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3 December 2011

The Takeaway

New York City Mayor
Michael Bloomberg says
cities need to innovate just
as much as corporations—
and offers prescriptions for
how to do it.

Fifteen years after founding my company, I wrote an autobiography that forced me to look back on my experiences – not something I had had much time for. In doing that, I realized that my chief function at the company had morphed from managing day-to-day operations into soliciting new ideas and driving the best of them forward. “I make sure we allocate resources to new, innovative, and risky development projects,” I wrote in Bloomberg by Bloomberg (Wiley, 8/01). “My job is to ensure that new products come alive at Bloomberg and to integrate them with the rest of our system.”

When I first ran for mayor of New York, many people were skeptical that an outsider could run the biggest city in the country. There are, of course, major differences between the public and private sectors, but the primary challenge for a chief executive of any organization is the same: to encourage & enable the workforce to consistently find new and improved ways to serve our clients.

In general, government tends to be risk averse, because taking risks means taking on special interests. It means getting attacked in the press. And, for elected officials, it means potential consequences for your reelection.

That’s why many officials tend to play it safe. Even when they want to be bold, there are often bureaucratic barriers standing in the way. For example, different agencies are often isolated into silos instead of integrated across functions. Some of this is attributable to restrictive legislation and regulation, antiquated work rules, separate funding streams, competitive jockeying, and differing cultures. But sometimes the reason agencies do not work well together is less complicated: they’ve never been expected to.

There is another challenge to innovating in government: public dollars are scarce, and especially in these times, it is hard enough to fund existing basic needs let alone new experiments. Even in better times, it is challenging to use taxpayer dollars when the possibility of failure is real. The public rightly expects its money to be used in productive ways. You simply cannot ask taxpayers to take the same risks as shareholders or partners.

In New York City government—much like at Bloomberg LP—three key approaches have helped us get around these and other challenges to drive innovation forward.

Empower your team

I expect my staff to value creativity and new ways of thinking. Citizens deserve more than tweaks to the status quo—so I reinforce to commissioners and other policy makers that bold, new ideas should be the rule rather than the exception. This mandate empowers leaders to push themselves and their teams beyond their comfort zones, to look with fresh eyes at challenges and potential solutions. Simply giving permission to innovate is insufficient; you have to expect it and hold people accountable for delivering it.

Remove the barriers

Being clear-eyed about (removing) barriers to innovation... is also important. For example, we’ve raised private philanthropic dollars to subsidize innovative new programs, such as our new comprehensive effort to help black and Hispanic young men achieve at the same rates as their peers in other ethnic groups. When we’ve tackled issues like sustainability and poverty that span numerous agencies, we’ve created cross-agency teams to improve coordination and results. As a result, our sustainability program has produced a 13 percent reduction in New York City’s carbon footprint over the past five years.

Support those who fail

When it comes to innovation, the one thing you know for sure is that it will not always succeed. In New York, the intense media focus can be a disincentive for innovation, which is why I’ve always believed it is critical to give a public pat on the back to those who took reasonable risks but failed. That’s how you keep the new ideas coming in—and it’s how you keep attracting the top talent.

These three approaches have helped us drive innovation in areas ranging from poverty to sustainability to education to creating new open spaces. And mayors from cities all over the nation are launching their own bold solutions to many of the same challenges.

That’s why government innovation is one of the five focus areas of Bloomberg Philanthropies. The centerpiece of our government innovation work—called the Mayors Project—aims to spread these proven or promising ideas among cities. By replicating innovative programs, policies, and leadership strategies, we know we can help fuel cities’ efforts to solve pressing challenges and achieve even greater impact.

One of the most recent Mayors Project investments is in Innovation Delivery Teams. These are stand-alone teams of top performers who bring a rigorous focus to developing and delivering powerful solutions to major urban challenges. The three-year initiative will fund teams of 6-to-12 members each in five cities: Atlanta, Chicago, Louisville, Memphis, and New Orleans. And in each city, the team will focus on top-priority issues identified by City Hall, ranging from job growth to customer service to public safety.

It’s exciting that the teams will help these five mayors produce new, tangible results for their residents—reducing street homelessness in Atlanta, the time Chicagoans wait in line to receive city services, and the homicide rate in New Orleans. But Bloomberg Philanthropies has a broader purpose, too. Through this initiative, we hope to refine a set of leadership and management strategies that ultimately can be used by mayors in cities worldwide to advance bold innovation.

The need for local government innovation is now greater than ever. When I talk with my colleagues in cities across the nation, they say they are being asked to do far more, often with much less. Citizens expect more. Many residents, hard hit by the recession, need more. And there are fewer public dollars to respond. That’s certainly the case here in New York City—and that’s why we’ll continue empowering leaders to drive innovation, reducing the barriers they face, and supporting all those who keep challenging the status quo with innovative new ideas. And that is why, through my philanthropic work, I will continue to support others who aspire to do the same.

source: McKinsey Quarterly

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