Embedding Innovation in Workplace Culture: Leadership and Employee Engagement in the Ontario Public Service

Dr Kalim U. ShahDr. Kalim U. Shah has over ten years of  experience in public policy design, analysis and evaluation in the public and private sectors. His current interests are primarily in the fields of corporate sustainability, environmental responsibility, innovation and governance. He has worked and conducted research in these fields in Latin America and the Caribbean, Canada and the United States. A former Fulbright Scholar and Organization of American States Fellow, Kalim is currently on the faculty of the School of Public and Environmental Affairs of Indiana University Northwest; is an affiliate faculty with the Graduate School of Business at the University of the West Indies in Trinidad & Tobago; and Principal of Valinor Research and Consulting LLC headquartered in Toronto, Canada.
(This article is derived from the author’s work with the Modernization Division of the Ministry of Government Services, Ontario Public Service)


INTRODUCTION
 
“I want to connect a focus on innovation with how we address the fiscal challenges that are facing all ministries in the government at large. I think that if we consider how we are going to tackle some of these difficult challenges associated with the deficit, one of our pathways for it is through innovation and a focus on productivity and efficiency.”
George Ross, (former) Ontario Deputy Minister of Research and Innovation

The world around us is changing at an ever-increasing rate. From lifestyles to technologies across countries and industries, change is being driven by creative and innovative philosophies, policies, processes and products. In the private sector innovation has long been the foundation of competitive advantage and business survival. Traditionally the public sector has been largely shielded from market pressures and this, coupled with the bureaucratic nature of public sector organizations, has to some extent, led to under-appreciation of innovation in the public sector workplace.

The continual shift towards ‘new government’ models, increasing public pressure for government accountability and tough economic realities are forcing public organizations to look for creative ways to “work smarter”, “achieve more with less” and “be client responsive”. A review of how public sector organizations have approached “being innovative” suggests three typical models.

Table 1: Traditional Models of “being innovative” in public sector organizations

In Canada, the Ontario Public Service (OPS) has been at the forefront of moving the culture of innovation forward in government. Here, we describe some of the organizational successes and stumbles along this journey to date. Drawing from evidence collected through the OPS Employee Survey, innovation focus groups and projects, we identify how leadership practices and employee engagement impact our approach to building a culture of innovation in the workplace and how we intend to move the agenda of innovative government forward.
 
ORGANIZATIONAL BACKGROUND
 
The OPS is the largest provincial government in Canada serving over 13 million citizens and employing over 60,000 people through 30 ministries and numerous agencies and boards. Ontario’s total 2010-11 spending was approximately $113.3 billion. In the early 2000s Premier Dalton McGuinty challenged the OPS to build better quality services for the public and enhance operating efficiency. To do this, the OPS had to harness all of its creative energy and innovative capacity. The result was the birth of two landmark institutional changes, innovative in their own rights and representative of an approach then untried in the Canadian public sector landscape.
 
First was the introduction of the OPS Innovation Fund. This fund launched nearly ten years ago provided financial support to implement proof of concept innovations that improved service delivery and increased government effectiveness and efficiency. Over its course some 152 projects were funded to the tune of approximately 150 million. The program was significantly curtailed by 2010 due to fiscal constraints and other programmatic concerns. Second was the launch of the centralized Office of Ideas and Innovation charged with selecting pilot projects and implementing them across the enterprise. By 2011 over 152 projects were converted into workable programs, with the Office recording an average 88% implementation success rate annually over that time period. But despite this, it was difficult to measure success of many projects and many also had longer-term payoffs difficult to reflect and justify in the fiscally constrained environment after 2008/09 (Shah and Prokopec, 2011).
 
The OPS and the Ideas and Innovation Office took the opportunity to revisit its strategies and role in transforming the organization into an innovation driven one and seek avenues to revitalize its approach given the new realities of a fiscally constraining immediate future. One key question to be answered was why, with all the support, processes, structure, investment and planning put into the effort, it did not seem that an innovative culture seemed to take hold and grow.
 
Through a year long series of introspective reviews and feedback gathering activities from employees, management and leadership, the public, internal and external stakeholders and advisory input from leading consultants, the OPS came to understand and appreciate the implications of its strategies which were founded on the drive to innovate rather than the crucial foundation of embedding an organizational culture that sufficiently supports innovation.
 
While with good intentions and strong foresight the mechanics of the programs, resources, structures, processes administration were promoted, seeding and cultivating innovative projects, they struggled to sustain a broader culture of innovation across the organization. The Ideas and Innovation Office began to appreciate the importance of an embedded culture of innovativeness as opposed to a portfolio of innovations invested in across the organization. Now the job began, to switch gears to fostering this culture. For the OPS a culture of innovation referred to an organizational environment that is open to encouraging and rewarding of new behaviors and mindsets that support creative exploration and idea implementation. It is the fertile ground that allows innovations in the form of value enhancing new processes or services and products.
 
Although the OPS has a long standing history of innovation, it was at the turn of the century, that the OPS adopted a more systematic approach towards innovation as an organizational strategy. In 2002 the OPS dedicated its Framework for Action to innovation, calling for all programs and services to make innovation a priority. In 2003 the OPS Ideas and Innovation Office was established and through this dedicated focal point, the OPS Innovation Fund and OPS Ideas programs were borne. These corporate programs were intended to support a stronger culture of innovation through funding for ‘proof of concept’ projects and through an outlet for employee originated ideas. Around this time as well, the OPS witnessed a sharp increase in the amount of senior leaders who were talking about and calling for a more innovative approach to work in the OPS.

While the OPS Ideas and Innovation program as initially conceived and designed in 2003 was successful in its early years, in 2011 it shifted gears somewhat, and began focusing more on growing that culture that would be necessary to support innovation long term, as oppose to improving the rate of innovation projects or idea generation.
 
EMPLOYEE PERCEPTIONS OF INNOVATION AND WORKPLACE CULTURE 

Innovative workplace behavior is the outcome of three interacting systems - the individual, leadership, and the “climate for innovation” (Scott and Bruce, 1994). In this climate or “culture” of innovation, employee engagement and leadership are often posited as important influences on both culture change and innovation. In fact, data gathered through the OPS employee survey suggests a strong correlation1 between Employee Engagement and Independence and Innovation (r= 0.64) and between Leadership practices and Workplace Culture (r = 0.60) (Prychodko and Shah, 2012a).
 
The survey includes a bank of questions designed to measure employee perceptions of Independence and Innovation in the workplace. Employee
independence provides a measure of psychological empowerment which has been shown to positively relate to innovative behaviours (Spreitzer, 1995). When employees have a reasonable level of autonomy they know that their decisions impact their work and they are more likely to be creative. Enough flexibility in job design to allow reasonable risk taking has also been shown to determine entrepreneurial success (Baer and Frese, 2003).

Figure 1: OPS Employee Survey results for Independence and Innovation

Figure 1 shows that less than half of all staff (48%) agreed/strongly agreed that they are “encouraged to take reasonable risks in doing their jobs”. But the mean score has increased since 2007. Also trending positively is “having opportunities to provide input into decisions that affect my work” with 61% of staff agreeing/strongly agreeing and a statistically significant improvement in mean score since 2009. The OPS may be stagnating on “staff feel free to express opinions that diverge from those of management without fear of reprisal” and “having the independence needed to make decisions about daily work” even though about two-thirds of staff agree/strongly agree with the latter statement. Perhaps of most concern is the statistically significant decline in mean score for “innovation being valued in the work unit”. Only 52% of staff agree/ strongly agree with this statement.
 
Analysis of the survey results allowed us to identify organizational themes most strongly associated with a culture of Independence and Innovation (figure 2 below). Taking action on these themes presents the most likely means of inculcating and growing a culture of independence and innovation in the OPS.

Figure 2: Drivers of the culture of innovation in the OPS

Leadership Practices and Communication:
Research suggests that transformational (as opposed to transactional) leaders who focus on increasing employees‘ belief in the importance of their roles, their abilities, trust in the leadership and involvement in decision-making are positively linked to innovative workplace behaviour (Yukl, 2009). Sarros et al (2008) find that two characteristics of transformational leadership - communicating vision and providing individual support – were most important to embedding innovative culture. This aligns with evidence from the OPS which shows strong relationships between organizational culture of innovation and staff confidence in leaders of the organization; leaders’ ability to provide clear direction; leaders’ showing genuine interest in their well-being; and good flow of essential information from leaders to staff.
 
Direct Supervision:
Research has long shown that the quality of the relationship between managers and employees is directly related to innovativeness (Evans and Waite, 2010). The manager- employee relationship develops around the amount of decision latitude, influence, and autonomy the employee is allowed and over time, may evolve from formal, impersonal interactions to ones characterized by trust and respect. Here the employee is allowed greater autonomy and decision latitude, which is essential to innovative behavior (Scott & Bruce, 1992). OPS survey results suggest that there are strong relationships between organizational culture of innovation and managers being perceived as effective; keeping staff informed; consulting with them; offering constructive feedback; and making timely decisions. Positive supervisor-staff relations support an innovative workplace.
 
Workplace Morale and Recognition:
Innovation as a system based, organization-wide orientation is significantly influenced by employee morale (Bourgault and Gusella, 2001). Sirota et al. (2005) found that there is a strong negative impact on workplace morale when leaders and employees have different understandings or acceptance of the organization’s stance on encouraging, punishing, rewarding or ignoring innovation and risk taking. OPS survey results suggest that there are strong relationships between organizational culture of innovation and having good morale in work units; when staff are treated respectfully; and when the organization does a good job of formally and informally recognizing the efforts of staff.
 
Learning, Development and Career Advancement:
Employees should be motivated and confident enough to continually try out new ideas. Therefore they must be equipped with the right types of knowledge, skills and abilities to both effectively generate and implement new ideas. By providing a wide variety of opportunities for learning, organizations expose staff to a greater variety of stimuli, developing their intrinsic motivation to learn and develop their knowledge and skills to work with new innovations. OPS survey results suggest that there are strong positive relationships between organizational culture of innovation and provision of good quality learning and development opportunities; support by the organization for work related learning and development’ opportunities for career advancement and employee satisfaction with career progress.
 
EMBEDDING AND SUSTAINING AN INNOVATIVE CULTURE
 
“Openness on the part of the organization to new ways of thinking and doing – guided by our values – that brings about service improvements across the OPS and benefits to the citizens of Ontario.”
OPS Definition of a culture of innovation 

Across the broad public sector, despite the multitude of corporate strategic reports that describe innovation as ‘the way we do business,’ many leaders lack a clear understanding of how to embed innovative culture in their day- today decisions and processes. Here in the Ontario Public Service (OPS) we have been continuously improving our understanding of what it takes to be an innovative organization, how to embed it, sustain it and shape our workplace of tomorrow.
 
Above all else we should not lose sight of our purpose of producing public sector value (i.e. cost savings, better and smarter service/dollar spent, reduced business risk, taking advantage of opportunities) through innovative means and not be distracted by innovation in and of itself. This requires leadership that is open and adventurous enough to create the right cultural environment while at the same time keeping the ship on a responsible, even keel. This is not an easy task but through our internal research in the OPS, including employee surveys, focus groups and open discourse, we have identified the roles most required of leaders for embedding a culture of innovation (figure 3).

Figure 3: Leadership Roles in embedding a Culture of Innovation 

THE OPS APPROACH:ORGANIZATIONAL AND LEADERSHIP STRATEGIES
 
To support knowledge sharing and mobilization around public sector innovation, an internal innovation centre of excellence will be created from our own dedicated professionals in the OPS. The innovation centre of excellence will engage in synthesizing and sharing relevant research and information on innovation with the OPS community and will serve as the central hub of expertise on matters of modernization and innovation.

Figure 4: OPS Working Model for embedding a Culture of Innovation

Below, based on our experience in the OPS, we identify ways in which leaders can make an impact on embedding a culture of innovation and how the CIWC is playing a key organizational role in this transformational process.

Leaders must foster commitment to a workplace culture of innovation

The creation of the Innovation Community of Practice has amplified efforts throughout the OPS. This is a group of volunteer practitioners from across the organization that hold the common goal of promoting innovative approaches to public service delivery and fostering a culture of innovation in the OPS. The community is an organic and self- sufficient body that coordinates itself by rotating meeting chairs, and partners with corporate entities to deliver events and mobilize knowledge. Consisting of members from different ministries and disciplines, the community continues to grow and increase its influence.
 
While, the OPS holds a wealth of information and data, an opportunity exists to improve access to this information in order to increase innovation capacity. A corporate communication strategy that includes the use of various channels of communication (i.e., OPSpedia, MyOPS, and Ontario Newsroom) will be developed to ensure innovation is being promoted across the province and to ensure that the innovation message is sustained throughout the year. Communication about new trends, research, learning events, performance metrics, successful innovation projects, lessons learned and other items will ensure the OPS is informed, engaged, and in a position to make better decisions.

Leaders must clarify what they expect from employees in an innovative workplace

Implementing baseline assessments to gauge where the organization is and develop metrics to measure progress against pre-defined innovation goals. Measuring success has been challenging for us in the OPS and our methods provided limited value for decision-makers. Going forward, performance measurement will focus on outcome measures adapted to the environment and stage of experimentation at which the OPS as an organization sees itself. Measures include:
  • The OPS Employee Engagement Survey
  • Employees’ narratives about their changing employee experience
  • Inter-ministerial and even cross-jurisdictional activity and collaboration
  • Information sharing
  • Frequency of key messages being used by leaders
  • Innovative initiatives and opportunities available to employees
  • Level of public outcome improvements
  • Employee attraction and retention ratesInternal and external innovation recognition awards
Leaders must build momentum for cultural shift towards an innovative culture

Internally, an Annual Innovation Challenge is being designed to bring together a diverse group of innovators from across the organization to tackle a specific ‘wicked’ issue affecting the OPS in a given year. By posing an annual innovation question that aims to achieve a specific result or outcome, it engages the entire OPS community to bring different perspectives to the table while connecting around a common, real and tangible problem.
 
A great idea remains only a great idea if the right opportunity for implementation does not present itself. In order to connect great ideas with the right opportunities, we have developed a new ideation platform that enhances the user experience and supports improved interactivity levels among submitters during idea submission. The new ideation platform is a three-pronged approach. The first prong, the OPS ‘creative problem solving’ forum, is an outlet for employees to post any “innovation challenges” they may be experiencing on the job, as well as, an opportunity for the rest of the OPS community to engage in some creative thinking while passing-down their knowledge as they respond to posted challenges. Challenge submitters will then be responsible for picking the best “creative solution” and proceeding with implementation, thereby supporting change at a local level. The second prong, targeted ideas campaigns, will continue to be deployed throughout the year, and will continue to engage and harness the collective knowledge of the OPS around cross-cutting, global issues to support change at a global level. The third prong, local idea incubation hubs, will provide a safe space for specific units and divisions in the OPS to implement and manage their own creative thinking processes.

Leaders must instil the capacity of staff to be a part of the new culture of innovation

The OPS Innovation Zone includes the Innovation Toolkit - a collection of practical innovation resources and learning tools to support the implementation of innovative solutions to service challenges across the OPS. We are also developing an Innovation Learning Path to help build innovation capacity at the individual level, and to ultimately support the common goal of attaining an enterprise- wide culture of innovation. The Innovation Learning Path will provide a streamlined and measurable approach for employees to acquire new skills, knowledge, and attitudes which they can subsequently deploy in their areas of work in the form of new innovative initiatives or new ways of doing things.
 
World Creativity and Innovation Week is a time when the OPS community comes together to celebrate innovative work in the OPS, to engage in learning on innovation, and to connect with senior leaders on the topic of innovation. The week is important to promoting a culture of innovation inside the OPS and to showcasing to Ontarians the steps that are being taken to transition to a more modern, nimble and agile organization that is always ready to meet the needs of its citizens. Every year the WICW will continue to deliver a series of unique, relevant and out-of-the-box corporate events that support the OPS innovation agenda and ultimately seek to increase innovation capacity across the OPS.
 
MAKING THE CULTURE OF INNOVATION A REALITY IN PUBLIC ORGANIZATIONS
 
“These are challenging times. But there are also many opportunities to embrace innovation and improve outcomes for the people of Ontario. So we must be ready to transform ourselves in order to succeed.”
Peter Wallace, Secretary of Cabinet, Memo to staff in response to the Commission on the Reform of Ontario’s Public Services Report, Feb. 2012.
 
The experience of the OPS highlights a critical lesson for public sector organizations embarking on their own quests for innovation. Many times, we are too eager to pump finances and resources into “innovation directives” with the expectation of immediate returns on those investments. While many “quick- wins” and short term outputs  can be accrued, innovation is not likely to be sustainable, and in reality, the true objective of re-orienting the organization as an engine of innovation for continuous, self-generating, long term improvements is not achieved (Prychodko and Shah, 2012a). That lasting transformative change requires not just resources and support but a working environment and a workforce that has an intrinsic culturally embedded understanding and appreciation of innovation.
 
Gone is the philosophy that decisions about innovation had to be made by senior leaders and not many else; and that employees were to take direction from these chosen few and carry out the task of government. Move leaders away from the notion that sharing decision-making means a loss of power and prestige. Leaders need to understand their new role, not as the gate-keepers of innovation but as the facilitators and cheerleaders of innovation from all corners of the organization. In fact, leaders’ main task should be to see that creative ideas in the organization are successfully implemented.
 
Employee driven innovation is much more than the traditional “ideas box approach” no matter how sophisticated that ideas box might be, as we’ve seen in the OPS. People at all levels of organizational hierarchies can lead change in the workplace. A high-performing public organization has employees at all levels being encouraged, enabled and motivated to contribute to their full potential and actively lead change and workplace transformation. Providing staff with greater autonomy, opportunities for participation, recognition, feedback and information are prerequisites for gaining the motivation and commitment needed to drive innovative behaviours as well as attract and keep the best new talent to the public sector, especially since we can hardly hope to match private sector salaries in most cases.
 
But creating an innovation culture is easier said than done. Strong leadership is necessary for establishing a cohesive, yet flexible, workplace culture that encourages idea experimentation and tolerates “smart failures.” At the same time, clear and progressive leadership helps organizations develop, thrive and survive crises. It is important to remember formal and informal aspects of creating an innovative organization. It’s about the right systems in place but its also built on a foundation of the right public service values. Finally, our organizations first and foremost must meet its responsibilities in transparent and accountable ways, but that does not minimize the fact that taking some calculated risks to innovate can lead to greater rewards.
1 Pearson correlations (r) between 0.75 and 0.50 
 
 
REFERENCES 

Baer, M., and Frese, M. (2003). Innovation is not enough: Climates for initiative and psychological safety, process innovations, and firm performance. Journal of organizational Behavior, 24(1),45-68.

Bourgault, J., and Gusella, M. (2001). Performance, Pride and Recognition in the Canadian Federal Civil Service. International Review of Administrative Sciences, 67(1), 29-47.

Evans, K., & Waite, E. (2010). Stimulating the innovation potential of ‘routine’workers through workplace learning. Transfer: European Review of Labour and Research, 16(2), 243-258.

Prychodko, N. and Shah, K.U. (2012a). Driving client-centric service transformation across the OPS. Canadian Government Executive, 17(7).

Prychodko, N. and Shah, K.U. (2012b). Turning data into insight. Canadian Government Executive, 18(1).

Sarros, J. C., Cooper, B. K., and Santora, J. C. (2008). Building a climate for innovation through transformational leadership and organizational culture. Journal of Leadership & Organizational Studies, 15(2), 145-158.

Scott, S. G., and Bruce, R. A. (1994). Determinants of innovative behavior: A path model of individual innovation in the workplace. Academy of Management Journal, 37(3), 580-607.

Shah, K.U., Prokopec, K. (2011). Organizational Transformation through Employee Driven Innovation:  The Ontario Public Service Ideas and Innovations Program. CAPAM & Commonwealth Secretariat PSTI Case Study Catalogue.

Sirota, D., Mischkind, L. A., and Meltzer, M. I. (2005). The enthusiastic employee. How companies.

Spreitzer, G. M. (1995). An empirical test of a comprehensive model of intrapersonal empowerment in the workplace. American Journal of Community Psychology, 23(5), 601-629.

Yukl, G. (2009). Leading organizational learning: Reflections on theory and research. The Leadership Quarterly, 20(1), 49-53.