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Problem discovery, the overlooked piece of the innovation puzzle in the public sector

Written by Robert Chiu, Principal Advisor – Stats NZ Tatauranga Aotearoa

The increasing rate of change due to rapid advances in technology is finally a topic of mainstream conversation. Just recently, the programme ‘What’s Next’ on New Zealand television introduced the topic of disruptive change, which was met with high levels of public engagement.

The New Zealand public sector has acknowledge this and the need for government to update its approach to reflect the changing needs of citizens. Economic Development Minister Simon Bridges recently said: “The fast-paced iterative model of solving problems fosters exactly the sort of innovation we need to keep our economy growing strongly and put customers at the centre of everything we do”. It is extremely positive that this is a topic of senior public sector leader discussion, however the change needed to enable this within the public sector remains a challenge.

The current system and its problems

Generally speaking, the mechanism for problem solving in the public sector operates under the benefits/risk ‘arms race’ model. Investment in projects is based on which business case has the most assumed benefits and highest risk of no investment to the business. Therefore there is an incentive to group smaller problems together. Most investment decisions will favour these projects, as the scale of the problem infers the scale of risk to the business, thus higher prioritisation. This forms the basis for massive multi-year projects requiring large investment.

However, often we hear stories of projects going over budget and not delivering on the assumed benefits in the public sector. Why? Because the system does not address two modern issues in problem solving:

  • It doesn’t account for the shortened time frames for problem solving from changing customer needs in an environment of rapid digital change.
  • The increase in complexity of projects when problems are incentivised to be large and complex.

What can we do?

Firstly, problems and benefits are typically based on expert opinion. Performing a problem discovery exercise as a prerequisite for investment provides additional assurances and lowers the risk profile by:

  • Providing a secondary data point to validate the expert opinion.
  • Providing timely evidence that provides insight and feedback on the changing environment.
  • Minimising the investment risk since problem discovery requires small investment, if a valid problem is not found, the sunk cost is limited, the learnings immediate.

Secondly, when projects and problems are combined, the risks and complexity are increased exponentially, not linearly, this is the main reason why projects fail. By breaking down big problems into small manageable parts, it increases the successful delivery of benefits by:

  • Reducing the complexity of the problem by significantly reducing the number of dependencies and moving parts in the project.
  • Incorporating a rapid feedback loop to improve decision making for later pieces of work.
  • Allows flexibility in problem solving, because reducing dependencies allows you to re-evaluate your approach as each part is completed.
  • Deliver benefits more quickly, since the timeframes are smaller.

Practicing what is being preached

There is an increasing demand for innovation in the public sector. Traditional approaches to problem solving display some obvious gaps in addressing the modern needs and demands of citizens. The current system is deeply ingrained in the public service and to change this system will involve considerable time and effort. However, to practice what is being preached we need to take on small, manageable parts of this problem, starting with applying the two suggestions of introducing problem discovery into your problem solving process, and breaking problems into manageable chunks.

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