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What We Talk About When We Talk About Innovation

In city government, the hard work of change isn’t flashy… but it requires spending political capital

Jeremy Nowak
Jeremy Nowak

If empowerment was the buzzword of the 80’s and 90’s, innovation has become the cultural fashion of the past 15 years. Given how technology has reshaped every facet of our lives, this is no surprise.

We purchase goods, access entertainment, speak to thousands of people at the touch of a keystroke, work in ways we thought impossible a decade ago, and marvel at new medical techniques and 3-D printing devices.

Few people expect the public sector to lead innovation (except perhaps as a federal funder of basic research), but government is, after all, in the customer service business. We expect it to adopt new technologies and smarter work processes for the sake of cost efficiency and quality. In an era of budget stress, the old ways will not cut it.

Of course government is run for all of us, not only those who can opt in based on their ability to use a certain technology or pay for a service. It needs civic and public buy-in in ways that are different than that which a private firm requires.

Nobody walks into the city’s Department of Licenses and Inspections expecting to confuse it with Google or Apple. But at times in local government, the greatest obstacle to change is the culture of customer service more than a lack of technological innovation.

Moreover, the public sector does not always have the working capital to experiment with new ideas or overhaul old systems. This is particularly true when the infrastructure is old and the taxing capacity is low. And in times of fiscal scarcity, in particular, those that work in the public sector always feel like they are in a bunker taking incoming fire, with little time to change the way business is done.

Most people expect a lag time in public sector change around new technology. Nobody walks into the city’s department of Licenses and Inspections expecting to confuse it with Google or Apple.

It is when the lag time becomes the extended norm that citizens become testy or puzzled, particularly when the cost of change is not the driving factor and so many other governments, in comparable positions, seem to be improving.

Comparison is a critical motivating factor for change in the public sector. Just as a consumer product goes viral, so can a new way of doing things in the public realm. New York’s CompStat and  Baltimore’s CitiStat were two well-known examples of rapid diffusion in the public use of data.

There are many others, some highlighted by Harvard’s Kennedy School of Government, whose Ash Center has given out innovation awards for the past thirty years.

The diffusion of techniques and attitudes is not only a product of government-to- government competition but business to government sales, and citizen to government attitudes. This last point is important to note.

As people work and live in multiple cities during their lifetime and as they visit different cities, they experience other public services. They then draw new conclusions about what they are willing to put up with or what they expect where they live.  You use the New York City fare card on its transit system and return to Philly wondering why it has taken so long to change.

At times the greatest obstacle to change is the culture of customer service more than a lack of technological innovation. A few days ago philly.com ran a story about City Hall pushing back on Philadelphia’s Parking Authority for wanting to adopt cell phone apps that would allow people parked in metered areas to pay by phone as time ran out.

You can find these apps in many cities in the United States and all over Europe.  The technology has been around for years now and its cost has come way down. Yet there are reportedly some in City Hall afraid the city would lose revenue by cutting back on fines.

In fact, Parking Authorities should want much more revenue to come from easy meter payment rather than parking fines, which are more labor intensive to manage. After all, revenue after operating costs, not just gross revenue, is what truly matters.

More importantly, the easier and less punitive you make the experience, the more people will use it and pay for it over the long term. Amazon wants it to be easier for you to buy something, not harder. That way you buy more. In comparison to some at City Hall, the Philadelphia Parking Authority just became a hotbed of innovative thinking.

By some standards Philadelphia government has taken steps forward in public management under Mayor Nutter. There is a greater commitment to open data and there are more electronic pathways to connect to government, even in relatively intransigent departments.

Philadelphia has gotten better at organizing data onto city websites that allow people to do basic searches around taxes, zoning, code enforcement, and other issues. We can even make payments and forward applications electronically for certain functions.

As with several other cities, we have also gotten much better at identifying non-governmental problem solvers who can use city data to build platforms and apps that government, residents, businesses, or tourists can use. You can check out the city’s Department of New Urban Mechanics to get a view of some of this work.

But the hardest part of change in public management often has less to do with such high-profile examples of innovation and more to do with re-setting work processes: aligning operating priorities with the core mission of departments, re-structuring work rules and functions around meeting those priorities, making personnel changes to place the right people in the right positions, adopting technological solutions where applicable, and using information to measure progress.

This is the hard part of organizational change that is not as cool as the local hackathon. It is often incremental and not too fancy. Great organizations—private, public, and civic—must have the institutional room and incentives to make these ongoing incremental changes. Otherwise they lose market share or citizen confidence.

These deep organizational changes often come up against political obstacles in the public sector: managers that have limited knowledge of their field but are political appointments, labor contracts that make it hard to change the rules of work or remove those that are not competent, civil service regulations that make it hard to hire new management teams, and the inability to use budgeting to incentivize departmental change.

The best mayors and public managers get around much of this resistance and show that even in difficult political cultures, change is possible. But they generally have to pick their fights carefully. They can rarely change too much of government at once. They have to make choices. What do they go after and what do they concede?

It is natural that the past is better organized than the future. The future is uncertain; most people take a wait and see attitude.  In the private sector this is most true with large companies as opposed to smaller entrepreneurial firms that have less history and more flexibility. In a public sector setting, the past carries a heavy weight. It sometimes appears to have regulatory authority on its side, even when it does not.

Today those that seek public management change are aided by fiscal stress (“we have to do more with less”) and customer demand (“we’ve seen it work better in other places”). When an election occurs, a third factor comes into play: political capital.

When a new mayor is elected, he or she generally has the political capital to take on a few big issues. But political capital is an asset that depreciates quickly. It cannot be stored indefinitely. You use it or you lose it. When Philadelphia elects a new mayor, an important thing to follow is where that capital is spent. How much is dedicated to ceremonial (new people) versus substantive (new processes and outcomes) change.

The new mayor would be wise to focus on those operating departments, largely off the radar screen of this administration (until recently), that we know require a re-set; departments such as Revenue and Licenses & Inspections. They will both require very high quality leaders and political cover to make real changes.

If the new mayor has enough political capital, perhaps a further step is in order: getting rid of departments that should not exist: the gas utility, the sheriff’s department, and the register of wills are good places to start.

But this will all depend on the ability to make the case more than make the website. And to use political victory as a vehicle for change rather than political payments. We will see very soon if the capacity for further change is present.

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