A combination of innovation and risk management could help the public sector cope with the imminent cuts

Of course the sector is fully aware of the changing landscape in which it operates – but how many organisations have taken unique measures to tackle, head first, the imminent cuts? There are pockets of best practice, but in the current climate organisations can’t be operating ‘business as usual’. A radical overhaul of public services is needed to make a dent in the £157 billion deficit.

But as innovation always carries an element of risk with it – many will not feel comfortable in taking such a punt. You can just imagine the public sector bashing headlines now: ‘Yet more public money wasted on fad projects’. Therefore the dilemma for the public sector is that if it doesn’t innovate – it won’t successfully make the cuts the economy so desperately needs; and if it does innovate, and it goes wrong – it will come under fierce criticism and lose funds over what will be perceived as a bad gamble.

In order address this quandary, two disciplines (that are not usually found coupled in the same sentence) can be applied – innovation and risk management. If organisations apply the techniques of risk management to innovative measures, they will be able to assess how likely a new project is to succeed and put various benchmarks in place to measure it.

The fundamental elements of risk management are: identifying what might go wrong; assessing the size of the risk; and how to respond if it does go wrong. To illustrate with a familiar example: consider the innovative measure by some councils to collect refuse once a fortnight as opposed to once a week.  The cost savings here are obvious; less spend on resources to collect rubbish, with the added advantage of increasing awareness around recycling and reducing waste.

What might go wrong? This is the crucial first step of any risk management process. Using the refuse collection case: there could be a public-health issue around rotting rubbish; an accessibility problem if refuse is left on pavements, which could potentially impact on road safety and in turn extra pressure on A&E. Identifying what may go wrong will help to highlight any assumptions that have been made, such as the public being fully supportive, and bring to light whether the innovative measure is viable. This process will also serve to emphasise the cost of running the project – rather than just implementing it.

Assessing the size of the risk is the second step. For example, what is the probability of a member of the public being hurt in a road accident while trying to avoid rubbish on the pavement? Next, think about the impact – how will the emergency services be affected if this happens? If the probability of something happening is high, and the impact is equally high, then the innovative idea may be best left behind. But if the probability and impact is both low, then the idea should be seriously considered. Either way, a decision – dependent on individual circumstance – needs to be taken.

Finally, it’s important to consider what to do if it all goes wrong. One option is to do nothing, which in itself carries a substantial risk. Another option is to do it differently, such as issue leak resistant bags to reduce the impact on public health. But one of the most important areas is to have a back-up plan: for example, raising awareness with hospital staff about the tell-tale signs and treatments for salmonella.  

If staff have knowledge and discipline to manage risk, and the ability to make an educated assessment as to whether a risk is worthwhile taking – it would give the public sector a much needed confidence boost to innovate, with success, in a society where all eyes are closely watching their next move.