Estimated reading time: 6-8 minutes. This blog is about innovation-oriented culture in the public sector.
Does leadership autonomy for managers and performance management for innovation?
One study investigated the impact of specific New Public Management (NPM) -related properties to explain the culture that is innovation-oriented. This in public sector organizations. According to NPM doctrine, increased autonomy combined with performance management will stimulate a more innovation-oriented culture in such organizations.
The researchers used survey data in over 200 public sector organizations across several countries. The researchers tested for the influence of managers’ autonomy, performance management and their interactions, on a culture that is innovation-oriented.
Innovation-oriented culture – results
The results in the study indicate that the relationship between managers’ autonomy and performance management, on the one hand, and innovation-oriented culture, on the other hand, are not as unambiguous as expected. High economic autonomy, high independence in personnel management and high-performance management, each independently showed strong positive effects on innovation-oriented culture. However, when a high degree of performance control was combined with high economic autonomy, researchers found no connection. On the other hand, when public organizations have high autonomy for executives while having high levels of government performance management, they will be less likely to exhibit a culture that is innovation-oriented.
Decision makers should be aware that combining a high degree of autonomy for public sector managers while rewarding them for their results may, in fact, hinder innovation. However, it is not only the independence and performance management of the boss that are important factors for innovation-oriented culture. Decision makers should also take into account that the size of the organization’s budget has an important role in innovation-oriented culture. The higher the budget, the less likely it is that an organization has innovation-oriented culture. Finally, decision-makers should be aware that an innovation-oriented culture is more likely in larger organizations.
When attempting to encourage a culture that is innovation-oriented in the public sector, decision-makers should therefore focus on the precarious balance between the autonomy of independence and performance management. At the same time, account should be taken off the budget and size of the organization. The decision-makers should, therefore, develop different strategies for different (individual) organizations when they want to stimulate innovation. This because simple NPM recipes can be counterproductive.
Wynen, J., Verhoest, K., Ongaro, E., van Thiel, S., 2014. Innovation-oriented culture in the public sector: do managerial autonomy and result control lead to innovation? Public Management Review, 16 (1), 45-66.
Available from: http://www.tandfonline.com/doi/abs/10.1080/14719037.2013.790273
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