How to make innovation a rational choice for the government

So I got some really great feedback, some of it back channel, on my post earlier about “Plan B” set-asides for innovation in government IT.

I think the general consensus is that there needs to be positive steps taken by the government to promote real and fair competition of ideas in IT programs. Many of us who have worked in this field or observed this field agree that innovative, disruptive (read cheaper for the taxpayers) ideas tend to get smothered more often than not. Some attribute this to fear of change, others to the fact that government contractors provide value to shareholders by selling lots of expensive hours and lots of expensive products from their partners. It is hard for fresh ideas to compete in that dynamic, and we’ve all experienced that in one way or another.

I think everyone agrees that fixing this systemic issue is a necessary step for sustainable innovation in E-Gov, Gov2.0, OpenGov, Gov^2, and so on.

Right now, innovation is not the rational choice

The way contracts are structured right now, innovation is often not the rational choice for a government program. I’m not talking about incremental investments like social media or website redesigns and that sort of thing; I’m talking about major IT programs like financial systems, CRM, document and application management and the sorts of programs where governments often end up with underperforming expensive systems.

In a lot of those cases, the government department buying such an IT solution is both a customer and an investor in that product. There are very few cases where a product can be bought off the shelf and just put to work. In almost all cases there are data and service integrations that need to be done, security constraints that need to be met, accessibility mandates that need to be met, etc. So for all of that, the government program is the investor.

So now you have an investor and customer who is asked to choose one solution, one team, one architecture and one outcome. Any person who is asked to put all her eggs in one basket is going to choose the old, staid, proven basket. That’s human nature, but it’s also, I would argue, completely rational. Innovation involves risk, and our current procurement processes, which are almost always “winner takes all” make that risk virtually impossible to manage.

So there needs to be a way for a government agency to choose more than one solution so that the risk of innovation is actually palatable. The question is how do you structure that in a way that works for conservative buyers and powerful contractors and vendors? Solving that is, I think, key to returning value to taxpayers in this Gov2.0 world.

As always, I look forward to your thoughts…