Innovation 27 add more challenges to employees’ tasks and eliminate or remove hindrance stressors so as to encourage the creation and development of innovative ideas. Further, practitioners need to develop climates that cultivate innovation within organisational structures and minimise hindrance stressors. This literature informs our third and final proposition: Leadership Behaviour /Skills Copyright © 2022. Taylor & Francis Group. All rights reserved. Organisation’s Climate Issues Barriers ❖ Foster Greater Self-Awareness and SelfDevelopment. ❖ Realistic; Optimistic; Reliable; Persistent; Impartial; Considerate. ❖ Integrity/Honesty; Problem-Solving; DecisionMaking; Commitment; Support; Inspiring Others. ❖ Effective Coordination; Persuasive Communication; Resilience; Courtesy and Respect; Strategic Thinking; Conflict Management. ❖ Prudence; Courage; Delegation/Empowerment; Forward Thinking; Decisiveness. ❖ Psycho-Social Conditions. ❖ Physical Conditions and Exposure. ❖ Work Wellbeing Practice. ❖ Productivity. Workplace Innovation ❖ Short-Term Budgets & Planning Issues; Lack of Training & Coaching; Inaccurate Organisational Structure. ❖ Lack of Problem-Solving Skills and Dialogue; Severe Rules and Regulations; Deficiencies in System Development. ❖ Lack of Managing Conflicts; Feelings of Biases and Mistrust; Aggressive Attitudes or Activities; Heavy Workloads. ❖ Old Organisational Models; Ineffective Leadership Style. ❖ Administrative Burdens; Inadequate Rewards and Incentives; Lack of Resources; Cultural Differences. ❖ Resistance to Change; Top-Down Dictates; Reinforcing a Culture of Inferiority; Workplace Politics. ❖ Lack of Risk Management Competencies; Change Management. Figure 1.1 Conceptual Model. Source: Authors. Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. 28 The Factors Contributing to Innovation Proposition 3: Positive organisational climate, such as physical conditions, psycho-social conditions and well-being practices, has a positive impact on an organisation’s ability to innovate in the public sector. As shown in Figure 1.1, the authors present the antecedents of innovation at different levels. Conclusion As a result of serious global competition, COVID-19 and the rapid development of technology, public sector organisations are increasingly viewing the development of new ideas and innovations as both inevitable and of utmost importance.This in-depth literature review was carried out to better understand how to foster innovation in public sector organisations effectively. Rather than offering any straightforward answers, particularly with regard to encouraging a culture of innovation in the public sector (Management Advisory Committee, 2010), administrators and decision-makers should make themselves aware of the many complications, restrictions and barriers outlined in this chapter, since a better understanding of ways to augment, measure and encourage innovation in the public sector would benefit both governments and nations as a whole. Copyright © 2022. Taylor & Francis Group. All rights reserved. References Amabile, T.M., Conti, R., Coon, H., Lazenby, J., & Herron, M. (1996). “Assessing the Work Environment for Creativity”. Academy of Management Journal, 39(5), pp. 1154–1184. Baer, M., & Frese, M. (2003). “Innovation Is Not Enough: Climates for Initiative and Psychological Safety, Process Innovations, and Firm Performance”. Journal of Organisational Behavior, 24(1), pp. 45–68. Bamel, U.K., Budhwar, P., & Bamel, N. (2013). “Revisiting Organisational Climate: Conceptualization, Interpretation and Application”. Paper Presented to 3rd Biennial Conference of the Indian Academy of Management (IAM), Indian Institute of Management, Ahmedabad (IIMA), 12–14 December, 2013. Retrieved from http://vslir.iima. ac.in:8080/xmlui/handle/11718/11533, accessed January 5, 2017. Bass, B.M. (2008). The Bass Handbook of Leadership: Theory, Research and Managerial Application (4th ed.). New York, NY: The Free Press. Bloch, C., & Bugge, M.M. (2013). “Public Sector Innovation: From Theory to Measurement”. Structural Change and Economic Dynamics, 27(null), pp. 133–145. Borins, S. (1998). Innovation with Integrity.Washington, DC: Georgetown University Press. Borins, S. (2000a). “Loose Cannons and Rule Breakers or Enterprising Leaders? Some Evidence about Innovative Managers”. Public Administration Review, 60(6), pp. 498–507. Borins, S. (2000b). “What Border? Public Management Innovation in the United States and Canada”. Journal of Policy Analysis and Management, 19(1), pp. 46–74. Borins, S. (2001). “The Challenge of Innovating in Government. The Pricewaterhouse Coopers Endowment for the Business of Government”. Retrieved from www.strate gie- cdi.ro/ spice/ admin/ UserFi les/ File/ CA%20The%20Ch alle nge%20of%20inn ovating%20in%20government.pdf, accessed February 20, 2017. Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. Copyright © 2022. Taylor & Francis Group. All rights reserved. The Factors Contributing to Innovation 29 Burns, T., & Stalker, G.M. (1961). The Management of Innovation. London: Tavistock. Chapman, M. (2006). “Building an Innovative Organization: Consistent Business and Technology Integration”. Strategy and Leadership, 34(4), pp. 32–38. Cheung, M.F.Y., & Wong, C.S. (2011). “Transformational Leadership, Leader Support, and Employee Creativity”. Leadership & Organization Development Journal, 32(7), pp. 656–672. Clark, J.R., Murphy, C., & Singer, S.J. (2014). “When Do Leaders Matter? Ownership, Governance and the Influence of CEOs on Firm Performance”. The Leadership Quarterly, 25(2), pp. 358–372. De Jong, A., De Ruyter, K., & Lemmink, J. (2004). “Antecedents and Consequences of the Service Climate in Boundary-Spanning Self-Managing Service Teams”. Journal of Marketing, 68, pp. 18–34. Delbecq, A.L., & Mills, P.K. (1985). “Managerial Practices that Enhance Innovation”. Organizational Dynamics, 14(1), pp. 24–34. Eisenbeiss, S.A., & Boerner, S. (2013). “A Double-Edged Sword: Transformational Leadership and Individual Creativity”. British Journal of Management, 24(1), pp. 54–68. Ekvall, G. (1996). “Organizational Climate for Creativity and Innovation”. 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Mackenzie (eds.), Current Topics in Management,Vol. 5. (pp. 263–280). Greenwich, CT: JAI Press. Hage, J.T. (1999). “Organisational Innovation and Organisational Change”. Annual Review of Sociology, 25, pp. 597–622. Hassan, S., & Rohrbaugh, J. (2012). “Variability in the Organisational Climate of Government Offices and Affective Organisational Commitment”. Public Management Review, 14(5), pp. 563–584. Hunter, S.T., Bedell, K.E., & Mumford, M.D. (2007). “Climate for Creativity: A Quantitative Review”. Creativity Research Journal, 19(1), pp. 69–90. Isaksen, S.G., Lauer, K.J., Ekvall, G., & Britz, A. (2001). “Perceptions of the Best and Worst Climates for Creativity: Preliminary Validation Evidence for the Situational Outlook Questionnaire”. Creativity Research Journal, 13(2), pp. 171–184. Kaiser, R.B., Hogan, R., & Craig, S.B. (2008).“Leadership and the Fate of Organizations”. American Psychologist, 63(2), pp. 96–110. Khalili, A., Muenjohn, N., & McMurray, A. 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Cham, London: Palgrave Macmillan. Moussa, M. (2021b).“Barriers on Innovation in Australian Public Sector Organisations”. In A. McMurray, N. Muenjohn & C. Weerakoon (eds.), The Palgrave Handbook of Workplace Innovation (pp. 179–196). Cham, London: Palgrave Macmillan. Muenjohn, N., & McMurray, A. (2016). “The Impact of Leadership on Workplace Innovation in Thai and Vietnamese SMES”. The Journal of Developing Areas, 50(5), pp. 479–486. Special Issue on Kuala Lumpur Conference held in November 2015. Muenjohn, N., & McMurray, A. (2017). “Design Leadership, Work Values Ethic and Workplace Innovation: An Investigation of SMEs in Thailand and Vietnam”. Asia Pacific Business Review, 23(2), pp. 192–204. Mulgan, G., & Albury, D. (2003). Innovation in the Public Sector. Strategy Unit, Cabinet Office, October 2003. Retrieved from www.sba.oakland.edu/faculty/mathieson/ mis 524/ resour ces/ readi ngs/ inn ovat ion/ innovati on_ i n_ th e_ pu blic _ sec tor.pdf, accessed February 21, 2017. 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Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39. 32 The Factors Contributing to Innovation Copyright © 2022. Taylor & Francis Group. All rights reserved. Walker, R.M., Jeanes, E., & Rowlands, R. (2002). “Measuring Innovation: Applying the Literature-Based Innovation Output Indicator to Public Services”. Public Administration, 80(1), pp. 201–214. Yoshida, D.T., Sendjaya, S., Hirst, G., & Cooper, B. (2014). “Does Servant Leadership Foster Creativity and Innovation? A Multi-Level Mediation Study of Identification and Prototypicality”. Journal of Business Research, 67(7), pp. 1395–1404. Yukl, G.A. (2012). Leadership in Organizations (8th ed.). Boston: Pearson Education Limited. Moussa, Mahmoud, et al. Innovation and Leadership in the Public Sector : The Australian Experience, Taylor & Francis Group, 2022. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/flinders/detail.action?docID=7071043. Created from flinders on 2022-10-06 01:38:39.