Public Tech (Part 2): 5 x Critical factors to consider when commissioning innovation

Part 2 of 5 short articles on just some of the many barriers faced by both public sector buyers and technologists when trying to bring inventions to market that can improve lives and save money.

Although I use technology for older people as a reference point, many of the themes I touch upon should have parallels for anyone, on either side of the table in bringing meaningful tech to the masses. For brevity quite complex themes are abbreviated in these articles, but I hope you enjoy them. Take what you want.

In the last blog we discussed one of the reasons why there is a lack of inventiveness and adoption of ground-breaking technology for older people

But, as if that wasn’t enough of a hurdle for the agetech sector, the situation is compounded by a number of issues that often arise when the public sector considers procuring technology to meet the needs of any large population challenge – not just our older people.

Old ventures, old ideas. New ventures, new ideas. Take your pick.

New businesses are usually created by founders, specifically as a vehicle to market an idea or an invention – a new piece of technology. It’s almost the sole reason to set something up.

This means you have a disproportionate number of smaller, founder-led businesses driving new products and services to market. The founders of those ventures have often been moved by some personal experience which has made them passionate about finding the right solution.

So, in many cases, earlier stage ventures will have developed coherent and valuable solutions to a problem, which should be in significant demand. But, by their very nature, they don’t have the same levels of operational and marketing capacity of an established incumbent player.

Conversely, often the larger a venture becomes and the longer it exists the more it focuses on delivery and marketing in order to take advantage of its previous investments in products, and to make those investments deliver a return for as long as possible.

This is why established companies can continue to put increasingly colourful lipstick on products that could have long since become defunct. The creation of novel technology is risky, and sometimes expensive – so why bother at all if you can avoid it for as long as possible, right?

Now, before I get criticised for making obviously over-simplistic statements, I do recognise that there are companies out there that operate outside these norms, so I’d merely like to encourage readers to consider this as a rule of thumb (for most businesses) – a shortcut as it were.

Pure tech businesses can sometimes break these patterns because they recruit the inventors that might otherwise have gone on to become founders. And, they often acquire startups too, which can come with its own challenges.

But ask yourself the question, are your incumbents really up to the job of delivering change?

How public sector procurement crushes technology adoption

In the, understandably, risk averse arena of public sector procurement – where quite rightly there should be proper diligence about how the public money is spent – buyers will overwhelmingly operate procurement processes that structurally favour long standing incumbent organisations which exhibit the following characteristics:

– Good marketing skills and the ability to make themselves heard
– Experience writing tenders and playing the scoring systems
– A long track record of operation (so the buyer feels “safe”)
– Financial resilience (so the buyer knows the supplier “will be around”)
– Certifications to a huge number of (sometimes only vaguely relevant) standards

And so it is and it has been since the ‘start of time’ that the startups, with sometimes the most to offer are immediately disqualified or overlooked because they’re not perceived to have the right resources, usually in favour of established incumbents who have what’s required on paper, but who might not ever drive adequate technological change or progress.

This quantitative and reductionist approach crushes innovation, time and time again, and the worst part of it is that you can’t easily blame anyone for prioritising the aforementioned metrics.

I remember going to an agetech event hosted by a local authority in about 2006. There were 13 brighteyed exhibitors, with some other founders like me – and it was exciting to meet them.

Perhaps it was something about the number 13, but here we are 20 years later only 2 of the exhibitors are still trading in any material capacity. One is a large incumbent that has been around for decades, the other is my own venture, Alertacall.

So it’s not that ground-breaking innovation isn’t out there – because it is, it’s that getting any innovation to market in the public sector is profoundly difficult – most ideas and ventures fail along the way because housing, health and social organisations simply don’t buy their technologies.

Ultimately, this means that millions of people don’t get to benefit from superb ideas that could help them and “GB” ‘misses a trick’. So what could we change and how?

Three magical metrics that are often entirely overlooked

We’ve established that procurement teams, for good reason, gravitate towards the evaluation of supplier metrics around capacity, longevity and stability. But where’s the real evaluation of the game changing stuff, the invention, and attitudes and most important the technology?

Imagine a world in which procurement gave much greater consideration to three other critical factors, namely; Ingenuity, Passion and Technological Viability.

Ingenuity – Has the organisation developed something that looks very different to what we are doing right now? Because if so, courage is needed to look at that first, not last. Most people shy away from things that look materially different to what they are used to. Organisations need to somehow cultivate greater levels of courage and experimentation.

Passion – Are the people behind the technology truly passionate? This is the primary indicator of whether they’re going to stay the course and make your project work? Right now most procurement processes simply don’t give any credit for “passion” and would consider the notion childish. Maybe because it seems too difficult to measure but more so because teams haven’t realised passion is a leading indicator of investment in a project. A passionate startup, could potentially do more to move the needle than anything an incumbent ever could.

Technological Viability – Right now, very little effort is made to evaluate the viability of technological claims. In equal measure, innovation is routinely written off because someone in the procurement process thinks it’s too futuristic (and therefore too risky) or it is waved it through because someone bought in to complete and utter nonsense.

Quite recently my venture Alertacall, in a formal procurement process, was criticised for wanting team members on a sheltered housing scheme to have smartphones so they could access data about older tenants. Absolutely nothing revolutionary about that, right? Nothing whatsoever.

Well, you wouldn’t think so, except that we were asked whether we could deliver that service through an old DECT style handset because the person involved in the process couldn’t conceive of doing it any other way.

And therein lies the biggest problem in technology procurement.

Many otherwise good people involved with these processes frankly don’t know what they are talking about when it comes to technology, and cannot conceive of solutions that are materially different to those they’ve already been using for decades. This needs fixing.

It also gives rise to the next paradox, because even if an organisation recognises it needs help, it will often seek the help of an “independent consultant”.

‘Independent consultants’: There is no such thing

Let’s make one thing clear: Independent consultants are, by and large, a myth.

That doesn’t mean you shouldn’t use a consultant, because there are plenty of excellent people out there – I’m just stating out loud that, well, they’re just not likely to be truly independent.

This is because the path to becoming a consultant often begins by having a career or working extensively with one or more suppliers to the sector in question. This means they are likely to favour certain solutions for a number of reasons:

* Personal ties and relationships to suppliers they’ve worked with or for
* A lack of knowledge of other solutions they haven’t been exposed to
* Financial incentives and referral schemes (which are legitimate, so long as transparent)

Sometimes the biggest barrier is a mix of a lack of capacity for professional development and a little too much personal pride, which will not allow the consultant to countenance technology and operators who are new to them, lest it reveal limitations in their own expertise.

In the few cases where I have seen an independent consultant guide an organisation through the process of commissioning an innovative solution, it has come with significant hard work and pain for both the vendor and the buyer and resulted in failed outcomes.

Combined with the natural risk aversion of public sector procurement, independent consultancy just isn’t always the answer, and at its worst can be yet another barrier to organisations realising the benefits of new technology – especially when they are hired without due care and research.

It’s critical to choose independent consultants carefully, thoroughly exploring all their former projects, ensuring they’ve truly delivered success, getting them to prove they’ve used novel technology – and making sure they disclose their interests. Remember, hiring a consultant should feel as critical and important as hiring any new senior management.

All that glitters is not gold – beware the shiny things

While all of the above situations can occur, there are examples where new entrants, with new technology do manage to overcome these obstacles to win contracts.

The problem is that this is not always good news for innovation either.

I am sure we can all think of examples of earlier stage businesses who have entered the market, backed by large amounts of investment and slick, shiny, sales and marketing operations that blind people to the limitations of their capability.

These organisations serve up a Kool-Aid of flair, cash and style over substance, which can bewitch procurement departments and consultants alike.

Tragically, when they fail to deliver, this only makes buyers even more avoidant of new approaches, in case they turn into another expensive mistake.

Currently, there is a particular risk of this happening in relation to artificial intelligence, the new (but also widely misunderstood) ‘kid on the block’. As someone who truly believes AI will be world-changing, but who also lived through the dotcom bubble of the late nineties, I can say that for every legitimate attempt to create a viable venture it is likely there will also be a number of Trojan horses.

So how do we need to change our thinking?

Of course, there are cases where ingenious enterprises around technology and the public sector manage to get over all of these hurdles to deliver novel, progressive services.

I am not saying it is impossible, but the conditions are such that they make it difficult. This does a disservice to suppliers, vendors, and the public the institutions are meant to serve.

The good news is there are some approaches to overcome this problem which we shall explore soon.

But before we do, we will discuss in my next article one final blocker to meaningful technology adoption; the failure of funding streams to make any damn sense.

 

For more articles in this series on Public Sector Technology Adoption see

Public Tech (Part 1): Why innovation & agetech adoption is so slow

Public Tech (Part 2): 5 x Critical factors to consider when commissioning innovation

Public Tech (Part 3): The three funding truths – that block innovation

Public Tech (Part 4): Treating our tech adoption sickness with a “PILL”

Public Tech (Part 5): Why chronic sickness is inevitable without “The PILL”