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Can a rock star CIO from business fix government IT?

2014-10-30

Gregory Dawson is trying to bust the myth that state governments can hire “rock star” CIOs from the private sector and, voila, technological innovation will result. It’s a nice thought, but one that rarely matches reality, according to recent research co-authored by Dawson, assistant professor of information systems in the W.P. Carey School of Business. Instead, his team found that good performance and successful innovation are more likely to occur when CIOs have strong relationships with their governors and legislatures and when they leverage those relationships to tackle technology issues that directly affect citizens’ lives.

“What a lot of governments in general have done is they’ve gone to what we call the rock star CIO, a CIO who has come over from the private sector, who had an excellent track record of innovation in the private sector, and basically the governor turns this person loose and says, ‘Make us innovative,’ ” Dawson said. “They believe that these rock stars have the secret sauce to make innovation work. Quite contrary to that are the actual results.” Dawson has been interested in the world of public-sector chief information officers ever since his days as a partner at consulting firms PricewaterhouseCoopers and Gartner. There, he dealt with many government CIOs, some of whom were effective and some not, he said, and he began wondering what it took to be effective.

For all the popular notions of “running government like a business,” previous research has shown huge differences between the public and private sectors, Dawson noted. First, while businesses are unified in focusing on profits, government officials are elected for their stands on a range of issues. And, while businesses keep much of their internal workings private so they can maintain competitive advantage, governments must operate transparently and openly. In business, a board of directors hires and oversees the executives, but legislators only can vet officials appointed by governors. Another difference is the age of the technology used in the two sectors.

Businesses invest in continually upgrading their technology and anticipate a return on investment, but governments frequently work with dramatically older technology for which parts and expertise become less and less available. Despite all those handicaps, success stories do emerge from state government. Michigan, for example, is investing in IT upgrades for its Medicaid system and an emergency response command center. Oklahoma opened its books by developing a website where citizens can search for specifics of state revenue and spending. Dawson set out to examine public-sector innovations, with the help of co-authors Kevin Desouza, associate dean of research at ASU’s College of Public Programs, and James Denford, department head of management and economics at the Royal Military College of Canada.

Defining innovation in government

In business, innovation is prized when it creates or generates state-of-the-art technologies. For the public sector, Dawson and his colleagues focused on innovation in which governments adopt or assimilate new technologies from the outside. Critical to their research were sources of data about state-level technology efforts and state-level performance. The trio examined a compendium from the National Association of State CIOs, which detailed how each U.S. state approached specific problems and how much time and money each state spent doing so. The researchers distilled the NASCIO data into four general types of public-sector innovation:

• Public service delivery innovations. These change a process by which citizens receive state services, such as electronic billing or online application forms.
• Citizen engagement innovations. Foremost among these are “dot-gov” websites, which automate how citizens connect with the state.
• Administrative innovations. These change a process by which state employees work, such as a switch to electronic procurement.
• Human resources innovations. These automate how state employees connect and collaborate with each other.

The researchers matched that data with data from the Pew Charitable Trusts’ Government Performance Project, which studied outcomes of the states’ investments. Their research broke new ground, first in identifying the different types of innovation in the public sector, and second in finding that successful outcomes depend on who was involved in each type of innovation.

It turned out that in three out of the four categories, states’ performances improved when the CIO worked with the governor, or the governor and the legislature, on the innovation. Dramatic improvement came in both kinds of citizen-facing innovations. Dawson thinks these innovations succeeded because the governor and legislators were both involved in a project designed to improve citizens’ lives.

“We felt like the legislature had a much broader sense in terms of what really needed to be done, and they were able to help shape it more dramatically than any single individual,” he said. “Second, if the state legislature got behind it, people from both parties were supporting it … and pulling forward as a group to improve the lives of citizens.” Employee-facing innovations that changed a process also succeeded when the CIO and the governor worked together. “We think that the governor’s involvement was a signal to employees in the state that this was something the governor supported and was going to become a de facto standard,” Dawson said. The only type of innovation that didn’t affect state performance was employee-facing automation, they found.

A case for insiders, desperation, centralization

Other research by Dawson and his colleagues busted more myths about the role of CIOs in the public sector. They found that states got the best results under an experienced CIO who had a relatively long tenure in government. The reason for that, Dawson believes, is that such CIOs have formed good relationships with governors and legislators and have earned their trust. Such CIOs also understand the issues of the public sector, where IT needs to respond to a need that elected officials can help identify.

In looking at what motivates states to be innovative, the researchers initially thought states whose citizens had higher incomes and higher education levels would be most likely to understand the need for innovation. But they found that more innovation came from states with lower levels of income and educational attainment. Dawson calls it those states’ version of a desperate football team’s Hail Mary pass. “They fundamentally can’t fix the income and the education problem,” he said. “As a result of the income and education problem they don’t have as much money, so they’ve got to try something innovative.”

Also busted was the myth that across the board, decentralization makes for more efficiency and faster responses. In fact, their research found that states outperformed their peers when they had strong central CIOs in two areas: setting overall strategies and choosing the personnel to carry out the strategies. In two other areas — finance and coordination/planning — their research found no significant difference in performance between states that had decentralized those functions and states that had centralized them. Though their research so far has crunched state-level data, Dawson thinks the lessons apply to all levels of government, from federal down to local. Last year’s botched rollout of the federal government’s Affordable Care Act website was a great example of such a failure, he said.

The necessary details and procurement came so late, and the project lacked the support of half of lawmakers, so he was not surprised that the project was doomed to failure. “As much as we would like to make a technology project technology-centric, it’s not. Whenever you’re addressing any problem, you’ve got people issues, process issues and technology issues,” Dawson said. “Merely making one of them very good, or even making two of them very good, cannot overcome the problem of not having the third. “This is why I think the job of a public-sector CIO is so hard,” he added. “In government, you have to know all three parts, but then you have to make sure that you the CIO are marching in lockstep with both the governor and the legislature.”

The bottom line

From his and his co-authors’ research, Dawson recommends these takeaways for the various stakeholders in the public-sector CIO arena:

• For CIOs, realize that relationships matter, that the public sector is different, and that innovation should be a process instead of a one-time event. Importing innovation from the private sector might not seem sexy, but you’re also free to copy successes from other states.
• For governors and legislators, trust your employees and listen to senior IT staffers. Employees in government have been embedded in the problems the public sector faces, and they know many of the answers.
• For public-sector IT professionals, speak up and offer ideas. Many in government know what they are doing, have been successful at their work, and care about the public they serve.
• For citizens, remember that the public sector isn’t the private sector, because of the need for openness and accountability. Public-sector executives want to do the best they can with the tax dollars they have.

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