MSc Assignment 3 - Business and Technology


I'm doing an apprenticeship MSc in Digital Technology. In the spirit of openness, I'm blogging my research and my assignments.

This is my paper from the Business and Technology module. You can read my Digital Leadership paper and my Data Analytics Paper.

I really didn't enjoy this module. Although well taught, it was a business studies course mostly focussed on how American companies managed innovation. I struggled to connect the teaching to my role in the UK public sector. I was charmingly bewildered to score 76%. In the English system 50% is a pass, 60% is a commendation, 70% is distinction.

A few disclaimers:

  • I don't claim it to be brilliant. I am not very good at academic-style writing.
  • It is fairly inaccurate. Many of the concepts we were being taught were not relevant to the public sector, so there is a lot of fudging.
  • Lots of it is needlessly harsh. We were encouraged to be extremely critical of our organisation.
  • Many of the recommendations it makes are already in practice.
  • This isn't how I'd write a normal document for work - and the facts have not been independently verified.
  • This isn't the policy of my employer, nor does it represent their opinions. It has only been assessed from an academic point of view.
  • It has not been peer reviewed, nor are the data guaranteed to be an accurate reflection of reality. Cite at your own peril.
  • I've quickly converted this from Google Docs + Zotero into MarkDown. Who knows what weird formatting that'll introduce!
  • All references are clickable - going straight to the source. Reference list is at the end, most links converted using DOI2HT.ML.

And, once more, this is not official policy. It was not commissioned by anyone. It is an academic exercise. Adjust your expectations accordingly.


Abstract

The author describes how a government department reacted to disruption in the data exchange ecosystem by adopting a shared-standards approach to APIs and the resultant learnings.

The project - to launch an API catalogue based on open standards - is the subject of this assignment.

Introduction

In 2020, the author's team at the Data Standards Authority (DSA) was responsible for selecting and promoting the use of OpenAPI v3 for Government APIs.

This was in response to an overwhelming proliferation of Government APIs being developed, each with a unique set of documentation, and a lack of central coordination.

This paper looks at how innovative new standards are chosen, the process underlying any decisions, how the team executes innovation, and whether they successfully exploit that innovation.

It concludes with a critical analysis of the current innovation workflow and how it can be improved.

Exploring Innovation

How do market and technology dynamics provide opportunities for your organisation?

The Data Standards Authority is part of the Civil Service and is insulated from market dynamics. They have no competitors and have statutory funding (Manzoni, 2020). Their activities are constrained by the political mandate granted to them.

The DSA has to demonstrate value for money against a complex set of requirements to ensure fiscal responsibility (Treasury, 2020). This restricts the ability of the DSA to innovate and produces a unique set of pressures on the way innovation is exploited.

An analysis was conducted in line with Porter's Five Force Model:

A diagram showing the forces governing competition in an industry.

Figure 1 - Porter's Five Force Mode (Porter, 1979)

Table 1 - Analysis of Five Forces
ForceExampleInfluence
New entrantsWill other departments be seen as the source of internal standards?Medium. If DSA doesn't consistently innovate and respond to user needs, then other departments may take up the mantle of mandating standards.
SuppliersAre proprietary standards being promoted by industry groups?High. Pressure from suppliers to adopt non-open standards. This would undermine DSA's credibility.
CustomersDo departments want to use specific standards?High. Departmental desire for a strong open standards mandate is generally high.
Threat of substitute products or servicesWhat ability do other organisations have to promote a catalogue of standards?Medium. Standards bodies like ISO and BSi all produce standards. But they do not specifically target DSA's users with a full complement of standards.
Existing rivalryAre there competitors in the standards space?Low. Although there are multiple standards organisations, each only "competes" in their own sphere of industry.

How are opportunities developed with stakeholders?

The DSA is a demand-led organisation. This means that the main driver of diffusion of innovation is external factors (Sullivan & Wang, 2020). After receiving a request from a member of the public to better improve API documentation, stakeholders across the organisation were polled for a response. The innovation process takes place in the open. This allows the public, academics, politicians, and other interested parties to shape the innovation process.

This is a loose process, with no defined timescales, and no published stage gates.

"The team is still small enough that we can do this to some degree in an ad-hoc. When we start doing things at a larger scale, we're going to need to put some more formal processes in place." - Product Manager

How are speculative technologies or unfulfilled needs managed differently?

Interviewees were unable to identify any "technology looking for a home". New technology is designed to fill an identified user-need. There are no speculative launches.

The DSA's remit is for continual "service innovation" (Helkkula et al., 2018). It provides value-added services through innovations in the standards space.

"You don't go with a blank bit of paper to organizations, but something generally will come up in conversations in engagement." - Senior Stakeholder

How are ideas generated?

The DSA operates a form of "Demand Pull" innovation (Schilling, 2020). It has a mandate to respond to user needs.

Research identified 3 main sources for idea generation:

  • Ministers
  • Internal stakeholders
  • External pressure

As part of the innovation process, technology is assessed along an "S-Curve" type model known as the Gartner Hype Cycle.

Graphic showing the rise and fall of various technology hypes.

Figure 2 - Gartner Hype Cycle (Woodbridge & Cain, 2017)

The majority of innovation within DSA occurs along the "Plateau of Productivity"; selecting standards which are mature in their marketplace - but may be innovative within Government.

Interviewees were cautious about selecting standards which were too early in the curve. Stakeholders realise the DSA has to fit in with other departments:

"[The DSA] is not risk averse but more conscious of where it sits in the ecosystem, perhaps." - Product Manager.

The use of the Gartner Hype Cycle to analyse technology is an accepted industry standard. DSA should examine other models which may provide more insight - for example a community design canvas (Weiss, 2017) would help generate ideas with their community.

What idea generation methods are used?

Repeated studies have shown that "brainstorming" (a form of group discussion and deliberation) is an ineffective way to manage the generation and curation of new ideas (Henningsen & Henningsen, 2018).

Instead, discussions take place on an open forum - where stakeholders can propose and discuss ideas in a structured fashion. Although a Code of Conduct may appear to add bureaucratic overhead, it is effective in discouraging derailing or abusive messages (Li et al., 2021).

Competitor Analysis is also used. Although other Governments are not traditional competitors, the DSA finds value in analysing other organisations' response to similar challenges.

How are risks assessed and prioritised?

In order to assess risks, the DSA uses the Common Assessment Method for Standards and Specifications (CAMSS) (Regulation (EU) No 1025/2012, 2012). This meets DSA's legal obligations to assess the risk of adopting a new standard. It covers legal, environmental, and sustainability issues.

The ultimate arbiter of risk assessment is the Open Standards Board which provides a decision on whether risks should delay or prevent launches (Thornton & Campbell, 2017).

Although CAMSS provides a method of assessing risks, the author thinks the DSA would benefit from a more formal technology risk prioritisation process before proposals reach the Open Standards Board. Although this may have slowed down the product launch, it would have reduced the risks the project faced.

How does the organisation plan the order in which technological concepts to invest?

A typical Stage-Gate Process is:

Graphic of a step by step process.

Figure 3 - Stage Gate Process (Cooper, 2015)

The DSA did not have a formal planning process for assessing the order of projects. The author believes this contributed to the delays the project faced.

What is the organisation strategy?

The DSA's strategy is to reach a "dominant design" (Utterback & Abernathy, 1975) for Government standards, in order to enable a strong base for growth via a stable architecture.

In a commercial marketplace, an organisation would segment customers into groups such as innovators, early adopters, early majority, later majority, or laggards (Moum et al., 2017).

Graphic showing a bell curve.

Figure 4 - Diffusion of Innovation Curve (Rogers, 2003)

Because the Civil Service does not have customers, the author has adapted the concept of Rogers' customers to refer to other departments who have to adopt the DSA's proposals.

No formal analysis is undertaken to understand which customers fit into which segmentation. This means the strategy cannot be prioritised to reflect market positioning.

A description of the context of the cases and examples

The DSA's mission is to ensure that Government data are available in standard formats, with consistent ways to manage and analyse them.

The shift from published data sets of read-only files - to the emergence of on-demand data via an API - is a new technological discontinuity (Pedota et al., 2021). It changes the existing business model and relationship between data publishers and consumers via "creative destruction" (Schumpeter, 1942).

This is relevant to the author's pathway specialism (Data Analytics) because this innovation in API standardisation reduces the burden on analysts working with diverse data sets. Having standardised data formats available via well-documented APIs, reduces the likelihood of errors in the cross-referencing between data produced by different departments.

Critical Analysis

The author believes that DSA is lacking in formal processes to prioritise areas of innovation. Based on the author's 20 years of industry experience, they recommend adopting a basic funnel to improve innovation capability (Smith et al., 2017). The process for selecting standards would benefit from a balanced scorecard to help prioritise risks and align with the organisation's vision, strategy, and goals.

Graphic showing how vision leads into strategy, which leads to goals, which leads to a balanced scorecard.

Figure 5 - Typical way of linking strategies to a Balanced Scorecard (Harmon et al., 2019)

However, the additional overhead may be difficult for a small team to absorb.

The existing process is lacking in both defined timescales and specific pass / fail criteria. No records are kept of how the process has been applied. Without metrics, the author believes there is no way to determine how the innovation process could be made more efficient.

No assessment is currently carried out on what value can be created from focussing on a "demand-led" (Rietveld, 2018) process. Customer segmentation would have helped this specific project understand which customers were likely to be hesitant to adopt innovative services.

Executing Innovation

How are budgets arranged for the innovation process?

Due to the DSA's statutory funding (Manzoni, 2020) the author found limited budgetary and cost implications. Interviewees remarked that the only costs associated with the project were operational expenditures.

Are many activities undertaken in parallel?

As an Agile team, the DSA scopes its work to fit both the availability of resources, and the needs of the organisation. This use of Agile allows the DSA to parallelise its processes, thus reducing the development cycle (Cooper, 2021). Respondents noted that this was sometimes overwhelming:

"You're trying to do 50 things at the same time." - Product Manager.

How are the R&D teams designed?

While there are no specific teams dedicated to research and development, there are multiple teams involved in the development of new standards. The Civil Service can be considered a Loosely Coupled Organisation (Lemon & Towery, 2021) and teams exhibit a high degree of autonomy.

As a reactive organisation, the DSA relies on "Product Champions" (Maier & Brem, 2018). This is someone - often outside the organisation - who expends significant resources to ensure that the innovation process completes. Within the DSA, the Product Champion is referred to as a "challenge owner".

What is the incentive structure within and across teams?

Interviewees thought the lack of incentive structure was a problem across the civil service. Although there are some reward mechanisms in place, they are rarely used.

The author investigated how private industry commonly incentivises staff. Common methods are through pay awards, stock options, and long-term bonuses (Mbebeb, 2019). The author's industry experience suggests that incentives must be managed closely to reduce the risk of misalignment of corporate and personal goals.

Interviewees indicated that the Civil Service attracted people with different priorities:

"It's certainly very different from my experience in Enterprise where you don't often get people who are involved in enterprise stuff because they really believe in the mission of the company." - Product Manager.

How is motivation managed?

The DSA can be thought of as an "Ambidextrous Organisation" (Tushman & Smith, 2017). It has multiple internal teams each of which conglomerate to work on short-term projects.

The DSA's team draws from several virtual and matrix organisations. This allows them to leverage the core competencies of multiple teams - which prevents underinvestment from managers who only align with a single team (Prahalad & Hamel, 1997).

Interviewees mentioned that the lack of standardisation between each project meant that a mechanistic structure would not be suitable (Su et al., 2019).

"We're still at a kind of knotty enough place in this problem, where the effort of automating it would take longer than doing it the way we're currently doing it." - Product Manager.

The author agrees that this project could not have benefited from Robotic Process Automation.

Are outsiders part of the innovation process? What are the incentives for them?

Although the DSA relies on outsiders to become part of the innovation process, interviewees mentioned that the incentives for outsiders were based around improving the provision of Government services rather than for financial gain.

"Being a civil servant has got an unusual incentive in that people do it for reasons that people don't do stuff in the private sector. You have people doing stuff for the passion." - Senior Stakeholder

A focus on open standards allows the DSA to take a liberal diffusion strategy (Inoue & Tsujimoto, 2018). This promotes the growth of a technology ecosystem based on multiple competitors with low-to-no barriers to entry.

Critical Analysis

The author has identified that an internal product champion would have made this project more effective.

An internal product champion of sufficient seniority should be appointed as an executive sponsor (Roberts, 2001). Rather than solely relying on the external "Challenge Owner" and the DSA team's resources, a senior figure would provoke a greater response from the wider organisation.

However, there is a risk that in-group bias and an unwillingness to confront senior leaders will lead to projects being continued even when they should be discontinued (Devaney, 1991). As suggested by Devaney, this can be countered by the use of "anti-champions". The DSA uses a number of "critical friends". These resources could have been better utilised to ensure that this project had a better balance between internal and external needs.

The author's current role involves analysing the standards and facilitating discussion. Although this has been useful for this project, a future role could include being an internal product champion. This would allow the author to engage in budgetary discussions and provide rigorous analysis to the organisation promoting the use of the DSA's standards.

Exploiting Innovation

What are the drivers of innovation?

Government has an important role in developing the ground-work for private sector innovation (Mazzucato, 2014). By setting standards, DSA aims to minimise Government spend on out-dated and inefficient technologies. This will lead to higher quality data and APIs - which will make private sector innovation more efficient.

The DSA's work is open source. They want to accelerate the adoption and dissemination of new technology and standards. This should create a positive feedback loop to ensure that open standards reach market dominance (Schilling, 2020).

The introduction of the Open API Catalogue was considered by the organisation to be critical to the long-term success of the Government National Data Strategy (Dowden, 2020).

Does the organisation have strong IP?

Paradoxically, the Intellectual Property (IP) rights of the DSA are strong - but are mostly given away.

Almost all the work created by the DSA is protected by "Crown Copyright" (Copyright, Designs and Patents Act, 1988). In addition, some work receives protection with severe legal penalties (Official Secrets Act, 1989).

Most work published by the DSA is released using Open Government Licence v3 (The National Archives, 2020). This permits extensive re-use with minimal obligations.

All the code the DSA produces is under the MIT Open Source Licence (Linux Foundation, 2018). This allows others to use the code without requiring compensation.

Table 2 - Crosswise Analysis of DSA's IP position
StrengthsWeaknesses
Strong ProtectionReduces risk of material being used in a harmful way.

Consistent with other Governments.

Chilling effect on reproduction or criticism of Government work.
Liberal LicensingAllows wide dissemination of our work.

Users expect this of technology organiations.

Can confuse people who expect strong protection.

The author's assessment is that the DSA strikes a balance between capability transfer and internal incubation (Gonthier & Chirita, 2019). It is a low risk way to disseminate IP in order to build future capability in both the department and the wider economy.

Does the organisation have a strong brand?

The DSA was created in 2020. It is part of a new department, the Central Digital and Data Office (CDDO). This means both DSA and CDDO have limited brand awareness. There is little risk of new entrants - so entry barriers are not a consideration. Interviewees questioned the need to create brand loyalty:

"GDS had a strong brand. I certainly don't think the DSA has that. Whether or not it should have one is a different question." - Product Manager.

The author recommends that they conduct a search for what Gladwell terms "connectors, mavens, and sales people" (Gladwell, 2015). Internal and external people who are willing to connect the DSA to new opportunities and persuade other organisations to adopt the DSA's recommendations. The project could have gained more traction if customers associated it with a powerful brand.

Does the organisation engage in strategic partnerships?

The widespread adoption of open standards is seen by the DSA as a form of positive network externality (Thum, 1994). The more suppliers which adopt a standard, the more choice there is in the market for standards compliant solutions.

Open standards reduce entry barriers for Small to Medium Enterprises and reduce the switching costs of Government departments (Eaves et al., 2019). Porter defines this as a form of "complement" (Porter, 2001) - the presence of open standards enhances the utility of a service, thus making it more desirable.

Which portfolio of projects provide early success for customers?

Looking at the standard S-Curve to understand the DSA's focus:

A graph showing how technology matures over time.

Figure 6 - S-Curve (Priestley et al., 2020)

For this project, the DSA selected technology which was on the maturity side of the curve.

The author found a lack of metrics hampered the analysis of whether the project met its objectives over time.

Does the organisation have a platform strategy and technology roadmap?

Interviewees responded that there was no specific platform strategy nor technology roadmap around the open standards process.

"probably something that we will need is a platform strategy and a technology roadmap" - Senior Stakeholder.

Given that the DSA hopes to influence the rise of "Open Platforms" (Boudreau, 2010) through its innovation, the author recommends that it should define its own strategy and roadmap.

What are the challenges of managing platforms and portfolios for the firm?

Interviewees responded that the lack of resources posed a major challenge to managing the platforms the team relied upon.

"I would argue that when you've got as few people as we do, those formal processes can be an overhead, which we can't really afford." - Product Manager.

Critical Analysis

Based on the author's analysis of the way the DSA exploits innovation, they recommend several ways it can improve.

The DSA must make better use of "internal integrations" (Eslami & Lakemond, 2016). Complex collaborative projects require multidisciplinary experts from various stakeholders to work together. Although the DSA integrates well with some of the teams, it needs to more tightly couple with others in order to disseminate and exploit the innovations it has produced with this project.

The DSA as a team has relatively high homophily, so it could benefit from a more heterogeneous mix of team members in order to increase diversity and thus improve performance (Jackson, 2003). The project currently focuses on like-minded individuals and may struggle to attract a diverse range of customers. Although there were only a small number of customers, segmentation via user personas (Nielsen, 2019) would have helped the team identify which customers this project should have been targeting.

The DSA also needs to improve the learning rate of the organisation in adopting innovative standards (Mukherjee et al., 1998). This means closely observing how standards are selected, assessed, and adopted - in order to improve the processes within the department. The author believes that DSA needs to urgently assess its core competencies (Prahalad & Hamel, 1990) so it can prioritise development of any areas of weakness. At the moment, there are no metrics to evaluate the success of the project, so weaknesses cannot be addressed.

Self Evaluation

The author will evaluate their experience using Gibbs' Model of reflection (Gibbs, 1998).

Description of the experience:

With the author's background in private-sector innovation, they were able to relate to some of the concepts which are absent from the public sector world of innovation.

Through their stewardship of the Open Standards Board - both setting the agenda and facilitating meetings - the author plays a key role in ensuring that the current innovation process runs smoothly.

Feelings and thoughts about the experience:

The author found it productive to share their expertise with others on the course. They were frustrated with the monocultural perspective (mostly US companies) given in examples. They also found it difficult to relate the module's core concepts back to the public sector.

By reflecting on how other organisations approach innovation, the author will be making recommendations on how to improve the process.

Evaluation of the experience, both good and bad:

The author's organisation doesn't produce products, and they found it difficult to find examples of innovation which matched the framework of the course.

The author found the use of interviews an intriguing way to connect with colleagues and superiors. The relatively "flat" structure of the organisation meant that the author regularly meets with people at all levels. Consequently, the interview structure felt contrived.

Analysis to make sense of the situation:

This module has strengthened the author's belief that Government needs to be more innovative.

To provide solutions to the issues facing the country, Government needs the freedom to experiment with new services and ideas.

The author's analysis is that viewing Government innovation through the lens of the private sector is not the most appropriate way to understand public sector needs.

Conclusion about what you learned and what you could have done differently:

The author should record the value they add and create to the team. Recording personal performance will lead to a greater understanding of their personal effectiveness.

Action plan

The following CPD was identified by the author as being suitable for future action:

  • Better understanding of Treasury processes
  • Budgets and procurement
  • Stakeholder analysis

Previous actions taken included:

  • Innovation Workshops at Telefonica
  • Writing submissions for ministers
  • Presenting standards work to Cabinet members

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It may not be used or retained in electronic systems for the detection of plagiarism. No part of it may be used for commercial purposes without prior permission.

Any source code is under the MIT Licence

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