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Why Innovation Matters Now More than Ever

Why Innovation Matters Now More than Ever. Karen Thoreson, Alliance for Innovation. Vuja de. Navigating the Fiscal Crisis: Tested Strategies for Local Leaders. What did we Ask?. What defines the current crisis? What has worked in previous efforts? Which organizations cope better?

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Why Innovation Matters Now More than Ever

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  1. Why Innovation Matters Now More than Ever Karen Thoreson, Alliance for Innovation

  2. Vujade

  3. Navigating the Fiscal Crisis: Tested Strategies for Local Leaders

  4. What did we Ask? • What defines the current crisis? • What has worked in previous efforts? • Which organizations cope better? • Why innovation is critical? • How can local governments contribute to the recovery?

  5. Deeper and DifferentThan the Last 50 Years • Housing Market • Auto and Financial Services • Manufacturing and Exports • Service and Retail • Even Energy is Impacted • All Levels of Government • All Sectors of the Economy • None of Us Have Experienced Before

  6. Deeper and Different • Sales Tax • Property Tax • State Government Transfers • Capital Markets – Public and Private • Pension and Other Investment Funds

  7. Lessons from the Past • Tax cuts have less impact than cash investments. • Investment in capital projects is better than support for operating costs. • Continue projects with low versus high operating costs. • Block grants speed recovery compared to competitive grants.

  8. Lessons From the Past • Cutback Management? • Across the Board Cuts • Freezing the Workforce • Or Strategic Management? • Predict the Decline • Focus on Core Mission • Educate the Public • Long Term Savings, Not One Time

  9. Contributing to Recovery • Maintain Spending, Don’t Cut Revenues • Avoid Across the Board Cuts • Don’t Cut Capital Projects With Low Operating Costs • Avoid Random Hiring Freezes • Lead Inclusively • Draw on Ideas from All Sectors

  10. Opportunity in Crisis • Improve the Organization • Resize or Restructure • Develop New Partnerships • Focus on Community Priorities • Proactive, Not Reactive • Embrace the Future’s Possibilities

  11. So What Have We Seen?3 Strategies: Hunker Down All Expenditures are Equal – Lower Tide, Lower All Boats Transformation – “What If,” Not “Why Me”

  12. CRISIS IS AN OPPORTUNITY RIDING ON A DANGEROUS WIND

  13. Who Copes Best in Hard Times? • Strong Management Capacity • Targeted and Flexible Spending Choices • Revenue Diversity • Have a Long Term Financial Plan • Maintain Adequate Reserves • Fees for Service Reflecting Cost of Delivery • Educated Stakeholders • Adaptive but Resolute Organization

  14. Promoting Constructive Change • Cut Quickly, Avoid Delay • Long Term View • Core Mission, Highest Priorities • Innovation and Continuous Improvement • Manage Revenues, Not Just Expenditures • Organizational Design and Processes • Employee Stewardship • Embrace Inevitability, Stick With It • Communicate with Stakeholders

  15. What do Transformed GovernmentsLook Like? Anchored Around Purpose, Mission & Values Risk Tolerance Profile – Innovation Matters Understand the Brutal Facts but Focused on the Possibilities Not the Problems Engaged with all Stakeholders See a Path to a Desirable Future that others don’t Individuals & Organizations Use Both Left and Right Brain

  16. Areas of Innovation Top 22 in 2004 (Joshua Franzel, Review of Policy Research, 2008) • Managerial/Administrative (3), e.g., 3-1-1 • Technological (10), e.g., web portal, video streaming, online GIS, online transactions/applications, wifi, online training • Area-Specific (9) • Emergency coordination • Traffic photo • Hydrogen fuel cells • LED signals and smart signs • Monitoring traffic flows • Crime technology-shoe wear • Natural storm water runoff control • Affordable housing • Public-private partnerships in parks

  17. Sustainability Youth advancement Law enforcement and technology Health and wellness Business process reform E-gov Organizational improvement Succession planning and regeneration Citizen participation /engagement Community renewal Cities and schools Areas of Innovation-CurrentThoreson and Svara, Municipal Year Book 2009

  18. Correlates of Innovation • Wealthier and larger organizations • Sunbelt • Cities/counties without unions • Cities/counties with public pressure for change • Cities/counties competing with other governments • Democratic vote • Council-manager form cities/counties Correlation does not mean causation. What’s happening on the inside to convert these conditions or overcome these conditions to produce innovation?

  19. Six Qualities Linked to Innovation “I’m happy to give you innovative thinking. What are the guidelines?” Leadership Creativity Internal Collaboration External Partnerships Community Connections Results Focused

  20. Innovation: #1 Key Qualities Leadership: • Elected Officials • At the Top • In the Middle • Organization-wide • Unselfish - Shares: • Credit and Recognition • Level 5 leaders • Looks to the Next • Generation to Sustain

  21. Innovation: #2 Key Qualities Creativity • Unleashing the potential • Not Satisfied with Status Quo • Look for ideas elsewhere • Working on Multiple Fronts • Allows for Failure • Constantly Revising and Changing • Breakthrough and Incremental

  22. Innovation: #3 Key Qualities Internal Collaboration • Unusual • Non-Hierarchal Teams • Diverse teams • Disrespect the Silos • Staff are Supported & Heard • Members Want to Be There

  23. Innovation: #4 Key Qualities External Partnerships • Public, Private, NGO • Not Quid Pro-Quo • Know How to Disagree • Are Willing to Trust and Take Risk • Understanding Value From New Perspectives • Deep Level of Cross-fertilization

  24. Innovation: #5 Key Qualities Community Connections • Real connection, Not Lip Service • Deep Sustained Involvement • Public: Not “me-centric” • Looking for Long –term Value

  25. Innovation: #6 Key Qualities Results Focused • If You Count It, It Will Change • Useful and serves need • Sustained Impact, Not Flash in the Pan • Knowing Who Benefits

  26. Fostering Innovation If you create the qualities, will innovation come? • No, Innovation is never automatic • Yes, Will generate the ideas and foster the spirit that supports innovation • Support with a culture of innovation • Consider what has worked and not worked in your organization • Consider the straddler (and the stragglers) • Set the bar high. Invite all to determine how to get over it.

  27. Combination of Individual and Organizational Characteristics Can you be constructive but still be tired and discouraged?

  28. What Kind of Change? Continuum of response to crisis: INNOVATION < Reaction Adaptation Adoption Invention > “Re-Invention” Continuum of outcomes: < Status quo Improvement Transformation >

  29. Characteristics of Innovative Leaders* Senior executives of the most innovative companies—only 15% the total—don’t delegate creative work. They do it themselves. *Jeffrey H. Dyer, Hal B. Gregersen, & Clayton M. Christensen, “The Innovator’s DNA,” Harvard Business Review (December, 2009). Study of the habits of 25 innovative entrepreneurs and survey of more than 3,000 executives and 500 individuals who had started innovative companies or invented new products.

  30. Five “Discovery Skills” that Distinguish the Most Creative Executives • Associating Successfully connecting seemingly unrelated ideas. • Questioning Constantly ask questions that challenge common wisdom; ask Why, Why not, What if… • Observing Scrutinize common phenomena, particularly the behavior of potential customers. • Experimenting Try out new ideas and approaches. • Networking Find and test ideas through a network of diverse individuals.

  31. How Innovators Stack Up

  32. What is Working? Reassess Community Priorities • Delray, FL (60K) • Polk County, FL • Jefferson County, FL

  33. What is Working? Re-engineer Organization • Montgomery, OH (10K) • Oakland Park, FL (42K) • Olathe, KS (100K)

  34. What is Working? Fix Structural Deficits (personnel) • Dublin, OH (38K) • Washtenaw County, MI • Palo Alto, CA (57K)

  35. What is Working? Advance Technological Solutions • Decatur, GA (17K) • Winter Park, FL (25K) • Southlake, TX (26K) • Palm Bay, FL (100K)

  36. What is Working? Increase Revenues • Charlottesville, VA (41K) • Hickory, NC (40K) • Howard, WI (16K) • Leesburg, VA (28K) • Sarasota County, FL

  37. What is Working? Partnerships • High Springs, FL (4K) • Morgan Hill, CA (38K) • Manassas, VA (35K)

  38. What is Working? Management Flexibility and Transparency • South Jordan, UT (51K) • Fort Collins, CO • Las Vegas, NV

  39. What is Working? • Reassess Community Priorities • Re-engineer Organization • Fix Structural Deficits (personnel) • Advance Technological Solutions • Increase Revenues • Partnerships • Management Flexibility and Transparency

  40. What is Working for You? • Re-engineering Organization • Partnership

  41. Thank You MCMAKaren Thoreson, kthoreson@transformgov.orgRegan Gerlt, rgerlt@transformgov.org

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