Government in the age of Web 2.0

I hope you can see the analogies with the minimalist approach to Government 2.0. We have some hard evidence that the challenge of gaining the benefits of modern information technology is similar to the challenge of adopting Japanese production methods. Even before the advent of Web 2.0 MIT economist Erik Brynjolfsson had this to say from his own research into hundreds of firms:

[F]irms that couple IT investments with . . . decentralized work practices are . . . more productive than firms that do neither. However, firms can actually be worse off if they invest in computers without the new work systems.

. . . So why do so many organizations still retain the old structure?

A plausible reason is that these types of organizational changes are time consuming, risky, and costly. Redesigning management infrastructure, replacing staff, changing fundamental firm practices such as incentive pay and promotion systems and undertaking a redesign of core business processes are not easy.

Intriguingly, as Brynjolfsson speculated in 1998, it has come to pass that amongst heavy users of IT, the disparity between the most and the least profitable firms has grown enormously suggesting that, indeed, getting this right is a tricky business.

Now there is no shortage of management books on how to make organisations responsive and innovative. But the evidence just presented suggests that there is no sure recipe, or if there is it is not easy to apply. Being a really good manager is a bit like being a good parent or a good Prime Minister. There are so many skills to master, so many judgements to make, most in a fog of ignorance even about what is going on right now, let alone what will happen next.

In this fog of ignorance one can do a lot worse than to empower people at all levels to make small, low risk innovations and then gradually try to learn from experience. Indeed this is what markets do. This suggests some complementary strategies.

Firstly we should tap into people's enthusiasms and intrinsic motivation. I'm always surprised at how rarely this is mentioned. Yet as the Australian Public Service Commission notes in its latest State of the Service Report "High levels of employee engagement also encourage innovation within agencies". It cites Google's efforts to drive innovation through employee engagement.

Indeed Google's then CEO, Eric Schmidt commented (McKinsey, 2011): "[A]t Google, we give the impression of not managing the company because we don't really . . . It sort of has its own borg-like quality of its own. It sort of moves forward" on the intrinsic motivation – the passion – of its highly talented workforce. This is encouraged by Google permitting each employee one day in five to work on projects for Google of their own choosing and initiative. As Schmidt acknowledges "20% time is a very good recruiting tool" but he's even keener on its potential to subvert bad management. "[I]t serves as a pressure valve against managers who are obnoxious. I doubt that such a rule should be pursued across the board in the public service but at least one public sector agency – the Victorian Department of Justice has experimented with 10 percent time with apparent success.

Secondly openness can help in various ways. Wherever standards and/or information can be open, others are invited in and their different perspective can lead to new and better approaches. Note for instance that the hash-tag was not the brainchild of Twitter when it launched in 2006 but rather its user community two years later. This innovation and many others were mightily facilitated by Twitter's preparedness to open its system sufficiently to enable its users to access Twitter any way they liked through third party applications of their choice.

Open information is also crucial. If we have succeeded in fostering increasing experiments in innovation, the better we are at discovering what works, the better we can evolve the system to propagate the successes and terminate or correct the failures.

In a market, firms that are most successful either take over or drive the least successful firms out of business. We can't replicate that model in the public sector, but if it suffers from many disadvantages against markets, the public sector does actually have some advantages over the market. For the public sector has the reach and the control to gather systematic information over its entire domain.

To explain what I mean let me digress briefly to explain 'Windows on Workplaces', a proposal I took to the 2020 Summit. Firms regularly survey their employees to understand how engaged they are in their work. This information has obvious value – most particularly to those considering working for the firm. You might think it's obvious why it's not public. Who'd want their dirty linen aired in public? But that doesn't explain why the best firms don't publish their results. And if they did, that could create a dynamic which forced other firms to publish their results lest people think they were covering something up.

But the problem is that there is no standard against which all firms report. As a result, no-one can really compare different results. And a standard is a public, which is to say, a collective good. So my proposal was that some leader – the Prime Minister is the obvious candidate but it could be any prominent and well intentioned figurehead – challenge the best firms to join them in developing and reporting to a standard.