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Innovation Insights: Experimentation and risk

One of the tenets of innovation and creativity is the ability to experiment with new ideas and fail. Experimentation and failure, however, are two words not found in any politician’s campaign promises.  Enabling experimentation and managing risk were common themes throughout the Summit.  Pilot programs and small initiatives are common in city government. But the idea of experimentation clearly suggests that the outcome is not known and there is the potential for failure. As one participant articulated it, “Some segments of the public, the media, and elected legislators do not think experimentation is a valid use of taxpayer dollars.”

But how does one innovate if experimentation and the corresponding risk are not possible in traditional governance policy?  Two solutions were posed by participants. The first, offered by Nigel Jacob, was that experimentation and risk are core components of New Urban Mechanics. He explained that they represent a means for the city to move experimentation and risk to a localized “lab” to be examined, analyzed, and plant the seeds of innovation.  New Urban Mechanics views itself as a startup. The initiative is made possible with support from the Bloomberg Foundation – which raised the important issues of public versus private money. Ted Smith aptly noted “As it turns out, everybody stops asking the questions if you're not using tax dollars.” 

This raised questions – and possible solutions – related to public/private partnerships and private sector investment capital.  The goal in this context was not to gain untapped capital, which has been one motivation for public use of private capital. Instead, the objective would be to use private funds to support activities that represent a what governments and taxpayers consider an unacceptable level of financial risk.  The funding from the Bloomberg Foundation is one such example, one organization cannot fund every project in a city or every city in the world. Another solution is needed, one that is universal and scalable from small to large projects.

The second example came from Ted Smith, who suggested that a city may find ways to mitigate risk, thus making it more palatable to the municipality and its residents.  One method would be to increase the number of stakeholders, so that it is not just the mayor’s office involved – but perhaps the school district, the mayor’s office, and a community foundation.  He also shared the idea that public/private endeavors are a way to de-risk experimentation – just as the asthma program in Louisville and the Foundation for a Healthy Kentucky and Norton Healthcare Foundation have shown.

Where should a city start?  The consensus from Summit participants was that cities should start with small pilot programs to answer basic questions:

  • Is there a solution to the proposed problem (technology, process, etc)?
  • Will that solution be readily adopted and utilized by residents?
  • Is that solution scalable?
  • Is there a business model that will sustain such a solution?

In deciding which problems to tackle first, there were two approaches recommended. The New Urban Mechanics program focuses on projects that fit with their expertise and resources.  They choose projects that show great potential for success. An app that uses existing data and solves a problem for every parent  waiting for the school bus is an easy win. It is a relatively small infrastructure investment, there is a clear need, and there is easy acceptance and scalability.

Louisville has taken a different approach. It uncovers the most important social needs and tries to find ways to de-risk those and obtain private funding for support. The asthma air-quality program is a great example. They focused on finding a solution for specific problems, even if the impediments were great. 

Riverside has been focusing not only on programs, but also on the culture within their Innovation Department – which includes IT.  Lea Deesing described it by saying, “I really think that's part of the innovative culture - building a safe environment where people understand that they can take risks and fail and they won't be harshly penalized. Really fostering a creative environment, where people are free to have divergent opinions and ideas and where that is still okay. That’s actually a great thing.”