INNOVATION TALK:WHEN THE perfect storm hit the economy in 2008 and a €20 billion shortfall appeared in the public finances, managers across the public service were faced with a challenge they had never encountered before – to cut costs by an average of 30 per cent. Four years on, after a series of austerity budgets and the loss of thousands of staff, and with the prospect of several more years of the same, there is no let up in the pressure to "do more with less".
To do more with less – that is, to deliver a better service with fewer resources – can be done, but it takes imagination, careful planning and disciplined execution. It also takes time. Such are the targets and tight time frame stipulated by the troika, however, that the cost-cutting to date has been achieved largely through the crude instruments of shedding programmes, across-the-board cuts, an accelerated retirement programme, a moratorium on recruitment and other similar interventions designed to have short- term impact.
What are managers supposed to do in this situation? Do they simply deliver the outstanding number of job savings demanded and wait for the PER programme to unfold? I believe there is something else they can do: they can take the initiative and innovate. Earlier this month, Kieran Cannon, a Minister of State, urged senior managers “to bring an entrepreneurial spirit to the task”.
The scope for cost-effective innovation in the vast, labour-intensive public service is enormous. Just one example illustrates: Genio, a small NGO dedicated to “accelerating the dissemination of proven, cost-effective solutions that deliver person-centred care to people with disabilities, mental health problems and dementia” has developed a track record of enabling a better life for such people at lower cost.
They achieve this mainly by moving people from congregated settings, which in many cases required 24/7 nursing cover, to an individually tailored place in the community where they might need perhaps a few hours of assistance daily.
Ideally this kind of game-changing innovation would be happening system-wide, but it is unlikely to happen any day soon, for a number of reasons. Sticking with the disability sector, just to illustrate, service managers around the country are constrained by pay and conditions, demarcations, work practices, grade structures, disciplinary codes and other barriers, which were centrally negotiated and are locked in to the wider, monolithic HSE arrangements. Many managers want to transform their systems but are stuck with these central agreements and with industrial relations machinery that is no longer fit for purpose.
While the reform of the industrial relations machinery and leadership from the top will certainly make a huge difference in enabling and driving radical innovation system-wide, some of the most exciting innovations emerge from the local managers; from the front line.
This pattern is evident in the domain of mental health where the implementation of A Vision for Change, a radically new approach to service provision has been disappointingly slow. Yet, in a number of catchment areas around the country, because of innovative local leadership, implementation is at an advanced stage, while other areas have hardly got started. In spite of formidable systemic constraints, there are numerous islands of innovation which show what's possible.
Managers face two basic challenges in attempting to slash costs while maintaining service quality – the technical challenge and the challenge of winning over the hearts and minds of all those impacted by the changes. A serious corporate commitment to innovation plays a crucial role in raising morale in a context where all staff hear of are cuts, cuts and more cuts. This is where corporate leadership comes into play. System-wide innovation needs to be legitimised and supported by senior managers and union leaders. It is only they who can remove systemic obstacles.
An Post is an example of innovation leadership from the top. Faced with a continuing decline in mail and the imminent prospect of market liberalisation, the senior management of An Post set out a twin-track strategy of reducing costs and driving innovation. From an early stage, they engaged with the unions and secured their support.
Another case is natural resources company Coillte, which is delivering impressive results on foot of a strong collective commitment to innovation at a time when they also have to take out very significant costs in order to stay competitive and grow.
The inclusion of innovation in the public service reform agenda is crucial to winning the hearts and minds battle. Without it, all managers can offer is more cuts. But there is a need to overhaul the system of central bargaining and endless appeal mechanisms that make innovation impossible. In several areas of the HSE, for example, the mental health services, where the leadership team is committed to radical reform, these inherited infrastructural barriers significantly hold back implementation of A Vision for Change.
We cannot cut our way out of the crisis we are in; the only way out is through growth. The key to growth in the commercial sector is innovation, but for companies to compete in the global market place, they require high-quality, cost-effective public services. So do all citizens, and the key to achieving this goal is radical service innovation.
There is a brighter future to hope for than a public service demoralised by repeated cuts and delivering a second-rate service.
Eddie Molloy is director of Advanced Organisation, consultants who specialise in systemic innovation and large-scale change management. He is also chairman of Mental Health Reform.
A serious corporate commitment to innovation plays a crucial role in raising morale in a context where all staff hear of are cuts, cuts and more cuts
