Contingent Effects of Decision-making and Customer Centricity on Public-Sector Innovation Success

ABSTRACT Public sector organizations need to become more innovative to meet growing demands for better services. Innovations enhance public sector efficiency. It is the speed and efficiency of the public sector that determine the cost-effectiveness of operations. The latter then boost national competitiveness and prosperity. However, the paucity of studies on public innovations does not afford much knowledge on the key determinants that amplify innovation success, particularly in the context of a developing economy. This paper investigates how three major elements of dynamic innovation capabilities, namely technological, marketing, and team organization capabilities, affect the success of public sector innovation projects. The paper also explores the contingent effects of project management (decision-making comprehensiveness, management direction) and customer emphasis (customer solution orientation, external integration) on the domain relationships. This exploration is important to determine if the extent of comprehensiveness in decision-making in exploiting the opportunities for innovation has a greater desired impact on service delivery. Also, innovations pursued independently of customer needs and expectations are bound to fail. Analysis from survey data of 225 Innovative and Creative Circle (ICC) public sector projects in Malaysia indicate that technological, marketing and team capabilities are antecedents of innovation success in the public sector. Indeed, team capabilities represent the more important factor. Decision-making comprehensiveness, management direction, customer solution orientation, and external integration were found to exert significant moderating effects. We discuss important implications for public administrators to uplift their effort toward realizing successful innovation projects.