What does it take to move beyond pilot projects and deliver real innovation in government?
At Brisbane’s Business Improvement and Innovation in Government (BiiG) Conference Dinner, the answer came down to a fundamental shift: how leaders cultivate a culture of trust to more effectively understand and manage risk.
Under the theme “Risk, Trust & Leadership: Innovating in Complex Public Systems,” senior leaders, academics and practitioners came together to explore how organisations can move from isolated experiments to meaningful, system-wide change.
In an environment where the pace of change is outstripping traditional governance approaches, the challenge is no longer just about moving faster, but about making better decisions under uncertainty.
This tension was brought into sharp focus by the keynote speaker, UQ Professor Tim Kastelle, a globally recognised innovation expert and Director at the Andrew N. Liveris Academy for Innovation and Leadership.
© 2026 J Byford. Used with permission.
Rethinking risk: the leadership challenge at the centre of innovation
As early as the 16th century, Machiavelli recognised the core challenge of innovation: those who introduce new ways of working face both resistance from the status quo and uncertainty from those who are yet to benefit, making change inherently risky to lead.
This enduring tension sits at the heart of Professor Kastelle’s keynote, which reframed one of the most persistent barriers to public sector innovation as our ‘misunderstanding of risk’.
Professor Kastelle challenged leaders to question the assumptions underpinning how risk is traditionally assessed. Too often, innovation is evaluated against narrow financial or operational models, such as short-term investment costs, without a realistic understanding of the alternative.
One of his key takeaways was the importance of striking the balance between moving fast and getting it right.
As Professor Kastelle explained, “We misunderstand risk. In government, moving fast is not enough. Leaders must also innovate and move with legitimacy.”
The risk of doing nothing
In many cases, maintaining the status quo carries its own escalating costs:
- declining performance
- rising inefficiencies
- failure to meet evolving community expectations.
If the baseline is wrong, decisions that appear to reduce risk in the short term can actually increase risk over time.
This reframing shifts the challenge for leaders. Innovation is no longer just about generating new ideas. It’s about making informed choices in uncertainty, where standing still is itself a strategic risk.
As Professor Kastelle put it, innovation is fundamentally about, “new ideas, made real, to unlock value.”
In a time defined by complexity, leaders who can balance risk, build trust and think systemically will not only respond to change, they will also define what effective public leadership looks like in the years ahead.
© 2026 J Byford. Used with permission.
From stable assumptions to structural volatility
Professor Kastelle challenged one of the most deeply embedded assumptions in how government approaches innovation investment. Too often, agencies design investment portfolios as if the future is stable, optimising for a known destination.
But as Professor Kastelle argued, the evidence points to the opposite: the operating environment for government is structurally volatile, not temporarily disrupted.
Despite this, planning frameworks, business cases and risk settings still carry a hidden assumption that stability is the norm.
Professor Kastelle’s provocation reframes the question entirely.
“If volatility is the baseline, the issue is no longer whether to invest in innovation, but whether current portfolios are built for the world as it is, not the one we wish it to be – and whether agencies can ultimately afford not to adapt."
Redefining how we lead risk
At the core of Professor Kastelle’s argument was a fundamental shift that risk isn’t the enemy of innovation, but instead the work of leadership.
Rather than attempting to eliminate uncertainty, he emphasised the need to recalibrate how we consider risk.
This includes:
- running many small, controlled experiments
- creating safe-to-test environments, such as sandboxes
- treating learning as a core output, and not a by-product.
This approach represents a shift from risk avoidance to risk stewardship.
“Leaders aren’t expected to remove uncertainty. They are expected to navigate it deliberately.”
For public sector organisations, this is critical. Without structured experimentation, innovation efforts either stall before testing or fail to scale beyond pilots. Experimental approaches provide a mechanism to trial ideas responsibly while maintaining public trust.
Where value is really created: beyond new technology
A central insight from Professor Kastelle’s keynote challenged one of the most common assumptions in innovation: that technology itself creates value.
History suggests otherwise.
Professor Kastelle pointed to the introduction of electricity as a case in point. Although electricity became available in the late 19th century, it took decades (nearly 50 years) for organisations to unlock its true value.
Why?
Because early adopters simply replaced steam engines with electric motors without rethinking how factories were designed or operated. A steam-powered factory in 1890 looked fundamentally the same, even with new technology. It wasn’t until the 1920s, when factories were redesigned around electric power, that productivity gains were realised.
The lesson for today is clear:
- Replacing old technology with new tools, without changing the underlying system, rarely works.
- Real value comes when organisations rethink business models, processes and behaviours, not just tools.
For public sector leaders navigating AI, digital transformation and emerging technologies, this insight is especially relevant. The opportunity is not just to digitise existing processes, but to redesign how value is created and delivered.
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Trust as the non-negotiable foundation
If risk is the central tension in public systems, then trust is the anchor.
Professor Kastelle reinforced that innovation must strengthen, not erode, public confidence. Without trust, even successful initiatives will struggle to gain acceptance or scale.
This requires:
- transparency in decision-making
- clarity around trade-offs
- consistency between intent and action.
Trust isn’t a by-product of innovation – it’s a design requirement.
Why innovation stalls: the gap between pilots and impact
A recurring theme in Professor Kastelle’s keynote was the persistent gap between starting innovation and sustaining it.
Many organisations are becoming increasingly capable of launching pilots. Far fewer can translate those pilots into system-wide change.
One reason is the tendency toward “1:1 substitution” like introducing new tools into existing systems without redesigning how those systems operate. As history shows, this rarely delivers meaningful value.
Another is the lack of alignment between:
- governance structures
- organisational incentives
- capability and culture.
The result is a cycle of experimentation without transformation.
As Professor Kastelle challenged the audience, “if innovation can’t scale, it can’t deliver value”.
It’s not just leadership: it’s the system
Crucially, Professor Kastelle positioned this not as an individual leadership failure, but as a system design issue.
Public sector leaders are operating in environments that:
- reward certainty
- penalise failure
- separate innovation from core operations.
Yet, they’re simultaneously expected to:
- adopt emerging technologies such as AI
- respond to increasingly complex societal challenges
- deliver outcomes faster than systems are designed to allow.
This creates a fundamental mismatch.
The implication is clear: innovation challenges are rarely technical. They’re systemic.
What does this mean for leaders now?
The future of public sector innovation won’t be defined by new ideas alone. It will be defined by how well leaders can carry those ideas through complexity. For leaders, this translates to:
Reframing risk
Assessing both the cost of action and inaction. Recognising that reducing short-term risk can increase long-term exposure.Designing for scale from day one
Avoiding pilot traps by considering implementation, adoption and system integration early.- Leading risk instead of outsourcing it
Recognising that risk decisions are leadership responsibilities, not purely compliance exercises. Investing in experimentation
Building portfolios of small tests and using sandboxes to learn safely.Focusing on business models, not just tools
Redesigning systems and processes to unlock value from new technologies.Innovating behaviour
Looking beyond systems to how people interact, decide and act.Designing for systems, not silos
Innovating across organisational and sector boundaries.Treating trust as a measurable outcome
Building it intentionally through transparency and action.
So, ask yourself:
- How are you truly understanding risk and factoring in the cost of doing nothing?
- How are you redesigning how value is created, rather than simply layering new technology onto old systems?
- How are you creating the conditions for ideas to scale, instead of allowing them to stall in pilots?
Because, as Machiavelli observed, there is nothing more difficult, or more dangerous, than introducing a new order of things.
The challenge for today’s leaders isn’t to avoid that risk, but to lead through it.
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