THE BLOG
01/27/2015 09:10 am ET Updated Dec 06, 2017

The United States' First CTO: 6 Business Innovation Lessons

Most people do not associate innovation and the notion of a lean startup with government, but former Chief Technology Officer (CTO) of the United States Aneesh Chopra shares his insights about data and how government data can be a force of positive change to enable the private sector for the benefit of everyone. Chopra served as the first Chief Technology Officer of the United States, appointed by President Barack Obama. Chopra previously served as Virginia's fourth Secretary of Technology. As an assistant to the president, Chopra designed the National Wireless Initiative, helped launch Startup America, and executed an "open innovation" strategy across the government built on private-sector collaboration -- opening up data, convening on standards and staffing "lean government startups."

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Aneesh Chopra, (Twitter: @aneeshchopra) Former CTO of United States

Currently the co-founder of Hunch Analytics and author of the book Innovative State: How New Technologies Can Transform Government, Chopra is focused on how the country can tap entrepreneurial problem solvers to address challenges in health, energy and education markets among other public and regulated sectors.

Before leaving his position as the nation's first CTO, he was asked by the president to prepare a final memorandum to summarize his key findings. Chopra created the Open Innovator's Toolkit so that his lessons learned could be applied more broadly to inspire innovation in all levels of the government. It is Chopra's hope that America return to an innovative state by taking advantage of newer technologies and releasing data sets in new and valuable ways.

6 business innovation lessons from the United States' first appointed CTO:

1. Close the innovation gap using lean startup principles - Chopra's role as the first-ever CTO for the U.S. was created to close the innovation gap between the public and private sector by advocating policies to grow the economy and solve some of the big challenges we face as a country. He worked to achieve this by focusing his effort on the creation of the Open Innovator's Toolkit at the U.S. government level to be replicated across all areas of government. Applying the principles of The Lean Startup by Eric Ries, the Toolkit covers the four aspects that Chopra focused on in his role of CTO: moving beyond data "by request" to "computer-friendly by default"; engaging not just as "regulator" but as "impatient convener"; adding the ability to pay for outcomes through "prizes," not just "procurements"; and attracting "top talent" including "entrepreneurs-in-residence."

2. Enable and promote public- and private-sector collaboration - As CTO, Chopra functioned first as an advisor to the president, giving policy advice to the president. He also was responsible for ensuring the execution of policies and promoting inter-agency cooperation. Last but not least, Chopra was tasked with closing the innovation gap by building relationships with innovators and creating an external engagement strategy which entailed reaching out and cultivating broader communities to put this innovation into practice. Chopra said that that the next decade of problem solving would be the result of private and public communication, and at Hunch Analytics he has the chance to "eat the dog food he was serving as CTO." One example he gives of this collaboration between the private and public sector using open data for the benefit of American people is the creation of a website to tap into the talent of our veterans. The website maps the skill sets of people coming out of military looking for work with skills from jobs on demand.

3. Tap into the power of recommendation engines - Chopra says that looking at the importance of data from a broad enterprise perspective, the power of recommendations engines can manifest themselves in the way we live our lives better. Given their own data analysis, marketers are able to draw their own conclusions about how customers may benefit from one product or another, but if customers share data and marketers can personalize their recommendations, the idea of using data as a value add is born, allowing marketers to deliver a more precise message to improve the well-being of the customer in question. This opportunity, made possible through the private sector, is especially important in the healthcare and education markets where they could derive big benefits from these smart recommendations engines that tap into the power of data as a glue to bind together the sources of assistance with the people who need that assistance.

4. Develop feedback loops and predictive models - As an advisor to the Advisory Board Company, a company who has been active in the higher education space, Chopra says that using analytics to improve student success is a growing field. To address the question of who has the right to access sensitive data, Chopra says that the key to any of this is that feedback loops matter. "Say you know that for any given population of students, those who did these things have a higher probability of dropping out. If you have a full loop with access to a data base of student actions and transactions data, that would give you the ability to analyze patterns and use the data to develop a predictive model to be applied on a new piece of data, allowing institutions to intervene based on the recommendation of the prediction model before it is too late," says Chopra.

In order for this to work, you need to have access to a large body of data, and organizations are struggling with the issue of bulk access to data for the purpose of prediction models. Chopra says, "There's lots of business models, but the key is to understand the feedback loop for a large body of data so you can understand patterns, and then you need specific individual data sets to run against the pattern to provide these recommendations; it's a public and private interface."

5. Learn from the private sector - In order to make innovation more pervasive in government, Chopra says he looked no further than the private sector to look at ways technology can spur innovations that help government do a better and more efficient job. In his final memo to the president he says, "It is a task we've seen deployed effectively across our nation's most innovative companies - Procter & Gamble's 'Connect+Develop' strategy to source 50% of its innovations from the outside; Amazon's 'Just Do It' awards to celebrate innovative ideas from within; and Facebook's 'Development Platform' that generated an estimated 180,000 jobs in 2011 focused on growing the economy while returning benefits to Facebook in the process."

Chopra outlines three critical private-sector lessons learned about what the open-innovation system looks like in the public sector: (1) force multipliers (Facebook), (2) tapping into the expertise of front-line workers (Amazon), and (3) needing a cultural focus on making sure the organization is open to the notion of collaborating beyond the internal wall of the enterprise (P&G).

6. Embrace handshakes and handoffs - Handshakes and handoffs are the two principles that answer a lot of the questions Chopra gets about an innovative state. "The notion of handshakes is meant to signify that this is a bipartisan collaborative effort. That is to say the left and the right have shaken hands and authorized that these policy tools have been made available and both parties have said they want more government data available. It is all about the core idea that this vision of an innovative state is not ideological," explains Chopra, "But because an innovative state can't do it on its own, we need handoffs, an encouragement and act of courtship of entrepreneurs and innovators to bring resources from government into products and services that help people in their life wherever they are." Put simply, handshakes on opening up the data and then authorizing the handoff for a private company to build a product or service that creates value creation and economic growth.

You can watch the full interview with Aneesh Chopra here. Please join me and Michael Krigsman every Friday at 3 p.m. EST as we host CXOTalk, connecting with thought leaders and innovative executives who are pushing the boundaries within their companies and their fields.