Disruptive Innovation in the Public Sector: Lessons on How Government Can Achieve More For Less

In our first “Disruptive innovation in the public sector” podcast, authors Michael Raynor and Bill Eggers discuss the benefits of disruptive innovation in the public sector. Tune into this episode of Deloitte Insights to watch a panel of three former government decision makers weigh in.

Speakers

Tom Davis, Director, Deloitte Consulting LLP 
Carmen Medina, Specialist Leader, Deloitte Consulting LLP
Lieutenant General James Soligan, Director, Deloitte Consulting LLP

Transcript 

It’s time for Insight, a video news production of the Deloitte LLC¹.  Now here’s your host Sean O’Grady.

Sean O’Grady
Hello and welcome to Insights, where today we’re continuing our examination of a cost savings strategy called Disruptive Innovation and its potential use in the public sector. Now you may recall in our last episode, authors Michael Raynor and Bill Eggers introduced us to the topic of disruption and spoke of its proposed benefits. Well, today, we’re going to weigh their thoughts against a panel of three former government decision makers, all of whom are joining us remote from Washington, D.C.

First, we have Tom Davis, a former Virginia Congressman and Chairman of the House Government Reform Committee who currently serves as a Director in Legislative Affairs for Deloitte LLP.

We also have with us Carmen Medina, a former Director of the Center for the Study of Intelligence with the Central Intelligence Agency and a Specialist Leader within Deloitte Consulting LLP.

Finally, we’re joined by Lieutenant General James Soligan, USAF (Ret.), former Deputy Chief of Staff for Transformation of NATO’s Allied Command Transformation. General Soligan is also a Director within Deloitte Consulting LLP.

Tom, I’d like to begin with you. Our previous guests – they said that the public sector has an advantage when it comes to the potential for Disruptive Innovation because of the U.S. Government’s size in buying power. I’m interested to know, do you agree with that? Why or why not?

Honorable Tom Davis
Well, we have some potentials but we also have some liabilities. The largest liability we have and this is reflected in the fact that we have basically a digital economy and an analog government. It is the incentives of our government are not to be disruptive. The incentives in government are not to make a mistake. So you get less innovation generally in government.

I think our panelists Michael and Bill before this were talking about – because government doesn’t have the money now, it’s going to force them to be disruptive and to look at new ideas. I’d like to think they were right, but history shows that’s far from any foregone conclusion.

Sean O’Grady
Thank you for that, Tom. I’d like to turn it over to General Soligan since we’re speaking about drones and the Department of Defense. General, have you seen disruptive innovations in your career or do you see potential for more of them in the future?

Lt. General James Soligan, USAF (Ret.)
As we look to the future, obviously we see there some other opportunities to build on this. We’ve already talked a little bit about unmanned or remotely piloted vehicles. We have the tendency to think about them mostly as airplanes but I’d also like to highlight the role that they play in submarine warfare or counter-mine warfare or port and harbor security. So the military is making a very large investment in the ability to use these unmanned remotely-piloted vehicles.

But then we see the commercial marketplace feeding off of that. In particular, you’ll see oil exploratory using unmanned vehicles as well as the ability to do some mining, deep sea mining of precious materials.

The first one is the gaming industry where all of our children have games that are connected in a distributed way. But that has the potential to revolutionize the way we educate and train our military folks and the way we conduct our exercises instead of bringing everybody together for an exercise that we prepare for months in advance. In fact, we can do dynamic training and exercises in a distributed way using the gaming technologies and capabilities that commercial marketplaces invested in. As a matter of fact, they invested about $6 billion a year in the gaming industry and that’s really a significant investment that the [Department of Defense] DoD doesn’t have to do but, in fact, can benefit a great deal from.

The second area that I’d like to talk about is, in fact, social media. In particular, what we’ve seen in social media is the ability for some firms to be able to collect 48 hours worth of video every minute. They load it up, they collect it, they sort it out, they analyze it and then on demand they distribute it to any user who needs it. In today’s world, where we collect so much intelligence information in full-motion video, in fact, the ability to leverage that best practice of collecting, sorting, and distributing and analyzing this kind of video can play a dramatic role in reducing DoD costs and making us much more effective.

Sean O’Grady
Well, thank you for that perspective, General. I’d like to turn it over to Carmen now because, as you were speaking, I was thinking about the Intel communities. So, Carmen, from your view, have you seen Disruptive Innovation there as well?

Carmen Medina
I sure have and, you know, I retired a couple of years ago after 32 years at CIA and I remain a hopeful optimist about the potential for innovation in government and I certainly think that given where we are in terms of budget and performance, that government could stand a little disruption. Now my story is when I was the Deputy Director of Analysis at CIA, a mid-level officer came to me and suggested that instead of all the agencies doing their separate work on Iraq – and this is when we were, in fact, in Iraq – that we should collaborate on one repository of information and use the same software that powers Wikipedia to do that, the MediaWiki software.

Now, this was an unheard of idea at CIA but I was someone that was very receptive to it and my immediate reaction was, “Let’s be sure and do this.”  Originally, it was supposed to be about Iraq, it was going to be called ‘Iraqipedia’ (a little-known fact for the audience) but it became so popular that it became ‘Intellipedia’ and the two officers who developed and ran the Intellipedia Program, in fact, received Service for America awards which is one of the highest honors that civil servants can get. And Intellipedia was a classic disruptive innovation scenario. It had three elements that are often cited when you talk about Disruptive Innovation.

First, it used a new technology, the MediaWiki software. Two, it served a previously under-served audience. In this case, you know, the President of the United States was not going to look at Intellipedia but the war fighter in the field or the mid-level policy maker would. And, third, it was less expensive than any other way we could think of delivering important intelligence to that customer set.

So, the success of Intellipedia, in fact, fed a whole series of innovations in terms of how intelligence has been in the community. So, it’s a great example and it’s only actually been recently as I reflected on it that I realized it was a really excellent example of the principles of Disruptive Innovation.

Sean O’Grady
Thank you very much for walking us through the Iraqipedia to Intellipedia. As you were talking, I guess I’m interested to know if Intellipedia was the exception to the rule in terms of Disruptive Innovation or have – have you seen more of these.  So I guess my question is to you and Jim and that is, as organizations are going about potentially applying Disruptive Innovation, how could they get their project to be a success much like how Intellipedia was a success in your case?

Carmen Medina
Well, since we’re on Intellipedia, I’ll jump in first. I learned several lessons and I know the organization learned several lessons while doing Intellipedia. First the importance of supporting people in your organization who aren’t necessarily leaders, but who care deeply for the organization and have real insight about what could be new and different.  So that was, I think, a key necessary step and something I was probably just lucky to stumble onto.

And one of the wonderful things about Disruptive Innovation is if you start in a smaller area, you need less of a budget. You can afford a little bit of failure or a little bit of tinkering that you couldn’t afford in a high-profile effort and you learn a lot of lessons that then make it much easier for you to implement the more important innovations.

The Honorable Tom Davis
What they’re both saying and I agree is that necessity is the mother of invention and the necessity the government has right now is to do more with less and as their top-line budget comes in – but what it was the year before with basically the same kind of things they have to do, the same mission – is going to force them into – out of their comfort zone and to look at other ways to accomplish missions that ordinarily they would be really reluctant to embrace.

Sean O’Grady
So, growth through discomfort or, in this case, disruption.  General Soligan, I’m interested to hear your thoughts coming from the DoD perspective. Carmen was saying, you know, supporting junior leaders and just support from leadership, in general--what do you think are some of the success factors that might drive disruptive innovation from your view?

Lt. General James Soligan, USAF (Ret.)
Thank you, Sean. Let me build a little bit on the point that Carmen made and then I’ll go to this second point, in particular. When we were conducting the Libya Operations, in fact, we were using wikis in order to be able to find out what the public on the ground in Libya was saying about the success of the activities that were going on in the country because we didn’t have any intelligence forces on the ground.  So, in fact, we were using this social media in a very innovative way to complement what we were collecting from intelligence in our formal process.

So, what we saw was that our young folks, in particular, were very comfortable with this new technology. They inserted, they bring it, they drag it and, in many cases, they force it into the military and that adds, in a very important way, some great capabilities at little or no cost to the military which is a very dramatic change.

Carmen Medina
If I could jump in there, Jim, one of the ways I used to think about this is that government tends to be very formal and hierarchical in how it does things and good reasons. We have legal responsibilities and it’s important to be right. But I think what social media and technology and things like Intellipedia and Wikipedia are showing you, that you can still be right and fulfill your obligations but do things in less formal but still official ways.

And I think that is a huge area for government to explore and I think definitely it’s something that it’s going to have to accomplish. It’s going to have to find less formal and [less] hierarchical ways to do things and I think some of that will mean facilitating communities who will accomplish much of –much or some of what government used to have to accomplish.

Sean O’Grady
I would just imagine the word informal probably gets lumped into the word ‘secure.’ So if it’s informal, is it still secure, which I think draws me right back to you, General Soligan, and that is, from your perspective, what has worked in DoD as it pertains to Disruptive Innovation? What have you seen push these objectives through?

Lt. General James Soligan, USAF (Ret.)
Well, there are several things that I think are important elements of technology and disruption that actually stick. One of the problems that we have inside our Department is, in fact, inserting new technologies in because of our budget process. So what we have in our budget is the services have fully committed their programs for the next five years. There’s a new technology that comes out and is very promising but the services don’t have any room inside their budget to either fund it or to sustain it once it’s there.

So I think that’s really the budget process and the ability to insert the new technologies and the new capabilities inside the Department is an important step that needs to happen as we go through this. Now, as you know, I also worked across NATO  and we were trying to do this kind of innovative technology across 28 nations so that we could all operate together.  And the ability to collaborate and share both across those nations and with commercial industry is a very important part of what I think is the disruptive technology and making it work well.

Sean O’Grady
Well, folks, I thank you very much for your time. We’ve been taking a deeper dive into the potential for Disruptive Innovation in the public sector with Carmen Medina, Lieutenant General James Soligan, USAF (Ret.), and former Virginia Congressman, Tom Davis.

If you’d like to learn more about Carmen, Jim, Tom, or any of the topics discussed on today’s broadcast, you can find that information on our website. It’s deloitte.com/insightsus. For all the good folks here at Insights, I’m Sean O’Grady. We’ll see you next time.

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