Organizing for disruptive innovation in a local authority
David Griffin
Leeds Metropolitan University
Abstract
Innovation has been a pubic administration priority throughout the past decade. A key issue that is still the subject of debate is how to organize resources in order to manage such innovation. Christensen (1997) distinguishes between ‘sustaining’ and ‘disruptive’ innovation. It is suggested that councils have developed structures and capabilities to undertake the sustaining type of innovation. However, these capabilities can become impediments when faced with disruptive change. The contribution of this paper is a proposed framework for organizing for disruptive innovation by local authorities. The empirical basis of the article is a case study of disruptive innovation in a North of England council. The innovation capability model (Lawson and Samson, 2001) is used to analyze the case study and is extended in two ways: firstly, to identify distinct characteristics for sustaining and disruptive innovation and, secondly, by proposing a bridging role to accommodate the duality caused by separate innovation streams.
Key words: Disruptive innovation, local government, organizing for innovation
1. Introduction
“The findings stand out more and more clearly as the evidence rolls in: whenever a practical innovation has occurred, a skunkwork, usually a nucleus of 6-25 people, has been at the heart of it.” Peters (2004).
Innovation has been a pubic administration priority throughout the past decade. Central and local government have transformed services through a programme of change based upon e-government technologies. Environmental drivers, such as new policy priorities, changing citizen expectations, technological developments and, latterly, the global credit crunch, have shaped this innovation. Most developments have been introduced to ‘sustain customer value’ (Christensen, 1997), rolling out service improvements perceived to be of value to the existing client base for the particular administration. Many councils have developed a bureaucratic structure and resource capabilities that are well-suited to meet this challenge. However, periodically, when environmental conditions alter significantly (a ‘paradigm shift’), for example opening up new ‘markets’ for a local authority to serve, the organizational structure, capabilities and culture that so well served for sustaining innovation, become impediments. The innovator’s dilemma is how to organize for this disruptive change (Christensen, 1997).
The contribution of this paper is a framework for organizing for disruptive innovation by local authorities. It reviews the existing literature on organizing for innovation, which has mainly investigated private sector operations. From this it develops a framework that it is appropriate for disruptive innovation in local government. The empirical basis of the article is a case study of disruptive innovation in a North of England council. This case study is used to explore the limitations of existing theory in this area and to propose the extensions to it represented in the framework. The framework is applied to the case study in order to gain insight into the tensions introduced by a council undertaking sustaining and disruptive innovation concurrently.
2. Review of the literature on organizing for innovation
The term ‘innovation’ is used in many ways, highlighting the lack of definitional agreement amongst scholars and practitioners. Some definitions emphasize the perception of newness of the idea by its recipients (e.g Rogers, 1995). Others give prominence to the implementation aspect, stressing the need for an innovation to be successful (DIUS, 2008). However, it is generally agreed that innovation, in essence, comprises of two components: creativity and implementation (Besant and Tidd, 2007; von Stamm, 2008). Creativity is required from some of the actors within the social context to initiate, design and develop a product, service or process that would be perceived as new by its likely recipients. This idea also needs to be diffused amongst the recipient actors in the target social setting. To be considered an innovation, it probably also needs to be perceived as a success by powerful stakeholders in this setting.
A key issue that is still the subject of debate is how to organize resources in order to manage innovation (Bessant, 2005; Pettigrew and Fenton, 2000). The innovator’s dilemma, according to Christensen (1997), is that successful organizations have developed the capability to excel at the ‘sustaining’ type of innovation, but these competencies are the very impediments that prevent them from introducing ‘disruptive’ innovation. Bessant (2005) suggests that the public sector has considerable experience of disruptive, or to use his term, discontinuous, innovation. This article takes a contradictory viewpoint. It is argued here that local authorities are used to responding to disruptive innovation led by central government. In this case, government policymakers have provided the majority of the creativity. There are far fewer examples of disruptive innovation generated by a local authority, in which it plays a leading role throughout the innovation process.
An organizational approach that has been successful in undertaking disruptive innovation in some private sector settings is the ‘skunkworks’ approach (Bessant, 2005; Peters, 2004). A skunkworks is a small group of creative individuals that has been set up with the sole purpose of innovating on behalf of the company. The individuals are usually selected from the mainstream business. But they operate within different constraints. An enterprising culture is established that cuts across the mainstream processes, values and norms of the parent organization. The culture and politics of public administration sometimes impede innovation. Consequently, the establishment of an innovation hub, operating in an enterprising micro-culture, might be a one way of increasing innovation in the sector.
Burns and Stalker (1961) conducted one of the pioneering studies of the sociology of work. Based upon an empirical investigation of companies and government agencies in the UK, they identified two ‘ideal types’ for organizing the workforce: ‘mechanistic’, which is suitable for operating in a stable environment and ‘organic’ which is more appropriate for those attempting to innovate in a changing environment.
Others (e.g. van der Van and Poole, 1995) have suggested that that the situation is more complex than that presented by Burns and Stalker. Organizations need to respond to a duality: how to successfully allocate some resources to the steady-state, low risk operation of the mainstream business whilst concurrently allocating other resources to the risky, prospective innovation of newstream products and services. The former might be suited to a mechanistic organization and the latter requiring an organic set up. Moreover, the management of mainstream business should be separate from newstream activity (Kantner, 1989).
A recent school of thought in the strategic management field adopts the resource-based view of organizations (Prahalad and Hamel, 1990). From this perspective, it is possible to identify a range of competencies required to manage the duality of mainstream and newstream activities. Lawson and Samson (2001) proposed the innovation capability model as a framework for evaluating the ‘key mechanism(s) for stimulating, measuring and reinforcing innovation’ (p388) in an organization.
Figure 1: The innovation capability model (Lawson and Samson, 2001)
The innovation capability comprises of a range of elements that combine to form the capacity to undertake successful newstream innovation. These elements are described in Table 1.
One criticism that could be leveled at Lawson and Samson’s innovation capability framework is the extent to which it is suitable for all types of innovation. It has been argued that successful companies establish, over a period of time, the capabilities which equip them to undertake newstream activity to meet the ongoing needs of its top-end customers. Such activity has been variously labeled as ‘sustaining’ (Christensen, 1997), ‘steady-state’ (Bessant, 2005) or ‘customer-driven’ (Dodgson, Gann and Salter, 2005) innovation.
| Innovation capability element | Description |
| Strategy | The vision and strategy required for responding to the changing business environment. |
| Competence base | The ability to harness and manage the various resource types that form the inputs to the mainstream and newstream processes. |
| Organizational intelligence | The ability to process external information relating to the market (mainly concerning customers and competitors) and environmental drivers. |
| Creativity management | The ability to encourage and manage divergent thinking leading to the development of new business ideas concerning processes, products, services and so on. |
| Structuring | The adoption of appropriate organizational structures for fostering innovation. |
| Culture | The development of a culture that is conducive to innovation. |
| Management of technology | The ability to align technology strategy with overall business strategy |
Table 1: The elements of the innovation capability (Lawson and Samson, 2001)
The innovation capability for making newstream innovation decisions will be shaped by the environment in which the mainstream business is conducted. What if environmental conditions change to such a degree that new market opportunities arise and new types of customer groups are available? The so-called ‘innovator’s delemma’ is how to organize to cope with such disruptive change. The steady-state innovation capability will be incapable of producing the newstream innovation required in this situation (Christensen, 1997)
A second criticism is that the model pays no regard to the role of internal politics in innovation. Politics and power will feature in any social setting in which decisions are made over the allocation of finite resources amongst competing actors (Burns and Stalker, 1961; Pfeffer, 1992).
3. Methodology
Research does not always progress in a linear fashion from data-gathering to analysis and conclusions. Following the approach espoused by Fenton and Pettigrew (2000), this research has progressed in a more tentative cyclical manner. It started with an initial review or relevant literature, but was then driven by what the interviewees had to say about disruptive innovation. This informed the choice of outline frameworks from the literature. But, as the research has developed, the analysis using the frameworks has raised questions that led back to the data and the re-exploration of the data has challenged the assumptions behind the emerging enhanced framework.
This paper explores the following research questions:
How might a local authority organize for disruptive and sustaining types of innovation?
What are the organizational and managerial implications of a attempting to pursue both types of innovation concurrently?
These questions will be examined using the case study method. A case study will be presented of an innovation incubator unit set up in a large English metropolitan council. For the purposes of discussion, we shall refer to this organizational unit as Metro Innovation Team (MIT). The case study method is particularly appropriate for dealing with contemporary situations in which the intervention is difficult to distinguish from its context (Yin, 2003). This is certainly the situation with regard to the case being studied in this paper. One of the most significant characteristics leading to its eventual demise is the intriguing interplay between the intervention and its context.
The case study method uses a variety of data sources to investigate a situation (Keddie, 2006). Table 2 summarises the phases of the study and the various methods employed.
| Phase | Purpose | Methods employed |
| 2005 Phase I | Familiarisation with the intervention and its context | Informal discussions with MIT staff and ICT staff. |
| 2007 Phase II | Observation of the intervention in operation | Observation of MIT staff interacting with other local authorities attending their stand at a major public sector conference. Initial (unrecorded) interview with Interviewee One about the reasons for establishing the unit and some of the contextual issues. |
| 2008 Phase III | Understanding of the change of direction | Unrecorded discussion with MIT staff regarding the change from being an incubator unit to an innovation consultancy. |
| 2009 Phase IV | Critical analysis of Metro Innovator | One-hour interviews with the four staff most closely associated with the establishment, strategy, operation and closure of MIT. Analysis of documents and web source material related to the case study and the participants in it. |
Table 2: The project phases and methods
The range of methods employed – observation, informal discussions, semi-structured interviews and document analysis – have contributed to the methodological triangulation of findings needed to produce reliable results (Jupp, 2006 ; Fenton and Pettigrew, 2000). Some of the informal discussions and document analyses provided the rich context and background to the later empirical phases of the study. The formal interviews, in particular, were repeatedly examined to elicit patterns and recurring themes discussed within individual interviews and across the complete sample of interviews. Table 3 lists the case interviewees and highlights participants’ roles prior to, during and after MIT. The interviewees were selected using ‘snowball’ sampling (Jupp, 2006). At the end of each interview, the respondent was asked who should be interviewed next to help develop an understanding of the wider context of ICT Services and the ‘intervention’, MIT itself.
| Interviewee | Role prior to the establishment of MIT | Role during MIT | Role following the demise of MIT |
| Interviewee One | Head of ICT reporting to the Director of Resources | Head of ICT and line manager for the Head of MIT | Head of Service but no longer has any responsibility for ICT Services |
| Interviewee Two | IT Services Manager reporting to Head of ICT. | Head of MIT | Commercial director of a technology company serving the public sector |
| Interviewee Three | Business Consultant reporting to the IT Services Manager. | MIT Business Consultant | Business Consultant within ICT Services |
| Interviewee Four | Service Manager reporting to the Head of ICT. | Service Manager and then, latterly, Head of ICT. | Head of ICT |
Table 3: The case study interviewees
4. The case study organization
Metro Council is a large metropolitan local authority in the North of England. It is the sole tier of local government in its administrative area. The council completed its e-government service transformation, a major series of technology-based innovations, in the timescale stipulated by central government. Its e-government portfolio incorporated both product and process innovations. A complexity of public sector innovation is the difficulty of distinguishing between product and process innovations. Most service developments are a mixture of both of these. For example, when Metro Council introduced web-based application forms for requesting services online, these were predominantly product innovations. But some of the forms’ projects also featured the redesign of back-end processes. The customer call centre established by Metro Council is a second example. This process innovation brought together staff previously distributed throughout the council. Nevertheless, a vital component of this change project was the new computer system that provided call centre staff with an integrated information base (a product innovation).
It is argued that most of the e-government innovations at Metro Council were of the sustaining type. Sustaining innovation is often introduced to add new functionality for ‘top-end’ customers (Christensen, 1997). In this case, the ‘top-end’ customers which benefited from the e-government services were digitally- engaged residents and businesses. The programme provided little assistance to ‘lower-level’ residents experiencing the ‘wicked issues’ of life who, predominantly, reside on the other side of the digital divide. This may in part explain the low take-up of online services by residents. Applying selected characteristics from the innovation capability model to this sustaining type of innovation results in the summary found in Table 4.
| Innovation capability element | Discussion |
| Culture | The Council had a traditional culture: hierarchical, command and control oriented. One of the interviewees summed this up as a ‘late 1970’s/early 18980’s’ culture. |
| Competence base | Within IT, it had one senior officer who had extensive experience in the private sector and was perceived to be good at spotting technological advances that might be beneficial for the council. The Head of IT at the time was someone who had previously set up a newstream organization for ‘disruptive’ innovation in a previous local authority for which she had worked. It was her belief that disruptive innovation needed to occur in a ‘bubble’ with a separate culture from the mainstream organization. A £350.000 bid for funding of MIT from the government was successful. A key success factor in winning this, the team felt, was the visibility they had obtained by developing MIT’s initial innovation, the digital pen for council field workers. |
| Organizational structure | The council operated several large service departments with a central IT department of 350+ staff. All technology projects began by using traditional IT development approaches. A viable business case was required and requirements were elicited before the development and implementation of an innovation. |
Table 4: Innovation capability 1: dealing with sustaining innovation
In 2005/06, Metro Council established a ‘skunkworks’ organization, MIT, to develop new products and services for both internal consumption and for marketing to the wider public sector. There were several drivers for this change. Externally, new market opportunities were opening up, as the legislative restriction on trading outside of home geographical areas was removed. Internally, staff were available with the experience and competencies suited to taking advantage of these opportunities. This organizational development was a disruptive innovation. It required a different innovation capability to that needed for sustaining innovation. The competencies required for this type of innovation are summarized in Table 5.
Tables 4 and 5 illustrate the first proposed extension to the innovation capability model: rather than there being a single set of innovation capabilities, different competencies are required for sustaining and disruptive innovation streams within an organization.
| Innovation capability element | Discussion |
| Strategy | The interviewees identified a range of strategic issues associated with the establishment of MIT. For example, interviewee 1 mentioned the following: to embed innovation within the organization; to raise the confidence of the ICT department in exploring new technologies By contrast, interviewee 4 suggested that MIT ‘came about by accident’. It was set up to exploit the competencies of a particular individual whose strengths were underused in his then post. MIT’s business strategy was to create value from the privileged position occupied by Metro Council. For example, the companies helping to develop a narrowcasting project were informed that MIT would not pay them for this. But this large council would become their demonstration site. Furthermore, MIT would pro-actively recommend the companies to other public sector organizations. |
| Competence base | The Head of MIT is mentioned repeatedly by name during the interviews (e.g. he is mentioned seven times by interviewee 1 and eleven times by interviewee 4). If, somewhat simplistically, we divide an innovation project into two phases, creativity and implementation, then this individual was particularly adept at the creativity phase. He had previous private sector experience of delivering innovation during the ‘dot com’ boom. His commercial acumen distinguished him from most local government officers. He was good at spotting technological advances worthy of exploitation and had a ‘massive personality’ (interviewee 1). However, he lacked the political nouse for dealing with the people issues that were likely to arise during the implementation of disruptive technology. |
| Creativity management | MIT adopted an entrepreneurial approach to creativity management, undertaking projects with a higher risk element than would normally be the case. It was accepted that some projects would fail. Their research was not constrained by precedent. It could also develop ideas quickly without awaiting for agreement through the traditional council structure. |
| Organizational structure | The MIT structure was an organic structure (Burns and Stalker, 1961). It was ‘business-oriented’ rather than having a technical focus. (Interviewee 2: “We sought to draw a straight line between ourselves and the objective”). Key staff had fluid roles (Interviewee 2: “Everyone else was charged with responsibilities; we set our own agenda”) and greater autonomy than elsewhere in the council (e.g. Interviewee 3 was the only officer of his rank to be issued with a corporate credit card). |
| Culture | Nemeth (1997) suggests that, for innovation to flourish, it requires a culture that is opposed to the one that is dominant in the organization. MIT had quite distinct symbols, processes and values. The symbols adopted MIT gave the impression of being set apart from the council. For example, its branding and business cards omitted mention of the council name. At trade fairs its stand would have adornments (e.g. banners, branded carrier bags, free gifts) that were on par with those of private sector suppliers. The business consultant procured services and products using a corporate credit card, thus avoiding the delays and some of the checks inherent in the normal council purchasing process. |
| Management of technology | MIT was established to deal with disruptive technology, to experiment with technologies for which the business case was not immediately evident. Its major projects, the digital pen and a wireless community initiative, were both started without an initial business case. However, as pointed out repeatedly by two of the interviewees, its Head did not always adequately deal with the people issues associated with disruptive innovation projects. |
Table 5: Innovation capability 2: dealing with disruptive innovation
This public sector organizational innovation had a life span of four years. Three distinct phases of development are discernable:
Phase I – Innovation incubator (2005/2007) In the first two years of its existence, MIT employed six staff. During this time it developed several products in conjunction with private sector partners. It gained £350,000 of seed-corn funding from the government and became the sole distributor of the digital pen in the UK public sector. Metro’s own Social Services department purchased digital pen equipment. In addition, MIT sold thousands of digital pens to sixty other local and central government clients. According to the then Head of MIT, it captured approximately 90% of the market for digital pens in the public sector, pitching for, and winning, business against some large established public sector providers. This was a period of extensive external networking and relationship building. For example in the local government sector, MIT established relationships with 140 councils. It gained peer recognition for its work by winning six major public sector innovation awards in its first year of operation.
Phase II – Innovation consultancy (2007/2008) In September 2007 the focus of MIT was realigned with internal council priorities. One of the interviewees offered a different perspective, describing this phase as ‘the death by a thousand cuts”. MIT ceased to support external clients (60% of the service) and downsized to two staff, the Head of MIT and the Business Consultant. During phase I of its life, MIT had ‘owned’ its innovations and ‘profited’ from licencing the use of products to all customers (even those within Metro Council). In phase II, the client service department became the owner of the technology, with MIT acting as a consultant to identify opportunities and help to realize the achievement of the benefits desired by the relevant department.
Phase III – End life: MIT abolished (2008/09) The team was abolished in 2008/09 and returned to the ICT department as part of a wider reorganization of ICT services. Its remaining activities and contracts were gradually terminated, or assimilated into the ICT department, over a period of six months with final abolishment in April 2009.
5. Bridging the gap between the competing innovation capabilities
The innovation capability framework is a useful analytical tool for considering the skills and competencies needed to undertake innovation in organizations. This paper has extended the initial concept, outlined by Lawson and Samson (2001), to incorporate the distinct capabilities required for sustaining and disruptive innovation. However, setting up two separate innovation units, with differing cultures is likely to cause tension and conflict within the organization. Organizational actors will seek to use power and politics to influence decision-making at a senior level in order to gain a larger share of the scarce resources available (Pfeffer, 1992).
Previous organizational research has highlighted several roles that aid the introduction of technological innovation. In situations in which contradictory cultures are present, there is a need to bridge the gap between the cultures (Ward and Peppard, 1996; Peppard, 2001). When high-level resource allocation decisions are being made, it helps to have a senior project sponsor to argue the business case for the allocation of resources to the project (Edwards, 1998). An implicit assumption in the literature is that this is needed to allocate the scarce resources to innovations meeting the requirements of the current client base. If the innovation is of a disruptive nature, current major clients, and senior in-house staff skilled at fulfilling the needs of this group of clients, may not necessarily understand the business rationale for undertaking the project. A project sponsor who can make a persuasive argument for this new type of venture becomes more significant in this situation. Once the implementation of the innovation has been given the go-ahead, a project champion can help to steer progress through the organizational barriers and blockages that sometimes impede innovation (Beath, 1998). The ontological perspective of many of these studies is that there should be alignment between the technologists’ innovation activity and the business objectives and strategy. In this article, we adopt a different perspective. This is one of co-existence, within the organization, of the distinct innovation capabilities required for sustaining and disruptive innovation, based on an accommodation reached between the business and the competing organizational units. This accommodation is sustained by the introduction of a bridging role.
It is suggested that the bridging role played a significant role during the innovation incubator phase of MIT. During this two-year period, the Head of ICT (interviewee 1), who took on this role, reported that she “sheltered [MIT] from the naysayers”.
Influencing key staff
A key bridging capability is winning over key influential staff (Peppard, 2001). The interviewees all repeatedly mentioned the Director of Resources as a key stakeholder in the Council’s innovation activities. There was the potential for disruptive innovation to give him problems with elected members. The bridging role holder kept him informed and satisfied. Several of the interviewees reported that the Director was nervous about disruptive innovation. This individual was more comfortable with the characteristics of sustaining innovation (e.g. familiar business case, limited risk, responding to the needs of in-house clients).
Dealing with organizational politics
A second capability is being able to deal with organizational politics and stakeholder management. According to Pfeffer (2002), this includes recognizing the varying interests of other parties involved in the innovation and aligning with powerful stakeholders to maintain the balance of power if conflict arises. During the case study discussions, Interviewee 1 frequently mentioned the need for disruptive innovators to be aware of ‘people’s legacies’. Interviewee 4 further clarified this point, emphasizing the importance of the innovator understanding other people’s ‘value propositions’, recognizing stakeholders operational situation and the opportunities and threats presented to them by the innovation. The social context in which the artifact is diffused is a significant component of the innovation (Griffin, 2009). Interviewee 1 was skilled at identifying such ‘legacy’ issues and recognizing the additional problems that a new technology might bring to the participating sections of the Council. Innovation is rarely merely a closed, in-house activity. Most new developments feature a more open, extended approach encompassing an innovation network (Cheesbrough, 2003). In the local government sector, an innovation network might include other councils (Wazniak, 2010), private sector companies (Flood, 2010) or voluntary organizations (Web Reporter, 2010). In these circumstances, this particular capability takes on an additional significance.
Managing the relationship between the innovation units
A third capability identified from this study is to maintain the relationship with the sustaining innovation capability within the organization. The significance of this is clear from the case study. The following quotes from the interviewees pinpoint some of the relationship challenges present in this context.
“[MIT] got all the luxury stuff and we are left to do the day to day druggery”; [it] was seen by many within the Council that [the Head of MIT] can go off and just do what he wants. What is [he] spending loads of money on going all over the country?” (interviewee 4). “Within IT there were plenty of people looking at sabotaging it anyway” (Interviewee 1). “We were the golden boys”; “if I walked down the corridor in [the town hall], … people would pop out telling me what I couldn’t do. Nobody was telling me what I could do. Others said there was innovation elsewhere. I said show me. I looked up the corridors and could only see tumbleweed bouncing down. They just resented that I started to own innovation.” (Interviewee 2).
Interviewee 1 undertook the bridging role during her tenure as line manager for MIT. In Autumn 2007, the bridging role disappeared when she was effectively absent for a period of three months. She outlined what happened next as a result of the removal of this accommodation between the competing innovation capabilities: “People who were waiting saw the opportunity. The saboteurs moved in whilst I wasn’t there. While my back was turned for three months, they neatly stitched it up. The saboteurs had been waiting for the moment all along.”
The bridging role is the second proposed extension to the innovation capability model. The empirical research undertaken here identifies a new duality: the need to manage the tension between the parties undertaking sustaining and disruptive innovation, when they co-exist within the same organization. Tensions in the innovating organization have been previously identified, but have concentrated on the relationship between the managers of innovation activities and mainstream operations (Storey, 2000). In this research, we have analysed the innovation capabilities associated with sustaining innovation (Table 4) and disruptive innovation (Table 5), to discover three elements of tension and conflict between the managers of these two types of innovation in the case study council. These tensions are: culture, peer esteem and access to resources (see Table 6).
| Element | Evidence from the case study |
| Culture | Symbols Tension was caused by MIT’s separate brand and business card, which were not easily identifiable as being part of the Council (Interviewee 3). The UK Cabinet Office gave permission for a distinct MIT website address, but this was blocked by the Council (Interviewee 2). Processes Tensions arose from MIT’s organic organization which contrasted with the mechanistic organization of the Council. MIT appeared to set its own agenda, allowing creativity to flow; other departments were more constrained as they discharged responsibilities. MIT had streamlined procurement processes and was not so constrained by council committee processes. Values There was a clash of values. The Council adopted a risk-adverse approach, based on its accountability for spending public finances. In contrast, MIT adopted an entrepreneurial stance, accepting a greater degree of risk in its ventures. The Head of MIT exhibited commercial acumen and a ‘private sector’ mentality which challenged other senior staff who possessed traditional public sector values. |
| Peer esteem | MIT was regarded as an innovator throughout the public sector. For instance, it had a relationship with 140 councils at its peak (Interviewee 3). It gained 90% of the UK public sector market for digital pens (Interviewee 2). Its innovation capability and record were recognized by the Cabinet Office (Interviewee 2) and the Office of the Deputy Prime Minister (Interviewee 3). In one year, it won six major awards, including the SOCITM Project Excellence Award. This level of esteem was unmatched in the ICT section responsible for sustaining innovation. |
| Access to resources | MIT was able to experiment with new technologies before identifying a client (Interviewee 1). These ‘golden boys’ (Interviewee 2) were not constrained like the main ICT section, which began projects by eliciting client requirements. This led to professional jealousy and the feeling elsewhere that MIT was gaining special treatment (Interviewee 1). The perception in corporate ICT was that MIT staff were wandering the country spending money without being restrained by accountability and committee decision-making (Interviewee 4). |
Table 6: Elements of tension between the sustaining and disruptive innovators
6. Extending the innovation capability model to deal with disruptive innovation
The technological innovation activities at Metro Council can only be partially analysed by using the innovation capability model. The innovation capability framework is a useful device for evaluating the innovation characteristics present in an organization. However, the model assumes that this innovation is aimed at the existing customer base and is consequently of the sustaining type. Metro Council undertook both disruptive and sustaining innovation concurrently. The innovation capability model has been extended during this research to distinguish between these separate activities as they will require distinct innovation capabilities. As has been mentioned in section 5, this introduces a new duality, and causes new tensions that, in Metro Council, were held in check by means of a bridging role. Whilst the bridging role was being fulfilled, the council was able to maintain positive development of both streams of innovation. When the bridging role was removed, the tensions took hold and political activity led to the demise of the disruptive innovation stream. The characteristics of the bridging role are documented in section 5.
Figure 2: The extended innovation capability model (adapted from Lawson and Samson, 2001)
7. Conclusion
This research was initiated as a result of serendipity: being involved in other project work with the case study organization at the time the MIT innovation was being established. However, the direction taken in the research was informed by a review of the literature. It has previously been identified that there is a paucity of empirical research into public sector innovation (Bessant, 2005) and the organizing for innovation literature is a comparatively new and under-researched area that is still emerging (Pettigrew and Fenton, 2000). The study, examining an approach to organizing for innovation in a local authority, aimed to contribute to filling both of these gaps in innovation knowledge.
Many local authorities in the UK have become skilled at the sustaining type of innovation. Under the recent New Labour Government, they responded to the challenges of e-Government (Cabinet Office, 2005) and the ‘Gershon’ efficiency drive (Gershon, 2004) by developing technological innovations to serve their current service users (or, to be more precise, the top-end users, the ones most capable and ready to engage with the technology). However, the current political and economic climate presents new, disruptive challenges. The UK Coalition Government has prioritized the reduction of the structural deficit element of the sovereign debt by contracting the size of the public sector. The budget for local authorities is to reduce by 28% over a period of four years (LGA, 2010). To maintain services, councils will need to alter their business models. There is also the potential for councils to deliver services to new markets, in collaboration with other public sector bodies, the private sector and voluntary organizations. As illustrated in the case study presented here, the innovation capabilities required for such disruptive innovation are quite distinct from those required for sustaining innovation. Furthermore, it is likely that tensions will arise as a result of a local authority being concurrently involved in sustaining and disruptive innovation.
The innovation capability model, developed out of empirical research in the private sector, was applied and extended here in the context of an organization undertaking both sustaining and disruptive innovation. Two extensions were proposed. Firstly, using the innovation capability framework, distinct characteristics were identified for sustaining and disruptive innovation. Secondly, to accommodate the duality caused by separate (and, at times, opposing) innovation streams, a bridging role was proposed.
There are several imitations to this research that should be highlighted to the reader. It is a small-scale study. The key actors involved were identified using the snowball sampling technique. However, it would have been beneficial to interview other significant staff (e.g. the Director of the Resources Directorate). The project had a short life of four years and, although this was a ‘complete’ life of setup, mid-life and disbandment, an organizational setting in which sustaining and disruptive innovation are undertaken over a longer timescale might overcome the tensions between the two in quite a different manner. It is for future research, in other public or private sector contexts, to further explore the application of the extended innovation capability model to overcome these limitations.
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