What does it take to be awarded? Determinants of management innovation in Brazil12
Pedro Cavalcante Institute of Applied Economics Research
[email protected]
Marizaura Camões National School of Public Administration
[email protected]
Abstract Improving public sector has being a crucial purpose embedded in reform movement’s debates since the end of 1970. Currently, practitioners and scholars seem to overcome comprehensive reform strategies and focused their attention on minor changes in public administration with lower transactional costs that also generate short term outcomes. In that sense, many have argued that innovation can contribute to improve the public services quality and efficiency as well as to enhance government capacity in solving problems. In Brazil, specifically, there is a certain degree of consensus about management innovation’s increase over the last two decades; however, as well as in other countries, the lack of evidence-based knowledge regarding different dimensions of innovation prevails. One important dimension that must be deeply investigated is the innovation’s determinants. In other words, which factors influence the public sector innovation initiatives? The paper aims to answer this relevant question. The original data comes from the Innovation in Federal Public Management Awards, the most important prize in Brazil, created by the National School of Public Administration (Enap) to recognize innovative practices that have improved government capacity and service delivery. Every year, ten initiatives are awarded as the most innovative management practices. The article builds a dataset of quantitative variables, from qualitative analyzes of the reports from the winners initiatives (2007 to 2015). Subsequently, we examine their influential factors, including environmental, organizational, innovation characteristics and individual/employee levels. Some analyzes are undertaken to explain the relations among these factors and other relevant aspects, such as innovation type, decision process and initiation phase. Overall, the research results confirm the hypothesis that innovation is not an isolated construct, in other words, its determinants tend to be also influenced by the relationships amongst drivers, types and phases.
1
Paper to be presented at the ASPA’s 2016 Annual Conference in March 18-22, 2016, Seattle/USA. This is a working paper, please do not cite without the authors' permission. 2 We also would like to thank our research assistants Tanieli de Moraes Guimarães Silva, Artur Santiago Brant Campos e Victor Lucas do Nascimento for the careful content analysis of the data protocol. 1
1. Introduction Improving public sector has being a crucial purpose embedded in reform movement since the end of 1970. Currently, practitioners and scholars seem to overcome comprehensive reform strategies and focused their attention on minor changes in public administration with lower transactional costs that also generate short term outcomes. Accordingly to Borins (2014), public innovation has become a field of interest on its own, distinguished from the New Public Management and other similar paradigms, popular in recent decades. These broad reform strategies have been replaced by what Pollit and Bouchaert (2000) called the “micro-improvements”. The theme has also moved from being an exclusive issue for firms and private enterprises to public organizations worldwide. Public sector agencies, therefore, generate or adopt innovations in response to the constant economic, political, social and technological changes in a more globalized and networked world, constrained by rising citizen expectations, complex problems and tight budgets. As Damanpour, Walker and Avellaneda (2009:653) argue “organizations are viewed as adaptive systems that introduce change in order to function effectively”. In that sense, many have claimed that innovation can contribute not only to economic growth, industrial change, competitive advantage, but also to improve the public services quality and efficiency as well as to enhance governmental capacity in solving problems. However, despite the increasing interest in the public administration field of study, innovation suffers by having the 'magical concept' status, as well as participation, accountability and governance (Pollit and Hupe, 2011). In other words, the noble and normative nature of innovation, to some extent, hinders the ability of analysts to deepen in its limitations. Osborne and Brown (2013) support that three flaws hamper understanding innovation in the public services: i) understanding the nature of innovation is often regarded, wrongly, as a purely conscious process; ii) positioning innovation as a good 'normative' in public policies; iii) the adoption of inappropriate reference models of innovation manufacture and not services. In Brazil, specifically, a certain degree of consensus about management innovations has increased over the last two decades; however, as well as in other 2
countries, there is a lack of evidence-based knowledge regarding different dimensions of innovation (Bekkers, Edelenbos and Steijn, 2011; Brandao and Bruno-Faria, 2013; ) One important dimension that must be deeply investigated is the innovation determinants. In other words, which factors influence the public sector innovation initiatives? Do the innovations determinants or drivers vary accordingly to the innovation’s type or stage? Do the different innovation’s drivers affect their goals distinctly? The paper aims to discuss these relevant questions. The original data comes from
the Innovation in
Federal Public Management Awards
(FPMA),
the
most
important prize in Brazil. The annual award was created by the National School of Public Administration (Enap) to recognize innovative practices that have improved governmental capacity and service delivery. Every year, ten initiatives are awarded as the most innovative management practices. The article builds a dataset of quantitative variables from analyzes of the winners reports. Subsequently, we examine their influential factors, including environmental, organizational, innovation characteristics and individual/employee levels. Moreover, some analyzes are undertaken to explain the relations among these factors and other relevant aspects, such as innovation type, decision process and initiation phase. The research results bring important empirical insights to the debate and help advancing theory and empirical knowledge on innovation processes and outcomes in public organizations. Besides this introduction, the paper presents a brief discussion about public sector innovation followed by a literature review regarding innovation’s influential factors. Based on that, a detailed analysis using a particular protocol is undertaken in order to identify the presence or lack of these factors on the FPMA’s initiatives reports from the winners (2007 to 2015). Descriptive statistics are presented on the paper’s fourth section. Moreover, final remarks and future research agenda are discussed.
2. Public Sector Innovation First of all, the focus on public sector innovation excludes most of the literature production available, since it is notorious the private sector dominance on the subject. In that sense, it is important to define precisely the former as well as other important aspects that may distinguish both sectors. 3
Although innovation has been highlighted in the recent debates about the economy and public administration changes, the theme is not so contemporary. The seminal work of Joseph Schumpeter, Theory of Economic Development from 1934, investigated the relationship between technological innovation and economic development. According to the author, innovation could be understood as something being done in a different way, which would reflect in new outputs: a new asset or a new quality of it, a new method of production, a new market, and lastly, a new source of supply. Schumpeter called the dynamic process of technological substitution the “creative destruction” (Schumpeter, 1934). Since then, the variety of analysis on innovation has expanded continuously, going through economic and administrative sectors and areas. Studies of innovation in recent decades have switched from hegemonic emphasis on manufactured goods to focus on innovation in services. Therefore, a myriad of innovation definitions prevails (Kattel et al., 2013). As the renowned Oslo Manual (OECD, 2005), innovation to be recognized as such requires three essential criteria: i) novelty in the context in which it is introduced; ii) to be implemented, not just an idea and; iii) to generate better results, for instance, efficiency, effectiveness and user satisfaction. Based on these criteria, the document defines innovation as: Implementation of a new or significantly improved product (good or service) or a process, or a new marketing method, or a new organizational method in business practices, in the workplace organization or in external relations. (OECD, 2005: pp. 55)
In another also comprehensive concept, nonetheless, regarding the public sector, Osborne and Brown (2005) argue that innovation means the introduction of new elements in a public service - in the form of new knowledge, a new organization and/or new skill management or procedural, all representing discontinuity with the past. Innovation can also be defined as the process of generating and implementing new ideas in order to create value for society, whether with internal or external focus on public administration (European Commission, 2013). Innovation in public services, although less emphasized compared to the private sector, is recently calling more attention among academics. In this context, the major common sense, but not necessarily correct, is that private sector is pioneering and most successful, regarding innovative practices in its products and services (Hartley, 2013).
4
This argument stems basically from the differences between both sectors, which would generate advantages for the private sector to innovate. The absence of competition - a necessary condition to innovation according to Schumpeter's view, the nature of multitasking, the bureaucratic culture of standardization and formalization, the presence of a variety of principal (stakeholders) and the complexity of societal issues (wicked problems) faced by public administration are presented as the differential factors that tend to promote public sector innovation in an incremental way (Bekkers, Edelenbos and Steijn, 2011). Despite these factors apparently hampering innovation, prominent scholars as Pollit (2011) and Mazzucato (2013) have shown that public sector is not only important to create conditions conducive to innovation in enterprises, but also historically has been the largest innovative source, from the railroads to the advent of the internet. In the majority of innovations, governments play a crucial role accepting higher initial risk and, therefore, are pioneers in the development and financing of basic technologies that subsequently generate innovations in products and services with the participation of the private sector (European Commission, 2013). In management, examples are also not rare. In recent decades, governments have introduced innovative practices in processes and services as strategy to optimize costs, increase legitimacy and restore society trust, given the scenarios of fiscal crisis and social criticism about democratic systems representation. For instance, it is worth mention cases such as Planning, Programming and Budgeting System (PPBS), a budget management technique that revolutionized public finances back in the 60s; new forms of citizen participation in policymaking and; the numerous processes that embrace information and communication technology (ICT) in public administration. Innovation in public administration has gained followers not only as result of the need to respond constrained circumstances by providing better services regarding responsiveness, quality and efficiency (Mulgan and Albury, 2003; OECD, 2015), but also because the close relationship between management strategies and economic development policy innovation (Morgan, 2010). Likewise, in the last fifteen years, scholars are placing more emphasis in public sector innovation research, which is reflected on greater theme relevance in seminars/conferences and, above all, the increase of publications in scientific journals, books and international agencies (Borins, 2014; De Vries, Bekkers and Tummers, 2014). In such a context, researchers have been exploring many perspectives of the 5
phenomenon, including definitions of innovation (briefly discussed above), its types, goals and results/outcomes. In addition to them, this paper’s object of analysis – the influential factors or determinants is one feature of public administration innovation that has been one of the most explored by the literature, as we are going to discuss in the next section. 3. Innovation’s determinants or influential factors In order to provide theoretical basis to support the paper’s analysis, we developed a comprehensive literature review on innovation in public administration, not only relied on the domestic production, but also on international publications. It focuses, primarily, on the determinants or influential factors that affect the innovation’s generation or the decision to adopt it in the public sector. First, the review included classic books on the subject and publications of multilateral organizations3 and specialized government agencies. Next, the literature review analyzed the most important international scientific publications that scored an impact factor above 1.5 in 2014, according to the classification of Thomson Scientific ISI4. For the Brazilian literature, we searched articles published in the six most important journals in the administration area, classified by CAPES5. The review covers ten years period (2006-2016). The descriptors used were as follow: i) innovation; ii) innovation and public sector; iii) innovation in public administration. Lastly, we searched for publications frequently cited in order to assure that important references were not omitted. Based on these complementary searching strategies employed, from hundreds of studies discussing the influential factors of public sector innovation, we add up others specific descriptors: antecedents, determinants, drivers and facilitators. As a result, the bulk publications examined are from international journals (36), followed by
3
The list includes Australian Government; British National Audit Office; Center for American Progress (USA); Danish Centre for Studies in Research and Research Policy European Commission; Innovation Unit (UK); National Endowment for Science, Technology and the Arts (Nesta - UK) and; Organization for Economic Co-operation and Development (OECD). 4
The journals selected were Administrative Science Quarterly; Journal of Public Administration Research and Theory; Journal of European Public Policy; Journal of Policy Analysis and Management; American Review of Public Administration; Public Administration Review and; Policy Studies Journal. 5
CAPES Foundation is a Brazilian government agency responsible for supporting students at universities and research centers in Brazil and abroad. The Brazilian journals examined were Brazilian Administration Review; Cadernos EBAPE.BR; Organizações & Sociedade; Revista de Administração Contemporânea; Revista de Administração and; Revista de Administração Pública. 6
international and national organizations reports and studies (25), including three from Brazilian federal government, besides sixteen domestic scientific publications and, lastly, six classic books. Management innovation is a multidimensional construct that may vary accordingly to salient aspects, such as types, objectives/outputs, stages and so on. Historically, organizational and environmental factors play a dominant role in the debates about the capacity of organizations to innovate. However, their relevance varies in accordance to particular cases and, above all, to the combination of them, not only as a consequence of an isolated factor. As Walker (2007, pp. 591) puts: “configuration theory is proposed as a framework to move away from examining the myriad of individual variables and toward a consideration of the relationships between antecedents and innovation types.” Considering this assumption, to investigate innovations’ drivers or determinants, special attention should be given to these other aspects. Hence, initially, we highlight some of these aspects understandings, because they are part of the data collection protocol used by this research. To begin with, innovation typologies seem to receive a considerable level of attention from scholars. OECD (2005: pp. 57) divides innovation in four types, as follows: 1. Product: new or significantly improved service or good with respect to its characteristics or intended uses; 2. Process: new or significantly improved method of production or distribution; 3. Marketing: new marketing method with significant changes in product design or packaging, in its positioning, promotion or price fixing; 4. Organizational: new organizational method in the firm's business practices, in the organization of their workplace or in their external relations. Despite the fact that OECD’s typology was conceived to the private sector innovation, it has been considered an important reference for the public administration debate. Therefore, researchers have introduced many conceptual typologies of innovation, since they realized that innovation’s characteristics and its adoptions are affected distinctively by environmental and organizational factors (Damanpour, Walker and Avellaneda, 2009). 7
In accordance to Walker, Damanpour and Devece (2011), the typologies most frequently used are: i) product/service versus process innovations; ii) technological versus administrative/managerial innovations; iii) radical versus incremental. The latter, for instance, may be analyzed in three formats, instead of two. Bekkers, Edelenbos and Steijn (2011) argue that innovation process can be incremental, small gradual changes; or radical which is new products or services or significant changes in the way to serve and produce and; lastly, systematic innovations, major changes that arise from, for example, the introduction of new technology. Other similar classification divides innovation in evolutionary - incremental changes within the organization and revolutionary - innovation not as part of the normal adaptation or change process, but as a great transformation within the sector. Both conditions are perceived as discontinuity with the past, whether by the internal or external environments. Considering the public sector complexity, a comprehensive typology suitable to organizational innovations is the one formulated by Meeus and Edquist’s (2006). The authors divide in four types, employed in this research’s data collection protocol:
1. Service innovation: the introduction of new services to the existing or new clients and offer of existing services to new clients. 2. Process innovation: internal focus and it aims to increase efficiency and effectiveness of the internal organizational processes to facilitate the production and delivery of goods or services to the citizens; 3. Technological
process
innovation:
new
elements
introduced
into
an
organization’s production system or service operation for producing its products or rendering its services to the citizens; 4. Administrative process innovation: new approaches and practices to motivate
and reward organizational members, devise strategy and structure of tasks and units, and modify the organization’s management processes. Another dimension that concerns scholars is the innovation stages. According to Jean Hartley (2013), the analytical phases of the innovation process are invention (when ideas are generated); implementation (process of translating ideas into policy) and diffusion (disseminating innovation in the organization or outside). Since the focus is on the innovation determinants already executed in public organizations, this relies on two distinguished stages: generation and adoption. The former, also called innovation 8
development or initiation consists on a process, endogenously incubated, that results in a new outcome to an organizational population. The latter, more examined in literature of managerial innovations (Damanpour and Aravind, 2012), normally, involves three phases: initiation, adoption decision and implementation. In sum, only after accepted by users and employees that the innovation is considered implemented and regularly used by them, similarly as an assimilation process (Damanpour and Schneider 2006; 2008; Rogers 2003; Walker, Damanpour and Devece, 2010). Generation of innovation is typically slower than adoption, whereas measuring adoption tends to be easier. Studies have also proposed that while generation may be facilitated by higher complexity, and lower formalization and centralization, adoption tend to be facilitated by lower complexity, and higher formalization and centralization. In other words, generation of innovation is easier to occur in an organic structure and adoption in mechanistic one (Damanpour and Aravind, 2012). Regarding objectives and results, despite the overlap between these dimensions of innovation, adoption dominates the public sector literature. In this case, studies include three general goals: to generate efficiency in internal actions (policies and initiatives); improving services and outcomes for citizens and businesses; promoting innovation in other sectors (De Vries, Bekkers and Tummers, 2014). Just as the analysis of typologies, these studies have also run into multitude of instances or overlapping between results/objectives of the innovative process. Put differently, actions aimed to produce effectiveness and efficiency may also result in higher citizens’ satisfaction; or innovations designed to answer to the external environment causing greater involvement of citizens and private partners. In order to investigate the determinants of innovation in Brazilian public administration, besides the most common innovations objectives and results, such as efficiency, quality and users satisfaction (Bloch, 2011), we also add up effectiveness, economy, response to the external environment and social involvement, all, in different degrees, are found in the literature (Vries, Bekkers and Tummers, 2014). The decision making processes concerning innovation, either a generated or adopted one, tend to reflect and be reflected by the initiative’s drivers or facilitators (European Commission, 2010). Subsequently, there are three approaches that can be prevalent in developing or implementing an organizational innovation: i) top-down - a result of politicians/officials/top managers' decisions or engagement; ii) horizontal – a process of co-creation between low and mid level's team/staff with leaders and; iii) 9
bottom up - innovation undertaken by low-level staff/team without the involvement of leaders. Finally, before discussing the influential factors of public sector innovation; it is worth mentioning that we also included the variables thematic area and policy sector in the dataset. Both are information provided by the FPMA’s reports and are presented in the paper’s appendix (table 3 and 4). As stated before, the bulk of the literature about public sector innovation’s determinants comes from the main scientific journals, not only in quantitative basis but also in terms of comprehensiveness and quality. This production analyzes innovations from different countries, levels of government and distinct innovations areas/policies. As regards the methodology applied, the researches cover a range of approaches, from single case study to large n comparative inquiries. In the substantive side, innovation in public administration is affected by a variety of factors that, in most of the cases, are difficult to individually measure their impacts. Due to this complex context, scholars have been separating and framing the innovation drivers/facilitators in groups or levels. The usual strategy is to classify the influential factors as internal and external and then examine their impacts. In this way, Luke (2010), investigating three New Zealand state-owned enterprises, finds that the performance demands from outside and internal aspects, such as more flexible culture, investment in people and deliberate application and transfer of knowledge affect entrepreneurial activities. The combined effects seem to matter as Bloch and Brugge (2013) showed, analyzing innovation in Scandinavian governments. The authors rank innovation drivers, perceived by stakeholders, as follows: internal management; internal staff; political driving forces; public organizations; business (suppliers and users) and citizens. Hansen (2012) found that leadership of elected politicians as well as professional bureaucrats and organizational size were relevant antecedents of New Public Management (NPM) adoptions in Danish local governments. As presumed, influence degrees tend to vary accordingly to the innovation type, in this particular case, between NPM marketization-type and generic managerial-type. Leadership and organizational size, along with slack resources, are also innovation determinants identified by Fernandez and Wise (2010) in the adoption of specific Visa by public school districts in Texas. Managerial leaders behavior and will 10
tend to be positive related to the likelihood of great staff involvement in innovations process, while the authors findings suggest that, since larger organizations display higher levels of structural complexity and differentiation, they have more resources and legitimacy to face the costs of innovation failures. The same fits to slack resources that, logically, tend to increase the probability of an innovation to succeed, by securing the necessary inputs. Likewise, Damanpour and Schneider (2008), studying the adoption of 25 innovations in 725 local governments in the United States, found that leaders are able to influence the workers motivation and job satisfaction by creating an innovation atmosphere in the organization. In doing so, manager attitude added to innovation characteristics effect innovation’s adoption. Although the latter is one of the less analyzed influential factor, Damanpour e Schneider (2009) test the influence of innovation cost, complexity, and impact on innovation adoptions. They found that innovation cost and impact had a positive effect; in contrast, complexity did not show a significant effect at all. Furthermore, the paper supports that innovation characteristics were more influential than environmental and organizational factors. The leader’s positive behavior in favor of innovative practices is also perceived by citizens in the inquiry of Vigoda-Gadot et al (2008) with public service end-users and citizens in eight European countries. Leadership definition doesn’t only mean politicians or agency heads; they may also come from organization’s mid-level managers as Borins (2014) calls “local heroes”. The author, on the other hand, reinforces that public innovation is essentially a consequence of collaborative relationships among different players. Similarly, Choi e Chang (2009) investigate the effects of institutional factors and collective processes, based on the employees, on the innovation effectiveness and implementation. They also conclude that collective processes mediate institutional effects on the innovations implementation and their results. This comprehensive perspective highlights the role of external factors as well. As already well-known in the private sector, public organizations can become prior innovation adopters by using strategically information from networks and communication (Damanpour and Aravind, 2011). The range of influential factors stems from the external environment is broad, from competition, deregulation, and isomorphism, passing through resource scarcity and customer demands (Damanpour, Walker and Avellaneda, 2009). 11
In the individual level, Hopkins (2015), grounded on case study of Canada federal government, argues that incentives matter indeed. Agencies that provide incentives to their employees increase their likelihood of implementing innovations. Other key dimension of innovation promotion is the how staff is structured. In that sense, Puttick, Baeck and Colligan (2014, pp.7) claim that there are six decisive elements, which may be differently combined depending on the innovation features, for a successful innovation team: i. Methods: the tools, techniques, and approaches that the team uses, as well as the outputs produced; ii. Team: the size, skill set, dynamics and culture of the staff, as well as the recruitment and staff development strategies; iii. Resources: how the team is financed, including leveraging funds from external sources, as well as how resources are allocated and spent; iv. Leadership: how the team is led and managed, including by the director, and wider political sponsorship and buy-in; v. Partnerships: the key relationship with government, and external agencies, groups and citizens; vi. Impact measurement: the use of data to inform strategy development, as well as evaluation frameworks to measure impact. As we showed, scholars investigate innovation determinants from a variety of approaches and find different answers. In order to summarize this knowledge, they have tried to classify influential factors in groups. Damanpour e Schneider (2006), for instance, distinguish them between environmental; organizational; managerial background and; managerial value. Similarly, the studies and reports from international and government institution have dedicated to the analysis of drivers and facilitators that make innovation happens. However, generally, they are less worried with scientific inquiry and more concerned on normative recommendations, frequently grounded on innovations champions or cases of success. In this direction, using experiences from national and sub-national governments available on the Observatory of Public Sector Innovation, OCDE (2015) elaborated an integrated framework for analyzing innovation. Basically, the framework establishes 12
that innovation is a result of the interaction of levels (individual, organizational, public sector as a whole and society) and factors (people, knowledge, ways of working and rules and processes), although the borders are normally not precise. Regarding these factors, the people dimension includes not only supportive and engaged political leaders and senior managers, but also human resources management practices that foster and encourage innovation, such as recognition, career advancement, special assignments and competitions. Knowledge is assumed to be an essential aspect of either supporting or hindering innovation; hence the flow of information for new ideas and how it is managed play a crucial role on innovation development. About ways of working, governments have increasingly adopted networks and collaborative strategies with the aim of face wicked problems that are hardly solved by unilateral actions. These include “new ways to work with citizens, the private sector and civil society to “co-design” public services” (OCDE, 2015: 9). Finally, countries are trying to overcome the set of rules and processes, generally seen as innovations barriers, by looking for new approaches to project management focused on the desired outcome and then adapt processes to achieve it, instead of formulating policy around existing structure. European Commission, another leading institution in this debate, has also concerned on establishing knowledge about innovation drivers. The 2010 edition of the Innobarometer found that the probability of service innovation increases linearly with the size of the institutions, since leading innovators frequently come from large and national or central organizations (European Commission, 2010). Moreover, the report highlights how isomorphism is as an important mechanism to disseminate innovation ideas among public organizations. The report Trends and Challenges in Public Sector Innovation in Europe, an analysis from interviews with public officials and academics from 25 Member States in the European Union, also examines the factors and pre-conditions for public sector innovation. Its conclusions are similarly comprehensive, in that matter, showing that success innovation practices stem from a broad set of complex variables, such as culture; strategy; human capital; incentives and rewards; leadership; organizational capabilities and innovative capacity and; good governance (European Commission, 2012). Other publication, Innovation in the Public Sector: State-of-the-Art Report, elaborated on an online survey and in-depth interviews conducted with innovation 13
stakeholders, also divides the innovation influential factors in two broad categories that can either foster or hinder public sector innovation (European Commission, 2013): i. Internal drivers a. Organizational culture; b. Organizational leadership and managerial attitude towards change; c. Management of human resources (incentives in favor innovation); d. Internal and external communication (communication channels between the public sector innovators and the different stakeholders from the external environment). ii. External drivers a. adequate legislative framework; b. Public needs and expectations; c. Rapid emergence of new technologies; d. Presence of political impetus (decisions, public or not, that have direct influence onto the integration of innovation on the decision making agenda). It is worth mentioning, however, that these drivers do not affect innovation processes in an isolated form. On the contrary, their influences are often interconnected and some of them can even be framed in both categories, such as financial resources and political will. Fostering innovation through the public sector has been also a priority policy in developed countries, mainly, for the last ten years. Some of them have also played a major role in producing knowledge of innovation determinants, such as Australia, Scandinavian nations and United Kingdom. Their conclusions converge, in large extent, to the findings discussed above. The Australian report, Empowering change, in the internal dimension, emphasizes the role of staff, especially frontline employees, as a rich source of innovation. On the external side, partnership with general public, experts, the business sector and the academic community is seen not only as a source of new ideas, but also as a mechanism to overcome resource constraints and risk management. Scandinavian countries are World leaders in innovation, both in private and public sectors. Publications from these countries (Publin, 2006) and United Kingdon (Innovation Unit, 2009) also demonstrate how partnerships, along with leadership, staff involvement, clear management strategy for innovation, communication and an open 14
environment for creativity, are essential to generate and/or implement public administration innovation. Regarding the Brazilian literature, although innovation has recently become a trending topic, few relevant studies have been undertaking the challenge of mapping its determinants. Ferrarezi and Amorim (2007) and Cavalcante and Camoes (2015) explored how innovative initiatives, awarded by the FPMA, were convergent to the cutting-edge management movements. Ferrarezi, Amorim and Tomacheski (2010) investigated the favorable conditions for innovations sustainability and demonstrated a doubly endogenous feature of the sustainable initiatives, in other words, they were conceived internally the organization and by its own staff (mid-level bureaucrats). Sousa et al (2014), also using the FPMA database, from 1995 to 2012, found that organizational innovation was the leading type rewarded, followed respectively by process, marketing and product innovations. As regards the innovative policy sector, health and education have dominated, mainly because they both require extensive citizen’s interaction. In a different period of analysis (2004-2012), Oliveira, Santana and Gomes (2014) argue that the most prominent factor for an initiative to become successful in the Federal Public Management Awards was the staff engagement, followed by partnerships with other organizations. Overall, it is evident that the complexity of innovation determinants involves a considerable degree of overlapping among these factors and levels. In order to facilitate our analysis, based on this section discuss and Vries, Bekkers and Tummers (2014) classification, we employ four different levels of influential factors, as follows: i) organizational;
ii)
environmental;
iii)
innovation
characteristics
and,
iv)
individual/employee level. The figure 1 details them:
15
Figure 1 – Levels and Influential Factors
Management Innovation Determinants To analyze the innovation determinants, we formulated a particular protocol to identify
the
presence
or
lack
Federal Public Management Awards
of
winners’
a
range reports.
of The
aspects prize
in
the
methodology
underwent a number of changes, but since 2007 is following the same criteria, categories and processes, so the period of the paper’s analysis covers the last nine years (2007 to 2015). The reports were categorized by content analysis, based on three steps: i) construction of categories and variables; ii) analysis and categorization of each initiative by three research assistants, independently and guided by protocol description; iii) validation by the authors in case of disagreements. The protocol includes the following variables: thematic area; policy sector; stage; decision making approach; type; organization’s location; objectives, results and, overall, the influential factors (drivers or facilitators) listed in Figure 1. The database is composed of dummy variables (binary dichotomous) with 0 (zero) if the characteristic is not reported and one (1) in case of presence. The tables 3 to 6 in the appendix present the most important aspects and their descriptions. Then, the paper employs descriptive analyzes and also Pearson's chisquared tests to assess how likely it is that any observed difference between the sets of data arose by chance. 16
Table 1 shows distribution of FPMA’s winners by innovation stage, location, decision making approach, and thematic area. To begin with the innovation stage, surprisingly, almost 60% of the initiatives were generated inside the organization. Innovations implemented as consequence of a diffusion process, i.e. external ideas incorporated by the federal ministries and agencies, represent around 40%. This finding differs from the literature view of adoption’s predominance (De Vries, Bekkers and Tummers, 2014). The majority of the initiatives are highly concentrated in the District Federal DF (81%), whereas less than 20% are developed in federal agencies spread over the other twenty six states. Although a significant part of Brazilian civil service works outside DF, the result seems reasonable due to the fact that the most important departments and agencies, consequently, the top officials, are located in Brasília, the Capital. Besides, it converges with the approach prevailing in developing or implementing these organizational innovations, since 96% of the initiatives stemmed from politicians/officials/top managers' decisions (top-down) or from processes of cocreation between low and mid level's team/staff with leaders (horizontal). On the other hand, only three innovations were conceived by the engagement of low-level staff/team without leaders’ involvement. This finding reinforces the relevance of leadership highlighted by many scholars (Damanpour and Schneider, 2008; Vigoda-Gadot et al, 2008; Fernandez and Wise, 2010; European Commission, 2012; Hansen, 2012; Borins, 2014; Puttick, Baeck and Colligan, 2014; OCDE, 2015). Similarly, the considerable presence of the horizontal approach (42%) shows the collective processes influence on public sector innovation (Choi e Chang, 2009).
17
Aspect
Total
%
Generation
52
57,8%
Adoption
38
42,2%
DF
73
81,1%
Other State
17
18,9%
Top-Down
49
54,4%
Horizontal
38
42,2%
Bottom-Up
3
3,3%
Institutional Arrangements
28
31,1%
Process Improvement
18
20,0%
Information Magagement
16
17,8%
Citizen Service
14
15,6%
Evaluation and Monitoring
8
8,9%
Planning and Budgeting
3
3,3%
HR Management
3
3,3%
Innovation Stage
Location
Approach
Thematic Area
Table 1 – Winners’ distribution by stage, location, approach and thematic area
Regarding thematic area, on one side, we observe a predominance of initiatives related to institutional arrangements, process improvement and informational management. On the other side, areas such planning and budgeting and human resources management are less commom. Similar variety can be perceived by policy sector. Nineteen ministries have won the prize at least once along the analyzed period. However, the distribuition is far from equal. As the literature advocates, organizational size and complexity matter (European Commission, 2010; Fernandez and Wise, 2010; Hansen, 2012). In this specific case, education, health and defense, that not only have the biggest structures in the Brazilian cabinet but also are the oldest ministries, leads the ranking with 14, 13 and 11 winner practices over the last nine years. On the contrary, smaller and newer ministries, such as cities and sports, have not won at all. An interesting and expected result concerns innovations’ objectives and outcomes. The figure 2 demonstrates how converging these two dimensions are in almost all cases, exception for social involvement and user satisfaction. Nevertheless, we employed Person chi-squared tests and confirmed that the relationships between these two variables present significant results.
18
Response to the external environment Economy Social involvement User satisfaction Effectiveness Quality Efficiency 0
10
20
Outcome
30
40
50
60
Objective
Figure 2 – Innovation Outcomes and Objectives
As expected, the most common objectives, identified in the literature (De Vries, Bekkers and Tummers, 2014), are also the most mentioned outcomes for innovation in FPMA’s winners. Innovation goals linked to improving organizational performance, such as efficiency and quality represent individually over 50% of the initiatives, while effectiveness and economy covers 37% and 24%, respectively. Response to external environment is present in 14 cases or 16%, followed by user satisfaction with 13 (14%). On the other end, the objective related to citizen participation, social involvement is rarely mentioned in the innovation reports, only 4% referred to it as an initial goal. The same pattern is observed in the outcomes, similarly to the recent scholar’s findings (De Vries, Bekkers and Tummers, 2014), better public services and policies, perceived by efficiency (53 cases); quality (49); effectiveness (29) and economy (22) lead the ranking of innovation outcomes in Brazilian federal government. It is also worth highlighting how user satisfaction is identified as an outcome in 27% of the initiatives, even though it was not mentioned as an objective in almost half of them, which converges with Osborne and Brown (2013) assumption that the innovation nature is not a virtuously conscious process. At last, response to the external environment (19%) and social involvement (9%) are the less reported outcomes in the FPMA’s winners.
19
About the main goal of this paper, the innovation determinants, we observed that every influential factor, used to fill the data protocol, was identified in the FPMA’s winners. Obviously, the results are highly diversified. Overall, aggregating by levels, factors linked to innovation characteristics are the most cited in the reports with 178 cases. This is unexpectedly, since the knowledge about innovation characteristics as predictors is scarce (Damanpour and Schneider, 2008). Then come drivers from the organizational (136), environmental and individual levels with 91 mention each. This demonstrates how suitable to the Brazilian government is the assumption that innovation is a consequence of the factors combination, not an isolated construct, as discussed in previous section. Analyzing the determinants grouped by innovation phases, figure 3 above, it is very clear some similarities among influential factors in generation and adoption’s innovation. Put differently, in the majority of cases, the numbers of determinants in both phases are quite close. While the most frequently mentioned drivers tend to be related to the generation phase, the opposite pattern happens to innovation’s adoption. In sum, these results do not show evidences to state that the innovation determinants are systematic different between them. Overall, regardless the phase, relative advantage; cost benefit; slack resources; network/cooperation and; leadership stand out. At the other extreme; competition; incentives/awards; functional autonomy and; risk aversion seem to residually affect public sector innovations.
20
Relative advantage (Char) Cost benefit (Char) slack resources (Org) Network and interorganizational cooperation (Env) Leadership style (Org) Organizational structure (Org) Innovation acceptance (Ind) Compatibility (Char) External pressure (Env) Creativity (Ind) Knowledge and Talent (Ind) Commitment/Satisfaction (Ind) Professional conditions (Ind) Easiness (Char) Replicability (Char) Regulatory aspects (Env) Isomorphism (Env) Risk aversion/Space for learning (Org) Functional autonomy (Ind) Incentives/Awards (Org) Competition (Env) -
5
10
15
20
Generation
25
30
35
40
45
50
Adoption
Figure 3 – Influential Factors and Innovation Stage
Other relevant assumption consists on the configuration theory that advocates that innovation is, normally, a consequence of relationships amongst drivers and innovation types (Walker, 2007). Therefore, figure 3 shows how the influential factors vary among the four types of innovations collected by the protocol: service; process; technological process and administrative process. The most mentioned type, technological process (38 cases) is also very influenced by the five emphasized factors above; however, two individual drivers, innovation acceptance and knowledge/talent are also relevant in this particular type. Service innovations, with 21 cases, seem to be affected by several levels of factors as well. Relative advantage, network/cooperation, leadership and cost benefit are present in at least half of them. Instead, some drivers related to individual and organizational level, such as commitment/satisfaction, functional autonomy and incentives/awards were not even cited. Regarding innovation in processes inside the organizations, a similar pattern of facilitators is observed with the most cited factors highly influential. Nevertheless, external pressure and creativity, differently from the other innovation types, cover almost one third of this case. Last but not least, administrative process innovations correspond to less than 15% of FPMA’s winners. It could be reasonable to predict that environmental factors would influence this internal type of innovation, however, 21
network/cooperation were mentioned in 62% of the initiatives and external pressure in 23%. On the other side, drivers from individual level are the less important, since none of them were mentioned more than twice. Technological Process Innovation (38) Cases %
Service Innovation (21)
Process Innovation (18)
Administrative Process Innovation (13) Cases %
Cases
%
Cases
%
Relative advantage (Char)
33
87%
19
90%
17
94%
10
77%
Slack resources (Org)
22
58%
8
38%
13
72%
6
46%
Cost benefit (Char)
22
58%
10
48%
12
67%
5
38%
Network and interorganizational cooperation (Env)
19
50%
12
57%
8
44%
8
62%
Leadership style (Org)
15
39%
11
52%
10
56%
8
62%
Knowledge and Talent (Ind)
15
39%
4
19%
1
6%
1
8%
Innovation acceptance (Ind)
15
39%
6
29%
8
44%
1
8%
Organizational structure (Org)
14
37%
8
38%
7
39%
3
23%
Compatibility (Char)
13
34%
6
29%
4
22%
3
23%
Creativity (Ind)
10
26%
1
5%
5
28%
2
15%
Isomorphism (Env)
8
21%
3
14%
2
11%
0
0%
Replicability (Char)
7
18%
3
14%
4
22%
2
15%
Regulatory aspects (Env)
5
13%
6
29%
0
0%
3
23%
External pressure (Env)
4
11%
4
19%
5
28%
3
23%
Easiness (Char)
4
11%
2
10%
1
6%
1
8%
Professional conditions (Ind)
4
11%
1
5%
2
11%
2
15%
Commitment/Satisfaction (Ind)
4
11%
0
0%
3
17%
1
8%
Risk aversion/Space for learning (Org)
2
5%
1
5%
3
17%
2
15%
Incentives/Awards (Org)
2
5%
0
0%
1
6%
0
0%
Functional autonomy (Ind)
2
5%
0
0%
2
11%
1
8%
Competition (Env)
0
0%
0
0%
1
6%
0
0%
Table 2 – Influential Factors and Innovation Types
Final Remarks The main purpose of this paper was to investigate crucial aspects concerning public management innovation, primarily, its influential factors or drivers. Essentially, this objective is far from simple, since innovation is a complex construct. The phenomenon’s status has escalated in public administration in the last twenty years, especially, because governments have been strategically prioritizing “micro-improvements” solutions to public issues instead of broad reform. In such a context, public organizations have adapted themselves in order to deal with frequent changes in a more globalized and networked world, constrained by rising citizen expectations, complex problems and tight budgets. Their strategic focuses may vary, but generally governments aim to perform better, improving their deliveries. On one side, it seems to be a hot topic in public administration, on the other, a lack of evidence-based knowledge about different dimensions of innovation prevails, which hampers the state capacity to innovate and, then, provide better services. With the intention to contribute to this relevant debate, we developed a systematic investigation
22
on what are the types, underlying decision-making processes, objectives/results and, mainly, innovation determinants. To do so, we created a data protocol that quantified the FPMA winner’s reports and found how diverse they were in the last nine years. After employing descriptive analyzes and Person chi-squared tests, the research’s finding confirm that innovation is a consequence of the combination of factors and not an isolated construct. These innovation drivers affect differently depending on innovation types, however, all four levels of influential factors are common in the Brazilian case. In sum, the most recurrent ones are relative advantage; cost benefit; slack resources; network/cooperation and; leadership. We also observed that, contrarily from common sense, the majority of the management practices were generated inside the public organizations. They are highly concentrated in the agencies and ministries located in the Capital, Brasilia. Finally, as the literature predicts; organizational size and complexity matter indeed. Overall, we conclude that the paper has accomplished its objective and, subsequently, has produced some important empirical knowledge and insights to the public management debate. Nonetheless, it is worth mentioning that they are preliminary results and, therefore, deserve further investigation. They, definitely, confirm our feeling that innovation in public sector is a complex and challenging subject in this comprehensive research field. In order to advance on the innovation determinants, the inquiry next step is to comparatively analyze the FMPA winners and the nominees as well.
23
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APPENDIX Decision making
Description
Top Down
Innovation as a result politicians/officials/top managers' decisions or engagement
Horizontal
Innovation as a process of co-creation between low and mid level's team/staff with leaders
Bottom up
Innovation undertaken by low-level staff/team without the involvement of leaders
Table 3 – Decision Making Approaches’ Descriptions Type
Description
Service innovation
The introduction of new services to the existing or new clients and offer of existing services to new clients.
Process innovation
Internal focus and it aims to increase efficiency and effectiveness of the internal organizational processes to facilitate the production and delivery of goods or services to the customers New elements introduced into an organization’s production
Technological process system or service operation for producing its products or innovation
rendering its services to the citizens
New approaches and practices to motivate and reward Administrative process organizational members, devise strategy and structure of innovation tasks and units, and modify the organization’s management
processes
Table 4 – Types’ Descriptions Objective/Outcome
Description
Effectiveness
The degree to which something is successful in producing a desired result
Efficiency
Maximum results with minimum resources, energy or time - Productivity
Quality
The degree of excellence of some action (high standards or improved results)
Economy
Minimizing the costs of an activity without compromising the quality standards
Response to the external environment
Meet external demands to the organization
User satisfaction
Social involvement
Improve the perception of service Engaging sectors outside the organization (citizens, businesses or third sector)
Table 5 – Objective and Outcome’s Descriptions
28
Level
Organizational
Environmental
Innovation Characteristics
Factor Slack resources
Availability of financial, personnel, time, structure and/or technology resources
Leadership style
Support and vision of leaders
Risk aversion/Space for learning
Organizational culture that values "trial and error"
Incentives/Awards
Policy of continuous incentives and/or awards for staff
Organizational structure
Organization with clear and effective structuring goals
External pressure
Media attention and/or political/social demands
Network and interorganizational cooperation
Innovation as a result of networks participation and/or other relationship between organizations
Isomorphism
Similar organization adopting the same innovation
Competition
Competition between organizations
Regulatory aspects
Need to adapt to changes in the legal system
Easiness
Easy to implement, low complexity
Relative advantage
More advantageous than the previous process/service
Compatibility
Compatible with the organization/policy's modus operandi
Replicability
Possibility of replication in other institutions
Cost benefit
Relatively low cost compared to the benefits of innovation
Functional autonomy
Empowerment, voice and influence of the staff
Professional conditions
Individual
Description
Stability, mobility and flexibility at work
Knowledge and Talent
Experience and Professional Qualification
Creativity
Ability to create new ideas/solutions to solve problems
Commitment/Satisfaction
Staff committed and/or satisfied in the workplace
Innovation acceptance
Satisfaction with the results
Table 6 – Levels and Influential Factors’ Descriptions
29
