Encouraging Innovation by Rewarding Risk

… a core concept used in Implementation and Delivery and Atlas107

Click for ICP Working Paper

Concept description

The Institute for Competitiveness & Prosperity (ICP, reference below) sets out a strategy of encouraging innovation in the Ontario government by “rewarding risk.”

ICP’s recommendations

The eight recommendations are as follows:

Integrate innovation into government activity to counter the risk-averse culture

“Government operates in a risk-averse environment and the province needs to take centralized action to counter this. Ontario recently announced the Program Review, Renewal, and Transformation (PRRT) process, an approach to multiyear planning and budgeting. … The Institute applauds this effort and recommends expanding the scope of the PRRT to counter the risk-averse culture in government. Improvements to policy design, the policy process, and policy implementation should specifically be built into this core government activity. This signals that innovation is both desirable and acceptable. It also creates a need for senior leaders to champion innovation.”

Revise funding frameworks to boost policy design

“Funding frameworks determine how policies are designed. The government of Ontario currently allocates funds along ministerial lines and according to particular policy initiatives. But this type of framework can stifle innovation by preventing resource sharing. Adopting a mission-driven approach allows resources to flow across ministerial lines, fostering collaboration, thereby enhancing innovation.

“Ontario should also expand and centralize innovation funds to experiment with policy design. … Furthermore, the government of Canada’s Innovation Hub, located in the Privy Council Office demonstrates how allocating resources for innovation is practically and politically possible.”

Apply behavioural insights to improve policy design

“Adopting behavioural insights into policy design can also enhance innovation. Although the province has taken initiative in this regard, more can be done. Expanding the number and scope of policy experiments can, for example, foster a culture of innovation. The exploration of behavioural insights to policy making is such an experiment. Enhancing innovation requires resources – revising funding frameworks and expanding innovation funds can achieve this. Integrating behavioural insights in policy design does, however, require experimentation. Experimentation, in turn, requires a willingness to try new things, acceptance of failure, and a readiness to repeat, but also transparency in the reporting and evaluation of outcomes. The government of Ontario needs to be more publicly upfront about the number of experiments conducted, the resources committed to these initiatives, as well as their results. Publicly reporting on policy experiments can enhance the number and quality of innovations, counter a risk-averse culture, and advance accountability.”

Advance human resource management to strengthen the policy process

“There is a need to improve human resource management in Ontario’s Public Service. The recent appointment of a Chief Talent Officer is helpful, but more can be done to strengthen internal capacity and willingness to innovate. This includes recruitment techniques such as messaging on websites that communicates that the public service is looking for innovative talent. In addition, training programs that teach how to think creatively and drive innovation can be introduced. … Ontario’s Public Service also needs to incentivize employee innovation. This can be done by expanding employees’ performance development plans and performance evaluations to specify innovation as a professional goal and assess innovation.”

Modify the quality and scope of engagement to support the policy process

“Ontario needs to modify its relationship with the broader public. The Open Government and MyHealth initiatives are great steps in this direction, but more can be done. Institutionalizing open data policies, as the case in Alberta, demonstrates commitment to enhancing engagement both within and outside of the public service. The Institute suggests that Ontario adopts a similar Open Government policy or become a signatory to the G8 Open Data Charter to formalize what engagement means and how it will be conducted. … The Ontario government should consider tasking an interdisciplinary team of bureaucrats, experts, and public members to adopt a design thinking approach to solve “wicked” policy problems in a competition setting. This is a radically different take on the traditional policy process but can yield appropriate and relevant outcomes.”

Revitalize relations between government and delivery agencies to upgrade policy implementation

“Today, many public programs and services are provided by third party agencies. Instead of joining public interest values with private sector techniques, public sector techniques and private sector values are now commonplace. This reduces collaboration and resource sharing, both of which are necessary for innovation. It is time to conduct a qualitative assessment of government agencies to determine the appropriateness of their scope and mission, along with the accountability agreements and required mechanisms.”

Streamline services to refine policy implementation

“Integrated service delivery requires bigger policy silos, or better collaboration across and within government. This requires ministries to work together on large policy problems that touch multiple issues, rather than each ministry work on their piece of the problem in isolation. These partnerships can foster innovative ways of thinking and problem solving. Ontario has already taken action to streamline service delivery but there is more to be done. The Institute recommends that the province organize public services and internal decision-making across policy objectives. … In particular, the Institute suggests that the Ontario government work with its federal and municipal counterparts to streamline services.”

Monitor government innovation to enhance accountability

“The government of Ontario has tools to account for innovation at the individual and organizational levels. The Institute recommends that employees’ performance management plans be broadened to evaluate workers’ propensity to innovate. The Institute also recommends expanding Results-based Planning Briefing Books to report on government’s innovative initiatives by policy field. … Tasking an external third party to scrutinize government innovation can also advance accountability. The Institute is mandated to report on innovation and share findings directly with the public. Given its mandate and interest in enhancing government innovation, the Institute is ready to monitor and report on these activities in our Annual Report. Third party bodies of the legislature like the Auditor General should dedicate a section of their Annual Report to evaluate government innovation – this can provide an alternative perspective on government innovation and stimulate a broader conversation. On the political side, opposition parties should allocate one session of Question Period to review the context, inputs, outputs, and outcomes associated with government innovation.”


Atlas topic, subject, and course

Promoting Innovation and Driving Change (core topic) in Implementation and Delivery and Atlas107


Institute for Competitiveness & Prosperity, Licence to Innovate – How government can reward risk, at https://www.competeprosper.ca/uploads/WP24_Final.pdf, accessed 16 October 2017.

Page created by: Ian Clark, last modified 16 October 2017.

Image: Institute for Competitiveness & Prosperity, Licence to Innovate – How government can reward risk, at https://www.competeprosper.ca/uploads/WP24_Final.pdf, accessed 16 October 2017.