Tackling Policy Challenges Through Public Sector Innovation

Annex B. Innovation Capacity Framework – Factors and variables

Table A B.1.  Factors and variables connected to the Innovation Capacity Framework

	Individual	Organisational	Public sector system
Purpose What is driving the intent to innovate?	Intrinsic motivation: factors including individual aspirations (e.g. career goals, self-efficacy, prosocial behaviour), job significance, individual satisfaction and engagement Extrinsic motivation: factors including compensation and rewards (financial and non-financial), external recognition (e.g. awards), career incentives	Institutional drivers: Organisational mandate and accountability; missions; strategy, innovation needs assessment Leadership and organisational culture: leadership traits and mindset (e.g. vision and appetite for innovation); attitude towards uncertainty and ambiguity; general appetite for innovation, ethical standards Change drivers: external-to-the-organisation events prompting the need to change (economic cycles, legislative shifts, change in citizens and business demands, audits, media/press); tipping points or organizational barriers (e.g. silos and turfs; service delivery challenges)	Government agenda: political direction and priorities, austerity Global challenges and missions: urgency to action to respond to shared global goals and targets (e.g. SDGs); International standards: desire to adhere to common principles and standards (e.g. Recommendation on Digital Government Strategies, Indicators, Declaration of Public Sector Innovation) Domestic dynamics and pressures: public sentiment / trust, expectations, lobbying pressure, electorate mood, polling Public sector reform agendas: reform efforts indicate the need for new approaches/change theory Public value, democratic principles and ethics: action dictated by responsiveness to democratic and public values (e.g. human rights, freedom of speech, rule of law)
Potential What determines whether innovation efforts are attempted?	Individual job design: factors include thelevel and degree of individual autonomy, discretion and ownership of tasks; room allowed to exercise creativity Work environment: quality of team interactions (psychological and intragroup safety, consideration for biases and diversity), trust, opportunity for risk and failure Perception of context: Perceived openness and legitimacy for experimentation, incentives for innovation, awareness of strategy, perceived and actual rules and parameters	Leadership practice and style: clarity of permission to innovate, mechanisms for collaboration, approach to stewardship Institutional settings: position of the organisation (independence, identity, reputation, funding, stability, trust); shared norms and values that underpins collaboration (social capital) degree of insulation from political cycle Strategy design approaches: innovation explicit in strategy design (e.g balancing current and future); inclusion of user and staff perspectives and environmental signals Decision making within the organisation: approach to uncertainty and risk appetite and management; approval processes and delegations	Political signalling: mandates for innovation (Innovation Manifesto, Declaration), parliamentary/cabinet decisions, political climate; political-administrative interface Contextual factors and governance dynamics: type and quality of accountability (e.g. centralised vs decentralised models, direct or indirect accountability); decision making, vested interests Existing public governance frameworks: features of regulatory, human resource, audit, budgetary, digital frameworks; possibility to challenge rules/default settings
Capacity What is needed to carry out innovative efforts?	Mindset: entrepreneurial, curiosity, confidence, multidisciplinary, resilience Practical ability: Knowledge and capability, skills (e.g. data literacy, iteration, user-centricity, story-telling, insurgency), tools (methods, techniques, models) and resources (financial and non-financial) Continuous learning and iteration: Priority for experimentation, learning and failure, reflective practices, making individual plans to use learning for action (including training)	Institutional conditions and supports: funding, procurement policies and direct investment; data and knowledge management; IT/technology; partnerships and external engagement, innovation management supports, organisation demographics Portfolio, program and project management approaches: portfolio (facets) and project management, funding flexibility, change management strategy Workforce strategy, practices and culture: combinations of knowledge, expertise across workforce; HR policy, HR systems including for talent management, incentives for innovation, mobility, diversity, recruitment, learning & development, performance management; organisational and workforce culture	Flexibility of rules and agile processes: agile approaches to policy making, regulation and procurement, open to input from citizens, civil society and industry Institutionalization of innovation: Institutional embedding of innovation, formal bodies and roles (e.g. CIO), integration of innovation approaches (e.g. through internal directives, circulars), intermediation/advisory/support roles Openness and connectedness: networks (national and x-border), partnerships across sectors; open innovation; interoperability and data sharing
Impact How is the impact of innovative efforts understood and informing future practice?	Individual experience: perception of barriers to innovate, recognition and validation, previous experience to innovate Individual performance: informal and formal evaluations during performance assessment cycles, including innovation Knowledge of results and impact: feedback on output and behaviour, quality performance data, including of innovative efforts or activities, personal perception of making a difference.	Organisation performance monitoring, audit and evaluation: internal controls, practices and organisational perceptions and sentiment Perceived impact: external (user) feedback of innovation activities, efforts and practices in the organisation, media scrutiny	Performance and evaluation: Performance evaluation frameworks across departments and agencies (integrity, accountability, system outcomes and performance reporting approaches), scrutiny, evaluation and audit Legitimacy mechanisms: effectiveness of outputs, quality of governance and internal processes Continuity of efforts: innovation practices embeddedness in long-term reforms

Note: Work in development.

Source: Kaur, M. et al. (2022), “Innovative capacity of governments: A systemic framework”, OECD Working Papers on Public Governance, No. 51, OECD Publishing, Paris, https://doi.org/10.1787/52389006-en.