Establishing an innovation programme in the Government Context

Establishing and Innovation ProgrammeIn the Government ContextAn Innovation Catalyst™ SeminarPrepared and Presented by Marcus TarrantManaging DirectorMission HQ Pty. Ltd. ATF the Innovate Trust

Contact DetailsMarcus TarrantManaging DirectorMission HQ Pty. Ltd. ATF the Innovate TrustMarcus.tarrant@missionhq.com.au+61 3 9005 9710www.missionhq.com.au© Mission HQ Pty. Ltd. All Rights Reserved2

Copyright ©2010 Mission HQ. The format, structure and communication technique utilised in this document are the intellectual property of Mission HQ Pty. Ltd.This document is strictly classified as “Commercial in Confidence” and intended only for recipients expressly authorised by Mission HQ. Any modification or distribution under altered expression, by any means, in its entirety or in parts, to any person without written approval from Mission HQ is expressly prohibited. Natural Persons or bodies corporate may not copy, retransmit, distribute, publish or otherwise transfer any copyrighted material to third parties or contractors without the express permission of Mission HQ.This document is intended to reflect MISSION HQ’s high-level overview of the Innovation process. It does not constitute formal professional advice or a recommendation to potential licensors, tax advisors, inventors or other third parties as to a course of action in respect of the processes addressed, and should not be relied on as such. All care is taken in the preparation of this document but MISSION HQ bears no responsibility as to the contents of this document and disclaims any liability with respect to its use or misuse.Intellectual Property & Disclaimer

Seminar Agenda© Mission HQ Pty. Ltd. All Rights Reserved4

Some inspiration Innovation is ugly, awkward, clunky, difficult and unknown. It lurks in garages, labs, fields, offices , cafes, pubs, the back of envelopes and around kitchen tables. Innovation is not about answers, but about finding the right problem. An innovation journey will take you through many loops, dead ends, and stale mates. It will force decisions you would rather not make. Innovation is a journey that changes both the destination and the traveller. Where will your journey begin? By Marcus Tarrant© Mission HQ Pty. Ltd. All Rights Reserved5

About Mission HQ Pty. Ltd.© Mission HQ Pty. Ltd. All Rights Reserved6Some recent past clients of Mission HQ and the team:

Mission HQ OverviewThe team have undertaken the following projectsFederal and State GovernmentDepartment of Defence (DSTO) – Technology Transfer Advisory GroupDepartment of Industry and Resources (WA) – Investor Ready Programme Design and Opportunity Evaluation FrameworkDepartment of Land ‘Landgate’ (WA) – Innovation programme design, and commercial engagement programme (Business Associations), technology commercialisation programmeCSIRO – IP management processNICTA – Audinate Capital Raising 4.2mCRC’sCRC-ACS, CRC for Polymers, Dairy CRCVC’sInnovation Capital, Starfish Ventures – Austhink, Audinate, Ceram Polymerik etc.

How can we help?Innovation programme reviewInnovation training and workshopsIdeation sessionsInnovation process design and integrationOpportunity assessment frameworks© Mission HQ Pty. Ltd. All Rights Reserved8

Quote`“There is no sausage crank for innovation, but it’s possible to increase the odds of a ‘eureka!’ moment by assembling the right ingredients”. By Gary Hameleconomic growth and social development are the result of invention and innovation, i.e. the result of systematically applied knowledge.© Mission HQ Pty. Ltd. All Rights Reserved9

Innovation in the public sectorInnovation in public services is very important, but unfortunately receives little study.Most research and analysis into innovation is at a policy facilitation level or focused on the private sector© Mission HQ Pty. Ltd. All Rights Reserved10

What is innovation?Mini workshop – Creating an innovation mood board.© Mission HQ Pty. Ltd. All Rights Reserved11

What is an innovation ProgrammeMini workshop – What does an innovation programme mean to us?© Mission HQ Pty. Ltd. All Rights Reserved12

Some more ideas on innovation© Mission HQ Pty. Ltd. All Rights Reserved13

Some macro drivers in public sector innovationPolitical EnvironmentChanging public needs and modes of operationChanging policy , regulation and compliance requirementsReduced budget allocationNew technologiesPrivatisation of government services© Mission HQ Pty. Ltd. All Rights Reserved14

A new perspective on Innovation© Mission HQ Pty. Ltd. All Rights Reserved15

You’re already doing it!© Mission HQ Pty. Ltd. All Rights Reserved16BAUProjects

Our dynamic innovation model© Mission HQ Pty. Ltd. All Rights Reserved17BAUEnviron.StrategyProgrammesProjects

Understanding Innovation© Mission HQ Pty. Ltd. All Rights Reserved18

Breaking down the innovation models© Mission HQ Pty. Ltd. All Rights Reserved19

Workshop - Models of Innovation© Mission HQ Pty. Ltd. All Rights Reserved20Open InnovationClosed Innovation

Innovation Programme DesignThe Innovation Hexagon™© Mission HQ Pty. Ltd. All Rights Reserved23

The Innovation Hexagon™© Mission HQ Pty. Ltd. All Rights Reserved242. Process1. StructureInnovation ProgrammeDesign6. Skills3. Information5. Technology4. Culture

1. Structuring for InnovationIncentivesOrg StructureProgramme ManagementBudget© Mission HQ Pty. Ltd. All Rights Reserved25

1.A. IncentivesIncentives can be complex in government environments:Numerous human resources issuesBudgetary issuesUnions and impact of rewarding individualsTry to be creative:A letter from the director rewarding outstanding performanceInvest in the idea, but make it publicPublic recognition and support of innovative ideasOffer more time to spend on innovative projectsSmall Gifts (Movie and dinner tickets)Create competitionsAttendance at conferences© Mission HQ Pty. Ltd. All Rights Reserved26

1.B. Organisational StructureBreak down silo’sEnable cross functional and cross level teamsAllocate time (Innovation doesn’t just happen)Get people from remote locations togetherHold offsite sessions to remove organisational constraints© Mission HQ Pty. Ltd. All Rights Reserved27

1.C Programme ManagementProgramme management ties your functions together.A programme is the level at which benefits accrue.© Mission HQ Pty. Ltd. All Rights Reserved28

1.D. BudgetA great place to start is by centralising a project budgetBusiness UnitSiteDepartment levelSelling innovation as something new is hard. The facts are that innovation is already a part of what you do.All you are looking to do is give it a name and some support.© Mission HQ Pty. Ltd. All Rights Reserved29

2. Process© Mission HQ Pty. Ltd. All Rights Reserved30Develop Vision and StrategyOperational ProcessesDefine business concept and long term visionDevelop business strategyDevelop long term visionDevelop & Manage Products & ServicesManage product and service portfolioDevelop products and servicesMarket & Sell Products & ServicesUnderstand markets & customersDevelop go to market approachDevelop sales strategyDevelop & manage marketing plansDevelop & manage sales plansDeliver products & servicesPlan for and acquire necessary resourcesProcure materials and servicesProduce/Manufacture/Deliver productDeliver service to customerManage logistics and warehousingManage Customer ServiceDevelop customer care/customer service strategyPlan and manage customer service operations Measure and evaluate customer service operationsDevelop & Manage Human CapitalManage Information Tech.Manage Financial ResourcesProgram & Portfolio managementManage knowledge & improvementManage External relationshipsSupport ProcessesManage OH&SDevelop & manage HRManage informationPerform planning & mgmt acct.Maintain project/ program methodologyDetermine environmentBuild Stakeholder relationsiposCreate & manage organisational performance metricsRecruit, source & select employeesIT Customer relationshipsPerform revenue accountingDevelop OH&S ProgrammeManage PortfolioManage gov.& ind. relationshipsBenchmark performance & manage changeDevelop & Counsel Continuity and RiskPerform general acct. & reportingTrain & educate employeesManage board relationsManage ProgrammesReward & retain employeesDevelop IT solutionsManage fixed assets & proejctsMonitor OH&S ProgrammeDevelop enterprise wide knowledge managementManage legal & ethical issuesRe-deploy and retire employeesDeploy IT solutionsProcess PayrollEnsure complianceManage Projects & resource allocationManage InnovationManage Public Relations programManage Employee info.Support IT services.Process payables & expenses.Manage remediation

2. Sample innovation process: The Stage Gate© Mission HQ Pty. Ltd. All Rights Reserved31

2. Process Integration PointsPrince 2PRINCE (which stands for Projects in Controlled Environments) was first developed by the UK government in 1989 as the standard approach to IT project management for central government. PRINCE2 has been widely adopted and adapted by both the public and private sectors and is now the UK"s de facto standard for project management. © Mission HQ Pty. Ltd. All Rights Reserved32

2. Process Integration Points (Cont.)© Mission HQ Pty. Ltd. All Rights Reserved33

3. Innovation InformationWho are our customers?What do they think of what we do?What else could we do for them?Internal K BaseWater CoolerIntranet© Mission HQ Pty. Ltd. All Rights Reserved34

4. Innovation CultureMeaningful work understanding how each person’s activity fits with the overall strategy and goals.Risk taking culture tolerance of failure as a pathway to learningCustomer orientation seeking to deliver value rather than just deliver.Agile decision making nothing kills a culture of innovation faster than slow decisions. Maintaining momentum is keyOrganisational intelligence having the ability to integrate requirements from a number of sourcesOpen communication innovation often stems from cross functional collaborationEmpowerment Providing a level of independence in decision makingPlanning Understanding and working with resource constraintsLearning organisation the share and capture of new knowledge and encoding of existing knowledge.Books© Mission HQ Pty. Ltd. All Rights Reserved35

4. Innovation CultureSome Crowd-sourced thoughtsCreate diversitycompelling need | relevance;Innovation drives culture (opposite to: culture drivesinnovation)Foundation, risk aversionIntangible, language key determinantFearful cultures crush innovationWhat goes on when management is not looking?Ability to make mistakesHow do you react to failures?Relaxed environment - Physical environment© Mission HQ Pty. Ltd. All Rights Reserved36

4. Innovation CultureMore Crowd-sourced thoughtsInnovation and risk taking – willing to experiment, take risks, encourage innovationOutcome orientation – oriented to results vs oriented to processPeople orientation – degree of value and respect forpeople. Are people considered unique talents, or is an engineer an engineerIndividual vs Team orientation – are individuals most highly noted, or are collective effortsAggressiveness -- taking action, dealing with conflictStability – openness to change© Mission HQ Pty. Ltd. All Rights Reserved37

5. TechnologyWhat support tools do we have?IntranetInnovation PortalState government innovation resourcesFederal innovation resourcesThe webSoftware programmes?© Mission HQ Pty. Ltd. All Rights Reserved38

6. SkillsWhat training resources do we have:Attendance at conferences and eventsOnsite bespoke trainingAccess to reading materials (online subscriptions)Books on innovation (The Innovation Library)Internal blogs on innovation (Intranet)Postings and articles onlinePower users© Mission HQ Pty. Ltd. All Rights Reserved43

Where to focus (Cont.)A formal proposal evaluation process that involves all relevant functionsEscalation mechanisms to defend rejected ideas, sending them to the innovation leaderCross functional sponsors assigned to each ideaIdea tracking from inception to implementationProcess discipline and continuous visibility of idea sharing statusSupplier reward system to ensure suppliers are fairly rewarded for ideas that contribute to sustainable business success.© Mission HQ Pty. Ltd. All Rights Reserved46

Where not to focusWrong Motivation. Disgruntled employees looking for a way to vent their issues.Lack of Training. Don't’ assume that employees know how to generate innovative ideas.Incremental Innovation. Employees tend to only generate ideas related to their immediate sphere of influence.Often cross functional or cross process ideas generate the greatest ROIIrrelevant to Customer Needs. No mechanism for incorporating the voice of the customerIrrelevant to organisational Needs. No alignment between the ideas and organisational strategy or policy© Mission HQ Pty. Ltd. All Rights Reserved47

Where not to focusToo Many Ideas and Poor Processes. Most ideas never go anywhere (often for good reason), this leads to employees feeling despondent Overwhelmed Managers. An unpopular policy or faulty process can lead to a deluge of almost identical ideas, leaving the innovation manager overwhelmed.Lack of Transparency. A suggestion box is not transparent. Lack of Oversight. Often a selected idea is given to others to manage through the delivery processWrong Message. They encourage limited, anonymous ideation in isolation and without any feedback, as opposed to open and collaborative ideation that leads to breakthrough innovation and adds real value.© Mission HQ Pty. Ltd. All Rights Reserved48

Some real roadblocks to innovation FUD – fear, uncertainty, doubt Trust – talking to right people Funding – budget Lack of needs identification People – biggest roadblocks: resistance to change | corporate culture Lack of knowledge and listening Bureaucracy – political process© Mission HQ Pty. Ltd. All Rights Reserved49

Planning Your Innovation ProgrammeWhat do we want to achieve from an innovation agenda?What can we learn from other innovation models and experiences?Why has it taken us so long to get our innovation programme moving?How will resource the programme and fund associated initiatives?How will we prioritise our projects?What kinds of innovation are we looking for, how do we know if it is “good”?What capabilities do we posses in house?What capabilities do we lack and can these be supported via training?Are we considering open or closed innovation models?How does our innovation programme fit within our landscape of existing projects.?Managing how will we manage competing priorities?© Mission HQ Pty. Ltd. All Rights Reserved51

what are intangible assets?Programme ParametersLeverage statutory authority status>1m PA allocated for innovation programme establishmentQuick wins a core component of the early activityPlan was to leverage existing Intellectual Assets initially and invest further in product developmentIncrease ROI on $110m allocation PA and reduce allocation over time.

The programme in their own wordsThe Innovation Program is a first for government in Western Australia. It is based on the research of best practice trends and information gathered from both internal and external sources, including public and private enterprises. Many organisations have recognised the need for innovation and implemented a system with various degrees of success. The challenge has been to develop a program that maintains the initial impetus and allows success to occur in a repeatable way.© Mission HQ Pty. Ltd. All Rights Reserved54

Why Innovate?It is recognised by global businesses that the key to increasing commercial revenue and remaining competitive, and therefore sustainable, is innovation. Innovation harnesses enthusiasm and allows staff to be creative. It motivates people to be involved, by allowing them to be heard, and breaks down internal silos bringing people together to share ideas. An innovation program allows for the incorporation of all our values; creativity, excellence, growth and learning, community, sustainability and celebration.© Mission HQ Pty. Ltd. All Rights Reserved55

ConclusionsEstablishing an innovation programme is a journey not just a destination.There needs to be support from the Corporate Executive and funding availability. Innovation is a mindset not a business unit, although centralised funding is recommended. The more people who are able to be involved the greater the momentum and the higher the chance of success. Innovation cannot become a part of the culture if the lag between idea and production is too great. © Mission HQ Pty. Ltd. All Rights Reserved56

How can we helpProvision of innovation training servicesInnovation process design and integrationInnovation programme establishmentOutsourced management of innovation programmesEstablishment of objectives and metrics for innovation managementFacilitation of the creation of an innovation culture.© Mission HQ Pty. Ltd. All Rights Reserved57

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