Managing risks and uncertainties in public sector innovation

Breakthrough innovations entail uncertainty, something the public sector is ill-equipped to manage. This chapter explores the distinction between risk and uncertainty, and the innovation management practices that can transform uncertainties into measurable risks, overcoming the bias against the unknown that is one of the main barriers to innovation. It considers the differences between public and private sector organisations and their implications for risk management. It distinguishes the different stages of the innovation lifecycle of any innovation, and identifies the activities and risks associated with each step. The chapter outlines a step-by-step approach to managing innovation, starting with a clear understanding of the context. It then considers three pillars of successful risk management: setting the preconditions for success, including proper resourcing and gaining a clear mandate using new processes to mitigate uncertainty, including iterative prototyping and co-creating proposed solutions with the ultimate users and the strategic orientation that ensures that innovation in one area does not have unforeseen consequences in other areas. It ends with some tips for innovators to overcome cultural barriers and build support for innovation, and two possible models governments could adopt to counter uncertainty on a wider scale.