Adapted image by Loic Leray on Unsplash

The topic of risk management would not be seen by many as an entry point into exciting conversations about the future of public services. So many conversations about risk in local government quickly descend into the process-driven minutiae of ratings and registers, that they can feel far removed from the tangible reality of the life-changing impacts of their staff and services. But my recent experience suggests that engaging with and exploring risk, and its links to innovation and experimentation, are essential if our ambitions to create a better society are to be realised.

As part of our work on the Nesta/Collaborate Upstream Collaborative, we’ve been supporting a group of local authorities exploring the theme of risk and innovation as a barrier and enabler to change. Through a series of conversations based on their practice and experience in developing new models of public services, the group have highlighted the key importance of a new approach to risk — one which enables and creates space for innovation — to making new models of public service the norm.

The group quickly identified that the way that many managers in public services currently perceive, define and respond to risk reduces the ability to innovate and improve public services to create positive societal outcomes. This is because:

1. Organisations and managers focus so much on preventing harm that opportunities for positive impact are missed. If the focus is solely on reducing downside risk (e.g. eliminating fraud), it is easy to miss out on opportunities for the positive benefits that come with a more collective approach to problem solving, supporting frontline staff to respond to the root causes of people’s needs and the sharing of power with citizens. Many of us will have experienced the frustration of seeing the debate about the potential upsides of taking a new approach — such as engaging with people to deliver a service, or supporting residents to do something for themselves rather than a service doing it for them — being crowded out because of a focus on what could go wrong, however narrow the chance and limited the impact may be compared to the likelihood of better outcomes and rich learning opportunities.

2. There is a bias in the kinds of risk that are attended to, with organisational risks being afforded greater weight than societal risks. Often the greatest focus is given to managing and containing financial and reputational risk at the organisational level, at the expense of considering and addressing the human, social and economic risks that challenge public services and society, relating to the overall outcomes public services are pursuing. This can lead to an insular and narrow focus on the immediate and short-term, and a failure to see the bigger picture.

These two factors limit space for innovation in pursuit of better social outcomes. As well as causing frustration for the many public servants who know that there are other and better ways to support their communities, this means that the public services fail to adapt and evolve, and that outcomes ultimately don’t improve.

But we can change this. The councils we worked with proposed a reframing of risk, pushing our thinking about what a different approach could look like. Reframing risk requires us to reflect on how risk is conceived of, measured and managed and what type of risk we give the most significance to. We are required to widen our lens and expand the space for possibility, and use innovation and learning to develop new responses to the complex challenges public services face. As new approaches are refined, the overall risk profile changes, and so public services evolve, focusing and making progress on the societal outcomes that matter.

Reframing risk means widening our lens in several key domains to balance a number of different factors. The process of reframing risk asks us to grapple with the following questions:

Which risks are attended to and where?

  • Organisation and service level AND systems: We need to balance attention between risks to the organisation and risks to achieving the overall outcomes public services care about, such as reducing inequality and supporting people to thrive; and work to understand and manage risk not just at the level of the service or organisation, but also at the level of the system.

How are risks managed and who is involved?

  • Oversight AND Trust & Participation: We need to move from a solely process-focused and hierarchical approach to risk management, to one which also allows for trust and participation so that exploring and understanding risk becomes an inclusive dialogue with a range of actors in the system.

When is risk managed?

  • Reactive and proactive and curious: We need to balance the need to react to short-term risks and presenting demands, with curiosity about the root-causes of issues and the need for prevention and early intervention.

As these questions suggest, reframing risk is predominantly a mindset and cultural shift, rather than a technical one. But this shift is driven by some very practical actions. To begin with, we recommend creating space for open conversations to explore the questions above and understand how risk is perceived and the assumptions that drive this. So often these attitudes are deeply engrained but rarely discussed or formally acknowledged. By bringing a range of voices from across the system into the conversation, including citizens themselves, you can develop a more mature approach to risk and a more nuanced understanding of your organisation’s risk appetite.

On 30th September we’ll be co-publishing a paper with Nesta setting out the thinking of the working group in more detail, along with a tool to support organisations to hold these conversations and think about the conditions they need to build — particularly in relation to culture, ownership and accountability, and infrastructure. Look out for this paper on our website.

Our experience of working with this group of innovative councils has proved that far from being dry and dull, questioning our mindsets and approach to managing risk is an important step to creating the conditions for innovation which will ultimately improve outcomes for citizens. By asking different questions about risk, creating a more participatory process and widening our focus, we create space for more creativity and a wider range of responses to the complex challenges we face.

Collaborate and Nesta will be publishing a new paper on reframing approaches to risk on 30th September. You can join the discussion at two free events hosted online by Nesta on the same day — sign up here (New Operating Models from 11am-12pm and Chain Reaction explores: What is the future for local government and the role for new operating models? from 12.30–1.30pm)

Written by Ellen Care