• Micha Veen

How does Operational Innovation benefit Government organisations?


When business leaders speak about “innovation”, they often refer to business innovation, however, over the last 5 years a number of government institutions have started to introduce transformational programs in their government organisations. Australian government, NSW government and local government in particular, are very active in this transformational environment.

Approximately 3 years ago, Transport for NSW has kicked off a multi-million ERP overhaul. A year earlier, NSW Education department started their ERP transformation program. Around the same time, NSW Treasury also kicked off their Financial Management Transformation (FMT). And there are many more Australian and non-Australian government institutions that have started various Finance, Customer Service, HR and Operational Excellence transformations…

However, all these “transformations” are still focussed on ERP/ IT transformations, transitioning towards “world-class”, operational excellence, best practices, etc., while the private sector, at the same time, have started to transition towards Operational Innovation or business innovation.

Instead of reviewing and optimising/ automating existing processes, technologies, and organisational models to drive operational excellence, it would be a great opportunity for government to focus on Operational Innovation, which is focussed on fundamentally changing how current work gets accomplished. Operational innovation means coming up with entirely new ways of delivering services, implementing new policies, providing tailored customer service, or doing any other activity that a government institution performs.

So why should a government organisation adopt Operational Innovation?

Government is challenged with the following pressures:

  • Higher public/ consumer expectations,

  • Requirements for higher efficiency, and

  • The desire for faster policy implementation.

Traditionally, governments have not been as adaptable as the private sector and their uptake of operational efficiencies and technology to deliver high-quality services or effectiveness to implement policies has been much slower.

Instead of a focus on new products/ services, as is key in the private sector, government is more focussed on internal innovation. Introducing Operational Innovation in will place a more radical focus on productivity and customer service effectiveness in a healthy dynamic government environment.

Exactly, a year ago, the then Communications Minister, Malcolm Turnbull highlighted that government required to introduce a radical shift in how it provides services to the public. He introduced the concept of a Government's Digital Transformation Office, which should undertake projects with short 90-day implementation cycles, through selected groups of the public, then improved upon (e.g. Agile Innovation through a Minimal Viable Solution approach).

This clearly shows that the government is realising that they also need to adopt a new transformational approach. Operational Innovation through Agile Innovation allows the government to introduce a structured innovation approach, which accepts that “alpha and beta” services won't be perfect, but require a continuous improvement cycle to drive an innovative behaviour in government.

Even though Operational Innovation is a fundamental shift from the way government has done things in the past, it allows a guided innovation journey towards innovation excellence that supports the continuous changing public and consumer expectations...

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