President Biden’s ambitious $2.25 trillion American Jobs Plan presents a unique opportunity for local governments and communities to modernize basic infrastructure, utilizing emerging technologies through local innovation ecosystems. However, tapping into local startups and disruptive technologies requires a certain level of skill, know-how, and risk management culture not commonly found in government organizations and mature industries.
In our work with both the public and private sectors, Spyre Group has identified several key impediments to innovation that are common to most organizations:
- Too much focus on technology. Most organizations tend to focus on the technology rather than on the broader mission fit. Without a clear articulation of the value proposition to all the stakeholders, it is nearly impossible to build integration momentum and achieve the critical mass of adoption needed to realize the full potential of the innovation.
- Clash of cultures. The hierarchical and formal nature of governmental agencies and many mature corporations strongly contrasts with the flat and informal organizational culture common in startups and young growth companies. Startups are often seen as “chaotic” by bureaucratic organizations, while conversely, mature organizations are “archaic.”
- Operational fit. Adoption of innovative ventures – both internal and external – into an organization often requires certain operational and cultural changes. For example, new technologies may necessitate a different mix of skills in the engineering department or a different performance indicator with which to evaluate employees. This so-called operational fit is a silent and very effective killer of innovation.
The President’s plan calls for at least half of all spending to address climate change. The distinction is significant, because it introduces an additional layer of complexity by requiring large-scale integration and adoption of “smart,” “connected,” and emerging technologies.
For example, the plan’s Power Infrastructure portion calls for “building resiliency in the electric transmission system” and for “modernizing power generation to deliver clean electricity.” To achieve this, local utilities and state, local, and tribal governments will have to adopt and integrate into the grid a growing network of communications technologies, controls, sensors, automation, and cybersecurity measures, all working together to predict and respond to demand and supply fluctuations.
Thus, the short-term challenge – beyond the ability to pass the bill through Congress — is the capacity of local governments and even some large businesses to work with, and source from, fast-paced startups and small businesses who are the main engines driving the “smart” capabilities the President is counting on.
Leaning on our experience over the years, Spyre recommends leadership begin building needed capacity for entrepreneurial skills and culture in their organizations. Three in particular come to mind:
- Groom innovation managers. Assign an innovation manager to every internal or external technology being evaluated. Innovation managers serve as the internal entrepreneurs assessing the potential value of the innovation venture, anticipating bureaucratic roadblocks, and in general championing technologies across the organization.
- Validate first. The tendency in most mature organizations is to focus on the technology and conduct a large-scale technological proof of concept (POC), which tends to be expansive and time consuming. If the POC fails – not uncommon when dealing with emerging technologies — the organization can develop “innovation fatigue.” Instead, organizations should seek to validate the potential value of the idea before moving to a POC. It is a cost-effective approach, and one that is commonly used by startups and venture capitalists.
- Develop the skills and culture. Innovation is highly specialized work. It requires dedication, expertise, management attention, and an entrepreneurial culture. Building the skillsets to manage innovation is a prerequisite to successful innovation.
There is very little doubt that the American Jobs Plan will serve as a significant driver of innovation if passed. The Administration is correct in assuming that increasing federal demand will create the market for an array of important technologies and capabilities. What is more, as the world’s largest buyer, the US federal government has unparalleled capability to drive down the costs of some of these technologies, helping to pave the way for their adoption in the market.
Those who hope to benefit from the infrastructure modernization bill, or who are expected to be at the forefront of implementation, are wise to get ahead of the curve and begin developing minimal, but vital, organizational and professional skills to maximize the impact. Selecting the right technologies and building a comprehensive innovation action plan – to scout for, vet, experiment, and adopt solutions – will be critical to meeting target KPIs in an efficient, sustainable, and long-lasting manner.
Roy Levy leads National Security Innovation at the Spyre Group. His experience and expertise stem from years of working at the intersection of innovation and national security, linking emerging technologies with critical missions and end-users. Roy has held various, and increasingly, senior roles working in national security policy, defense acquisition regulation, merger & acquisitions due diligence, strategy planning, product marketing, business development, and P&L management. He is the founder and partner at GEN-AVIV, a solutions company focusing on commercial and dual-use technologies in support of the defense healthcare management system and Live-Virtual-Constructive training capabilities.
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