Can

Government Work Like OpenTable?

Innovation in the Collaborative Era

Frank DiGiammarino

Abstract In a world where the private sector can instantly deliver customized results to millions of customers, government struggles to be relevant. In fact, its "bureausclerosis" - the hardening of the arteries of government - is so severe that today, it takes particular skills just to navigate the system. For example, in Spain, government programs, people and processes have reached the point that self- appointed "tramitadors" simply wait outside public buildings and charge a fee for their ability to cut through the red tape and actually produce a result. As a global society, we're at a crossroads. Government resources are increasingly diminished, yet our problems are more complex. If the public sector wants to break its bureausclerosis, it needs to understand and embrace new models for getting things done. Private sector companies like Kayak, Hulu, and yes, OpenTable all exist to sort through huge amounts of data to achieve an individualized outcome. This paper details how governments can leverage the lessons from these companies to create a positive impact where people work, live and raise their families.
Copyright 2012 Frank DiGiammarino All rights reserved This paper reflects the views of Frank DiGiammarino. You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, display, or in any way exploit any of the content contained in this publication, in whole or in part.

"With the publishing of this paper, Frank DiGiammarino has defined an original language-set in order to capture whats happening within organizations and to detail how the government can emulate the model for the benefit of citizens. Frank remains at the forefront of the horizontal thinking that will enable our government to emerge with the next generation of capabilities that all stakeholders demand. Take the time to read this paper as its a front row seat to the ongoing transformation of citizen services in an age of data and meaning. Daniel Forrester, Author, Strategist and Founder of Thruue Inc., a consultancy dedicated to creating high performance cultures via reflective thinking Outcome brokers are needed across government to produce the services that the public is demanding in increasingly greater numbers. Only by using carefully crafted networks can government meet these needs. Frank DiGiammarino has given us a blueprint for a new way of doing business. Ed DeSeve, President, Global Public Leadership Institute and former Special Advisor to President Obama Frank is certainly one of Washingtons great visionaries and thought leaders in the governance and IT space. If you want creative thinking about these topics, no one is better than Frank D. Terry Buss, Executive Director and Distinguished Professor of Public Policy, Heinz College, Carnegie Mellon University, Australia "Frank is part of a rare breed in Washington, he not only thinks big thoughts, but he achieves big results. Breaking through silos to create networked solutions can be a tall order in any organization. Yet, Frank managed to do just this across multiple federal agencies. His OpenTable prescription for achieving better results is exactly what we need to create new, positive outcomes with existing resources. John Fernandez, Partner & Innovation Strategy Director, SNR Denton, Former US Assistant Secretary of Commerce for Economic Development and two-term Mayor of Bloomington, IN "Franks insight causes us to think about two imperatives, firstly the need to unlock the innovation and energy trapped in the current workforce in the public and private sectors, and secondly to create an environment in which the next workforce is willing to invest in our home market" Lee Strafford, Private Sector Board Member, Sheffield City Region Local Enterprise Partnership

 The Game Changer: Innovation in the Collaborative Era

Do you remember how time consuming making a restaurant reservation was before OpenTable? In the old days like 2003 I had to go online, check out the menu and independently call each restaurant to see if they had availability. Remembering even further back like 1998 I had to thumb through a phone book and just start calling. If I didnt like a menus offerings, I would have to call a different restaurant; if that one didnt have space for me, I made another call. In the end, it took a lot of time to make a reservation. In fact, I would habitually go to the same place because the routine was so much easier. Today, I log on and I'm greeted by a service that's easy, free and provides customized insights about my dining options. What's more, OpenTable has partnered with other companies so that I can get a limo ride to the restaurant or have flowers waiting at my table when I arrive. The company even gives me points for being a loyal customer as of this writing I have over 15,000. According to their 2010 SEC 10K filing, over 20,000 restaurants are participating in OpenTable and over 200 million patrons have already been seated. I have no doubt that these numbers will only continue to grow because OpenTable is a platform that has been built to simplify the complex process of making a restaurant reservation. To do this, it engages a network of partners (i.e., restaurants) to fulfill the needs of the community (i.e., patrons). By doing this it has become my restaurant Outcome Broker. It compiles data from thousands of otherwise disconnected sources (that I call silos) and serves it to the user for easy analysis and quick decision-making. The old way of making restaurant reservations was like struggling in quicksand as we searched through each individual silo to get results. OpenTable is a horizontal agent in a vertical world, cutting across all the stuff that made making reservations hard in order to help the user get results. Instead of sinking in the quicksand, Im sailing across the surface.

The Collaborative Era

Silos are the products of the Industrial Era. During this time, every sector relied on information and services in a hierarchical delivery structure designed to maximum efficiency with the technologies available. For their time, these silos ensured that leaders were as connected as possible with the people who were receiving their services. As we innovate and as technology advances, though, were enabling ourselves to use data to connect each of the worlds 7 billion people like never before. As a result, while our industrial models are still working the way they were designed to, they can no longer keep up with these brand new connections. The silos that once ensured delivery are no longer effective because they are overwhelmed with too much information and too many options. Nonetheless, they are hard to break because the people controlling them are incentivized by their existence (e.g., if I cant easily learn about other restaurants, Ill keep choosing to go to the same one). Outcome brokers arent slowed down by silos. Instead, theyre focused and designed to solve problems. It turns out that OpenTable isnt the only outcome broker that is making every day processes more efficient and user friendly. From Kayak to Hulu to Kiva, we are seeing new problem-centric platforms change the way we get things done. Kayak has become my travel outcome broker, cutting across Orbitz, Expedia, Travelocity and even airline websites to make it easy to compare costs and quickly make a decision. Hulu has become my television outcome broker, aggregating shows in one place, making it easy for me to keep up with my favorites, no matter the network. It is simple to use, free and, with my busy schedule, allows me to watch what I want, when I want. Likewise, Kiva is my investment outcome broker and has revolutionized how people lend money around the world. It is a very simple platform that allows individuals to invest in cool ideas across the globe that need money to make them go. Kayak, Hulu and Kiva are just a few examples of outcome brokers that are changing how we function in our daily lives. There are many, many others - Amazon, iTunes, Khan Academy, Mint, Prosper, Spotify and Zillow- that are also navigating across silos to get results.

Can Government Work Like OpenTable?

While serving two and a half years in the White House, I routinely asked myself a simple question: why doesnt government work like OpenTable? Mention this at a cocktail party and you get a laugh. Mention it in a meeting and the excuses are quick to surface: There isnt executive support; You think we should share our data?; Security requirements restrict us from taking such an approach; or, my favorite, Thats not the way we do things here. Heres the thing: The jokes arent funny and the excuses are inexcusable. Government is cash- strapped and under-resourced; the public is increasingly frustrated and is literally protesting in the streets. We need to change the game. Too much is at stake and the latent potential of dedicated public servants and vital resources are wasted, stuck in silos. With this in mind, I set out to identify a few examples in the public arena where outcome brokers are producing impact-driven results: Green & Healthy Homes Initiative The Green & Healthy Homes Initiative (GHHI) recognizes that in housing, energy inefficiency, outdated materials and health problems are often related. For example, paint, allergens and drafty doors and windows are often the cause of illness. What does this mean? Simply put, that public health efforts can and should coordinate with housing and energy efforts. Previously, programs attacked this problem in an uncoordinated way. One program (its own silo) would assess a home for health problems- like lead paint and allergens- while another siloed program would perform a separate assessment for energy efficiency that targeted un-insulated boilers or drafty doors or broken windows. At the same time, a third program would actually pay for the long-term (and often unending) health care costs of a child whose asthma was compounded by all those problems. It becomes clear that identifying the issues was duplicative, expensive, inefficient and often ineffective- and so were the solutions. Taxpayer funds would address individual symptoms one by one instead of eliminating them all at once. It was like getting the flu, but visiting different specialists for each symptom: the upset stomach, the fever and the sore throat. Rather than solving these problems piecemeal, the Green & Healthy Homes Initiative aims to confront them in a holistic waycreating more efficient and healthier homes, while lowering energy

and medical bills all at once. Today, their pilot program is working with local communities to pull together the relevant information and funding from DOE, HUD and HHS, while concurrently partnering with state and local government, philanthropy and the private sector to conduct a single assessment of low-income homes. As a result, they enable a comprehensive, all-at-once solution to a familys problems. A house can undergo lead paint abatement, insulation installment and mold reduction in just a few days of work. So far, GHHI has completed "interventions" in 3,000 homes with over 5,000 more underway. To date, post- intervention data shows an average decrease of 32% in gas consumption and 14% in electricity consumption per home. Equally impressive is its impact on government efficiencies and resident health. Specifically, GHHIs single, more- efficient home inspection and intervention saves more than 23% in upfront service costs while lowering the chance of repeated illness. In fact, evidence shows a 67% drop in asthma-related ER visits and hospitalizations over GHHIs first three years, saving, on average, about $48,000 per year per child in Medicaid costs. Furthermore, the average cost of this integrated process is just $1,500 to $2,100. Conversely, before their homes were positively impacted, the same kids with asthma were being hospitalized an average of twice per year at a yearly expense of $16,000 in medical costs, alone. This does not take into account excessive school absences or parents lost wages while taking care of their sick children. After a GHHI intervention, though, no child has needed to be hospitalized for an asthma attack and only one is known to have returned to the ER.1 Recovery Operations Center As part of the American Recovery and Reinvestment Act (Recovery Act), Congress established the Recovery Accountability and Transparency Board (Recovery Board). The Recovery Board set a tone from the start that they were going to be engaged in the details of the Recovery Acts implementation by using technology and transparency to increase accountability. This effort yielded a war room at the
1

Source: The National Coalition to End Childhood Lead Poisoning. Green and Health Homes Grant Data

Recovery Boards headquarters called the Recovery Operations Center (ROC) - a place for the Board to identify potential risks related to the dispersal of Recovery Act funds. The ROC serves as an early warning system that can detect suspicious patterns by analyzing data and identifying potential high-risk recipients. Much like OpenTable, the ROC combines numerous data sources (silos) and powerful analytical tools to allow specialists to sift through and look for fraud, waste and abuse. When an investigative body like the Recovery Board securely pulls data together from a wide range of sources criminal, demographic, financial and geospatial they are able to identify patterns that havent before been exposed. In addition, the ROCs analysts have diverse backgrounds in economics, mathematics and engineering to complement the traditionally trained investigators with whom they work. As a result, when a concern is identified using the data, it is sent to the appropriate Inspectors General, who engage their respective agencies to prevent fraud. Accordingly, the ROC has become the governments investigation outcome broker. The ROC has been effective in cutting across independent silos of information and pulling together data that drives results. In one case, a recipient of funding appeared to be an upstanding business. By integrating data sets, though, Recovery Board analysts discovered that all of the business partners had a criminal history and thus posed a greater degree of risk. In another case, several individuals who used credentials from elderly doctors in other states to file Medicare claims were flagged as suspicious because the fake doctors all shared one storefront office and had no fax numbers or patient reviews. In yet another case, the ROC was able to use digital maps to show that the addresses given by an Indiana businessman for his 14 firms were really just a parking lot that housed a dozen tractor-trailers.2 Without the ROCs collaborative approach, each investigative agency would only have access to its own information. If a threat doesnt exist within their limited datasets, a flag is never raised. As the investigation outcome broker, the ROCs process is changing the paradigm by shifting the focus from simply detecting fraud to actually preventing it. The Entrepreneur-In-Residence Todd Parks official title is Chief Technology Officer of the United States (CTO). He also held the title of CTO when he was at the Department of Health and Human Services (HHS). However, he was more commonly referred to as the Entrepreneur-in-Residence because he and his team drove innovation to achieve remarkable results. They did this by serving as an outcome broker for health. The most obvious example of their work is Healthcare.gov. This site is a comprehensive inventory of private and public insurance plans that gives users the ability to compare the quality of care provided by a vast range of facilities (e.g., hospitals, nursing homes, and dialysis facilities). If you need
2

Shalal-Esa, Andrea. Software Helps Government Track Recovery Funds. Huffington Post. Reuters, 16 Nov. 2011. Web. <http://www.huffingtonpost.com/2011/09/16/software-helps-government_n_966710.html>

health insurance, you simply answer a series of quick questions about your current needs and are then presented with a personalized range of choices. When I did this myself, the site produced 80 unique plans for me to review. It even allowed me to filter those plans based on out-of-pocket costs, deductibles and base rates. Very quickly, and much like OpenTable, I was presented with details on a list of options, was able to compare them and was assisted in finalizing my choice. Amazingly, it only took 90 days from the passage of the Patient Protection and Affordable Care Act for Todd and his team to design and build their website. To be clear, this wasnt previously in the works- they started from scratch. Not content to rest on their laurels, the HHS team has continued to improve the site based on feedback from users. In addition, they also launched Healthdata.gov. As its name indicates, this site holds data gathered from all of its agencies (e.g., CMS, NIH, CDC, FDA, etc.) about clinical care providers, consumer products, medical and scientific knowledge and health-related government spending. Moreover, the HHS team is constantly combing through their databases to increase the amount of information they have available. They knew, however, (to draw upon a movie analogy) that they didnt have a Field of Dreams - just because they built it didnt mean people would come. It was clear that over 95% of the world had no idea what data they had. As a result, Todd and his team talked to the potential users of the data, both internally and externally, to understand what it could actually be used to achieve. The team then pulled together health care professionals and high tech innovators to identify the different applications that could be built to utilize the data that had been collected. These groups were then challenged to actually build these applications in 90 days. The 50 best and most useful applications were highlighted at a forum called Health Datapalooza. From Lose It!, a weight-loss tracker, to the Tylenol PM Sleep Tracker, which enables users to monitor their moods and the amount of sleep they get, Todd Parks and his team created a culture of outcome brokering, while enabling independent companies to do the same.

What does this mean? Wheres the point?

When the economy was frozen in 2009, the government used the American Recovery and Reinvestment Act to drive billions of dollars through already-existing programs and processes. Having visited cities across the country and having seen the investments that were made with these Recovery Act dollars, its obvious that dedicated Public Administrators were doing their jobs well. Still, they were confined to the structures in place and the processes they knew. Often times, the full potential of governments people and data stayed locked up in silos, restricting their ability to deliver for the public. While the examples in this paper illustrate both the private sector and governments ability to change, there is that a lot more that needs to be done. Of note is a new role for government. Using the Industrial Era model, government is comfortable when it has a specific process to follow. Furthermore, each portion of government is good at running its own process and focusing on the piece of the problem that it is supposed to solve. While these processes and structures allow dedicated government employees to complete their jobs, one has to ask if perhaps they are hitting the target and missing the point. For example, an industrial measure of effective policing is arrests made. More arrests make us feel like were capturing the bad guys and getting them off the streets. Ask a seasoned cop, however, and they will likely tell you that they cant arrest their way out of a citys problems. Often times, the people who have been arrested return quickly to their old neighborhoods and continue their old habits. Even worse, their kids follow in their footsteps. Allowing this to continue is like hitting the target and missing the point at the same time Instead, then, of asking how many arrests theyve made, some police departments are asking how can they improve the lives of the people in their community while decreasing crime, murders and the number of people going back to prison. When they do this, they are forced to look at the factors that impact people, such as health, basic skills, education, housing and finances. Preventing an individual from even considering crime depends on how these factors are addressed. Therefore, these departments are establishing a new police mentality that makes sure that people are getting the services they need to improve their individual situations and the overall productivity of the community. With this lens, police are asking, How is your community better by having the police in it?

Public Sector Problem Solving

In the examples in this paper, the outcome broker ensures a salient and transformative result by convening robust networks of participants, requirements, data and action. In doing so, they illustrate the private and public sectors ability to bring about a new reality. To continue the OpenTable analogy, the more people participating in the network- from restaurants providing menus and reservation information to patrons rating and reviewing their experience- the better the results. Even further, these results will continue to be powerful as long as the engaged community grows and continues to receive a defined value for participating. To put it another way, an outcome broker achieves a positive impact by eliminating the need to navigate silos, by sharing knowledge and ultimately, by enabling collaboration. Like GHHI, to effectively solve problems, we must draw upon multiple inputs and combine disciplines and expertise. Using this frame, government should see that it is not always best suited to be an outcome broker. Instead, before anything else, it must focus on fostering an environment conducive to problem solving, itself. This is a two-step process. First, it must assess whether it is having a positive effect on its community: "Are there fewer kids going to the ER for asthmatic conditions?" rather than "How many lead paint abatement inspections were completed?" "How many people are going to the library computer center, getting trained, working on resumes and getting jobs?" rather than "How many people logged onto library computers in September?" "What types of skills do local businesses need and are we educating people with those skills?" rather than "What's the graduation rate?" In changing the question, government can identify the problems that actually need to be solved. Second, like HHS, government has to recognize that its data is a national asset and must learn the value of pushing that asset out to the public. In doing so, government can give outcome brokers unprecedented access to information about the problems that need to be solved. Both of these steps reflect the Collaborative Eras prioritization of impact on individuals, families, communities and businesses over the processes involved. Moreover, they represent a significant shift away from the Industrial Eras focus on control. Specifically, the old paradigm promoted the belief that an effective process was one that the government could control from start to finish. Instead, the new paradigm suggests that by releasing control, more positive impact can be driven simultaneously. Its important to note that while Outcome Brokers in the private sector can focus almost exclusively on working with their partners and communities to drive impact, the public sector has additional variables to consider. Specifically, partners such as non-governmental organizations (NGOs) and philanthropy, as well as the agendas, interests and desires of local and national leaders must be taken into account. If government can convene and enable tailored solutions to specific problems, these other entities will be able to further invest their own resources to help. In addition to treating data like a national asset, leaders also need to understand how to use technology like a commodity. In the same way that information should no longer be the shrouded part of an organization, information technology should no longer be its rigid and inaccessible infrastructure.

Instead, leaders should understand that information is the ubiquitous energy that powers the Collaborative Era and that information technology enables an organization to flexibly navigate through it. To this end, the emergence of the cloud a commodity which allows companies to remotely satisfy their hardware, software, and data storage needs gives leaders a big opportunity to drive down costs and further enable innovation through the inclusion of a virtually unlimited number of off-site collaborators.

A New Game Plan

Budget cuts are forcing governments and educational institutions to fundamentally change the way they function. As a result, the public sector is searching for new ways to deliver services, create jobs and foster economic growth. All of these outcomes can be achieved by leaving the Industrial Era behind and quickly adopting the impact- driving power of the Collaborative Era. In doing so, leaders at every level of government- city, state or national- position themselves to unlock the full potential of their organizations and to make a positive difference in the lives of the people they serve. By pairing their problems with data, technology and innovative problem solvers, these leaders can set the new standard for public sector effectiveness. Just like any football team, if government only relies on the plays that got it to halftime, it won't be able to keep up. If it adapts to its opponent and shifts its strategy, though, it can utilize all of the assets at its disposal and define its success. Likewise, if we are to win in an increasingly interconnected, yet competitive world, we must recognize that our original game plan isn't enough. We cant remain overinvested in our current processes if they can't deliver the results we want. The game changer is embracing the innovation that occurs at the intersection of the white space between silos. Outcome brokers in both the public and private sectors understand this and are using technology to create new impact. Leaders can change the way the world solves problems, but to do so, they must aggressively face our biggest challenges and pull the data, technology and people together to solve them. Every time an outcome broker creates positive and far-reaching impact, it represents significant progress away from the old way of getting things done. Every time this impact makes a long-lasting impression on someones life, it symbolizes a win against inefficiency and slow-moving change. Every time I hear about government changing lives with this impact-driven change, I know that I want to celebrate with my wife at the restaurant we book on OpenTable! Acknowledgements: Hersh Fernandes contributed to the development of this paper.