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Public sector, disrupted

By Carmen Medina - February 10, 2012

Dollar bill arrowThe global public sector is under massive financial pressure. But that’s only one of its challenges. Citizens—the public sector’s customers—are also demanding better value for their taxes. And that includes dealing with government in new ways. With every sector of the modern economy and society changing in response to new technologies and social practices, citizens can’t help but wonder why so many government offerings remain shackled by the practices of yesterday.

These conditions indicate that the time is right to bring the principles and practices of disruptive innovation to the public sector. As a recently retired U.S. government senior executive, I am, of course, quite familiar with government’s ability to avoid change until it in fact becomes unavoidable. This persistent late adoption of new and more efficient technologies and processes costs government money, efficiencies, and, perhaps, most importantly, credibility. That’s why public sector executives everywhere need to become familiar with the concepts behind disruptive innovation and consider where in their organization they can plant the seeds of change.

The term “disruptive innovation” was popularized by Harvard Business professor Clayton Christensen when he observed some key factors in the toppling—or disruption—of large corporations. These include outside innovators who 1) start serving underserved customers or markets with 2) new technologies that initially provide a lesser product or service but 3) are less expensive than its competitors. Eventually, the disruptive innovation improves to the point where it captures most of the market share of the large corporation, which almost always is slow to respond to the disruption.

Government officials are not in a position to start new entities to challenge an existing government service. But they do have more ability than perhaps they realize to pursue disruptive innovation from within. I saw several examples of this in my career in the U.S. intelligence community. Unarmed drones, for example, began as a small research program in an obscure section of the U.S. Defense Department, but eventually, officials saw the potential that drones had to provide low cost, persistent surveillance. Today drones, once dismissed by many military professionals, are conducting missions that had been the purview of manned (and often very expensive) military aircraft.

Another disruptive innovation I experienced firsthand was the creation of Intellipedia. In this case, I was the government leader who gave the go-ahead to two individuals who believed that using the Wikipedia model to organize and disseminate intelligence information was a good idea. True to the principles of disruptive innovation, Intellipedia was aimed at an underserved customer—mid-level policy-makers and military in the field—was much less expensive than existing journalistic production processes, and was made possible by new software and technologies. 

Sometimes when public sector executives are considering change initiatives, they dismiss ideas that appear too modest, don’t have enough initial impact, or don’t serve important customers who they expect will subsequently provide them bureaucratic cover and more financial resources. The principles of disruptive innovation suggest, however, that these are exactly the kinds of opportunities that government executives should be looking to support. For disruptive innovation to truly gain traction in government it requires public sector executives to identify and encourage individuals at the working level who are itching to try something new. Most every government organization contains within it aspiring leaders who are eager to disrupt the prevailing model. The challenge for executives is to channel these efforts in the direction that will provide the most strategic benefits for government and its citizens.

Find out more about disruptive innovation and its potential impact on the public sector in the latest report from GovLab, Public sector, disrupted: How disruptive innovation can help government achieve more for less and learn about the latest trends and events that are shaping the marketplace in the Global Economic Outlook.

Carmen Medina Carmen Medina joined Deloitte Consulting LLP in January 2011 as a Specialist Leader after retiring from an almost 32 year-career at the Central Intelligence Agency. Since joining Deloitte LLP she has continued to support the Intelligence Community on issues such as social networking and future trends, and is also working closely with Deloitte’s Center for Federal Innovation.  Her areas of interest include rigor in analytics, navigating the emergence of new global norms in the 21st century, developing the transparent and collaborative future culture of work, and diversity.


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