The following interview was done by Diseño Público with Marco Steinberg, Founder and CEO of Snowcone & Haystack, a strategic design consultancy that helps governments meet today’s innovation challenges. Previously he worked as a Strategic Design Director at Sitra, the Finnish Innovation Fund where he led Sitra’s Strategic Design Capability. Prior to Sitra he was an Associate Professor at the Harvard Design School. mst_2013

“My interest in government is focused on the challenge of upgrading a delivery model that was created in a different era, with different values, and with different needs.”

Could you tell us about your work and why it is important?

I am an Architect, and during my initial work I got less interested in the architecture of buildings, but more interested in the architecture of solutions, meaning when we talk about the issues of social wellbeing, the building is one part of a bigger solution which involves not just the physical built environment but it also relates to health issues, incentives strategies, policy, culture, among another considerations. I got more interested in the end of the question, and mostly because I felt over the years that it is harder to address these bigger issues strictly through conventional architecture. I have worked during the last 10 to 15 years around what in the last years would come to be known as ‘social innovation’ or ‘Public Sector innovation’, specifically focusing in helping governments to be more innovative during the last years. My interest in government is focused on the challenge of upgrading a delivery model that was created in a different era, with different values, and with different needs. A lot of the solutions that we are dealing with today came out of yesterdays needs. One example is what is currently happening in Finland where, in an oversimplified way, the modern government wants to assist a very important transformation for Finland, moving from an agrarian into an industrialized country. The way we conceived our health services, our education system, the way we planned our cities, among other strategic decisions, will contribute into the transformation of an industrialized nation. Now, the context has changed, we already are an industrialized society and the challenges are not anymore to move from agrarian to industrialize, and yet we are trying today’s problems with yesterdays solutions. Businesses have understood this from a while, and they know that to be competitive and to develop healthier companies they need to engage in areas they have not done before such as innovation and design. I think governments have only very recently beginning to realize that maybe they also have to innovate the way they go about developing things.

During your presentation at the OECD Conference in Chile –Estado Futuro– you talked about “the need to manage risk and uncertainty in innovating government”, and “current problems will not be solved by the systems and logics that created them”. Could you expand on these 2 quotes? And, what are the different approaches towards these ends that local and central governments should have?

Quite simply we have seen over the years, and it is actually not anything that is particular to our generation but through our history, that a certain way of doing things will invariably bring some benefits in some problems, and a foolish mindset is to imagine that the same way of doing is capable of solving other problems. Sometimes the issues that we are dealing with are inherent in the logics and the biases of a certain approach.

“We can easily build rationale models of how things work, but because our perspectives are sometimes biased we will seek to confirm and reaffirm it to our biases.”

Remembering the 2008 subprime crisis in the US that spread globally, and how the leading and financial people began to understand the problem, specifically I will refer to Alan Greenspan testimony to the senate which was remarkable (video of testimony) which makes you begin to realize that there was a logic in place, which because of its bias produced certain problems, and because it was biased it could not see its flaws. Greenspan clearly had a model of how things worked, how the world worked, and he had the data to support it for 40 years, only to realize that it was flawed.

“… I think [design] is a difficult term. In fact when I talk to people from the Public Sector I frequently choose not to use it, because it gets in the way of conversations.”

We can easily build rationale models of how things work, but because our perspectives are sometimes biased we will seek to confirm and reaffirm it to our biases. These are the moments when we need to step out and take a different approach that can help us to see new things. Broadly speaking this makes the argument for design, which is a different approach to see things. This does not explain why design will be the right approach versus any other approach, but at least gives a little credence that having a different approach may actually help solve some of the issues we are dealing with today. The first part of the question has to do with design itself, which I think is a difficult term. In fact when I talk to people from the Public Sector I frequently choose not to use it, because it gets in the way of conversations, and they suddenly become about “what do you mean by design” or “isn’t everything design”, and suddenly we are not talking about the things that we are actually supposed to be talking about. I have to back into the concept of design, I will have conversations about “what is the nature of the challenge you are dealing with?” or “what kind of issues are you having?”, which invariably will bring ourselves defining design attributes.

“Every day more governments to be relevant in the future of their countries or cities are having to take on issues that they do not actually have the data on, they do not know what is going to work and what is not going to work.”

Going back to the question, risk is about probability and uncertainty is the lack of probability. These 2 concepts basically boil up to the fact that when you talk about risk you are talking about probabilities (we have data that tells us what the probability of the negative outcome is) which is defined as the risk, whereas when we have uncertainty it means that there is a lack of probabilities (we don’t have a probability of failure, it could be 100% or could be 0%, we don’t actually know). An example of risk is crossing the street, where we have traffic data from around the world that defines probabilities, for example the risk of failure on crossing the street due to being hit by a car. An example of uncertainty is when we went to the moon for the fist time in 1969, because no one had ever done it before, hence there was no data about it. We did not know the probability of failure of going 10 times to the moon. Going to the moon in 1969 was a matter of uncertainty whereas crossing the street is a matter of risk.

“Design delivers ways to manage uncertainty through – among other things – prototyping. By trying something out in a small scale in a real context, you get feedback and data.”

Now, looking at governments across the world, specially in Europe, they are having to do things that they have not done before because the systems they developed were developed for different needs. An example of this is how the Finland transformation from an agrarian to an industrialized nation, that I mentioned before, is not helping to address the current issues of the country. Now we have very different kind of issues and we do not know what their probabilities of failure are, for example about a completely new concept of education or health. We also have issues that we have absolutely never dealt with like climate change. Every day more governments to be relevant in the future of their countries or cities are having to take on issues that they do not actually have the data on, they do not know what is going to work and what is not going to work. Design delivers ways to manage uncertainty through – among other things – prototyping. By trying something out in a small scale in a real context, you get feedback and data. This in turn allows you to improve your proposal. You go back into an interactive loop that helps you to refine the prototype. For example, if I am a furniture designer I can go from a paper model, which is to some degree a prototype that is not to be scaled and it might not be functional, but it is proportional and visually accurate to the real one. Then as we scale the model up and we begin to bring its functionality, meaning it is not paper anymore but actual material, each time we iterate we get more data back which helps us refine it, but ultimately we are beginning to build probabilities around our idea. It is a way to develop ideas that you do not know they are going to work, and at the same time to build data rapidly. In that sense I think the idea of prototyping is a way of translating uncertainty into risk.

“… as we keep innovating in the Public Sector, I think we are going to see more of that innovation being lead by municipalities and find the states lagging and then adjusting the legal frameworks to what works in cities.”

One of the biggest challenges governments have is the inability to deal with uncertainty. Governments are good to deal with risk, they have a lot of analysis-led-people and the political system is build in a way which values risk analysis where it is easy for politicians to back a policy which the risk of failure can be demonstrated to be very low. There are no doubts it is a system built around risk and not uncertainty, but the current global situation emphasizes the need of the system to go more into uncertainty and hence ideas like iteratively prototyping working, and also ideas of engagement, which are maybe a different way of risk sharing with citizens and users, are some of the inherent concepts that are built into design that I think are very useful for governments in the way they innovate. Regarding the question about local and state government, I think one of the simple differences between the 2 is that local government actually has to deal with real people. I know I say this a lot and it sounds like an overall simplification but people live in cities, people do not live in states, states are concepts. This means municipalities and mayors have to deal with real issues like take the trash out or run the hospitals. It obviously depends on what country we are talking about and how these services are set up, but for the most part municipalities actually are where people live and where real decisions need to be made. The state level is much more abstract, it is about constitution, laws, legislations and creating the frameworks. In this line, and as we keep innovating in the Public Sector, I think we are going to see more of that innovation being lead by municipalities and find the states lagging and then adjusting the legal frameworks to what works in cities. This opposes to what happened in previous generations, which was a more central planning approach (at least it was in Finland), where it was the state that determined the basic principals for the future and then municipalities implemented them.

How should local governments strategies’ to improve and innovate relate to central government’s innovation strategies?

It is a hard question because part of the answer relies on how the relation between central government and municipalities is set up -countries have different approaches to this. Health systems, for example, in some countries are run through central government, in others through local municipalities.

“I believe central government has to shift their role and be more of a knowledge sharing platform rather than a minimum requirement setting agency”

In some countries, including Finland, central governments have been setting certain standards that municipalities need to meet. In terms of promoting innovation, most of the times these standards are formalizing practices that are already known, most of them are already established, with a long track record of use. This approach allows central governments to make sure the weakest municipalities do not drop off, but it does not stimulate the very innovative municipalities, where most of the times are left to them to do new and innovative projects. I believe central government has to shift their role and be more of a knowledge sharing platform rather than a minimum requirement setting agency. In other words, central government should help spread innovative practices, not just set minimum standards. If you look at all the municipalities in Finland, you would find that at any given issue some municipalities are more innovative than others, have more capabilities and are doing things that are actually delivering better results than others. In fact there are tons of great little innovations happening in Finland, and the biggest problem is that they do not spread, there is no positive sum. In order to encourage the best performing municipalities to be the innovation engines of the nation as a whole the central government could set certain challenges and help share the best innovative practices that emerge. The role of the state would then be to make sure that everybody has adopted those innovative practices.

“I believe municipalities could lead the innovation and the state could be a platform for sharing best practices, right now it is a different kind of relationship”

What I am suggesting is a much more active way of setting and sharing knowledge which is based on what municipalities are actually doing in any given day and then focus on spread that knowledge across. This could allow certain municipalities to take bigger risks in some of the issues they are dealing with by giving them some sort of financial or tax break incentives. By bigger risk I mean they would try something that others have not tried that might lead them to better rewards. Considering the challenge-based approach, the central government would put out an objective, i.e. who can have a population that learns the most or the healthiest population, and then it would give financial or other kind of incentives to those municipalities who give more freedom on the ways they achieved the objectives. Actually, one of the biggest problems that we have in Europe is that we have to many rules and regulations that tie municipalities’ ability to do new things. Challenges will free them and in exchange they will have to experiment and take risks, and if they succeed the central government will make sure the experiences and good practices become shared across the nation. I believe municipalities could lead the innovation and the state could be a platform for sharing best practices, right now it is a different kind of relationship.

What do you think are challenges for cities when they work to identify citizens’ needs and problems?

Let me try to answer by referring to 2 other questions, which are actually 2 areas that I am very interested in: ‘What kind of issues should cities be focusing on?’ and ‘How do cities realize they have a problem?’. Sometimes it is hard for cities -and the Public Institutions in general- to identify whose problem they are talking about, unlike the business sector that can choose its segments. On one hand companies can just choose to do toys for kids and choose to openly disregard the rest, on the other hand cities can never do that, they always have to be able to serve everybody, which includes all ages and also all generations. Cities also have responsibility towards future generations, where they need to consider the decisions they take today to benefit current generations and not put futures’ populations at risk. This is one of the major issues broadly speaking: Whose problems? Who are we designing for? which becomes much more frequently complex than in the private sector.

“Another aspect that interferes in governments’ efforts to identify citizens’ needs is they tend to have a bias in the way they see things, due to only use the statistics and data they have.”

There are other lines of work that are just as important, or even more important, that are not visible to you and I as much, like the development of a sewerage system in the cities, which may be less appealing or less engaging as other issues like schools, which are a visible part of our cities, whereas sewerage and other type of infrastructures tend to be literally invisible. Another aspect that interferes in governments’ efforts to identify citizens’ needs is they tend to have a bias in the way they see things, due to only use the statistics and data they have. Broadly speaking one could imagine that a city like Helsinki that has about 600.000 people also has 600.000 pairs of ears and eyes that are an incredible rich resource. The challenge for cities is how to engage citizens to actually bring their perspectives to the table to be aware of what are some of the issues cities should be working around. When city authorities start getting into the citizen territory to think who they are designing for, whose issues, whose solutions, what the immediate actions are, what the long term actions are, what the impact is in future generations, it is also important for cities to see what it is already happening within them. An example of this is a school issue in Helsinki, where we are going through a phase of evaluating which schools need to close, which need to be reallocated, and how many need to be built, as well as where to locate them. The common strategy is to base these decisions in the data the city has, which would be, for example, census data on where people is living. What is frequently forgotten is when using data there is always a level of interpretation and bias that comes in at some point. Historic data will show when the generation of my parents got married they would like to live in small apartments in the city centre, and when they got kids they would look for a bigger apartment slightly outside the centre. The city has over decades of data that shows this migratory behavior, data that shows where young people is living, where older people is living, where people with kids are living, and the city will use it to try to predict where the next school is going to be needed. The city identified many places that would potentially need a school and they proceed to build them, but then there would be no kids. Other case is when the city closed a school somewhere based on the data and then they realized that actually that was a place where all the kids were, and they couldn’t figure out what was going on. The reason was, in an oversimplifying way, the way the data was being interpreted. It may well be that my parents’ generation started off in the city centre in small apartments and then moved out into bigger apartments, so when the city now ‘sees there are a lot of young couples that just got married in this part of town’ it will mean that in seven years we would need more school in the outskirts of the city. Well, guess what, my generation has very different values, and my generations likes to be in the city centre in small apartments with kids, and we did not actually move out, and the city was surprised that we did not move out, because they built the schools in the wrong place. What we found out is that people who lives in neighborhoods actually has a pretty good sense about whether people are planning to stay in or are planning on leaving, and maybe some of these decisions could had made better by actually engaging with citizens, and bringing their analysis to the table. This data might not be as robust as census data but sometimes is more insightful.