Recently, the White House formed a new initiative called the Office of American Innovation. Its goal is to partner with tech companies to bring more modern solutions to federal systems, starting with the Department of Veterans Affairs. Representatives from Apple, Microsoft, Google, IBM, and other heavy hitters joined a phone meeting in August to help the White House reconsider how the federal government employs technology.

Regardless of whether the initiative achieves its goal, the need for these partnerships and this sort of growth is real. Companies, both in the public and private sector, constantly struggle to innovate while keeping day-to-day operations running. But innovation is essential to the marketplace and to the United States’ continued viability as an economic world leader.

By leveraging organization redesign, government agencies can discover more efficient ways to meet both the needs of the present and the vision for the future.

What innovation entails

Innovation can be categorized into three horizons: In terms of products and services, horizon one innovation is essentially a product extension, where there’s some evolution in the scope or scale but the development isn’t considered truly “innovative.” On the other hand, horizon two and three innovations cannibalize something in the marketplace and render a groundbreaking product or process (think the iPhone).

For horizons two and three in particular, innovation can’t take place when people are tasked to the gills with daily work. To avoid this fate, organizations need to create and install a parallel operating model with innovation forming a centerpiece rather than an add-on to an individual’s work. This gives people the space, time, and effort needed for innovation by separating teams into departments on the basis of their respective goals: to either keep the organization running under the status quo or to develop the new system, product, or service.

Parallel operating models are vital because without a separation between this model and the traditional model, innovation arms will stall, as employees can’t be expected to look forward while keeping their eyes on their current tasks. Moreover, this model allows innovation teams to pull subject-matter experts out of the daily operating model to serve as consultants without fully disrupting core operations.

In addition to implementing this model, leaders also need to know how to manage it. While regular management involves evaluating current results and adjusting that approach on the basis of traditional KPIs, innovation management requires leaders to judge the merit of ideas as they grow through a novel set of metrics often determined by the innovation itself. That’s why it’s essential for leaders to conduct regular review periods to gauge the innovation’s worth and the need for further investment.

Why government innovation is and has been limited

It’s certainly possible for government organizations to innovate as effectively as those in the private sector. Still, their innovation continues to lag behind private companies for a few reasons.

First, the people in government organizations are more often roadblocks to innovation rather than facilitators. Given the nature of elected and appointed roles, most leaders in government are empowered to say “no,” but few are empowered to say “yes,” making it unclear exactly where and how decisions are made.

For instance, during the early 2000s, we worked with a public transportation department on a redesign. Everything was going well until the human resources department realized that a few positions would no longer be necessary in the new operating model. The HR leaders got scared, and the work ground to a halt.

Secondly, budgetary constraints challenge government entities differently from those in the private sector. While the consequences and stakeholders that governments contend with may be no different from a business, government organizations are often viewed as resources instead of partners, making it extremely difficult for those within them to do anything but fight to maintain the departments’ existence.

Lastly, and unlike the private sector, government agencies tend to be insulated from outside pressure. While this insulation theoretically protects government organizations from volatile marketplaces and environments, it can also stifle innovation by preventing organizations from having to respond to environmental stimuli, essentially eliminating competition.

Part II of this piece will cover how government organizations can effectively implement organization redesign.

Mark LaScola is founder and managing principal of ON THE MARK. Operating through his passion for collaborative business transformation that’s supported by pragmatism, systems thinking, and a belief in people, OTM has been in business for 27 years and is a global leader in collaborative organization design.