Doing Something Different

Understanding Innovation

This is the second blog in a four-part series that answers questions very much on the minds of government: What is innovation? What does it mean for government to innovate? And why innovate, anyway?

The first blog defined innovation as doing something different to add value for a customer. It differentiated innovation from some close cousins such as invention and improvement. And it addressed the question of why innovate. In this blog, let’s look more closely at one part of the definition – doing something different.

Doing Something Different

Government programs provide value every day in the form of public goods – products and services created to deliver a specific benefit to a specific customer. Government agencies also constantly strive to improve programs, to deliver more value to customers for less cost. This is doing something different and it happens whether or not it’s recognized as innovation.

Things done differently can be grouped into an organization’s business, technology, and culture models.

  • A business model is the rationale for how an organization uses organizational assets to create and deliver value. Innovation changes this model when it impacts the organization’s customers, value propositions, channels, resources, activities, partners and more.
  • A technology model is the rationale for how an organization uses technology to support value creation and delivery. Innovation changes this model when it impacts the organization’s hosting environment, systems, apps, data and information, services, and security.
  • A culture model is the rationale for how people in the organization use knowledge and skill to support value creation and delivery. Innovation changes this model when it impacts assumptions, beliefs, values, norms, and more, plus the meaning people in the organization attach to these things.

You can use these models to create innovation scenarios, analyze trade-offs, predict model interactions, and plan specific innovation investments. Which components you change in which models, by how much, determines your degree of innovation. Let’s look at an example.

Imagine your organization offers Veterans, Medicare or Medicaid patients an app for exchanging health information with medical providers more convenient and cost-effective. Security enhancements impact the security, hosting, and systems components of the agency’s technology model but not its business or culture models. The enhancements are technical and don’t impact users.

Imagine testing patient-provider interactions with 10 patients. Now business model components are impacted with the technology model. The app offers a new value proposition to 10 patients, reaches them by a different channel, changes patient-provider interactions and communication behaviors, and impacts some provider business processes.

Now imagine testing the app with 100 patients and their providers. When 10 patients were involved, providers could modify their own practices. But 100 patients requires uniform procedures to receive health data when sent, monitor it, communicate about it with patients and within provider teams, and use it appropriately for decision making. Procedures related to the app must by synced with standard procedures for scheduling appointments, taking information, diagnosing, treating, and documentation. The hospital might need to review or revise policy pertaining to ordering tests and prescriptions on the basis of app interaction. Even with HIPAA requirements covered, providers and patients have questions about information security and the safe medical use of information technology.

At this scale all three models are impacted. he greater the number of practices and procedures impacted, and the more fundamentally they change, the more culture is impacted. Even though telemedicine early adopters have broken this curve and next adopters can draw on their lessons, every organization to adopt such a technology must unthink some of what it’s known and practiced and rethink operations in light of a new capability.

Change like this is inevitable but you can use innovation to make change safe and manageable by methodically choosing what to do different to add some particular value for a particular customer. You can also forecast model impacts and interactions to plan, manage, and evaluate change.

Conversations About Doing Something Different

How do you figure out what to do differently to add value for a customer? Facilitate conversations using these starters and customers, partners, management and staff will generate plenty of ideas.

Business Model

What are components of your organization’s business model? There’s no definitive list but common components include value proposition, customer segment, channels by which you reach the customer, key activities and resources, cost, revenue. Your organization might add to this list or regroup items. What’s important is to identify aspects of the organization which are relevant to creating and delivering value to customers, and which might be impacted by innovation. All innovation should impact the value proposition, customer, and channels by which you and your customers interact. The more an innovation might change your business model, the more game-changing the innovation.

Technology model

What are components of your organization’s technology model? This model’s components are usually fewer in number and less variable than business model components. Most organizations identify their hosting environment, systems and applications, data and information, sometimes services, always security. Again, your organization can add, delete or recategorize. The important thing is to identify aspects of the organization which are relevant to creating and delivering value to customers, and which might be impacted by innovation. Most innovation will impact technology model components so the question is which, and by how much.

How do business model and technology model components interact? These two models are highly interdependent. This allows organizations to analyze potential innovations and predict model interactions and changes. Change these two models a little and the innovation is more incremental. Change these two models change a lot and they’ll impact the culture model. Then you’re looking at a more game-changing innovation.

Culture Model

Components of your organization’s culture model are pretty established by the definition of organizational culture. The thing most people overlook about organizational culture is that there are many in every organization. Culture is shared by members of an organization so lawyers, scientists, policy wonks, managers, junior staff and more can each share their own culture. Look for groupings of assumptions, norms, beliefs, values and behaviors which new entrants into the group must adopt. When you see that, you’ve found an organizational culture. Consider the impact of business and technology model change on each and ask how the culture views the impact.

Additional Resources

I hope you found a few useful ideas in this blog. Read my complete paper on What Is Innovation? at http://govinnovators.com/resources/. There you’ll also find papers on creating an innovation strategy and standing up an innovation center. Look for all my innovation blogs at http://govinnovators.com/blog/.

Write me if you have questions and I’ll do my best to respond.

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