In episode 47, Olivia from our team chats with Rikesh Shah, Transport for London’s head of commercial innovation to discuss the creation of their groundbreaking innovation hub.
Transport for London developed a creative approach to improving their procurement processes, cutting through bureaucracy that hindered co-developing solutions with the market.
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Featured government: Transport for London, UK
Episode guests: Rikesh Shah, Head of Commercial Innovation
Visit govlaunch.com for more stories and examples of local government innovation.
Lindsay: (00:05)
Welcome to the Govlaunch podcast. Govlaunch is the Wiki for local government innovation and on this podcast, we're sharing the stories of local government innovators and their efforts to build smarter governments. I'm Lindsay Pica-Alfano, co-founder of Govlaunch and your host. Today, Olivia from our team chats with Transport for London's head of commercial innovation. They'll discuss the creation of their groundbreaking innovation hub. They've developed a creative approach to improving their procurement processes, cutting through bureaucracy that hindered co-developing solutions with the market. I'll turn now to Olivia to dive into this work and learn more about their approach to commercial innovation.
Olivia: (00:47)
Hi, I'm Olivia from Govlaunch and I'm here with Rikesh Shah from Transport for London London's transit agency. Rikesh, Tell us a little bit about yourself.
Rikesh: (00:56)
Yep, I’m Rikesh Shah. I'm the head of commercial innovation at Transport for London. I also sit on the mayor of London's Smart London board.
Olivia: (01:03)
Very cool. So how are things going in the realm of innovation at TFL just generally speaking?
Rikesh: (01:08)
Yeah, I think, uh, you know, over the last year with, with the pandemic, it's been a difficult year for all across the world. And TFL is no exception. You know we've had, we've had a tough year across the city. Um, but transport for London and our predecessor organizations, you know, innovation is within or DNA and as a result, support the response as part of the recovery post pandemic. And also during the pandemic, there are a series of innovative products and projects that were involved with. And most recently, and front of mind is the e-scooter trial, which we've launched in London and also the freight lab project, which has recently gone live.
Olivia: (01:47)
Sounds exciting. Perhaps we can start with explaining to our audience what transport for London is exactly. And I know we'll refer to it as TFL going forward, but can you give us a little background on TFL just as an entity?
Rikesh: (02:00)
Yep. So transport for London pre pandemic was responsible for 31 million trips in the city of London. And that ranges from 5 million journeys on the tube network every day, 7 million journeys on the bus network. We're also responsible for the strategic roads in London, which carries 33% of London's traffic. We also regulate the taxi and private hire trade. Um, we also run the London overground, Docklands light railway and the London tram service. And we also have a series of policy objectives around encouraging more active travel and cycling in the city and also to support, uh, a healthier London. And everything that we do is underpinned by the mayor's transport strategy, where we have a strategic goal of achieving 80% of trips made by walking, cycling and public transport by 2041.
Olivia: (02:55)
That's really exciting. So it's a transit agency that has a lot of responsibility. and just thinking about some of those climate change outcomes, it's quite exciting. Definitely lots of overlap between your work in innovation and achieving those strategic goals. So we're gonna talk a little bit about commercial engagements since as we all know, commercial engagements and procurement more broadly are an area that local governments often struggle with. Classic gripes include the inability to innovate due to the overly bureaucratic processes that are tied to public sector procurement and lots of policies that mean that even if they have the best intentions around getting the right to vendor, a supplier in place, oftentimes in practice, we don't always get that goal accomplished unfortunately. So before we delve into the specifics of how you've led some pretty incredible work on commercial innovation for TFL, can you walk us through what some of the initial challenges were for TFL and your team with regards to relationships with the industry broadly speaking?
Rikesh: (03:56)
Yeah. Thanks Olivia. This is a really good question. Um, I think the first one was a perception issue that the public sector is slow, is bureaucratic. Um, they're hard to work with. So I think that that was a perception issue initially then some of the other things we noticed early on was someone could have a really good, innovative idea that could solve a problem. But what happened was they'll get passed around from person to person within the organization. So very quickly we recognize that we do need to create a front door. And in our case, if anyone visits, tfl.gov.uk forward slash innovation, it enables an innovator to register. But what it also shares is are some of our open calls where we're looking for innovative ideas. So that was the second area. I think the third area is culturally, we can be solution centric and we have been in the past, which is where prescribing what we're looking for.
Rikesh: (04:54)
And that includes the innovation rather than being open to the market of saying, have you got ideas that could solve this particular problem? So that was a cultural barrier and another cultural barrier linked to that is the risk averseness culture, which is everything has to be absolutely right. And it's got to be a hundred percent, right. And you know, failure is not a good thing. And I think there's some of the cultural barriers that I'm trying to change in the organization. And then the final one, which I can talk about in a bit more length is the route to market the procurement, which you touched on earlier. And I think when I first started in this role, I thought procurement is a barrier, but what I've recognized more and more, it's not procurement. There are processes in place that allows us to innovate and scale with a clear route to market.
Rikesh: (05:51)
And a lot of that is sometimes in the public sector, we use the same procurement procedures every time when there's multiple avenues to use. So loosely speaking though, we've used the R&D exemption. We've used the innovative partnership procedure. We've also used our supply chain to bring innovators in. We've also looked at co-commercialization and co-innovation with corporates. So just that's just to name a few. So options are there. I think we just need to make sure that people like me within the organization are challenging colleagues to say, can we think creatively and differently? So at a high level, there, there were probably some of the initial challenges that we saw.
Olivia: (06:21)
So now that we've set the stage. I'd love to chat more about your incredible initiative at TFL first ever commercial innovation hub. Can you describe to our listeners what it is exactly and how it came to life?
Rikesh: (06:34)
Yep. So it initially started before I started in this role. So in my previous role, I was responsible for the open data and digital partnerships activity at TFL. And what we've recognized is by releasing some of that data and it, and it was quite a difficult conversation internally to convince people that we should be releasing the data. But once we released the data, what we saw is app developers and other innovators were using that data to create some excellent products and really innovative products. So we started to release lots of transport data about 10 years ago now and consciously about around 2016, 2017, we emphasized more effort in digital partnerships. So that started with some of the big tier one platform owners, the apple maps, the Google maps, the Twitters. And then we also worked with some of the niche transport apps, such as Citymapper bus checker and others.
Rikesh: (07:31)
And we also started to work with academia and other entities. And what we've realized is by sharing some problem statements together with releasing some data, people were solving problems that we want to solve in our city. And as a result, we have got over 17 thousand developers registered to access our data. And they're continuously producing niche, interesting, innovative products that ultimately helps people use public transport or move around in a more sustainable way. So that's when my old director of innovation started and he said to me, if we could do this through data, why can't this just be able to way of working at TFL, where we start shaping problem statements and release them to the market. So I came into the role, uh, and this was in 2017 and I took some time to just understand what are the pain points that we're facing as an organization.
Rikesh: (08:26)
So I sat down with a series of senior leaders across TFL and some said, I mean in dated with unsolicited requests, um, I'm too prescriptive when I go out to the market, I struggle with procurement. Some of the things we touched on, but in parallel, as we started to engage with, um, external stakeholders. So we started to engage with startups, large corporates, academia, just to understand what is preventing TFL from co-innovating and innovating more with the market. And then we put these issues together and we started to identify some of the barriers in the organization. And what that, what that started to make me think about is what's the right level of resource you need. What's the right type of culture you need? What's the right type of capability you need? And as a result we created this notion of the matrix virtual hub, and that was supported by a set of physical hubs because in London, we're very fortunate that a series of large corporates are investing in mobility hubs, and they want TFL to be part of that debate.
Rikesh: (09:28)
So the philosophy that we work with is transport for London on my team is like a curator. Around the table you have startups, accelerators, venture, capitalists, corporates, and they will want to hear about where London is going and what problems London's currently facing and what it might face in the future and what challenges we might have in the future. So what we're doing now is through this notion of a matrix hub is we start defining problem statements from a very large entity that's TFL, where you might have the bus director, the chief director and other directors understanding the problem statements. And then in parallel engaging with the market to say, why don't you start thinking about some of these real life problems that we have and how can we solve them? We give them data, we give them subject matter expertise. We even give them some seed funding quite often. And in return we want a lot of the innovative ideas to come from the market because we can't solve everything. So that's how the innovation hub was, was set up in 2017.
Olivia: (10:29)
I really appreciated your approach, especially around emphasizing what the public sector also has to offer. I think far too often being on the government side of the table, we might sell ourselves short. And coming to the table, knowing that we also have something to offer and that this could be a mutually beneficial relationship is a really important and strong element of your commercial hub. So thank you for sharing that. Can you give us an example of a specific initiative that recently went through the commercial innovation hub and walk us through from start to finish what that looked like?
Rikesh: (11:04)
So an example I'll pick on is, uh, how we've co innovated with a corporate. So historically what's happened is whether it's with me or other colleagues within TFL is we engage with a series of innovators, particularly some of the larger corporates, and they open their briefcase. And from that briefcase, they said, we've got some really interesting, innovative products, which do you want to buy? And my response to them will be they're really innovative, but they don't solve any problems that we have right now. So I can't really take much forward. And that creates a little bit of a tension. So taking that forward, I thought given we're being approached by a series of corporates from across the world, showcasing some of the best R&D, why don't we take a step back in their development and say, do they want to hear about some of the problems that we have, where they could invest some of their R&D efforts?
Rikesh: (12:01)
So a cup about three years ago, or two years ago, we tested that and we piloted it within TFL. And what we did was we shared some problem statements in this case with Bosch. And we said to Bosch, we'll share some problem statements with you. We'll share some data and we'll provide some subject matter expertise like we would with anyone else. But what we can't do at this stage during this, uh, this pilot is procure anything because we have to be fair and open to the market. So we went in there with absolute transparency as to what we're trying to achieve. We were trying to see if we could co-innovate with someone like Bosch or a large corporate and Bosch went in there and said, could they do something with a public sector entity? We, then I remember that initial conversation. And I said, what sorts of things would you want from this?
Rikesh: (12:46)
So I suggested what the offering could be, the things that I mentioned earlier, but I said in return, what we want is some of your best R&D engineers to start looking at some of our problem statements and genuinely take badges off and focus on London as a test bed and see what problems we could solve. And in parallel, I asked for, could we set up a lab in London where the startup ecosystem could be based there working with your R&D engineers and TFL colleagues. And it's amazing what you can do in a shared space. And that by osmosis, the level of knowledge transfer that just happens, and culturally, you start focusing on the same things. So we started with a long list of problem statements, and then very quickly we narrowed in on three or four.
Rikesh: (13:26)
And for my side, they were based on, are they realistic? Is there innovation out there? Have I got the right level of sponsorship internally and subject matter expertise that we can invest resource into? And so we did this at old street, a lab called the connect tree, and it was a fantastic space where it probably hosted up to about a hundred, a hundred people at once. And we started to throw around some ideas and some problem statements, and we had a long list of 50, 60, and then we narrow it down quite quickly into about five or six. And over the last two years, or is it an 18 month pilot? My team and their team worked together to co-develop solutions. And two examples that I'll give you. Um, one was around dealing with the challenges of pollution on Brixton high street. So Brixton high street became my test bed.
Rikesh: (14:20)
And what we wanted to explore the hypothesis was if you hold traffic back in a less densely populated area, and if it smoothly flows through a densely populated area, are you reducing the exposure to bad air to individuals or to the public? So that was a hypothesis. So with Bosch, they brought the best engineers in the design, the test bed with, with my colleagues at TFL, they brought other startups in, I think they worked with here maps as well. And together you've got this consortium of organizations with different specialisms. And what we proved was by putting on some of their high tech sensors. So that's where the innovation came in, as well as multiple data and data points. And what's really important with air quality. And I learnt this is there are so many variables involved when it comes to exposure to air buildings, topology, um, types of traffic.
Rikesh: (15:17)
That's going through a level of weather and wind on a given day. So it's quite a complicated notion. Anyway, we, we, we continued with the trial and it required lots of planning. There was lots of iteration going on. So even before we put the sensors up across, uh, Brixton high streets area, there was some off-site testing going on, lots of development iteration. And then where we got to is we ran the trial and interestingly it helped reduce exposure to bad air at that location. So as a result, traffic intervention worked. So that's given us food for thought now to say, should we be doing more trials? And if it's proven in different scenarios, is this something we should be scaling across London? So really interesting work. So the second example I'll touch on is, is the work that we did again, near Brixton high street with a focus on, uh, the use of computer vision and AI to help with our challenge of getting to vision zero. And Vision Zero is our target of getting to zero deaths on the, on the road network, uh, as a result of, uh, collisions.
Rikesh: (16:24)
So I've been historically approached by lots of different companies as to what AI and computer vision can do. Um, but it's been quite theoretical. So with Bosch here, we wanted to give them a practical example and that focused on, we had the pedestrian crossing, which had a, which carries traffic that will be road traffic. It'll be cyclists, it'll be pedestrians. And what we did is we started to segment the road through the use of CCTV on safe locations and unsafe locations. And as a result, we started to look for risky behavior from different types of road users, and that required an incredible amount of deep learning. So imagine classifying one person versus two people on a two cyclists, but making sure that it's not recognized as a car, et cetera, et cetera.
Rikesh: (17:15)
So there was a lot of classification going on. And what we started to do is as a result of that data that came back, it gave us an indication of the types of risky behavior taking place at a junction. And the most important thing here is by identifying the risky behavior, it will allow us in the future to start thinking about what interventions do we need to put in place before a collision takes place. So that's given us more consideration now as to how do we use the learnings from this activity on Brixton high street to help inform our future CCTV strategy, which starts thinking about the role of visual sensors, connectivity, but also the software that you're overlaying. So immediately, we're now starting to think about our technology on the road network in 5, 10, 15 years as a result of this trial.
Olivia: (18:11)
I think the approach of really piloting and getting into the weeds and trying something before scaling is a solid approach and really appreciate that that's a foundational element of what the commercial hub likes to focus on and how they like to tackle challenges. Shifting gears a bit, how do you ensure initiatives such as the two examples that you just shared that are coming through the commercial innovation hub are effectively handed over to the operations team within TFL for the business as usual element of what you're doing? Or I guess put differently, how does your team work effectively across different silos within TFL?
Rikesh: (18:40)
Yep. So, so transport for London's, uh, is a large organization. You know, we have 27,000 direct employees and tens of thousands of indirect employees. Going back to the earlier question about when we formed the hub, what I was adamant on is we didn't want to be a separate entity. So we didn't want to be a separate agency that comes in every so often and says, here's the great innovative ideas, and then goes back out again. So when we created the innovation hub, a key element of it is it's a matrix organization. So it consists of as you'd expect procurement colleagues in my team, tech and data colleagues, people from legal engineering, um, and, and other specialisms, but the most important person in that hub is the business area. The person that owns that problem statement, because without them, we haven't got a problem.
Rikesh: (19:30)
So what we do is before we even start that work, there's three or three, three or four things that we asked for the first one is can we work together with you on defining a problem statement? Because sometimes their problem, their definition of the problem statement might not be absolutely right. So we do test it to make sure we're going out with the right problem statement. The second element is can they provide some seed funding should it be required? And thirdly, we also asked for subject matter expertise and access to the asset. But the other that's really important here is upfront, I will have that conversation to, if we prove a business case here through this innovation, are you willing to reallocate funding or do you have the commitment or the intention to reallocate funding from other activities for this activity in the future?
Rikesh: (20:20)
So immediately we stopped back to front through that early conversation. We're already thinking about what success is, what level of funding we might need. And then we work back. And I think that's really important because doing it the other way, where you do a lovely proof of concept and it's proven, but then it doesn't go anywhere is annoying for the organization that's doing that work, but also that the ecosystem that's helping to enable it. So I think in terms of the handover, I'll give you one example. We ran a program called London road lab, and that was bringing in startups to solve some of the problems around reducing the adverse impact of roadworks. Well, what we did quite early is initially it started with a set of problem statements. We did nine proof of concepts in 10 weeks, which we provided seed funding for, but once we realized through the, and it was a procurement process, it was one of the first ever innovative partnership procedures processes in Europe.
Rikesh: (21:17)
Once we realized that there were a few products that potentially could scale my team already started to think about project management and asking the business area that we were working for to start project managing it. So towards the end of the R&D phase and where the business case was proven, and the procurement activity was taking place, we developed a process of handing over to the business area. So there was joint transition for about four or five weeks. And now what we've done is we've handed over to the business area completely. And my team keeps say, I sort of regular touch point with the team just as how it's going, but the handoff has naturally taken place. So I think it's a really, really important question around how do you manage the handover.
Olivia: (21:58)
That's great. Something that really resonated was the managing and setting of expectations at the start. And that's quite simple, but oftentimes we don't do that. And that's where people in the organization might have actually distrust in the innovation process, especially when there's a lot of effort that goes into the proof of concept stage, like you said, and then it goes nowhere. So really, really powerful advice that you gave there. Bringing it back to that internal culture piece through your work in the innovation hub, I'm thinking specifically about areas that you've already mentioned such as legal or your procurement division, I'm assuming that there might've been some hesitation with regards to the launch of your hub. How have you brought those folks in, engaged them and slowly started to change the broader culture and opinions on innovation within TFL through your work in the hub?
Rikesh: (22:50)
Yeah, I think the legal team and the procurement team were key stakeholders for the success of the hub, um, as, as was a tech and data team. I famously remember, and I caught this within my, within my organization of a series of workshops I had with legal colleagues about four years ago. And there were I think four, three hour sessions where I was trying to define what we were trying to do with innovation hub. And we went, there was lots of exploratory conversations. We painted about 17, 18 different types of scenarios. And at the end of the sort of 12 hours, um, legal colleagues said to me, Rikesh, I think we know what you want. You want to procure something, but you don't know what it is. And I said, that's fine. Let's go with that. And then immediately the procurement team started to think about different types of routes.
Rikesh: (23:45)
And as I mentioned earlier, they didn't think about the traditional routes. They were thinking about either other routes that we could deploy. So I think there was lots of engagement at the beginning. And the other thing that I've done is through the innovation hub, where you have legal and procurement colleagues, because they take the badge off and they know what you want to achieve. You don't get the organizational politics because we're all focusing on the same problem statement. So that's really important. And what I have to say now is I'm probably more risk averse than my legal and procurement colleagues in some of the debates. So it's amazing now how we've gained trust amongst each other and that push or pull. And I think without them, and I, and I really mean this, none of this will be successful. So I think the procurement and legal colleagues, you have to embrace them, take them on the journey. And I think you have to respect each other's boundaries because my job isn't to, at all, to challenge the law cause of procurement, there's a legal process. My job isn't at all to be Maverick and put the organization at risk. My job is to do things better, cheaper, and quicker through bringing in innovative solutions. And I want to do that in the right way that, that complies with, uh, our rules and regulations that we have. And I look for support from my procurement and legal colleagues to help us achieve that.
Olivia: (25:02)
Yeah, it seems like it's a way of just taking everyone's expertise and strengths and bringing that all together to, to challenge the status quo in a safe and respectful way, considering that we're all working for, for public sector entities. What advice would you share to local governments looking to foster an innovative culture within their own commercial area?
Rikesh: (25:25)
I think the first one is they've got to be grounded to the strategic because there's a perception of innovation being bean bags, pool table, nice lab. And the reality is innovation is there to add business value. So I think that's one, I think the second point is defining what we mean by innovation because everyone in the organization should, we should have the absolute right to be innovative, you know, in, in their day job. And part of, part of my job is to help spread that culture. And quite often in my organization, if things go well, we let other teams take the credit. And if it goes bad, I should be putting my hand up to say, we could have done this differently. So I think it's giving that air cover to the organization to try new things. Um, there's also innovation around the procurement space.
Rikesh: (26:17)
I think it's really important as we, we touched on earlier about bringing, commercial and legal colleagues into this, but I think ultimately my advice would be start small. So one of the first projects we started with was to deal with the adverse impact of roadworks. I touched on road lab. And that was a relevant problem at that given time. So we, we approached that one, like we would do any other problem statement. So I think it's, it's about being relevant in the organization to the problems that need to be solved. I think it's about identifying areas where you can help as an innovator. Um, but I think the final point I would say is you've got to roll up your sleeves. You know, there's this glamorous definition of a set of innovation. You've got to roll up your sleeves, work hard and find ways to make things happen. So tenacity is key.
Olivia: (27:10)
Lastly, what's something that excites you about the future of civic innovation at TFL, and even just London as a city more broadly?
Rikesh: (27:19)
So I think there's a couple of points here. Firstly, it's fantastic that as a public servant, working for TFL, we can bring some really thought-leading innovative ideas to make London better. So I think that's number one and our customers expect this, you know, when we ask our customers what they want, they want every journey matters. They want to get somewhere from A to B safely, reliably, and securely. They want value for money, but they also are saying to us, they want progressiveness and innovation within our city. And if we're going to achieve the mayor's transport strategy goals of getting to 80% of journeys made by public transport, walking and cycling, and our aspirations for vision zero and carbon zero and the other goals that we set, innovation plays a key role in that. And it's our job to bring the best innovators into create an exciting ecosystem that wants to help solve London's problems. And as a result, hopefully work with other public sector bodies across the UK and ultimately make life fir all of our citizens better.
Olivia: (28:20)
Excellent. We're looking forward to seeing more local governments and their agencies, specifically transit agencies challenge their commercial processes in a collaborative and very powerful way. Thanks so much for joining us today, Rikesh.
Rikesh: (28:32)
No problem. Lovely to be here. Thank you. Thank you, Olivia,
Lindsay: (28:44)
By focusing on strengths of the agency and fostering important relationships with transport for London's key operations, the innovation hub has created win-win scenarios for engaging with the market ultimately benefiting mobility across London. To stay informed on their work and others visit us at Govlaunch. I'm Lindsay Pica-Alfano and this podcast was produced by Govlaunch - the Wiki for local government innovation. You can subscribe to hear more stories like this wherever you get your podcasts. If you're a local government innovator, we hope you'll help us on our mission to build the largest free resource for local governments globally. You can join to search and contribute to the wiki at govlaunch.com. Thanks for tuning in. We hope to see you next time on the Govlaunch podcast.