However, innovation in the public sector is less about new products and more about improving efficiency and quality of outcomes. Innovation can therefore not only be linked to technological innovation leading to “Product Innovation”, but it can involve internal organisational processes and structures leading for example to new approaches to client services – “Client service innovation” – or new approaches to reaching clients – “Marketing Innovation” – or new methods for transforming information – “Information Innovation” – and so on.

The Publin report D20 introduces the concept of innovation in the public sector as a “…deliberate change (in behaviour) with a specific objective in mind “Innovation and change share a common DNA and in the public sector innovation and change are linked to improvements and novelty in systems, processes and products that add value to the public by allowing them to be more efficient and effective. In other words, innovation in public sector organisations involves the successful implementation of change.

So what can the private sector learn from the experiences of the public sector about the challenge of changing organisational structures, processes and behaviours?

Innovation examples in the public sector include: the use of new technology; the drive towards public-centric processes with the view to deliver simpler services and greater convenience; or the empowerment of staff and the public to better engage and participate in the design and implementation of new policies/services. To enable all these innovations to be successfully delivered in the public sector organisations we need effective change management methodologies and approaches.

Many of the barriers to innovation are common to both the private and public sectors; resistance to change, risk adverse cultures; centralised structures, internal politics, etc.

Some of the lessons learnt from the public sector innovations are:

1. Promote collaboration and collaborative working cultures within and across divisions and departments by identifying clear accountabilities and mapping (sometimes even creating) the cross-organisational interdependencies that need to work in order for the desired outcomes to be achieved
2. Beware that ‘fear of failure’ stifles innovation and change in organisations: in fact successful change organisations tolerate failure as part of learning, and growing change capability
3. Articulate an all-encompassing vision of what the change initiative will accomplish and align all stakeholders behind the vision
4. Capture all the expected benefits and the changes in the organisation that will realise the benefits and then establish the right metrics to monitor and track benefit realisation following the end of the change initiative
5. Smart individual and group incentives are needed to instil the desired culture. The most successful of these are about recognition of efforts and achievements, rather than financial reward.
6. Finally, be careful what you measure and what you reward, as this it will strongly influence behaviours, sometimes in unintended ways.

CITI, over the last 25 years, has developed and practiced robust and effective change methodologies and tools that enable change initiatives to be delivered successfully.

One of these models is the Change Diamond that assists organisations to view change through its different and inter-related viewpoints generating robust projects, programmes, and portfolios designed to bring the expected benefits into reality.

The Change Diamond takes a holistic view of the change journeys that organisations initiate; it is relevant not only for changes that involve organisational systems, processes and structures (the “hard” aspect of change), but also the changes that are needed in behaviours and organisation culture (the “soft” aspects of change) to enable change to be successfully embedded and realised.

CITI has supported many clients, from public and private sector markets, to achieve maximum value from their change initiatives and investment designed to bring innovations into the market place or introduce major technological change to enhance value to customers. It has done so by developing their programme, project, and change management communities.

Some recent examples to indicate the depth of our experience and support we provide to our clients can be found here http://www.citi.co.uk/case-studies/public-services/

Opportunity

But the world has changed in the past six decades. The latest thinking among disability groups and leading charities is that many disabled people will have better prospects working in mainstream employment, rather than on specialist sites.

For example, Jo Williams, Chief Executive of Mencap, has said: “When the factories were started 60 years ago they were making an important contribution. Those days have gone really. We’re looking forward to seeing people with disabilities fully integrated into society.” Bob Warner, Remploy’s Chief Executive, shares Mencap’s views.

As he says, “Remploy have a great opportunity to help more disabled people find jobs, but we have to change how we work in all areas of Remploy. There is now an acceptance that disabled people would prefer to work in mainstream employment alongside non-disabled people rather than in sheltered workshops from which they do not progress and develop. Therefore the company had to change.”

Remploy realised that, with the changing dynamics of employment today, for the cost of employing one person in a Remploy factory it could place four people in jobs with mainstream employers. Furthermore, some of the businesses that had been set up in the post war years were in urgent need of refocusing to ensure that they were meeting current market needs.

Approach

Bob faced a formidable challenge: first to convince all those who had an interest – including politicians, disability groups, the media, disabled employees and their families, and unions – that the company had the right approach.

“The vision was clear and the change made complete sense. It was a great day for Remploy when we were successful in securing government approval for our modernisation plan. It meant that we could increase the number of disabled people supported into work from less than 2,000 a year currently to 20,000 a year by 2012.”

“Planning, preparation and discussions took three years of detailed work”, said Bob. “Even with the green light from government and agreement from other stakeholder groups, we were faced with a major logistical challenge.”

Following a rigorous supplier selection process, Remploy turned to project and programme management specialists CITI for advice on how to manage a change programme of this kind, and for help in bringing it about. Remploy had to merge factories, close some sites and transfer people and production within a limited time and a defined budget, in the media spotlight and in a highly charged climate where emotions, understandably, were running high.

“Throughout its history, the company had never executed a programme of this scale and complexity.” said Bob. Building a foundation for Remploy to master change and develop its true potential was essential.

An early decision was made that, rather than bringing in external project managers, CITI would train and develop Remploy’s own staff as project and change managers, and would provide appropriate systems and support to allow Remploy’s own people to undertake this major change programme for themselves.

Geoff Vincent, CITI’s Principal Consultant leading the engagement said, “Transferring capability is exactly what CITI is about. We strive to give our clients the confidence to manage major change and are delighted that we have been able to ensure the change programme was a success, and also leave Remploy in a much stronger position to tackle the future challenges that may lie ahead”.

Outcome

Over the 12 months to the end of March 2008, Remploy has found 6,600 jobs in mainstream employment for people with disabilities – an increase of 27% on the previous year. The figures include 4,600 jobs under the government’s Workstep programme, which is aimed at those who experience the greatest barriers to finding and keeping a job – a rise of 47% on the previous year.

Bob Warner, pleased with the outcome of the modernisation programme so far, added “Remploy with its own project and programme management capability, working to the highest professional standards, has what we need to meet the new challenges the company faces, including the building and development of successful businesses following the restructuring. Refreshed and revived, Remploy are now in the ascendant and can apply its skills to helping many times more disabled people into employment, for the next 60 years and beyond”.