To those of you who are not the elected chief executive of your jurisdiction or who are not a senior executive in government, it may come as a surprise that there are public sector leaders who want to innovate. Particularly during this period of mounting problems and what seems to be a fast changing world, innovation strikes many public officials as the order of the day.
But like their counterparts in well-established private sector organizations, they face a high hurdle in overcoming resistance to innovations and the change that is a necessary part of innovation.
It’s often said that people fear change which is why it’s so hard to get them to accept innovation. But the Nobel Prize winning work of Princeton Professor Daniel Kahneman makes it clear that the situation is more complicated than that and there is hope for those who would innovate.
In his Prospect Theory, Kahneman points out that there is no general aversion to change or even merely to risk. Indeed people might make a more risky choice when all options are bad.
But there is an aversion to losses, which people often exaggerate beyond reality. The sense of loss is greater if what might be lost has been owned or used for a long time (aka entitlements). Regret and other emotions can also enhance this sense of loss.
Also, in situations where all outcomes are bad, people may become more risk-seeking.
Putting it all together (from http://www.econ.pitt.edu/papers/Lise_PTChoicePrice.pdf ):
“when faced with a risky prospect people will be:
(1) risk-seeking over low-probability gains,
(2) risk-averse over high-probability gains,
(3) risk-averse over low-probability losses, and
(4) risk-seeking over high-probability losses. …
Considering this background, what can you do if you want to innovate in government? Here are some thoughts on how to overcome the resistance to change.
- Reduce people’s estimate of their potential loss. For example, the new highway won’t be paid for by a 25% toll increase, but by an extra dime each time you use it.
- Increase the perceived value of the change and/or the perceived likelihood of success – positive vivid images help to overcome lower probability estimates of the chances of success; negative vivid images help to magnify the probability of loss.
- Help people redefine the perception of loss. (Shift their frame of reference, which determines their expected starting point.)
- Ensure that loss is perceived as a fair outcome (and not meanness), which may require you to find a way to allocate real (not potential) benefits widely. This was one of the reasons New Deal programs, like Social Security, were applied equally to all seniors.
- Reduce the overall size of the risks – which means it is best to introduce small innovations, piled on each other. (Note: behavioral scientists have also observed the irrational fear of loss versus the possibility of benefit is reduced when a person has had experience with the trade-off. A series of small innovations will help the public gain that experience.)
Since any innovation is an experiment, there’s no guarantee of success. Some will fail, but if competent people are implementing the innovations, you’ll succeed sufficiently more often than you fail so that the overall impact on the public is positive.
- Work to convince people that their certainty of loss is only a possibility. People react differently to being told something is a sure thing, than a 90% probability.
- Since risk taking is no longer avoided among bad choices, show that the obvious loss is less than a bigger possible loss.
(Of course, a long-term decline of nations/states/cities is usually accompanied by a shredding of the social fabric and a dysfunctional civic culture. Under such circumstances, a public official may find it difficult to exercise any leadership, never mind try to persuade people to adopt innovative solutions.)
Fortunately, the availability of the Internet and the general reduction over the last decade or so in the cost of software development makes it easier to do small experiments (think apps).
The body of work that Kahneman presents in his best selling book “Thinking, Fast And Slow” is more nuanced than presented here and the book is itself only a summary of years of research by many behavioral scientists. But this summary should be enough to start.
Of course the application of this research to the public sector is only beginning. So help us figure this out and please provide everyone with good examples.
© 2012 Norman Jacknis