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Processes of social innovation in mutual organisations: the case of social enterprise spin outs from the public sector
1. Processes of social innovation in mutual
organisations: the case of social enterprise
spin-outs from the public sector
Fergus Lyon, Ian Vickers, Leandro Sepulveda,
with Caitlin McMullin, Dan Gregory
Centre for Enterprise and Economic Development Research
1
2. Introduction
• Mutual spin-outs from the public sector – new spaces
for social innovation in public services
• Policy support for social enterprise spin-outs in England
• Aims and research questions:
– What types of innovations are being developed and
introduced?
– What are the processes of innovation involved within the
new organisations?
– What are the key external influences and sources of
support?
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3. Conceptualising social innovation
• Our definition: “the process and outcomes of designing,
developing and introducing novel responses to social needs
with the objective of collective or public benefits, rather than
private profit”.
• Degrees of novelty: completely original, new to a market/area
or new to an organisation
• Processes of innovation and systems perspectives –
importance of multiple actors and relationships (e.g. Bessant
and Tidd 2007; Fagerberg et al. 2005)
3
4. Insights from innovation theory
• Organisational strategy + cultures, values and routines (e.g.
Bessant and Tidd 2007; Greenhalgh 2008).
• Competences and dynamic capabilities - individual and group
(e.g. Eisenhardt & Martin 2000; Vickers and Lyon 2012).
• Risk taking or aversion - organisational climate and public
sector as ‘innovation stifling’ ? (Sorenson and Torfing 2012;
Vigoda-Gadot et al. 2005; Windrum and Koch 2008).
• ‘Open innovation’ and ‘co-production’ - interaction between
developers, users + others (Gallouj & Weinstein 1997;
Leadbeater 2007; Mulgan 2006; Parker and Parker 2007).
4
5. Insights from innovation theory
• Organisational strategy + cultures, values and routines (e.g.
Bessant and Tidd 2007; Greenhalgh 2008).
• Competences and dynamic capabilities - individual and group
(e.g. Eisenhardt & Martin 2000; Vickers and Lyon 2012).
• Risk taking or aversion - organisational climate and public
sector as ‘innovation stifling’ ? (Sorenson and Torfing 2012;
Vigoda-Gadot et al. 2005; Windrum and Koch 2008).
• ‘Open innovation’ and ‘co-production’ - interaction between
developers, users + others (Gallouj & Weinstein 1997;
Leadbeater 2007; Mulgan 2006; Parker and Parker 2007).
5
6. Methodology
• 25 case studies of social enterprise (SE) mutuals
in health and social care
• 5 cases in leisure services
• 8 cases examined in detail for this paper
• Interviews/focus groups with:
–
–
–
–
–
chief executives
senior managers
key staff
service users
key external stakeholders (commissioners, partner
orgs, TUs etc)
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7. Findings
Types of innovation
• Organisational - new forms to facilitate democratic
governance, decision making and involvement of staff/users
• New treatments and therapeutic work integration – driven
by broader conception of health and well-being + more
efficient use of resources
• Outreach - new ways of communicating health and well-being
messages and services within communities and for particular
demographic groups
• Redesign of pre-existing services + other incremental
improvements to org. systems/ processes.
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8. Strategy, culture and engagement
• Entrepreneurial leaders and an ‘open climate’
• Innovation from both formal R&D and
learning within everyday practices
• Spinning out giving freedom
– Opportunities for greater staff involvement
“…as shareholders, we’ve actually got a say in what
happens.” (Exec PA )
– Although challenges of engaging staff as
shareholders
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9. Capabilities and competences
• Entrepreneurial capabilities while in the public
sector – mavericks and disruptors:
“[Our pre-spin-out innovative service] existed
because we didn't ask permission. All the best
things I've ever done in the health service, we've
done under the radar […]. We haven't explicitly
looked for permission.” (CEO Case 6)
• Senior managers enabling staff and users to
introduce new ideas
• Bringing ‘new blood’ – from outside the public
sector and third sector
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10. Creating spaces for experimentation,
learning and risk
• Social innovation mechanisms – awards, ideas
boxes, reviews of all services
• Organisational cultures that allow spaces for
experimentation and risk
• Concept of risk different in social enterprise:
“The NHS tends to be overly secure for all sorts of right
reasons….. The initial response from our IT provider
which is the NHS said, ‘You can't do that.’… And we
were like, ‘Let's just do it and see what happens’. […]
So it was a cultural change that you need to do to
change them to say, ‘I can take a risk and do
something differently.’” (CEO Case 3)
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11. Engaging users and other stakeholders
• Greater responsiveness to user needs + more
active participation in some cases
– One case where board of Adult Care service
provider entirely composed of users with
disabilities - “experts by experience”
• Partnership working and open learning –
mainly with public and third sector
• Some developing new links with private sector
companies
11
12. Funding and resourcing innovation
• Organisations’ own reserves or surpluses
• External fund raising – donations and grants
• Working with commissioners of public services:
– Driven by their interests, particularly cost-cutting
– Some cautious and risk averse
– Others wanting to fund pilots and develop an
evidence base
– Greater involvement when continuity of
commissioner and when less financial pressure
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13. Conclusions
• Innovation faster and easier than in public sector
but some of most innovative elements developed
while in the public sector
• New processes of innovation shaped by:
–
–
–
–
Pre-existing routines and communities of practice
Greater staff/user engagement and ‘new blood’
Public service commissioners and competitive markets
Tension between co-operation/sharing ideas and
protecting IP in a competitive market
– Other actors (public/third/private sector) - emerging
new ‘ecosystems of innovation’?
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Are these mutuals doing more of different types of innovation?How does the mutual organisational form shape innovation?
Recent work on ‘open source’ methods, techniques and on co-production (von Hippel, 2005) highlights the advantages of innovation efforts that are characterised by close interaction between developers, users and other actors. Work on services (including in the public sector) and on social innovation has also focused on the relationship with customers (or clients/citizens) as an essential part of the innovation process (Chew and Lyon, 2012; Gallouj and Weinstein, 1997; Leadbeater, 2007; Mulgan, 2006; Parker and Parker, 2007; Osborne et. al, 2008; Simmons et al., 2006, 2007; Westall, 2007).
Recent work on ‘open source’ methods, techniques and on co-production (von Hippel, 2005) highlights the advantages of innovation efforts that are characterised by close interaction between developers, users and other actors. Work on services (including in the public sector) and on social innovation has also focused on the relationship with customers (or clients/citizens) as an essential part of the innovation process (Chew and Lyon, 2012; Gallouj and Weinstein, 1997; Leadbeater, 2007; Mulgan, 2006; Parker and Parker, 2007; Osborne et. al, 2008; Simmons et al., 2006, 2007; Westall, 2007).
Early findings – focus on 8 case studiesQuota sample procedures to ensure representation from different types of organisations and sectors:different subsectors within health and social care and a comparator sector of leisure services; size; location; and length of time since organisation spun out. Organisations also sampled in relation to the different types of innovation - as perceived by key informants etcYear established – 64% during 2011-12; 32% before 2011 (sample)Employee size – ranging from v small (7) up to 1500 (mean: 519 (db); 558 (sample))Turnover - mean: £21.8m (db); £18.8m (sample)