Innovation is a dynamic process through which problems and challenges are defined, new and creative ideas are developed, and new solutions are selected and implemented. It is also a complex process that involves taking iterative steps to solve problems. Innovation requires an environment that encourages participants to challenge traditional practices without fear of repercussions. Ideally, innovation participants are empowered to be creative and make mistakes, and appropriate risk- taking is not only tolerated but encouraged. Some federal leaders are trying various innovation tools, including on-line idea submission programs, competitions, and prizes, as ways of unleashing employee creativity. For example, in a memorandum issued in March 2010, the administration urged federal agencies to use challenges and prizes to crowdsource innovative approaches to government initiatives and programs. At relatively low costs, crowdsourcing initiatives can garner valuable and creative solutions that may not have come through traditional means. As another example, the Presidential Innovation Fellows program pairs top innovators from the private sector, nonprofit organizations, and academia with top innovators in government to collaborate during focused six- to thirteen-month periods. The program aims to develop solutions that can save lives, save taxpayer money, and fuel job creation. For example, the goal of one of the program’s projects is to identify information critical to saving lives and mitigating damage in a disaster. Even with the efforts of some federal leaders to encourage innovation, federal government-wide scores tracking how agencies foster and reward employee innovation dropped in 2013 for the second year in a row. OPM’s 2013 Federal Employee Viewpoint Survey, released in November 2013, found that only 35 percent of federal workers believe that creativity and innovation are rewarded, with positive responses in this area showing a steady decline of six percentage points over the past three years. Research suggests that half of all innovations are not initiated by organizational leaders. Instead, research shows that it is important to have processes for gathering stakeholders’ and front-line workers’ views to identify areas for possible improvement. As an innovation tool, labs are based on the idea that the competencies needed for systematic innovation—such as intelligent risk-taking to develop new services, products and processes—are not the same as those required for daily operations. Innovation labs seek to provide approaches, skills, models, and tools beyond those that most employees are trained in and use to do their work. In addition, public sector innovation labs can be viewed as attempts to create an organizational response to a range of challenges to innovation, as innovation efforts face unique obstacles in the public sector. For example, funding for new public ventures is limited, and the risks of innovation are high in government. A defining characteristic of the public sector is that it is subject to broad scrutiny, so that when an innovation fails or is less than a complete success, there is the prospect of political consequences. With constrained budgets expected to continue into the foreseeable future, innovation in our public services is a necessity. In the last decade, many public sector organizations around the globe have set up facilities with the explicit purpose of supporting innovation efforts. For example, Denmark’s MindLab, started in 2002, is a cross-governmental innovation unit that is part of the country’s Ministry of Business and Growth, the Ministry of Education, the Ministry of Employment, and Odense Municipality, and which collaborates with the Ministry for Economic Affairs and the Interior. The group covers broad policy areas including areas such as entrepreneurship, digital self-service, education, and employment. OPM’s lab was modeled, in part, on Denmark’s MindLab. OPM officials, consistent with other innovation lab representatives we interviewed, maintained that, unlike a typical conference room, innovation labs can be easily reconfigured for large groups and smaller breakout sessions. They allow users to write on walls and preserve visual artifacts more easily than typical cubicles and traditional office space. This can be done with very low-tech tools such as markers and a whiteboard. Figure 1 shows a view of OPM’s lab. Organizations with different missions are pursuing a lab-based strategy to foster innovation. For example, organizations—including OPM—use their labs as a space where participants can conceptualize and prototype new products or processes outside their normal environment. Many also use their labs as a teaching space where participants can exchange ideas and information through classes, workshops, presentations, or other events. Figure 2 shows how innovation labs we surveyed from the public, private, and nonprofit sectors share common design elements, and how these different organizations generally use their labs for multiple and similar purposes. Based on OPM documents, the innovation lab’s start-up costs totaled approximately $1.1 million including facility upgrades and construction, equipment, and training and other personnel costs. (See table 1 for a breakdown of costs.) In building the lab, OPM worked with the General Services Administration (GSA) and contracted with both design and architectural firms to renovate a former storage room in the sub-basement of its headquarters building. The 3,000 square foot renovated space presents an open layout with a meeting area for up to two dozen people and is surrounded by breakout areas and team rooms. The physical renovation of the facility was completed in March 2012, after the installation of final technology equipment, asbestos abatement, and enhancements to ventilation and life-safety systems. According to OPM, to make the space useful for any purpose, much of the funding for the improvements and construction of the space would have been required. OPM officials said that in fiscal year 2013, the lab’s total operating budget, including all contracting costs, was $476,000, which supported a build up to 5.5 full-time equivalent (FTE) employees over the last seven months of fiscal year 2013. Officials expect this amount will remain stable in the coming fiscal years, proportional to a full fiscal year. Operational responsibility for the innovation lab has been assigned to OPM’s Employee Services Division and is managed by the agency’s Deputy Associate Director of Strategic Workforce Planning. According to OPM officials, since February 2013, the lab has grown from 1 FTE to roughly 6 FTEs. Specifically, as of the end of summer 2013, day-to-day operations in the lab are carried out by 4 FTE staff members, 1 FTE intern, 1 part-time intern, and 1 part-time staff member whose time is divided between the innovation lab and OPM’s Resource Management Office. A core group of staff from OPM’s Employee Services Division have been trained in human-centered design and also contribute up to 15 percent of their time in the lab. According to OPM officials, the lab reached its maximum fiscal year 2013 funding level of 5.5 FTEs in July 2013. A brief description of each position is provided in table 2. OPM has taken a phased approach to developing the lab programming (activities taking place in the lab) and the policies governing lab use (such as priority-setting policies for lab projects). According to OPM documents, each phase has incorporated an element of experimentation, review, and a shift in strategy based on lessons learned. Phase I lasted from March through June 2012. During these first 4 months after the lab was built, OPM made the space available to the OPM workforce for meetings and events. OPM leadership also used this time to investigate an appropriate problem-solving approach to pair with the lab that would be consistent with approaches used by other labs; they determined that a human-centered design approach and curriculum would complement OPM employees’ technical expertise and analytic competencies. OPM also began to recruit interested staff from the Employee Services Division to be trained in human-centered design fundamentals: this staff would then support project sessions in the lab as part of their collateral duties. Phase II lasted from July 2012 through March 2013 and consisted mostly of facilitated sessions with OPM project teams. During these sessions, Employee Services staff worked with project teams to generate ideas to long-standing problems through exercises such as project or strategic planning, brainstorming sessions, or stakeholder mapping aimed at discussing and testing potential solutions. Topics discussed during these sessions involved a variety of initiatives directed at improving OPM processes and addressing government-wide human resources challenges. OPM officials noted that innovation lab projects have included, among others, designing an implementation plan with other federal agencies to collect valid, accurate, and timely data on the federal cyber security workforce; updating the government-wide strategy for veterans recruitment; attracting and retaining individuals with talent in science, technology, engineering, and mathematics disciplines; and specific challenges unique to individual agencies. Phase III lasted from April through November 2013. In Phase III, OPM continued to provide facilitated design sessions and in some cases, follow-on coaching to program offices from within OPM and OPM-led projects. For example, a facilitated design session included lab staff working with the Food and Drug Administration’s (FDA) Battery Working Group to more effectively engage with the group’s external stakeholders. According to an OPM case study about the lab, eight FDA employees attended the Fundamentals of Human-Centered Design course. Following the course, lab staff provided planning support for a public workshop with over 200 participants from stakeholder groups including medical device and battery manufacturers, other regulatory groups, and hospital staff; lab staff also attended the Battery-Powered Medical Device workshop to support the FDA team in their use of design methods. According to an FDA participant, their collaboration with the lab helped them engage in stakeholder dialogue that would not have been otherwise possible. OPM lab staff also began to offer classes in the lab designed to develop mission-critical skills federal workers need to become better problem solvers. The OPM lab offers courses such as Human-Centered Design Fundamentals, Prototyping in the Public Sector, and Communicating Visually, among other topics. These classes are available to OPM staff and other federal workers. Staff also made the lab available for federal communities of practice to convene.