Establishing an innovation programme in the Government Context

Establishing and Innovation Programme In the Government Context An Innovation Catalyst™ Seminar Prepared and Presented by Marcus Tarrant Managing Director Mission HQ Pty. Ltd. ATF the Innovate Trust

Contact Details Marcus Tarrant Managing Director Mission HQ Pty. Ltd. ATF the Innovate Trust Marcus.tarrant@missionhq.com.au +61 3 9005 9710 www.missionhq.com.au © Mission HQ Pty. Ltd. All Rights Reserved 2

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

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 Reserved 5

Mission HQ Overview The team have undertaken the following projects Federal and State Government Department of Defence (DSTO) – Technology Transfer Advisory Group Department of Industry and Resources (WA) – Investor Ready Programme Design and Opportunity Evaluation Framework Department of Land ‘Landgate’ (WA) – Innovation programme design, and commercial engagement programme (Business Associations), technology commercialisation programme CSIRO – IP management process NICTA – Audinate Capital Raising 4.2m CRC’s CRC-ACS, CRC for Polymers, Dairy CRC VC’s Innovation Capital, Starfish Ventures – Austhink, Audinate, Ceram Polymerik etc.

How can we help? Innovation programme review Innovation training and workshops Ideation sessions Innovation process design and integration Opportunity assessment frameworks © Mission HQ Pty. Ltd. All Rights Reserved 8

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 Hamel economic 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 Reserved 9

Innovation in the public sector Innovation 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 Reserved 10

Some macro drivers in public sector innovation Political Environment Changing public needs and modes of operation Changing policy , regulation and compliance requirements Reduced budget allocation New technologies Privatisation of government services © Mission HQ Pty. Ltd. All Rights Reserved 14

1.A. Incentives Incentives can be complex in government environments: Numerous human resources issues Budgetary issues Unions and impact of rewarding individuals Try to be creative: A letter from the director rewarding outstanding performance Invest in the idea, but make it public Public recognition and support of innovative ideas Offer more time to spend on innovative projects Small Gifts (Movie and dinner tickets) Create competitions Attendance at conferences © Mission HQ Pty. Ltd. All Rights Reserved 26

1.B. Organisational Structure Break down silo’s Enable cross functional and cross level teams Allocate time (Innovation doesn’t just happen) Get people from remote locations together Hold offsite sessions to remove organisational constraints © Mission HQ Pty. Ltd. All Rights Reserved 27

1.D. Budget A great place to start is by centralising a project budget Business Unit Site Department level Selling 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 Reserved 29

2. Process © Mission HQ Pty. Ltd. All Rights Reserved 30 Develop Vision and Strategy Operational Processes Define business concept and long term vision Develop business strategy Develop long term vision Develop & Manage Products & Services Manage product and service portfolio Develop products and services Market & Sell Products & Services Understand markets & customers Develop go to market approach Develop sales strategy Develop & manage marketing plans Develop & manage sales plans Deliver products & services Plan for and acquire necessary resources Procure materials and services Produce/Manufacture/Deliver product Deliver service to customer Manage logistics and warehousing Manage Customer Service Develop customer care/customer service strategy Plan and manage customer service operations Measure and evaluate customer service operations Develop & Manage Human Capital Manage Information Tech. Manage Financial Resources Program & Portfolio management Manage knowledge & improvement Manage External relationships Support Processes Manage OH&S Develop & manage HR Manage information Perform planning & mgmt acct. Maintain project/ program methodology Determine environment Build Stakeholder relationsipos Create & manage organisational performance metrics Recruit, source & select employees IT Customer relationships Perform revenue accounting Develop OH&S Programme Manage Portfolio Manage gov.& ind. relationships Benchmark performance & manage change Develop & Counsel Continuity and Risk Perform general acct. & reporting Train & educate employees Manage board relations Manage Programmes Reward & retain employees Develop IT solutions Manage fixed assets & proejcts Monitor OH&S Programme Develop enterprise wide knowledge management Manage legal & ethical issues Re-deploy and retire employees Deploy IT solutions Process Payroll Ensure compliance Manage Projects & resource allocation Manage Innovation Manage Public Relations program Manage Employee info. Support IT services. Process payables & expenses. Manage remediation

2. Process Integration Points Prince 2 PRINCE (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 Reserved 32

4. Innovation Culture Meaningful work understanding how each person’s activity fits with the overall strategy and goals. Risk taking culture tolerance of failure as a pathway to learning Customer 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 key Organisational intelligence having the ability to integrate requirements from a number of sources Open communication innovation often stems from cross functional collaboration Empowerment Providing a level of independence in decision making Planning Understanding and working with resource constraints Learning organisation the share and capture of new knowledge and encoding of existing knowledge. Books © Mission HQ Pty. Ltd. All Rights Reserved 35

4. Innovation Culture Some Crowd-sourced thoughts Create diversity compelling need | relevance; Innovation drives culture (opposite to: culture drives innovation) Foundation, risk aversion Intangible, language key determinant Fearful cultures crush innovation What goes on when management is not looking? Ability to make mistakes How do you react to failures? Relaxed environment - Physical environment © Mission HQ Pty. Ltd. All Rights Reserved 36

4. Innovation Culture More Crowd-sourced thoughts Innovation and risk taking – willing to experiment, take risks, encourage innovation Outcome orientation – oriented to results vs oriented to process People orientation – degree of value and respect for people. Are people considered unique talents, or is an engineer an engineer Individual vs Team orientation – are individuals most highly noted, or are collective efforts Aggressiveness -- taking action, dealing with conflict Stability – openness to change © Mission HQ Pty. Ltd. All Rights Reserved 37

5. Technology What support tools do we have? Intranet Innovation Portal State government innovation resources Federal innovation resources The web Software programmes? © Mission HQ Pty. Ltd. All Rights Reserved 38

6. Skills What training resources do we have: Attendance at conferences and events Onsite bespoke training Access to reading materials (online subscriptions) Books on innovation (The Innovation Library) Internal blogs on innovation (Intranet) Postings and articles online Power users © Mission HQ Pty. Ltd. All Rights Reserved 43

Where to focus (Cont.) A formal proposal evaluation process that involves all relevant functions Escalation mechanisms to defend rejected ideas, sending them to the innovation leader Cross functional sponsors assigned to each idea Idea tracking from inception to implementation Process discipline and continuous visibility of idea sharing status Supplier reward system to ensure suppliers are fairly rewarded for ideas that contribute to sustainable business success. © Mission HQ Pty. Ltd. All Rights Reserved 46

Where not to focus Wrong 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 ROI Irrelevant to Customer Needs. No mechanism for incorporating the voice of the customer Irrelevant to organisational Needs. No alignment between the ideas and organisational strategy or policy © Mission HQ Pty. Ltd. All Rights Reserved 47

Where not to focus Too 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 process Wrong 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 Reserved 48

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 Reserved 49

Planning Your Innovation Programme What 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 Reserved 51

what are intangible assets? Programme Parameters Leverage statutory authority status >1m PA allocated for innovation programme establishment Quick wins a core component of the early activity Plan was to leverage existing Intellectual Assets initially and invest further in product development Increase ROI on $110m allocation PA and reduce allocation over time.

The programme in their own words The 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 Reserved 54

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 Reserved 55

Conclusions Establishing 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 Reserved 56

How can we help Provision of innovation training services Innovation process design and integration Innovation programme establishment Outsourced management of innovation programmes Establishment of objectives and metrics for innovation management Facilitation of the creation of an innovation culture. © Mission HQ Pty. Ltd. All Rights Reserved 57

Establishing an innovation programme in the Government Context

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