Agency innovation slips, says report

The federal government is a frustrating place to innovate and it's getting worse, according to a new report.

(Read the report.)

Federal employees report a diminished feeling of involvement in decision-making, lower levels of empowerment about their work processes, a lack of leadership opportunities and few rewards for excellent work. All of these are predictors of an environment that stifles innovation. The government-wide innovation score calculated by the Partnership for Public Service dropped 1.7 percentage points to 61.5 out of 100 from 2011 to 2012. NASA retained its rank as the most innovative large agency, followed by the State Department and the Environmental Protection Agency. The Department of Homeland Security ranked last with an innovation score of 52.7, down 2.6 points from 2012.

The Partnership, known for its Best Places to Work government rankings, calculates innovation scores for government organizations based on responses to three questions on the Federal Employee Viewpoint survey conducted annually by the Office of Personnel Management. By looking at whether employees feel creativity and innovation are rewarded at their agency, if they are encouraged to devise "new and better ways of doing things," and if they are constantly looking for ways to improve their performance. About 700,000 federal employees participated in the 2012 survey.

The decreasing numbers reflect a tension inherent in fostering innovation in government, according to Partnership president Max Stier. "To innovate you have to have the ability to fail safely," he said. "It's challenging in the public sector to do that. The consequences of failure can be draconian." As a result, Stier said, "the risk aversion in government is a real problem."

With budgets tight across government and with agencies being urged to do more with less, it seems like an opportune time to encourage federal employees to innovate. Dan Helfrich, a principal at Deloitte Consulting, who contributed to the report, thinks it is possible. "There's an opportunity for leaders to drive innovation that's counter-cyclical, but leaders in the government haven't done enough to do so," he said. "Right now, the average federal manager is not asking a lot of questions about innovation."

There is something of a structural innovation trap built into the way agencies are organized, with short-term political appointees at the top, whose goals are not necessarily aligned with the goals of their department. They often manage their agency indirectly through other political appointees. Just 50.5 percent of 2012 survey respondents reported a high level of respect for their organization's senior leaders, down three percentage points from 2011. Career employees are "mission oriented," Stier said. "They want to do their job better. They want to innovate."

NASA is one agency that seems to have it figured out. Not only is it ranked at the top, but four of the top five agency subcomponents rated for innovation belong to the space agency. It's tempting to think that there is something in particular about the space mission that breeds innovation. But according to Helfrich, it's more about a culture of leaders and supervisors encouraging employees to provide new ideas and then giving employees a chance to try them out.

This is the exception rather than the rule among federal workplaces, Helfrich said. Even when there is an effort made to generate new ideas, "the weight of expectations, the weight of process, the weight of bureaucracy on those ideas, dooms them from the start."

The Federal Trade Commission, the Nuclear Regulatory Commission, and the Federal Deposit Insurance Corporation all scored well above the government-wide average for innovation among mid-sized agencies, although all showed declines in their scores from the 2011 rankings. Among the smallest agencies, the Surface Transportation Board led the pack, followed by the Office of Management and Budget, and the Federal Mediation and Conciliation Service. OMB was the biggest gainer of 2012, shooting up 6 percentage points from 2011. Government managers can take steps to improve the innovation culture at their agency. The authors suggest providing a forum for idea generation, and following through on those new ideas with development and testing. Helfrich cited a few examples of how government agencies are retooling their operations to allow employees to incubate new ideas and processes, including how the Government Services Agency retooled their physical layout to encourage collaboration, and how the newly formed Consumer Financial Protection Bureau is "building incubation and innovation into its DNA in a way that other organizations haven't been able to." "I do think you will see increasing signs from progressive agencies that innovation matters," Helfrich said.