Innovative Study

https://doi.org/10.1177/02750740211010464

American Review of Public Administration

© The Author(s) 2021

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Article

Introduction

The myth of the ossified public sector has long existed in the minds of nearly all innovation and public administration scholars; however, that myth has finally been dispelled (Torfing, 2019). Intensive research over the last two decades has provided rich evidence of public sector organizations’ innovativeness (De Vries et al., 2016). The current literature demonstrates that public sector organizations develop and implement innovations that are novel (at least to the imple- menting public sector organizations) and that create or improve public value (Chen et al., 2019). We also know that public sector innovation can take different forms, such as service innovation (Nelson & Svara, 2012), collaborative innovation (Sørensen & Torfing, 2017), or innovative public procurement (Torvinen & Haukipuro, 2018). In addition, the existing findings show that public sector innovations help public sector organizations increase their efficiency and effectiveness (Arundel et al., 2019), deal with constantly emerging social and economic challenges (Torfing et al., 2019), and respond to pressures and expectations from mul- tiple stakeholders (Sørensen & Torfing, 2019).

However, less is known about how public sector organi- zations “systematically raise innovation outputs over time” and manage their innovation processes and how such sys- tematic development and implementation of innovations

affect the public value that they create (Arundel et al., 2019, p. 794). The current research suggests that the possession of innovation capability explains why public sector organiza- tions can continuously develop, manage, and implement innovations (Clausen et al., 2020; Trivellato et al., 2021). The previous studies define innovation capability as an organizational dynamic capability that stimulates continu- ous innovation activities and strategic change (Schilke et al., 2018). Although these recent insights shed some light on why public sector organizations can continuously develop and implement innovations, it is clear that we need addi- tional investigations to explain how public sector organiza- tions develop the capabilities that make them innovative (Zyzak & Jacobsen, 2020).

Therefore, drawing on the insights from the dynamic capabilities perspective (Schilke et al., 2018), this study seeks to explore how public sector organizations develop their innovation capabilities and how such innovation capabilities spur public sector innovations. As we know little

1Nord University, Bodo, Norway

Corresponding Author: Petter Gullmark, Business School, Nord University, P.O. Box 1490, Bodo 8049, Norway. Email: [email protected]

Do All Roads Lead to Innovativeness? A Study of Public Sector Organizations’ Innovation Capabilities

Petter Gullmark1

Abstract Although much has been written about public sector innovation in the last two decades, we still do not fully understand how public sector organizations become innovative. Therefore, this study inductively explored how four Norwegian municipalities developed innovation capabilities. I found that public sector organizations develop two forms of innovation capability in a path-dependent manner: low-routinized innovation capability and highly routinized innovation capability. In the former, dynamic managerial capabilities in the form of individuals’ entrepreneurial and leadership skills comprise the source of innovation capability. In contrast, in the latter, innovation capability emerges from dynamic organizational capabilities, that is, a set of innovation-stimulating routines, processes, tools, and structures. Notably, I found that regardless of the form of innovation capability, both spur the continuous development and implementation of various radical and incremental public sector innovations. Based on these findings, this study offers several contributions to the literature on public sector innovation and to the dynamic capabilities research agenda.

Keywords dynamic capabilities, innovation capability, public sector entrepreneurship, inductive research methods, Norwegian municipalities

2021, Vol. 51(7) 509–525

about public sector organizations’ innovation capabilities, I employed an inductive, longitudinal research design. Using the case replication approach (Eisenhardt & Graebner, 2007; Huy & Zott, 2019), I studied innovation capabilities in four Norwegian municipalities over a period of 4 years.

This study makes three important contributions to the lit- erature. First, this study provides new insight into how public sector organizations develop their innovation capabilities (Piening, 2013; Trivellato et al., 2021). I found that politi- cians and top public managers used their dynamic capabilities to successfully respond to various external and internal chal- lenges that emerged in the focal organizations over time. Their decisions initiated and then strengthened the develop- ment of low-routinized or highly routinized types of innova- tion capabilities in the examined public sector organizations.

Second, this study deepens our understanding of the out- comes of innovation capability in a largely unexplored con- text of public sector organizations (Arundel et al., 2019; Clausen et al., 2020). Current private-sector-situated concep- tualizations (Slater et al., 2014) describe innovation capabil- ity as a highly routinized organizational capability that spurs radical, mostly product and service, innovations (Janssen et al., 2016) and that endows the organization with revenue and profit growth. Instead, this study showed that in the pub- lic sector context, innovation capabilities take two forms— low-routinized and highly routinized. I found that both types lead to equifinal outcomes (Eisenhardt & Martin, 2000)— they spur continuous development and the implementation of both incremental and radical public value-creating policy, management, partner, service, and citizen innovations.

Finally, this study enhances our current poor understand- ing of the relationship between three dimensions of dynamic capabilities—the functional domain of innovative capability, its degree of routinization, and the source of its “dynamism” (Schilke et al., 2018). My research demonstrated that when the entrepreneurial and leadership skills of individuals— their dynamic managerial capabilities—are the source of innovation capability in a public sector organization, the innovation capability is low-routinized. However, when organizational structures, processes, tools, and routines— dynamic organizational capabilities—are the source of inno- vation capability in a public sector organization, the innovation capability is highly routinized. Hence, this study provides evidence that the dominance of either dynamic managerial or dynamic organizational capabilities in the pro- cess of continuous innovation development and implementa- tion determines the degree of routinization of innovation capability in a public sector organization.

Theoretical Background

Innovation Processes in Public Sector Organizations

The phenomenon of public sector innovation has been exten- sively examined in recent years (De Vries et al., 2016). The

main focus of the prior research has been the antecedents and outcomes of various public sector innovations (Barrutia & Echebarria, 2019). Consequently, we have a relatively deep and nuanced understanding of public sector innovations’ out- puts such as new services, processes, or policies; their deter- minants; and the effects of such outputs on public sector organizations (Chen et al., 2019).

We also know that public sector organizations are innova- tive (Arundel et al., 2019). The prior studies provide substan- tial evidence that innovation processes are performed simultaneously in several public sector organizations’ depart- ments and that such processes lead to the continuous devel- opment and implementation of different innovation types (Clausen et al., 2020). In addition, we have some insight into the relevant antecedents that facilitate or hinder the develop- ment of public sector organizations’ capability for innovation (Sørensen & Torfing, 2017). We know, for example, that the heroic efforts of innovation sponsors and champions stimu- late innovation processes in public sector organizations (Zyzak & Jacobsen, 2020). Some studies also note that inno- vation-friendly organizational culture, available resources, and structures and systems can stimulate public sector orga- nizations to continuously innovate (Trivellato et al., 2021).

However, the foregoing contributions offer a relatively static and fragmented picture of the innovation processes in public sector organizations. We know relatively little about how the interactions of the relevant antecedents result in the development of innovation capabilities in public sector orga- nizations (Arundel et al., 2019; Clausen et al., 2020). Furthermore, we need more profound insight into how public sector organizations manage their innovation processes so that the abovementioned innovation outcomes can come to fruition (De Vries et al., 2016).

Adopting an innovation capability lens may deepen our insight into innovation processes in public sector organiza- tions (Clausen et al., 2020). The concept of innovation capa- bility is well established in the literature on dynamic capabilities (Schilke et al., 2018). Therefore, I draw on the dynamic capabilities theoretical framework to comprehen- sively explore how public sector organizations develop and manage their innovation capabilities to pursue innovations. In the following section, I briefly discuss the current state of knowledge on the dynamic capabilities perspective.

The Current State of Knowledge on the Dynamic Capabilities Perspective

The dynamic capabilities perspective explains how processes related to sensing, shaping, and seizing entrepreneurial opportunities enable an organization to reconfigure its resource bases and strategically change (Wilden et al., 2016). Dynamic capabilities are based on two pillars comprising “the organization’s values, culture, and collective ability to quickly implement a new business model or other changes” and “individual managers and the top management team” (Teece, 2016, p. 211). The former pillar embraces dynamic

510 American Review of Public Administration 51(7)

organizational capabilities (Schilke, 2014). The latter pillar is understood as the source of dynamic managerial capabili- ties (Helfat & Martin, 2015).

Dynamic organizational capabilities have been the most extensively explored area of research in the field of dynamic capabilities (Wilden et al., 2016). Consequently, we have great insight into organizational and individual-/team- related antecedents that are conducive to dynamic organi- zational capabilities (Teece, 2016). Among the most frequently identified antecedents of dynamic organizational capabilities are organizational learning, the willingness of organizational members to act entrepreneurially, and organic organizational structure (Schilke et al., 2018; Wilden et al., 2016). We also know that dynamic organiza- tional capabilities can reside at two or more hierarchical levels (Schilke, 2014) and that they improve organiza- tional-level performance (Helfat & Winter, 2011).

Research on dynamic managerial capabilities, in turn, has gained increased attention in the last decade or so (Helfat & Martin, 2015). Dynamic managerial capabilities studies have focused on the managerial impact on strategic change (Helfat & Martin, 2015; Martin & Bachrach, 2018). In contrast to dynamic organizational capabilities, dynamic managerial capabilities “do not fit well within the formal definition of routines” and are “inseparable from the individual managers with the ability to perform them” (Martin & Bachrach, 2018, p. 29). The vast majority of prior empirical research on dynamic managerial capabilities has explored how the under- lying factors of dynamic managerial capabilities—manage- rial cognition, managerial social capital, and managerial human capital—(separately and together) enable managers to change their organization (Helfat & Martin, 2015; Schilke et al., 2018). We also have a relatively good understanding of the effects of dynamic managerial capabilities on organiza- tional performance (Martin & Bachrach, 2018).

The dynamic capabilities perspective is built on several assumptions. First, the dynamic capabilities scholarship assumes that every organization comprises a collection of ordinary and dynamic capabilities (Teece, 2014). Ordinary capabilities enable organizations to achieve high levels of effi- ciency. However, such capabilities cannot be a source of long- term competitive advantage because they are easy to replicate (Teece, 2016). Dynamic capabilities, in turn, satisfy valuable, rare, imperfectly imitable, and nonsubstitutable (VRIN) crite- ria and enable an organization to strategically change (Teece, 2014). Second, dynamic capabilities have a certain degree of routinization, are path-dependent, and lead to organizational survival and growth (Wilden et al., 2016). Third, dynamic capabilities are based on the assumption that decision-makers have bounded rationality (Schilke et al., 2018).

Furthermore, dynamic capabilities have a universal char- acter (Wilden et al., 2016). The prior research has found dynamic capabilities in virtually all organizations—private (Song et al., 2016), public (Trivellato et al., 2021), large (O’Reilly et al., 2009), and small organizations (Sawers

et al., 2008). Although dynamic capabilities are universal, they also have a highly context- and organization-specific nature (Schilke, 2014). Our current understanding of dynamic capabilities in public sector organizations is that they rely on innovation-stimulating routines, processes, tools, and struc- tures—dynamic organizational capabilities—in directing strategic change (Piening, 2011). However, the importance of exploring how public managers affect strategic change in public sector organizations has also been noted in the more recent research (Ongaro & Ferlie, 2020).

Finally, we know that dynamic capabilities are complex and multidimensional (Schilke et al., 2018; Wilden et al., 2016). The current literature distinguishes dynamic capabili- ties along a variety of dimensions such as procedural dimen- sions (Teece, 2014), degree of routinization (Helfat & Winter, 2011), functional dimensions (Lawson & Samson, 2001), or hierarchical domains (Eisenhardt et al., 2010). From this study’s perspective, the most central dimension of dynamic capabilities is the functional domain of innovation capability (Schilke et al., 2018). Therefore, in the following section, I synthesize our current understanding of innovation capabil- ity in the dynamic capabilities literature.

Innovation Capability as a Functional Domain of Dynamic Capabilities

Innovation capability can be defined as the capacity of an organization to continuously innovate by sensing and seizing entrepreneurial opportunities and transforming the organiza- tion to exploit these opportunities to benefit the organization and its ecosystem (Lawson & Samson, 2001; Teece, 2016). Interestingly, innovation capability is the most frequently explored functional domain of dynamic capabilities (Schilke et al., 2018).

A large body of studies has investigated different aspects of innovation capability in various contexts (Clausen et al., 2020; Janssen et al., 2016; Slater et al., 2014). Knowledge generated by these studies indicates that the Schumpeterian concepts of disruptive innovations and creative destruction constitute the building blocks of innovation capability (Breznik & Hisrich, 2014). Consequently, the vast majority of research provides evidence that innovation capability leads to radical innovations in organizations (Lee & Kang, 2015; Schneckenberg et al., 2015). The prior studies also show that innovation capability mainly results in the devel- opment of new products and services (Breznik & Hisrich, 2014; Schilke et al., 2018). Furthermore, some investigations offer insight into the process of innovation capability devel- opment. The foregoing studies find that innovation capabil- ity is built on certain organizational- and individual-related components such as passionate and visionary leaders, organic structure, or organizational learning (Schneckenberg et al., 2015; Slater et al., 2014).

Interestingly, however, the current literature pays little attention to the phenomenon of innovation capability in the

511Gullmark

public sector context (Arundel et al., 2019; Clausen et al., 2020). This gap is surprising because the public sector com- prises an essential context for the validity, scope, and explan- atory adequacy of the innovation capability research (Fisher & Aguinis, 2017). Our current understanding is that innova- tion capability spurs public sector innovations (Clausen et al., 2020; Trivellato et al., 2021). Nevertheless, it remains unclear whether public sector organizations develop and manage their innovation capabilities differently than private firms (Arundel et al., 2019). The public sector context is characterized by a lack of “innovate or die” culture (De Vries et al., 2016), a lack of connection between performance and revenues (Choi & Park, 2014), a nonprofit orientation and focus on achieving multiple goals (Piening, 2013), and high media attention, risk aversion, and political inference (Sørensen & Torfing, 2017). Therefore, the question of how the public sector context affects the development and role of innovation capability in public sector organizations consti- tutes a useful starting point for additional research. My study addresses this issue by exploring how four Norwegian municipalities develop their innovation capabilities and how such innovation capabilities spur public sector innovations.

Method

Research Setting

The empirical context of this research is the Norwegian municipal sector. The Norwegian municipal sector offers several advantages for investigating the development and role of innovation capabilities in public sector organizations. First, the prior research has accumulated evidence that Norwegian municipalities are highly innovative (Rønning et al., 2014), actively pursue strategic change (Askim et al., 2008), and systematically engage in innovative processes (Torfing et al., 2019). These findings indicate that numerous Norwegian municipalities must have developed innovation capabilities. Moreover, Norwegian municipalities are easily accessible, enjoy a high level of citizens’ trust, and eagerly engage in collaboration with research institutions (Christensen & Lægreid, 2020). This, in turn, creates an ideal context for conducting a longitudinal and in-depth study of the development and role of innovation capabilities in public sector organizations.

Sample Selection and Data Collection

To inquire into how public sector organizations develop and manage their innovation capabilities, I used a theoretical sampling approach (Eisenhardt & Graebner, 2007; Huy & Zott, 2019). Such an approach involves the selection of between four and 10 “polar” cases where a researcher can transparently observe the examined phenomenon. To iden- tify the relevant cases, I searched the official websites of all Norwegian municipalities. The initial list comprised 426

municipalities. I looked for municipalities that (a) frequently develop and implement innovative projects/innovations (i.e., projects that contain the words innovation and/or entrepre- neurship in their title or description) and (b) emphasize inno- vation in their organizational strategy, strategic plans, and/or political-level policies. The initial screening process showed that 32 Norwegian municipalities fulfilled both criteria.

In June 2015, at the annual national conference of Norwegian municipalities, I conducted unstructured infor- mal interviews with representatives of the 32 selected Norwegian municipalities to gain an initial understanding of the nature of the innovative processes in the focal organiza- tions. I observed that two patterns emerged in my informants’ descriptions of how their municipalities pursue innovations. Some focused on heroic innovative individuals and discussed how critical they were for developing and implementing innovations in their municipalities. In contrast, others did not pay too much attention to heroic public sector innovators. Instead, they argued that the existence of innovation-stimu- lating tools, processes, structures, and routines was essential for pursuing innovations in their organizations. This helped me to choose the four municipalities presented in Table 1. I selected two municipalities where informants reported a high involvement of innovative individuals in developing and implementing innovations and two where informants reported a high usage of innovation-stimulating tools, pro- cesses, structures, and routines in developing and imple- menting innovations. Hence, variance in how the municipalities pursue innovations comprised my key sam- pling principle.

Table 1 presents an overview of the selected cases and collected data. The table shows that the selected municipali- ties adequately represent the variation in the population of Norwegian municipalities. Each reported pattern of the pur- suit of continuous innovation is built on insights from two municipalities that differ in terms of (a) their geographical location, (b) the ideology of the political parties that control their legislatures, (c) whether they have won the annual Norwegian Innovation Award for the Municipal Sector, and (d) their economic situation. I adopted such a sampling strat- egy because it allowed me to increase the likelihood that the observed similarities and differences between these two pat- terns would solely be attributed to those identified in these organizations’ innovation capabilities.

I collected the data from three sources: (a) semi-struc- tured interviews with politicians, chief administrative offi- cers, and top public managers as well as with project managers and workers; (b) follow-up emails and telephone conversations; and (c) archival data composed of project and municipality websites, internally published books, press articles, and other internal documents provided by the informants. The primary source of data was 60 semi-struc- tured individual interviews and focus groups, which were conducted with informants between 2016 and 2020. The length of the interviews ranged from approximately 20 min

512 American Review of Public Administration 51(7)

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to more than 120 min. The length of all interviews exceeded 48 hr. All the interviews were recorded and transcribed.

To triangulate the informants’ reports of how their munic- ipalities pursue innovations, I interviewed both innovative project managers and workers who worked with various innovative projects and top public managers and politicians who created and managed innovative organizational envi- ronments in the focal municipalities. This approach allowed to me to elaborate and validate the obtained accounts (Huy & Zott, 2019). The interview guide for project managers and workers differed from that used to interview top public man- agers and politicians. The interviews with the project manag- ers and workers were concerned with the project idea and the development and implementation of their project. I also asked them questions concerning the influence of the munic- ipal organizational environment on their project. Politicians and top municipal managers were in turn asked to discuss the history and various aspects of the organization’s work on innovation. In addition, they provided a “bird’s-eye” per- spective on the projects in their municipality.

The archival material contained descriptions of innova- tive projects, applications for funds, reports, internal strate- gies, brochures, PowerPoint presentations, and the websites of innovative projects along with internally published books and media coverage of the municipalities’ innovative work. The collected secondary data comprised approximately 2,500 pages and slides, 16 Excel files, and more than 40 min of video recordings. I used secondary data to triangulate informants’ accounts and thereby to increase the quality and validity of the gathered data.

Research Design and Data Analysis

Following the approaches used in inductive research designs (Eisenhardt & Graebner, 2007), I sampled the cases drawing on variations in outcomes and then attempted to identify the causes of these variations (Huy & Zott, 2019). The use of a multiple-case study approach allowed me to employ replica- tion logic (Eisenhardt & Graebner, 2007). Replication logic defines cases as experiments that either confirm or discon- firm the findings from other analyzed cases and extend the obtained theoretical insights (Yin, 2014).

I distinguished between low-routinized and highly routin- ized innovation capability based on the emerging findings and the dynamic capabilities literature. In the analyzed inter- views, I found quotes that described how the innovative activ- ities of individuals or innovation-stimulating organizational tools, processes, structures, and routines caused the focal municipalities to become innovative. In cases where the inno- vative activities of individuals were the source of organiza- tional innovativeness, I found a relatively low degree of innovative process routinization. However, in cases where innovation-stimulating organizational tools, processes, struc- tures, and routines constituted the “engine” of organizational innovativeness, the routinization of innovative processes was

relatively strong. Given such insight, I turned my attention to the dynamic capabilities literature. The dynamic capabilities literature indicates that dynamic capabilities are based on two pillars: dynamic managerial capabilities (innovative individu- als) and dynamic organizational capabilities (organizational culture, values, and collective ability to make strategic change; Teece, 2016). The dynamic capabilities literature also provides strong evidence that different types of dynamic capabilities can have a different degree of routinization (Schilke et al., 2018). Given such insight, I based my analysis on the variation in the routinization of innovation capabilities in public sector organizations. To identify the building blocks of each type of innovation capability, I first inferred the con- cepts that emerged from the data.

As an example, when I asked the mayor of Narvik about the drivers of innovativeness in his organization, he, among others, said, “We would not be that innovative if we weren’t organized in the way we are organized now. I mean . . . We use a two-level structure, which significantly strengthens our innovativeness.” I coded this statement as “lean organiza- tional structure as innovation stimulus.”

In the next step, I used other cases to confirm or discon- firm the emerging findings. The cross-case analysis demon- strated that lean organization structure also stimulated innovative processes in the municipality of Asker: “Without any doubt, a two-level structure is a building block of our innovativeness” (top manager in the municipality of Asker). Moreover, in both municipalities, I found that because of such an organizational structure, both organizations have little hierarchy in all of their departments. To illustrate, con- sider the following quote from the mayor of Narvik:

It [our structure] does not include so-called middle management such as the chief of schools or the chief of nursery homes. It is simply the chief administrative officer’s team and the 42 unit managers/leaders divided in 13 sectors. So, as you can see, our structure is quite flat.

In addition, I found that the lean organizational structure in these two municipalities supported the development of bottom-up and top-down innovations: “The two-level struc- ture gives us so much flexibility and supports interdisciplin- arity. That is why we have developed so many of both bottom-up and top-down innovation projects” (top manager in the municipality of Asker).

Then, to firmly establish the analysis in the theoretical realm (Gioia et al., 2013), I performed a more literature- informed, rigorous coding of what comprises low-routin- ized innovation capability and what constitutes highly routinized innovation capability. To this end, I relied on the microfoundational categories developed by Felin et al. (2012). Following Felin et al. (2012), I coded the above components of innovation capabilities as “flat and flexible organizational structure”—a microfoundation of highly routinized innovation capability.

514 American Review of Public Administration 51(7)

Overall, the conducted data analysis revealed that a highly routinized innovation capability is built on four microfoun- dations: interdisciplinarity and organizational learning, net- working, centralized support for innovation development and implementation, and a flat and flexible organizational structure. Performing similar analyses, I found that a low- routinized innovation capability rests on three microfounda- tions: public entrepreneurs, political and managerial leadership, and employee empowerment (see Figure 1).

In line with theoretical sampling, the selected municipali- ties in my sample demonstrate considerable differences with regard to the nature and development of their innovation capabilities. The municipalities of Arendal and Bodø devel- oped their innovation capabilities based on the dynamic managerial capabilities of their employees and lower-level managers as well as low routinization. The municipalities of Asker and Narvik, in turn, developed strongly routine-based innovation capabilities such that dynamic organizational capabilities played the critical role in innovative processes.

Findings

This section elaborates on the development, nature, and out- comes of low-routinized and highly routinized innovation capabilities in public sector organizations. My data suggest

that public sector organizations with low-routinized innova- tion capability can continuously pursue various public sector innovations because their employees and lower-level manag- ers possess dynamic capabilities. At the same time, public sector organizations with highly routinized innovation capa- bilities infer their innovativeness from the possession of dynamic organizational capabilities. The main findings of this study are summarized in Figure 2.

The rest of this section discusses my research model. The empirical evidence and the description of the identified microfoundational components are presented in Table 2.

Low-Routinized Innovation Capability

The development of a low-routinized innovation capability in the municipalities of Arendal and Bodø was the conse- quence of past decisions made by politicians and top manag- ers (see also Figure 2). The origins of Arendal’s low-routinized approach to innovation development and implementation can be traced to a large reorganization project launched in 1998. In the 1990s, the municipality of Arendal experienced a severe financial crisis. To recover from the difficult eco- nomic situation, politicians and top managers decided to make innovation the central point of the organizational strat- egy. The chief administrative officer told me that it was then

Figure 1. Data structure.

515Gullmark

that their “innovation culture with a dominant role of indi- vidual innovators was born during this big reorganization project.”

The path initiated toward more innovation was strength- ened by several radical and incremental changes that were made in the first decade of the 2000s. The most significant of these was the late 2004 construction of and move to a new town hall. Arendal’s chief administrative officer argued that this event ultimately shaped the bottom-up and individual- oriented approach to the continuous development and imple- mentation of innovations:

I think I can say that the year when we moved into the new town hall and removed almost all structures was decisive. It was an “innovative grip” and a brave move in relation to the bureaucracy, but we succeeded. We thought, “let’s try out new ways of working and base an organization on self-management, where professional discussions were aimed more at horizontal exchanges of knowledge and experience, and maximal delegation of power to ordinary employees.” So it was the employees and their professional colleagues who were actually given the authority to make a decision. (Chief administrative officer in the municipality of Arendal)

In addition, the charismatic style of leadership employed by Arendal’s chief administrative officer and the innovation and development advisor has been decisive for the

development of this particular type of innovation capability. For example, the advisor encouraged all employees to inno- vate and emphasized the more informal, interpersonal devel- opment of ideas and exchange of experiences in the organization (instead of preparing many internal documents, which “no one reads anyway”).

In the case of municipality of Bodø, the “turning point” was the central government’s decision to close the local mili- tary air base in 2012. Since the 1950s, the military air base was a vital part of the city’s economy and the local commu- nity. The closure of the military air base was, as the chief administrative office reported, “a shock for the whole munic- ipality.” However, this decision encouraged the top manag- ers and politicians to fully emphasize innovative attitude, which “created positive energy, and excitement in the whole organization.” The main task of all municipal employees and managers became generating innovative solutions that would make Bodø green, smart, more people-oriented.

The politicians and top municipal managers decided to build their innovation capacity around individuals. As Bodø’s chief administrative officer reported,

It is obvious that some people are fascinated by new things [tools, routines, structures, and processes]. But my view is that you need to have people who have the ability to think outside the box [to innovate] . . . Therefore, we think that the main source of

Figure 2. The development and outcomes of innovation capabilities in public sector organizations.

516 American Review of Public Administration 51(7)

T ab

le 2

. C

om po

ne nt

s of

In no

va tio

n C

ap ab

ili tie

s in

P ub

lic S

ec to

r O

rg an

iz at

io ns

.

M ic

ro fo

un da

tio n

C on

ce pt

d es

cr ip

tio n

Ill us

tr at

iv e

qu ot

es

Lo w

-r ou

tin iz

ed in

no va

tio n

ca pa

bi lit

y

Pu bl

ic e

nt re

pr en

eu rs

C re

at iv

e, e

nt hu

si as

tic ,

an d

co m

pe te

nt p

ub lic

se

ct or

e m

pl oy

ee s

w ho

po

ss es

s en

tr ep

re ne

ur ia

l an

d le

ad er

sh ip

s ki

lls

an d

w ho

c on

tin uo

us ly

ge

ne ra

te s

ol ut

io ns

t o

ex is

tin g

pr ob

le m

s an

d se

ek

pu bl

ic e

nt re

pr en

eu ri

al

op po

rt un

iti es

t o

in cr

ea se

t he

va

lu e

fo r

so ci

et y

cr ea

te d

by

th e

pu bl

ic s

ec to

r

“S om

et im

es I

am r

ea lly

s ur

pr is

ed , o

f c ou

rs e,

in a

p os

iti ve

w ay

, t ha

t so

m an

y gr

ea t

id ea

s co

m e

fr om

o ur

e m

pl oy

ee s.

T he

y em

er ge

a ll

th e

tim e,

fr om

d iff

er en

t em

pl oy

ee s

an d

in d

iff er

en t

un its

. . .

I am

g la

d th

at w

e ha

ve c

re at

ed s

uc h

an in

no va

tio n

cu ltu

re h

er e”

— C

hi ef

a dm

in is

tr at

iv e

of fic

er in

t he

m un

ic ip

al ity

o f A

re nd

al “W

e us

e ou

r kn

ow le

dg e

to c

re at

e ne

w s

ol ut

io ns

. W e

ha ve

s ki

lle d

pr of

es si

on al

s he

re w

ho k

no w

t he

ir jo

bs w

el l a

nd h

av e

a lo

t of

e xp

er ie

nc e

an d

kn ow

le dg

e ab

ou t

w ha

t th

ey d

o. Y

ou k

no w

, h er

e, w

e ar

e al

l v er

y pa

ss io

na te

a bo

ut w

ha t

w e

do . W

e w

an t

to h

el p

th e

us er

s to

h av

e a

be tt

er li

fe . A

s si

m pl

e as

t ha

t is

. . .

T he

re fo

re ,

w e

ha ve

s o

m an

y in

no va

tio ns

h er

e” —

M an

ag er

o f a

n in

no va

tiv e

pr oj

ec t

in t

he m

un ic

ip al

ity o

f A re

nd al

“T he

re a

re s

ev er

al r

ea so

ns fo

r it

[b ei

ng a

n in

no va

tiv e

or ga

ni za

tio n]

. T he

m os

t im

po rt

an t

on e

is t

ha t

ou r

or ga

ni za

tio n

ha s

a la

rg e

nu m

be r

of v

er y

sk ill

ed a

nd

kn ow

le dg

ea bl

e m

an ag

er s

an d

em pl

oy ee

s w

ho , w

ith ou

t be

in g

en co

ur ag

ed [

by t

he t

op m

an ag

er s]

, s ee

k op

po rt

un iti

es a

nd d

ev el

op a

nd im

pl em

en t

in no

va tio

ns . A

nd

th ey

d on

’t do

it b

ec au

se t

he c

hi ef

a dm

in is

tr at

iv e

of fic

er s

ai d

so o

r to

s av

e m

on ey

— th

ey d

o it

be ca

us e

th ey

fe el

it is

n ec

es sa

ry .

. . It

h ap

pe ns

in a

ll de

pa rt

m en

ts ”—

C hi

ef a

dm in

is tr

at iv

e of

fic er

in t

he m

un ic

ip al

ity o

f B od

ø “I

c al

l o ur

p ro

je ct

m an

ag er

a n

in no

va tio

n ch

am pi

on . H

e re

al ly

is .

. . I

m ea

n, w

e ne

ed t

o st

op h

im a

b it

so m

et im

es . W

e of

te n

sa y:

‘l is

te n,

w e

ha ve

t o

w ai

t a

lit tle

b it,

I a

m n

ot s

ur e

w e

ca n

do a

ll of

t ha

t at

t he

s am

e tim

e. ’ F

or h

im , t

he re

a re

s o

m an

y op

po rt

un iti

es o

ut t

he re

, a lo

t w

e ca

n do

. . .

I th

in k

w e

ar e

si m

pl y

de pe

nd en

t on

in

no va

tio n

ch am

pi on

s [li

ke h

im ]”

— Pr

oj ec

t w

or ke

r in

a n

in no

va tiv

e pr

oj ec

t in

t he

m un

ic ip

al ity

o f B

od ø

Po

lit ic

al a

nd m

an ag

er ia

l le

ad er

sh ip

Su pp

or tiv

e an

d tr

us tf

ul p

ub lic

m

an ag

er s

an d

po lit

ic ia

ns w

ho

ac t

as le

ad er

s, n

ot b

os se

s,

w ho

c re

at e

an in

no va

tio n-

fr ie

nd ly

o rg

an iz

at io

na l

en vi

ro nm

en t

in t

he ir

p ub

lic

se ct

or o

rg an

iz at

io n

an d

w ho

c ea

se le

ss ly

e nc

ou ra

ge

or di

na ry

e m

pl oy

ee s

to

de ve

lo p

an d

im pl

em en

t in

no va

tio ns

“O ne

h as

t o

en su

re g

oo d

m an

ag em

en t

of u

ni ts

in t

he m

un ic

ip al

ity . F

in di

ng a

b al

an ce

b et

w ee

n pr

ov id

in g

m or

e au

to no

m y

fo r

un its

, s ta

yi ng

w ith

in t

he b

ud ge

t an

d pe

rf or

m in

g its

c or

e ac

tiv iti

es w

el l w

hi le

a pp

ly in

g fo

r ex

te rn

al fu

nd s

is n

ec es

sa ry

b ut

e xt

re m

el y

ch al

le ng

in g.

T he

re fo

re , I

a m

g la

d th

at w

e ha

ve g

oo d

m an

ag er

s w

ho

no t

on ly

m an

ag e

th ei

r un

its w

el l b

ut a

ls o

ex te

ns iv

el y

su pp

or t

em pl

oy ee

s in

t he

ir w

or k

on in

no va

tiv e

pr oj

ec ts

”— D

ep ut

y m

ay or

o f A

re nd

al “A

s af

e en

vi ro

nm en

t is

e ss

en tia

l. In

m y

ca se

, i t

w as

a bs

ol ut

el y

ne ce

ss ar

y to

h av

e th

e su

pp or

t of

t he

c hi

ef a

dm in

is tr

at iv

e of

fic er

. H e

ga ve

m e

au to

no m

y an

d al

lo w

ed

m e

to t

ry o

ut m

y id

ea s,

a pp

re ci

at ed

m y

ef fo

rt s.

S om

e th

in gs

d id

n ot

g o

th e

w ay

w e

pl an

ne d,

s o

w e

ha d

to t

ry a

no th

er w

ay . I

n th

is m

un ic

ip al

ity , i

t is

p os

si bl

e to

d o

th at

, a nd

w e

ha d

no p

ro bl

em s

w he

n it

ca m

e to

t ak

in g

an ot

he r

pa th

”— Pr

oj ec

t m

an ag

er in

t he

m un

ic ip

al ity

o f A

re nd

al “M

e an

d ot

he r

to p

m an

ag er

s he

re a

re v

er y

op en

w he

n it

co m

es t

o ne

w w

ay s

of d

oi ng

t hi

ng s.

It c

an b

e ev

er yt

hi ng

, p ra

ct ic

al s

ol ut

io ns

, e ve

ry th

in g.

In s

uc h

si tu

at io

ns , I

si

m pl

y sa

y: ‘d

o it,

I tr

us t

yo u.

’ A nd

t he

n w

e w

ill s

ee h

ow t

hi ng

s w

ill g

o . .

. W

e al

w ay

s en

co ur

ag e

[e m

pl oy

ee s]

t o

co m

e up

w ith

s uc

h id

ea s

[in no

va tiv

e id

ea s]

. T he

re

ha s

to b

e an

e nv

ir on

m en

t fo

r co

m in

g up

w ith

[ in

no va

tiv e]

id ea

s, if

y ou

k no

w w

ha t

I m ea

n. A

c ul

tu re

t o

co m

e up

w ith

t he

m ”—

C hi

ef a

dm in

is tr

at iv

e of

fic er

in t

he

m un

ic ip

al ity

o f B

od ø

“S in

ce it

is a

v er

y la

rg e

an d

co m

pl ic

at ed

p ro

je ct

, w e

w an

te d

to g

et s

up po

rt fr

om t

he p

ol iti

ci an

s. T

he p

ol iti

ci an

s w

er e

po si

tiv e—

th er

e w

as n

o pr

ob le

m fo

r th

em . I

n ad

di tio

n, o

ur p

ro je

ct m

an ag

er e

as ily

g ot

s up

po rt

fo r

th e

pr oj

ec t

fr om

t he

c hi

ef a

dm in

is tr

at iv

e of

fic er

a nd

t he

r es

t of

t op

m an

ag em

en t”

— Pr

oj ec

t w

or ke

r in

a n

in no

va tiv

e pr

oj ec

t in

t he

m un

ic ip

al ity

o f B

od ø

Em

pl oy

ee

em po

w er

m en

t In

no va

tio n-

fr ie

nd ly

or

ga ni

za tio

na l e

nv ir

on m

en t

ch ar

ac te

ri ze

d by

e m

ph as

is

on a

t ry

-a nd

-f ai

l a tt

itu de

am

on g

em pl

oy ee

s, t

ru st

- ba

se d

ro om

fo r

ac tio

n, li

tt le

hi

er ar

ch y,

fe el

in g

of h

ig h

to le

ra nc

e of

fa ilu

re , i

nt er

na l

re co

gn iti

on , a

nd a

g re

at d

ea l

of s

up po

rt fr

om t

he t

op

m an

ag em

en t

an d

po lit

ic ia

ns

“M y

id ea

w as

t ha

t th

os e

w ho

w or

k w

ith t

he is

su es

in t

he ir

p ro

fe ss

io na

l a re

a at

t he

b ot

to m

o f t

he o

rg an

iz at

io n

ar e

th e

m os

t su

ita bl

e to

id en

tif y

ne w

s ol

ut io

ns a

nd

to c

om e

up w

ith n

ew a

nd in

no va

tiv e

id ea

s. T

he p

ol iti

ci an

s an

d ot

he r

to p

ad m

in is

tr at

io n

m an

ag er

s th

ou gh

t th

at it

s ou

nd ed

r ea

so na

bl e.

T ha

t is

w hy

w e

de ci

de d

to

‘e m

po w

er ’ o

ur e

m pl

oy ee

s” —

C hi

ef a

dm in

is tr

at iv

e of

fic er

in t

he m

un ic

ip al

ity o

f A re

nd al

“I a

m g

la d

th at

t he

m un

ic ip

al ity

o f A

re nd

al a

llo w

s m

e as

a n

em pl

oy ee

t o

th in

k ‘o

ut si

de t

he b

ox ’ a

nd t

ha t

w e

ar e

al lo

w ed

t o

tr y

an d

fa il

w hi

le w

or ki

ng w

ith in

no va

tiv e

pr oj

ec ts

. I f I

c om

e in

w ith

a p

ro po

sa l,

th en

I w

ill b

e ta

ke n

se ri

ou sl

y. It

m ea

ns t

ha t

w e

ha ve

r oo

m t

o tr

y ou

t ou

r id

ea s”

— M

an ag

er o

f a n

in no

va tiv

e pr

oj ec

t in

t he

m

un ic

ip al

ity o

f A re

nd al

“T he

y [e

m pl

oy ee

s] h

av e

au th

or ity

t o

m ak

e de

ci si

on s

an d

ta ke

r es

po ns

ib ili

ty fo

r th

ei r

ac tio

ns .

. . O

ur m

an ag

em en

t cu

ltu re

is a

bo ut

t ru

st —

it sh

ow s

th at

w e

gi ve

a

hi gh

le ve

l o f t

ru st

t o

ou r

em pl

oy ee

s. O

ur m

ai n

ru le

is t

ha t

as m

uc h

as p

os si

bl e

is su

es s

ho ul

d be

r es

ol ve

d at

t he

lo w

es t

po ss

ib le

le ve

l i n

th e

m un

ic ip

al ity

. . .

W e

al so

re

m in

d ou

r m

an ag

er s

th at

t he

y ca

nn ot

m ic

ro m

an ag

e ou

r em

pl oy

ee s.

P eo

pl e

sh ou

ld h

av e

a lo

t of

fr ee

do m

t o

ac t

. . .

H ow

ev er

, a lo

t of

r es

po ns

ib ili

ty a

nd fr

ee do

m

ca n

be ‘b

ig a

nd h

ea vy

’ f or

s om

e pe

op le

. T he

re fo

re , o

ur e

m pl

oy ee

s ne

ed t

o ha

ve t

he a

bi lit

y to

h an

dl e

it” —

C hi

ef a

dm in

is tr

at iv

e of

fic er

in t

he m

un ic

ip al

ity o

f B od

ø “W

ha t

ha s

be en

im po

rt an

t fo

r th

e pr

oj ec

t? I

w ou

ld s

ay , m

y de

te rm

in at

io n,

e ng

ag em

en t

an d

th e

fa ct

t ha

t w

e ha

ve a

n in

no va

tio n

cu ltu

re w

he re

t he

re is

r oo

m t

o tr

y an

d fa

il, t

o tr

y ne

w t

hi ng

s, a

nd w

he re

y ou

r le

ad er

s su

pp or

t yo

u an

d ap

pr ec

ia te

y ou

r ef

fo rt

s” —

M an

ag er

o f a

n in

no va

tiv e

pr oj

ec t

in t

he m

un ic

ip al

ity o

f B od

ø H

ig hl

y ro

ut in

iz ed

in no

va tio

n ca

pa bi

lit y

In

te rd

is ci

pl in

ar ity

a nd

or

ga ni

za tio

na l l

ea rn

in g

In no

va tio

ns a

re d

ev el

op ed

in

t ea

m s

co m

po se

d of

e m

pl oy

ee s

fr om

di

ffe re

nt o

pe ra

tio n

un its

a nd

w ith

v ar

io us

pr

of es

si on

al b

ac kg

ro un

ds .

T he

re is

e m

ph as

is o

n sh

ar in

g ex

pe ri

en ce

s an

d kn

ow le

dg e

ac ro

ss t

he

w ho

le o

rg an

iz at

io n

th ro

ug h

m ul

tip le

d ig

ita l t

oo ls

a nd

pe

ri od

ic m

ee tin

gs , a

nd

ce nt

ra l c

oo rd

in at

io n

of

in no

va tio

n pr

oc es

se s

“I n

m y

vi ew

, i t

is im

po rt

an t

to p

re se

rv e

th e

kn ow

le dg

e an

d be

g oo

d at

le ar

ni ng

fr om

p ro

je ct

t o

pr oj

ec t,

bo th

a t

th e

hi gh

es t

le ve

l o f t

he o

rg an

iz at

io n,

in t

he c

hi ef

ad

m in

is tr

at iv

e of

fic er

t ea

m , a

s w

el l a

s at

t he

o pe

ra tin

g un

its ’ l

ev el

. I a

ls o

th in

k th

at it

is n

ot s

uf fic

ie nt

t o

le ar

n fr

om d

iff er

en t

pr oj

ec ts

fr om

y ou

r w

or ki

ng a

re a

bu t

al so

t o

tr y

to d

o it

ac ro

ss s

ec to

rs a

nd u

ni ts

b ot

h w

he n

it co

m es

t o

th e

so lu

tio ns

a s

w el

l a s

w ay

s of

w or

ki ng

w ith

d ev

el op

m en

t an

d in

no va

tio n”

— M

ay or

o f N

ar vi

k “O

ur m

un ic

ip al

ity p

la ce

s a

lo t

of e

m ph

as is

o n

in te

rd is

ci pl

in ar

ity in

t ea

m s.

I th

in k

th at

t he

v as

t m

aj or

ity o

f o ur

in no

va tiv

e pr

oj ec

ts a

re d

ev el

op ed

in in

te rd

is ci

pl in

ar y

te am

s” —

Pr oj

ec t

w or

ke r

in a

n in

no va

tiv e

pr oj

ec t

in t

he m

un ic

ip al

ity o

f N ar

vi k

“M an

y ye

ar s

ag o,

w e

w or

ke d

in no

va tiv

el y

on t

he r

ec ru

itm en

t of

m en

t o

w or

k in

k in

de rg

ar te

ns . I

t w

as c

al le

d m

en in

k in

de rg

ar te

n [I

n N

or w

eg ia

n ‘M

en n

i b ar

ne ha

ge ’],

w

hi ch

c om

es d

ir ec

tly fr

om M

IB —

‘M en

in B

la ck

.’ A

m as

cu lin

e an

d co

ol lo

go w

as c

re at

ed , a

nd s

om e

m en

w er

e re

cr ui

te d.

W he

n w

e w

er e

do ne

w ith

o ur

p ro

je ct

, I

fo un

d ou

t th

at t

he h

ea lth

ca re

u ni

t in

o ur

m un

ic ip

al ity

d ev

el op

ed a

s im

ila r

pr oj

ec t

as so

ci at

ed w

ith r

ec ru

iti ng

m en

t o

th e

he al

th ca

re p

ro fe

ss io

ns . T

he re

w er

e a

lo t

of

si m

ila ri

tie s

in t

he w

ay t

he y

di d

it. I

th ou

gh t:

‘W hy

d id

n’ t

w e

w or

k to

ge th

er o

n ou

r pr

oj ec

ts ?

W hy

d id

n’ t

w e

sh ar

e id

ea s,

e xp

er ie

nc es

, o r

kn ow

le dg

e? ’ I

t is

b ec

au se

w

e di

d no

t w

or k

ac ro

ss u

ni ts

in o

ur m

un ic

ip al

ity . .

. I a

m s

o gl

ad t

ha t

no w

it ’s

c om

pl et

el y

di ffe

re nt

!” —

T op

m an

ag er

in t

he m

un ic

ip al

ity o

f A sk

er “I

fe el

t ha

t ou

r m

an ag

er s

an d

po lit

ic ia

ns p

la ce

a lo

t of

e m

ph as

is o

n in

te rd

is ci

pl in

ar ity

, o rg

an iz

at io

na l l

ea rn

in g,

a nd

c om

pe te

nc e

im pr

ov em

en t.

Fo r

ex am

pl e,

b ef

or e

I st

ar te

d le

ad in

g th

is p

ro je

ct , I

h ad

t o

at te

nd a

c ou

rs e

fo r

pr oj

ec t

m an

ag er

s an

d em

pl oy

ee s

ab ou

t in

no va

tio n.

A t

th e

co ur

se , w

e le

ar ne

d w

ha t

in no

va tio

n is

a bo

ut

an d

ho w

w e

sh ou

ld m

an ag

e in

no va

tiv e

pr oj

ec ts

. I t

w as

a ls

o ve

ry h

el pf

ul t

ha t

w e

re ce

iv ed

s o

m uc

h he

lp fr

om o

ur in

no va

tio n

un it

du ri

ng t

he im

pl em

en ta

tio n

of o

ur

pr oj

ec t”

— M

an ag

er o

f a n

in no

va tiv

e pr

oj ec

t in

t he

m un

ic ip

al ity

o f A

sk er

(c on

tin ue

d)

517

M ic

ro fo

un da

tio n

C on

ce pt

d es

cr ip

tio n

Ill us

tr at

iv e

qu ot

es

N

et w

or ki

ng U

se o

f l oc

al a

nd n

at io

na l

ne tw

or ks

t o

sy st

em at

ic al

ly

se ar

ch fo

r id

ea s

fo r

in no

va tio

ns fr

om o

ut si

de

of t

he fo

ca l o

rg an

iz at

io n;

co

cr ea

tio n

of in

no va

tio ns

w

ith v

ol un

te er

o rg

an iz

at io

ns ,

lo ca

l a nd

n at

io na

l p ub

lic a

nd

pr iv

at e

or ga

ni za

tio ns

a nd

ci

tiz en

s

“I w

as a

t a

m ee

tin g

in T

ro m

sø . I

t w

as b

ac k

in 2

01 4.

I as

ke d

m y

co lle

ag ue

s fr

om T

ro m

sø if

t he

y w

or ke

d on

a ny

in te

re st

in g

pr oj

ec ts

. T he

y to

ld m

e ab

ou t

a pi

lo t

pr oj

ec t

th at

t he

y ha

d, a

nd it

w as

a bo

ut a

n ew

m et

ho d

of r

eh ab

ili ta

tio n.

T he

y sa

id t

ha t

th ey

fo un

d ou

t ab

ou t

th is

m et

ho d

of r

eh ab

ili ta

tio n

w he

n th

ey h

ad b

ee n

in D

en m

ar k,

a nd

t he

y th

ou gh

t th

at t

he y

ha d

to t

ry it

in t

he ir

m un

ic ip

al ity

. I t

ho ug

ht : ‘

w hy

d on

’t w

e tr

y th

is in

N ar

vi k

as w

el l?’

A nd

w e

di d

it. W

e fo

rm ed

a t

ea m

an

d st

ar te

d a

pi lo

t pr

oj ec

t . .

. Y

es , t

he fe

ed ba

ck fr

om o

ur u

se rs

w as

c ri

tic al

fo r

th is

p ro

je ct

. T he

y he

lp ed

u s

to b

et te

r un

de rs

ta nd

w ha

t w

e sh

ou ld

a nd

s ho

ul d

no t

do ”—

C hi

ef a

dm in

is tr

at iv

e of

fic er

in t

he m

un ic

ip al

ity o

f N ar

vi k

“W e

ar e

en co

ur ag

ed t

o at

te nd

d iff

er en

t ev

en ts

a nd

c on

fe re

nc es

. H av

in g

a la

rg e

ne tw

or k,

a t

bo th

t he

lo ca

l a nd

n at

io na

l l ev

el s,

g iv

es y

ou t

he o

pp or

tu ni

ty t

o co

ns ta

nt ly

b e

ex po

se d

to n

ew id

ea s,

g oo

d pr

oj ec

ts . S

om et

im es

, I e

ve n

ca ll

m y

co lle

ag ue

s in

o th

er m

un ic

ip al

iti es

a nd

a sk

if a

ny th

in g

‘e xc

iti ng

’ i s

ha pp

en in

g in

t he

ir

m un

ic ip

al ity

w he

n it

co m

es t

o re

ha bi

lit at

io n”

— M

an ag

er o

f a n

in no

va tiv

e pr

oj ec

t in

t he

m un

ic ip

al ity

o f N

ar vi

k “W

e ha

ve b

ee n,

a m

on g

ot he

rs , t

he in

iti at

or s

of t

he r

eg io

na l c

oo pe

ra tio

n ne

tw or

k w

ith o

th er

m un

ic ip

al iti

es in

E as

te rn

N or

w ay

. I t

is a

k in

d of

v ol

un ta

ry n

et w

or k

w he

re w

e m

ee t

re gu

la rl

y an

d sh

ar e

ou r

ex pe

ri en

ce s

w ith

o th

er s

al l t

he t

im e.

It c

an h

ap pe

n th

at w

e ‘s

te al

’ a lo

t fr

om t

he m

o r

th at

t he

y sa

y th

at s

om eo

ne h

as a

n ex

ci tin

g id

ea , b

ut t

he y

do n

ot h

av e

tim e

to t

es t

it, s

o w

e de

ci de

t o

tr y

it ou

t, an

d so

o n.

S o,

it is

a ll

ab ou

t th

at ”—

T op

m an

ag er

in t

he m

un ic

ip al

ity o

f A sk

er “.

. . s

o, it

’s n

ot u

nu su

al t

ha t

ci tiz

en s

or e

nt re

pr en

eu rs

d ir

ec tly

c on

ta ct

u s,

h er

e at

t he

K no

w le

dg e

C en

te r,

a nd

a sk

fo r

a m

ee tin

g to

t al

k ab

ou t

an id

ea fo

r a[

n]

[in no

va tiv

e] p

ro je

ct .

. . L

at es

t ex

am pl

e? T

ha t’s

h ow

t he

p ro

je ct

‘N ew

C ity

[ N

yb y

in N

or w

eg ia

n] ’ w

as d

ev el

op ed

. S o,

a s

yo u

ca n

se e,

o ur

m un

ic ip

al ity

is v

er y

op en

to

id ea

s an

d co

op er

at io

n w

ith c

iti ze

ns ”—

M an

ag er

o f a

n in

no va

tiv e

pr oj

ec t

in t

he m

un ic

ip al

ity o

f A sk

er

C en

tr al

iz ed

s up

po rt

fo

r in

no va

tio n

de ve

lo pm

en t

an d

im pl

em en

ta tio

n

C om

pr is

es t

w o

el em

en ts

: Th

e in

no va

tio n

un it

th at

p ro

vi de

s tr

ai ni

ng fo

r em

pl oy

ee s,

co

or di

na te

s, a

nd s

up po

rt s

in no

va tio

n pr

oc es

se s

Va rio

us d

ig ita

l t oo

ls th

at a

re

us ed

t hr

ou gh

ou t

th e

en tir

e in

no va

tio n

de ve

lo pm

en t

an d

im pl

em en

ta tio

n pr

oc es

s to

le ar

n fr

om in

no va

tio n

pr oc

es se

s (e

.g .,

“t he

P ro

je ct

W

iz ar

d 2.

0, ”

an e

xp er

ie nc

e st

or y/

di ar

y, a

nd a

“ po

rt fo

lio

m an

ag em

en t”

s ys

te m

)

“S in

ce 2

00 4,

w e

ha ve

h ad

a n

in no

va tio

n un

it w

he re

a t

le as

t 4–

5 em

pl oy

ee s

w or

ke d.

F ro

m 1

99 9

to 2

00 4,

w e

ha d

a de

ve lo

pm en

t un

it. B

ac k

th en

, i t

ha d

ce rt

ai n

as si

gn m

en ts

a ss

oc ia

te d

w ith

in no

va tio

n, b

ut I

th in

k th

at w

e be

ca m

e m

or e

co ns

ci ou

s in

r el

at io

n to

in no

va tio

n ar

ou nd

2 00

4– 20

05 . T

he n,

w e

st ar

te d

us in

g it

ac tiv

el y

in o

ur w

or k

on in

no va

tio ns

”— C

hi ef

a dm

in is

tr at

iv e

of fic

er in

t he

m un

ic ip

al ity

o f N

ar vi

k “I

n N

ar vi

k, t

he w

or k

on in

no va

tiv e

pr oj

ec ts

, l ik

e th

e on

e I m

an ag

e, lo

ok s

lik e

th at

: t he

in no

va tio

n un

it gu

id es

y ou

t hr

ou gh

ou t

th e

w ho

le p

ro ce

ss . W

e ha

ve t

oo ls

, m

ee tin

gs . W

e ne

ed t

o do

cu m

en t

ex pe

ri en

ce s

fr om

e ac

h ph

as e

of t

he p

ro je

ct . I

fi nd

t he

ir h

el p

po si

tiv e.

It ’s

n ot

li ke

it is

ir ri

ta tin

g or

s om

et hi

ng ”—

M an

ag er

o f a

n in

no va

tiv e

pr oj

ec t

in t

he m

un ic

ip al

ity o

f N ar

vi k

“T he

K no

w le

dg e

C en

te r

[t he

in no

va tio

n un

it] h

as b

ee n

gi ve

n pa

rt ic

ul ar

r es

po ns

ib ili

ty fo

r fa

ci lit

at in

g th

e im

pl em

en ta

tio n

of t

he in

no va

tio n

st ra

te gy

in p

ra ct

ic e.

In t

he

K no

w le

dg e

C en

te r,

w e

cr ea

te d

m ee

tin g

pl ac

es fo

r th

e w

ho le

o rg

an iz

at io

n. T

he K

no w

le dg

e C

en te

r al

so fa

ci lit

at es

c oo

pe ra

tio n

w ith

e xt

er na

l a ct

or s

on in

no va

tio n,

co

or di

na te

s in

no va

tio n

an d

de ve

lo pm

en t

w or

k, p

ro vi

de s

tr ai

ni ng

t o

em pl

oy ee

s, a

nd w

or ks

w ith

p ub

lic r

el at

io ns

”— T

op m

an ag

er in

t he

m un

ic ip

al ity

o f A

sk er

“H ow

d o

w e

de ve

lo p

in no

va tio

ns ?

W el

l, th

er e

ar e

se ve

ra l t

hi ng

s yo

u ne

ed t

o be

ar in

m in

d w

he n

yo u

de ve

lo p

in no

va tio

ns . F

ir st

, o ur

in no

va tio

n st

ra te

gy —

lo ok

a t

th e

la st

p ag

e. It

s ay

s, ‘l

oo k

fo r

op po

rt un

iti es

’ [ ‘B

lik k

fo r

m ul

ig he

te r’

in N

or w

eg ia

n] . Y

ou h

av e

to fo

llo w

t he

se t

en r

ul es

w he

n yo

u w

an t

to p

ur su

e in

no va

tio n.

W ha

t el

se ?

O f c

ou rs

e, t

he ‘P

ro je

ct w

iz ar

d 2.

0’ [

Pr os

je kt

ve iv

is er

en 2

.0 in

N or

w eg

ia n]

— al

l o f u

s ne

ed t

o us

e an

d fo

llo w

t hi

s pr

oj ec

t m

an ag

em en

t to

ol .

. . ”—

M an

ag er

o f a

n in

no va

tiv e

pr oj

ec t

in t

he m

un ic

ip al

ity o

f A sk

er

Fl

at a

nd fl

ex ib

le

st ru

ct ur

e Le

an o

rg an

iz at

io na

l s tr

uc tu

re

th at

d ec

re as

es h

ie ra

rc hy

in

t he

o rg

an iz

at io

n, o

pe ns

up

t he

in te

rd is

ci pl

in ar

y bo

tt om

-u p

an d

to p-

do w

n pu

rs ui

t of

in no

va tio

ns in

te

am s,

a nd

m ak

es t

he w

ho le

or

ga ni

za tio

n m

or e

“d yn

am ic

”

“W e

ha ve

a fl

at , t

w o-

le ve

l o rg

an iz

at io

na l s

tr uc

tu re

. I t

hi nk

it is

im po

rt an

t to

h av

e su

ch a

s tr

uc tu

re b

ec au

se it

s tim

ul at

es t

he in

no va

tiv en

es s

of t

he w

ho le

m

un ic

ip al

ity ”—

C hi

ef a

dm in

is tr

at iv

e of

fic er

in t

he m

un ic

ip al

ity o

f N ar

vi k

“O ur

s tr

uc tu

re is

li tt

le h

ie ra

rc hi

ca l.

In g

en er

al , w

e ha

ve a

h ig

h de

gr ee

o f o

pe nn

es s

fo r

go od

s ol

ut io

ns , e

ve ry

on e

fe el

s th

at . H

av in

g lit

tle h

ie ra

rc hy

in a

n or

ga ni

za tio

n is

g re

at b

ec au

se it

h el

ps u

s to

w or

k m

or e

in te

rd is

ci pl

in ar

ily . I

t is

a ls

o ve

ry u

se fu

l w he

n yo

u w

or k

in t

ea m

s on

[ in

no va

tiv e]

p ro

je ct

s, r

eg ar

dl es

s of

w he

th er

t he

y ar

e de

ve lo

pe d

bo tt

om -u

p or

t op

-d ow

n” —

M an

ag er

o f a

n in

no va

tiv e

pr oj

ec t

in t

he m

un ic

ip al

ity o

f N ar

vi k

“O ur

m un

ic ip

al ity

u se

s a

tw o-

le ve

l m od

el in

w hi

ch t

he m

an ag

er s

of o

pe ra

tin g

un its

h av

e a

de ci

si ve

r ol

e in

r el

at io

n to

t he

m ob

ili za

tio n

of t

he in

no va

tio n

ef fo

rt s

in

th ei

r un

its ”—

T op

m an

ag er

in t

he m

un ic

ip al

ity o

f A sk

er “W

e ha

ve v

er y

lit tle

h ie

ra rc

hy h

er e.

B ut

, a t

th e

sa m

e tim

e, e

ve ry

th in

g is

s tr

uc tu

re d.

W e

w or

k in

t ot

al ly

in te

rd is

ci pl

in ar

y gr

ou ps

, a lm

os t

en tir

el y

in t

ea m

s. I

th in

k w

e de

ve lo

p m

an y

in no

va tio

ns b

ec au

se w

e m

ee t

ne w

p eo

pl e

al l t

he t

im e.

E ve

n du

ri ng

lu nc

h. H

av e

yo u

se en

t he

s ig

ns a

t th

e ta

bl es

in t

he c

an te

en ?

A t

th e

ta bl

e si

gn s

it is

w

ri tt

en : ‘

if yo

u kn

ow a

ll of

t ho

se w

ho a

re s

itt in

g at

y ou

r ta

bl e

no w

, y ou

s ho

ul d

ch an

ge y

ou r

pl ac

e. ’ I

t hi

nk t

hi s

is t

he q

ui nt

es se

nc e

of t

he a

pp ro

ac h

th at

o ur

le ad

er s

fo llo

w . T

he y

sa y

to u

s th

at in

no va

tio ns

o ft

en o

cc ur

r an

do m

ly a

nd t

ha t

th ey

w an

t to

‘s tr

uc tu

re t

he r

an do

m ne

ss .’

T ha

t’s w

hy w

e ha

ve t

o m

ee t

an d

ta lk

t o

ne w

pe

op le

a ll

th e

tim e”

— Pr

oj ec

t w

or ke

r in

a n

in no

va tiv

e pr

oj ec

t in

t he

m un

ic ip

al ity

o f A

sk er

Ta bl

e 2.

( co

nt in

ue d)

518

innovation in the municipality of Bodø cannot be tools, routines, structures, or processes . . . but the outgoing, innovative individuals who continuously look for new opportunities and solutions. We want them to look for new solutions. That’s why we put so much emphasis on both culture and environment for innovative thinking. (Chief administrative officer in the municipality of Bodø)

Similar to the municipality of Arendal, the construction of a new town hall in 2019 allowed the municipality of Bodø to strengthen its low-routinized innovation capability. The chief administrative officer noted that moving to a new town hall further developed “the sharing culture” in the municipality and further empowered employees and managers to “come up with new solutions in cooperation with the external actors and, above all, citizens.”

As some may point out, high reliance on individuals to continuously pursue innovation can make an organization very vulnerable—such that when an individual leaves, his or her creativity, innovative skills, knowledge, and experience also leave the organization. Both municipalities took particu- lar measures to minimize such a risk. The chief administra- tive officer in the municipality of Bodø told me that this measure is

. . . a rule, which we call “twin competencies”—never have just one person who has a knowledge about a particular area. That is to reduce our vulnerability. I wouldn’t say we are very dependent on individual people, managers, project managers, and so on, but . . . they are central for us. We have exceptionally skilled employees and managers and—God forbid—we don’t want to miss them. It is not like that when one person quits, it is simple to replace him or her. We then need to use some time to build up the same competencies, experience, and so on. However, because we have “twin competencies,” we are less vulnerable. (Chief administrative officer in the municipality of Bodø)

Interestingly, the recent coronavirus crisis has demon- strated how critical the possession of low-routinized innova- tion capability has been for both municipalities. For example, the chief administrative officer in the municipality of Bodø noted that

the corona crisis has clearly shown how easily we can adapt to turbulent events. Because we develop innovations in all areas of the municipality, all the time, we were so well-prepared to the deal with the crisis. For example, it wasn’t luck that we had provided all pupils with computers. We had them because one of our employees had dared to think innovatively. So, when corona [crisis] happened: “pang” . . . three days later [after imposing the lockdown], our teachers could easily start teaching digitally . . . No problem. (Chief administrative officer in the municipality of Bodø)

As Table 2 and Figure 2 illustrate, a low-routinized inno- vation capability was developed in both municipalities on three microfoundations: public entrepreneurs, political and managerial leadership, and employee empowerment. Table 2

describes these components and provides extensive empiri- cal evidence.

The data from both municipalities reveal that the dynamic capabilities of public entrepreneurs (i.e., dynamic manage- rial capabilities) are the “source” of dynamism of low-routin- ized innovation capability (see Figure 2). I found that public entrepreneurs can use their dynamic capabilities to continu- ously pursue innovations only because they operate in an innovation-friendly environment. My data indicated that such an environment is characterized by political and mana- gerial leadership and employee empowerment. In other words, my analysis reveals that in public sector organiza- tions, where politicians and top managers act as leaders and empower their employees, public entrepreneurs use their dynamic capabilities to continuously develop and implement innovations.

Highly Routinized Innovation Capability

As in the case of the development of low-routinized innova- tion capability, the highly routinized innovation capability in the municipalities of Narvik and Asker also emerged from past decisions made by politicians and top managers (see also Figure 2). The municipality of Narvik has been in a dif- ficult economic situation since the 1990s. Due to large-scale redundancies in its largest local enterprises, it became a restructuring municipality. A severe local financial crisis was the trigger for politicians and top managers to develop a cul- ture of thinking differently and continuously seeking new solutions to the obstacles it must overcome to achieve its objectives.

After the recovery and a decade of prosperity, Narvik experienced yet another crisis, at the beginning of the 2010s, in the form of the collapse of the local solar cell industry and the departure of the headquarters of a large Norwegian cruise, ferry, and cargo operator. The internal economic situ- ation was also difficult because of unsuccessful municipal investments in complicated U.S. financial products. Because resources for innovations were very limited, the municipality of Narvik had to perform its innovation processes in a some- what structured manner. Top managers and politicians decided that working in interdisciplinary teams would be the best approach to stimulate continuous innovation develop- ment and implementation. The mayor of Narvik told me that to encourage entrepreneurial attitude and working together in teams, employees and managers were provided with vari- ous tools, routines, structures, and processes:

We have management group meetings where project managers share their experiences and findings from their innovative projects and give feedback to each other. They also prepare some documents so that others can look at them at any time . . . We also have an internal online “project room” where project managers provide feedback to each other and follow the progress of other projects. (Mayor of Narvik)

519Gullmark

The municipality of Asker, in turn, began its journey toward highly routinized innovation capability in 2003 when politicians and top management decided to establish the innovation unit. The purpose of the innovation unit was to create a place where innovations could flourish. Given the insights from scientific research and after consultation, the municipal administration decided to work on innovations in interdisciplinary teams. To facilitate their work on innova- tion, the municipality of Asker developed a project method- ology and a number of tools, processes, and routines. Because of its interdisciplinary character, over time, the innovation unit became a place where innovations have been continu- ously developed and implemented.

The highly routinized nature of Asker’s innovation capa- bility was particularly strengthened by two events: the prepa- ration of a document called “Innovation Strategy” in 2015 and the move of the innovation unit to a new location in Lensmannslia in Asker in June 2020. The “Innovation Strategy” briefly summarized innovation culture and Asker’s systematic methods of working with innovation. These sys- tematic methods described the actions that every manager of an innovative project should perform in each phase of inno- vation development and implementation. They specified where to seek ideas for an innovative project, how to develop the initial concept, how to plan and execute the innovation implementation process, and how to assess the results of the implemented innovation. One of the top managers in the municipality of Asker told me that the implementation of the “Innovation Strategy” greatly enhanced Asker’s ability to connect small incremental improvements into more radical changes at the organizational level:

We think that if these small things are shared inside and outside the organization, it can lead us to quite big things that will be beneficial for the municipality. That is why we are concerned with working systematically. It is crucial to take a strategic look at projects and know where to go at all times. The most important thing is that we move in the correct direction. (Top manager in the municipality of Asker)

The move of the innovation unit to a new facility in June 2020 made the municipality of Asker even more innovative because, as one of the top managers in the municipality of Asker noted, it “. . . created a ‘garage environment’ where creative processes and new ideas have free rein.”

Highly routinized innovation capability, similar to low- routinized innovation capability, turned out to be critical in dealing with the recent coronavirus crisis. As one of the top managers in the municipality of Asker told me, because of their innovation capability, they could “. . . quickly respond—in the form of smart and creative solutions—to challenges in different areas such as teaching or local econ- omy stimulation.”

As Table 2 and Figure 2 demonstrate, both municipalities developed a highly routinized innovation capability on four

microfoundations: interdisciplinarity and organizational learning, networking, centralized support for innovation development and implementation, and flat and flexible orga- nizational structure. Table 2 presents these microfoundations and offers extensive empirical evidence.

My study reveals that in both municipalities, tools, rou- tines, structures, and processes (i.e., dynamic organizational capabilities) are the “source” of dynamism of highly routin- ized innovation capability (see Figure 2). Dynamic organiza- tional capabilities in these two cases comprise (a) a lean organizational structure that maximizes the interdisciplinary character of teams that pursue innovation in organizations; (b) a number of tools and centralized support from innova- tion units that guide innovation teams throughout the entire innovation process; and (c) the capability to systematically search for innovative ideas in established networks. In other words, my analysis suggests that in public sector organiza- tions that use such tools, routines, structures, and processes, dynamic organizational capabilities stimulate continuous innovation development and implementation.

Outcomes of Low-Routinized and Highly Routinized Innovation Capabilities

The inquiry into the outcomes of the innovation capabili- ties in selected public sector organizations has resulted in an interesting observation: Regardless of the type of devel- oped innovation capability, both stimulated the continuous development and implementation of the same types of public sector innovations. I understand a public sector innovation as the development and implementation of any idea that is new to the adopting public sector organization and that creates or improves public value (Chen et al., 2019). I found that municipalities with low-routinized and highly routinized innovation capabilities continuously develop and implement both radical and incremental1 pol- icy, management, partners, services, and citizen innova- tions.2 Table 3 provides some examples of public sector innovations that were developed between 2016 and 2020 in the investigated organizations.

Discussion

My inductive field study provides a more nuanced and deeper understanding of the development, nature, and out- comes of innovation capabilities in public sector organiza- tions. I discuss notable past decisions that shaped the form of innovation capability in each of the examined public sector organization. I also identify two distinct types of innovation capability in the public context (low-routinized and highly routinized innovation capabilities) and their building blocks. In addition, I show the outcomes of each type of innovation capability in the form of developed and implemented public sector innovations.

520 American Review of Public Administration 51(7)

T ab

le 3

. Ex

am pl

es o

f I nn

ov at

io ns

D ev

el op

ed B

et w

ee n

20 16

a nd

2 02

0 in

M un

ic ip

al iti

es W

ith L

ow -R

ou tin

iz ed

a nd

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hl y

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tin iz

ed In

no va

tio n

C ap

ab ili

tie s.

Pr oj

ec t

Pr oj

ec t

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ri pt

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T yp

e of

in no

va tio

n Sc

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of in

no va

tio n

M un

ic ip

al iti

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ith lo

w -r

ou tin

iz ed

in no

va tio

n ca

pa bi

lit y

M

un ic

ip al

ity o

f A re

nd al

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d re

am b

an k”

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on lin

e w

eb si

te t

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ct s

an d

re al

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t he

g oo

d id

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es id

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th e

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th

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ol te

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d is

tr ic

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in no

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ad ic

al : a

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tir el

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w w

ay o

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ro ac

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ci

tiz en

s to

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bl ic

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nt eg

ra tio

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s” Pr

ov is

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rv ic

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w he

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n R

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w

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t

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yc lin

g on

fa m

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p at

hs ”

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ew m

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d of

r eh

ab ili

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m ed

a t

m ot

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in g

th e

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cr ee

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rv ic

e in

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tio n

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ta l:

im pr

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of c

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nt ly

p ro

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d ho

sp ita

l/n ur

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h om

e re

ha bi

lit at

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se rv

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M

un ic

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ity o

f B od

ø

“W

el fa

re t

ec hn

ol og

y” A

p ro

je ct

d es

ig ne

d to

im pl

em en

t a

se t

of s

ta te

-o f-

th e-

ar t

di gi

ta l t

ec hn

ol og

ic al

s ol

ut io

ns (

su ch

a s

ap ps

, sm

ar t

ho m

e, d

ig ita

l s ec

ur ity

a la

rm )

in p

ro vi

de d

m un

ic ip

al h

ea lth

a nd

e ld

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c ar

e se

rv ic

es M

an ag

em en

t in

no va

tio n

In cr

em en

ta l:

im pr

ov em

en t

of c

ur re

nt ly

p ro

vi de

d he

al th

a nd

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rv ic

es

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le ct

ro ni

c in

te ra

ct io

n be

tw ee

n ho

sp ita

l a nd

m at

er ni

ty a

nd

ch ild

c ar

e ce

nt er

”

A p

ro je

ct d

es ig

ne d

to c

re at

e an

e nt

ir el

y ne

w s

of tw

ar e

th at

e na

bl es

t he

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o f e

le ct

ro ni

c m

es sa

ge s

be tw

ee n

th e

lo ca

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pi ta

l a nd

m at

er ni

ty a

nd c

hi ld

c ar

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nt er

s an

d th

er eb

y si

gn ifi

ca nt

ly r

ed uc

es

th e

w ai

tin g

tim e

fo r

th e

fir st

h om

e vi

si t

by a

m id

w ife

M an

ag em

en t

in no

va tio

n R

ad ic

al : a

n en

tir el

y ne

w w

ay o

f w or

ki ng

in t

he

m un

ic ip

al c

hi ld

h ea

lth c

ar e

ar ea

“B od

ø ci

ty la

b” A

p hy

si ca

l a nd

v ir

tu al

p la

tf or

m t

ha t

de ve

lo ps

a nd

t es

ts in

no va

tiv e

id ea

s th

at w

er e

co cr

ea te

d w

ith

ci tiz

en s

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ze n

in no

va tio

n R

ad ic

al : a

n en

tir el

y ne

w w

ay o

f a pp

ro ac

hi ng

ci

tiz en

s to

c oc

re at

e pu

bl ic

v al

ue

“N

ew c

ity —

N ew

a ir

po rt

” N

ew s

tr at

eg y

fo r

de ve

lo pi

ng a

d is

tr ic

t in

t he

c ity

o f B

od ø

in w

hi ch

t he

c or

e is

m ul

tif ac

to r

co lla

bo ra

tio n,

d ev

el op

in g

su st

ai na

bl e

en er

gy a

nd t

ra ns

po rt

s ol

ut io

ns , a

nd c

iti ze

n co

cr ea

tio n

Po lic

y in

no va

tio n

R ad

ic al

: a n

ov el

a nd

h ig

hl y

am bi

tio us

ne

w p

ol iti

ca l a

ge nd

a fo

r a

lo ca

l d is

tr ic

t de

ve lo

pm en

t M

un ic

ip al

iti es

w ith

h ig

hl y

ro ut

in iz

ed in

no va

tio n

ca pa

bi lit

y

M un

ic ip

al ity

o f N

ar vi

k

“B

us in

es s

de ve

lo pm

en t

pr og

ra m

” A

jo in

t pr

iv at

e– pu

bl ic

m od

el o

f f in

an ci

ng t

o co

nt ri

bu te

t o

gr ow

th in

t he

m un

ic ip

al ity

o f N

ar vi

k. T

he

pr og

ra m

is b

as ed

o n

a co

lla bo

ra tio

n an

d m

ob ili

za tio

n st

ra te

gy in

w hi

ch p

ri va

te a

ct or

s ad

d id

ea s,

pl

an s,

a nd

s om

e eq

ui ty

c ap

ita l (

25 %

) to

t ri

gg er

p ub

lic r

es tr

uc tu

ra tio

n fu

nd s

Pa rt

ne r

in no

va tio

n R

ad ic

al : a

n en

tir el

y ne

w w

ay o

f w or

ki ng

w

ith p

ri va

te , v

ol un

ta ry

, a nd

o th

er p

ub lic

or

ga ni

za tio

ns o

n lo

ca l e

co no

m ic

d ev

el op

m en

t

“E

st ab

lis hm

en t

of R

EO ”

Es ta

bl is

hm en

t of

a r

eh ab

ili ta

tio n,

fo llo

w -u

p ca

re , a

nd o

bs er

va tio

n de

pa rt

m en

t in

c lo

se p

ro xi

m ity

a nd

in

c oo

pe ra

tio n

w ith

t he

lo ca

l h os

pi ta

l. It

is r

es po

ns ib

le fo

r tr

ea tin

g pa

tie nt

s be

fo re

, i ns

te ad

o f a

ft er

, ho

sp ita

liz at

io n

Se rv

ic e

in no

va tio

n In

cr em

en ta

l: im

pr ov

em en

t of

c ur

re nt

ly p

ro vi

de d

nu rs

in g

ho m

e re

ha bi

lit at

io n

se rv

ic es

“D ai

ly li

fe r

eh ab

ili ta

tio n”

A n

ew a

pp ro

ac h

to t

he d

om es

tic r

eh ab

ili ta

tio n

of e

ld er

ly c

iti ze

ns u

si ng

m ul

tid is

ci pl

in ar

y te

am s

Se rv

ic e

in no

va tio

n R

ad ic

al : a

n en

tir el

y ne

w w

ay o

f w or

ki ng

in t

he

m un

ic ip

al h

ea lth

a nd

e ld

er ly

c ar

e ar

ea

“C

lo ud

s er

vi ce

s in

t he

m un

ic ip

al

se ct

or ”

A p

io ne

er in

g pr

oj ec

t in

r el

at io

n to

a gr

ee m

en ts

w ith

m aj

or IT

v en

do rs

a nd

le gi

sl at

io n

in t

hi s

ar ea

in

N or

w ay

, c on

ce rn

in g

th e

in tr

od uc

tio n

of G

oo gl

e A

pp s

to t

he m

un ic

ip al

s of

tw ar

e sy

st em

M an

ag em

en t

in no

va tio

n In

cr em

en ta

l: im

pr ov

em en

t of

t he

c ur

re nt

ly

pe rf

or m

ed m

un ic

ip al

m an

ag em

en t

M

un ic

ip al

ity o

f A sk

er

“E

co -f

ri en

dl y

sw im

m in

g po

ol ”

C on

st ru

ct io

n of

a s

ta te

-o f-

th e-

ar t

an d

en vi

ro nm

en ta

l-f ri

en dl

y sw

im m

in g

po ol

fa ci

lit y

to t

ra ns

fo rm

an

d re

vi ta

liz e

th e

di st

ri ct

o f H

ol m

en in

t he

m un

ic ip

al ity

o f A

sk er

. T he

fa ci

lit y

is c

on si

de re

d a

“t ou

ch st

on e”

o f f

ut ur

e ar

ch ite

ct ur

al d

ev el

op m

en t

of t

he fo

ca l d

is tr

ic t

Po lic

y in

no va

tio n

R ad

ic al

: a n

ov el

a nd

h ig

hl y

am bi

tio us

n ew

po

lit ic

al a

ge nd

a fo

r lo

ca l d

is tr

ic t

de ve

lo pm

en t

“W el

fa re

la b”

A h

ol is

tic s

er vi

ce c

on ce

pt in

te nd

ed t

o en

ga ge

c iti

ze ns

in im

pr ov

in g

th ei

r liv

in g

co nd

iti on

s an

d cr

ea tin

g lo

ng -t

er m

s us

ta in

ab le

h ou

si ng

C iti

ze n

in no

va tio

n R

ad ic

al : a

n en

tir el

y ne

w w

ay o

f a pp

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521

Innovation Capabilities, Their “Source” of Dynamism, and the Public Sector Context

How do public sector organizations continuously develop and implement innovations? Contrary to the prior research (Clausen et al., 2020; Trivellato et al., 2021), my findings suggest that innovation capability in public sector organiza- tions need not solely emerge from the routines, culture, struc- tures, and collective ability to stimulate innovations (Schilke, 2014)—the dynamic organizational capabilities—that are located at the meso- and organizational levels of analysis. My study indicates that in some public sector organizations, inno- vation capability can have its “source” of dynamism in the dynamic managerial capabilities (Helfat & Martin, 2015) of public entrepreneurs. This is important because the prior stud- ies have indicated the critical role of public managers in creat- ing or improving public value (Ongaro & Ferlie, 2020; Trivellato et al., 2021). For example, Piening (2013) observed that dynamic capabilities in public sector organizations are dependent on “how extensively and appropriately public managers use established dynamic capabilities” (p. 236) However, to the best of my knowledge, my study is one of the first in the field of dynamic capabilities to acknowledge that public sector employees and lower-level managers them- selves can possess and use their dynamic capabilities to con- tinuously develop and implement innovations.

By finding that innovation capability can take two forms in public sector organizations—low-routinized and highly routinized—and that these two forms of innovation capabil- ity are built on different building blocks, my study also con- tribute to our understanding of the relationship between three dimensions of dynamic capabilities—the functional domain of innovative capability, its degree of routinization, and the source of its “dynamism” (Schilke et al., 2018). The prior studies have largely focused on how the external environ- ment influences the degree of routinization of dynamic capa- bilities in organizations (Peteraf et al., 2013). Making significant headway on this issue, my study indicates that organizations operating in the same environment (i.e., the public sector) can develop both low-routinized and highly routinized innovation capabilities and have their “source” of dynamism at different organizational levels.

Do low-routinized and highly routinized innovation capabilities lead to different outcomes? My findings sug- gest that both types of innovation capability result in a continuous development and implementation of the same types of innovation. My study showed that municipalities with both low-routinized and highly routinized innovation capabilities have developed radical and incremental pol- icy, management, partners, services, and citizen innova- tions. This is an important finding because it indicates that the equifinality of dynamic capabilities’ outcomes does not occur only in the moderately dynamic environments of the private sector (Eisenhardt & Martin, 2000; Peteraf et al., 2013) but also in the public sector context.

This is also significant in the light of the prior work on public sector innovation (Arundel et al., 2019) and innova- tion capability (Breznik & Hisrich, 2014). The recent research on innovation capability in the public sector (Clausen et al., 2020; Trivellato et al., 2021) explores neither the scope nor the types of public sector innovation developed and implemented by innovation capabilities. In turn, the insights from the literature on dynamic capabilities (Janssen et al., 2016; Slater et al., 2014) suggest that innovation capa- bility stimulates the development and implementation of mainly radical product and service innovations. Hence, my study offers an important theoretical insight into both of these areas of research because it reveals that compared with innovation capability in the private-sector context, innova- tion capability in the public sector context results in different outcomes.

Is it thus relevant which type of innovation capability a public sector organization develops? My study reveals that it is of great relevance because the legacy of the past shapes and defines the nature of innovation capabilities. This find- ing is in line with the prior studies on dynamic capabilities in both public sector (Piening, 2013) and private-sector organi- zations (Teece, 2016) that have found that dynamic capabili- ties are developed in a path-dependent way. My study demonstrates that the past decisions of politicians and top managers result in organizational strategic change and a suc- cessful response to various external shocks, central govern- ment-level decisions, and internal organizational challenges. These decisions initiated and then strengthened the process of building the “source” of dynamism of organizational inno- vation capability around either dynamic managerial or dynamic organizational capabilities. This is an interesting finding because it indicates that public sector organizations also require decision-makers in the upper echelon who can direct strategic change. In other words, my study suggests that public sector organizations require politicians and top managers who possess dynamic capabilities to develop inno- vation capability (Helfat & Martin, 2015). The current litera- ture offers very limited insight into the dynamic capabilities of politicians and top public managers (Schilke et al., 2018). To the best of my knowledge, this study is the first to acknowledge that politicians and top public managers can also have dynamic capabilities.

As the process of innovation capability’s development happens over many years and in several stages, it appears that any considerable changes in the nature of a particular innovation capability cannot be made in the short term. This theoretical insight offers important implications for practitio- ners. Recent policy agenda in Norway and other Scandinavian countries (Government.no, 2018) have been focused on encouraging municipalities to take a more systematic approach to working with innovation—an approach that largely corresponds with the above-discussed highly routin- ized innovation capability. The most prominent example of this trend is the recommendation of the Norwegian

522 American Review of Public Administration 51(7)

Association of Local and Regional Authorities to use “The Project Wizard,” which was developed together with, among others, the municipality of Asker, in developing innovation processes (Bøgh et al., 2018; KS, 2019). My study calls for avoiding a one-size-fits-all approach to innovation capability development in public sector organizations. As my findings showed, innovation capabilities are developed over time in a path-dependent manner, and they are built on the resource and competence base of a particular public sector organiza- tion. Therefore, my study encourages policy-makers to uphold the diversity of innovation capabilities in public sec- tor organizations.

Limitations, Future Research, and Conclusion

As with all research, my study is not without limitations. First, my study was conducted in the context of the Norwegian municipal sector, which can be described as highly innova- tive. Consequently, such an innovation-friendly environment may well be an enabling antecedent of the observed innova- tion processes. While my data do not indicate that this is the case, I acknowledge this potential limitation of my research model. Second, because my study sought to explore how public sector organizations develop their innovation capa- bilities and how these capabilities spur public sector innova- tions, my sampling strategy was naturally limited to innovative Norwegian municipalities. However, it may be that if the sample were extended to include less innovative municipalities, my research would provide a more refined understanding of the role and development of innovative capabilities in public sector organizations. It is also essential to note that my research model does not capture the strength of the individual microfoundations’ influence on the observed forms of innovation capabilities. Therefore, based on the cur- rent model, we cannot explain how innovative a public sec- tor organization would be if it adopted only one of the building blocks of the identified forms of innovation capabil- ity. Furthermore, my study demonstrates the importance of path dependency for developing the identified forms of inno- vation capability. However, it may also be the case that path dependency influences the types of innovations that public sector organizations pursue. I see particular merit in per- forming additional investigation on these issues.

My research raises other intriguing questions for future studies. First, future studies could explore different “shades” of low-routinized and highly routinized innovation capabili- ties in public sector organizations. In my study, I focused on “polar cases” (Eisenhardt & Graebner, 2007). However, it is possible that public sector organizations develop more nuanced forms of low-routinized and highly routinized inno- vation capabilities that build their “source” of dynamism on different mixtures of dynamic managerial and organizational capabilities. If there are more nuanced forms of low-routin- ized and highly routinized innovation capabilities, one may wonder whether they are made with different building blocks

and at what point innovation capability becomes low-routin- ized or highly routinized. Second, we need more insight into the cognitive capabilities, social capital, and human capital (Helfat & Martin, 2015) of politicians and top public manag- ers as well as lower-level public managers and public employees who possess dynamic capabilities. In doing so, future research could examine the similarities and differ- ences between (a) the dynamic capabilities of top public managers and top managers in private firms, (b) the concept of the dynamic capabilities of managers (i.e., dynamic mana- gerial capabilities) and the dynamic capabilities of politi- cians, and (c) the dynamic capabilities of top public managers as well as lower-level public managers and employees. Third, future work could explore the generalizability of the findings of my study. Therefore, I call for quantitative stud- ies that can test and compare low-routinized and highly rou- tinized innovation capabilities in different organizations, country contexts, and sectors.

To summarize, my study provides a rare insight into how public sector organizations develop and use their innovation capabilities to continuously pursue public sector innova- tions. Drawing on the dynamic capabilities perspective, my research demonstrates how the strategic change-oriented decisions of politicians and top public managers can, over time, shape the form and degree of routinization of innova- tion capability in a public sector organization. I also find that both low-routinized and highly routinized forms of devel- oped innovation capability result in equifinal outcomes—the continuous development of the same types of public sector innovations. I hope my work encourages other scholars in the fields of public administration, innovation and entrepre- neurship, and strategic management to explore the interest- ing research questions that have been identified in my study and thereby support the flourishing of the research on inno- vation capability in public sector organizations.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This study was supported by the Regional Research Fund of Northern Norway (Grant/Award No. 257023).

ORCID iD

Petter Gullmark https://orcid.org/0000-0002-6600-6494

Notes

1. Following Barrutia and Echebarria (2019, p. 449), I define incremental innovations as involving little discontinuity from existing knowledge and practices and radical innovations as involving “significant departure from the existing knowledge and practices of the municipality.”

523Gullmark

2. I classified public-sector innovations according to the typol- ogy proposed by Chen et al. (2019).

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Author Biography

Petter Gullmark is an associate professor at Nord University Business School, Norway. His main research interests are public sector innova- tion and entrepreneurship, the dynamic capabilities perspective, strate- gic management, and qualitative research methods.

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