Do more for less – introduce disruptive innovation in transport

The biggest issue facing transport professionals is how to improve productivity – deliver more in a constrained resource environment.

As consumers, we are accustomed to the constant productivity improvements in technology and related services that lead to dramatic price reductions and performance improvements – known as disruptive innovation.

Past examples of disruptive innovations include the car compared to a horse and carriage, email compared to postal mail, or the personal computer compared to mainframe computers.

Can disruptive innovation be part of the solution to transport budget constraints?

The challenge is that transport infrastructure and services are primarily provided and managed by the public sector, where there are few examples of disruptive innovation.

Elected officials and senior management are demanding transport professionals do more for less. Unfortunately budget cuts encourage doing the same with less, but more than likely results in doing less with less! Working to an annual budget cycle results in short-term thinking.

The public sector frequently utilises sustaining innovation or incremental change to drive productivity improvements. This means looking for productivity gains in current programs using current technology, infrastructure and services.

Disruptive innovation, on the other hand, means using entirely new technologies and services to create value, while maintaining or improving services and at the same time radically reducing costs.

In the private sector market forces drive innovation, as increased profit results from creating new products and services that outperform current ones. These competitive forces and incentives don’t usually exist in the public sector and innovation is frustrated by politics and red tape.

When you think about it, there are many opportunities to reduce the call on taxpayer funding and deliver improved levels of service.

An example of a disruptive innovation is the parking management system being introduced in Washington DC based on a smartphone app replacing parking meters – mobile payment system provides the ability to vary parking prices based on supply and demand and provide accurate real time information to customers – lowers cost and increases revenue and level of service.

Keys to innovation

So what are the keys to disruptive innovation in transport?

  1. Results focus: carefully and clearly articulating the priority transport outcomes, being as specific as possible, and not constrained by what has been done in the past. Define the trade-offs, and consider how they could be reconfigured. For example the trade-off between fares or prices and quality of service.
  2. Pilot program: test new concepts as carefully designed experiments, using professional project management to ensure efficient delivery, and measure and report performance.
  3. Separate Unit: to be successful innovation requires a separate, lean autonomous unit with a clear charter, a realistic business plan, limits to political interference, access to minimal resources (capability, systems, funding) and in the short-term, minimum reporting requirements. Provide ‘white space for innovation’ – a buffer from the threats of special interest groups, rules and bureaucracy and provide top-level support for innovation.
  4. Market focus: choose a specific market segment to start an innovation project. Governments are often a dominant buyer and can shape the markets in which they operate. The best place where there is the greatest potential for improvement, requires a focus on a key segment that has the potential for the greatest impact. It is important to develop and align incentives, both for the public and private sectors, to achieve the desired outcomes.
  5. Align stakeholders: ensure affected stakeholders are aligned with the pilot program. Where an effort has been made to involve stakeholders, the less critical they are likely to be, as they have a better understanding of the processes, issues and what you are trying to achieve and the benefits.
  6. Demonstrate results: the best case for change is one that has been argued using well designed and implemented research and valid data.
  7. Identify next steps: having run a successful pilot program the critical success factor is speed of implementation. To achieve this requires identifying the lessons from the pilot program then setting out how the program can be scaled to achieve maximum benefits, including opportunities for additional revenue sources, changes needs in regulations and procedures, and change management strategy for public and private sector players.

Disruptive innovation should be part of the package of solutions to transport budget constraints.

As transport professionals it is our responsibility to challenge the status quo and seek out innovative ways of delivering more effective outcomes for reduced taxpayer investment.

Further reading: Sahni, N., Wessel, M. and Christensen, C. 2013. Unleashing Breakthrough Innovation in Government, Stanford Social Innovation Review.

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