The craft of incentive prize design State- and locally focused challenges

Public sector leaders at the state and local levels are increasingly finding opportunities to compete in challenges as participants.

State- and locally focused challenges

Public sector leaders at the state and local levels are increasingly finding opportunities to compete in challenges as participants.1These challenges hold the promise of helping public sector leaders to advance their innovation agendas. Notable examples include the US Department of Education’s Race to the Top Fund and Bloomberg Philanthropies’ Mayors Challenge, which feature state and city government participants, respectively.

Challenges that engage government participants seek outcomes that range from hyper-local to broadly national:

  • Using challenges to create local solutions. The CoolCalifornia City Challenge,2a partnership among the California Air Resources board, the University of California’s Renewable and Appropriate Energy Laboratory, and the Energy Upgrade California™ Initiative, is a competition between cities to reduce their carbon footprint. California cities win sustainability funding if they successfully lower household energy use and transportation emissions through personal and team-focused initiatives and solutions.
  • Launching challenges to garner national attention. The Talent Dividend Prize, sponsored by CEOs for Cities and the Kresge Foundation, will be awarded to the metropolitan area that exhibits the greatest increase in the number of post-secondary degrees granted per one thousand people over a four-year period. As part of the award, there will be a national promotional campaign featuring the winner to showcase the value of local talent development for other metropolitan areas. Currently, the prize has drawn participation from over 50 local governments.

As more governments participate in challenges, public sector leaders will need sound advice to determine when and how engage in these efforts. We offer below some general guidance based upon several high-profile examples, professional expertise, and inferences from our broader public sector challenge research.

  1. Find a senior leader to sponsor challenge participation. While several challenges, such as Bloomberg Philanthropies’ Mayors Challenge, target public sector leaders as their principal participants, most are not so specific. In these cases, government employees who wish to participate in a challenge will find that securing a senior government sponsor brings many advantages. From committing resources to managing stakeholders to communicating with the public, senior sponsors can help to create the conditions in which a state or local government can compete effectively. Through leadership and the power of convening, sponsors can also foster innovation and drive change. In fact, winning the challenge may not be the most urgent priority for sponsors who are willing to play this role. Challenge participation can focus government and citizens on innovative solutions that can still be pursued no matter who wins. Without the right sponsor, state and local challenge participants can have great difficulty translating their effort to compete into meaningful outcomes for their citizens.
  2. Engage constituents in solution development. There are several reasons why government participants should seek opportunities to engage their constituents. Engagement drives citizens’ awareness and buy-in that their tax dollars are being spent wisely to compete in a challenge that will bring tangible benefits. It helps to improve solution quality, as citizens can offer their governments ideas, expertise, and feedback about how best to develop the most powerful submissions. Finally, for some challenges, engagement is a formally evaluated requirement. Many challenge designers are now including community engagement and ease of implementation as part of their evaluation process. For example, the Georgetown University Energy Prize evaluates how participants demonstrate success in engaging their communities.3What better way to address such criteria than with a solution co-designed and/or approved by the very constituents who will be impacted?
  3. Plan for the work required to compete. Because challenges designed for state and local government participants often seek bold outcomes, it can be difficult for participants to simply bootstrap their submissions with just a few resources. Rather, submission development can involve full-time staffs that will need to develop and launch new programs through intra-governmental collaboration and public-private partnerships. To understand what it will take to compete, participants should engage challenge designers to understand how the incentives and scoring are tied to desired outcomes. These conversations can lead to practical insights about how much time and effort will be required and how best to commit scarce resources. For recurring challenges, participants should also consider networking with winners from prior years to better appreciate the day-to-day requirements for competition. Ideas Camp, a key design feature of Bloomberg Philanthropies Mayors Challenge, provides participants with all of these opportunities, allowing them to interact with and learn from designers, competitors, and prior finalists over the course of a two-day workshop, well in advance of the final submission deadline.
  4. Include the office of the general counsel and the tax department. Before registering for a challenge, it is critical to evaluate laws and regulations that may impact participation or winning. Challenge designers may not fully take into account how state and local laws impact participants’ ability to receive or use a prize purse or non-monetary incentives. Consultation with the office of general counsel and the tax department can not only prevent unwelcome surprises, but can also help government participants evaluate how best to leverage the post-challenge period for achieving their innovation goals. For challenges that require public-private partnerships or teams, this consultation can be especially valuable.
  5. Focus on challenges that build capabilities. As the number of government-focused challenges grows, state and local participants will want to selectively decide when to undertake the effort to compete. In certain cases, the challenge award and associated publicity may be sufficient incentives. In other cases, however, participants should consider whether their investment to compete will build lasting capabilities that benefit the government and its citizens. Many challenges now feature non-monetary rewards, such as mentorship and coaching, collaboration with peers, and networking or partnerships with industry, investors, and/or research institutions. For example, the Obama Administration’s Strong Cities, Strong Communities (SC2) initiative focuses on assisting US towns, cities, and regions in advancing their economic agendas by enhancing the capabilities of local governments via technical assistance, access to federal agency expertise, and the formation of public and private sector partnerships.4By taking advantage of these opportunities, government participants can become better innovators and problem solvers.

Read the full report on The craft of incentive prize design.