The new KPIs for city innovation

The city’s project launch went well. There was a pilot, a ribbon-cutting, and a dashboard. A few months later, someone around the mayor’s table asks the obvious question: “So… did it work?”

That’s usually the moment when the room reaches for familiar numbers: cost savings, processing times, app downloads, satisfaction scores. If those are moving in the right direction, mayors stamp it a success. If not, they quickly move on.

But after decades of research into how cities can better use innovation to improve lives, I’ve come to understand that performance metrics tell only part of the story. Critically, they don’t capture how work on any new initiative—whether overhauling bus routes, retrofitting homes for energy efficiency, or digitizing permits and licensing—strengthens a city’s overall ability to quickly and effectively respond to future challenges. 

That’s why our team at the University College London Institute for Innovation and Public Purpose (IIPP), in collaboration with Bloomberg Philanthropies, has spent the past few years developing what are, essentially, new KPIs for city innovation. The Public Sector Capabilities Index (PSCI) will be the first global measure of local government responsiveness. And while work on the tool is still in progress, it’s already pointing toward a new way for mayors to move beyond measuring the success of individual projects by also building their muscles to effectively respond to what comes next. 

Recognizing the limits of the usual approach.

Most innovation evaluations in city government revolve around a few familiar indicators. Did we save money and staff time or reduce backlogs? Did more people use the service or system? And are users and staff happier than before?

These are not meaningless. However, on their own, they are short-term, concentrating on the project's life, not what the city learns from it. They tell us little about whether new practices spread to other teams or policy sectors, whether frontline staff have greater autonomy, or if departments actually cooperate differently. 

When tackling challenges such as housing, health, and migration, mayors rarely get neat impacts within one election cycle. They have to deliver anyway—through concrete, incremental gains that show progress. But sustainable success depends on something else, too: strengthening the city’s capability to anticipate issues sooner, coordinate action faster, and adapt services under pressure.

At IIPP, we call these dynamic capabilities, or a city’s operating system for change. Together, they form a continuous cycle that helps local leaders better respond to new and evolving challenges. Cities begin with strategic awareness, spotting early signals of disruption and change. They adapt priorities as conditions shift, then build coalitions across silos and with communities to act. Through learning and experimentation, they test responses under real-world conditions and scale what works. And, by reconfiguring delivery, they equip teams to meet residents’ needs in real time, strengthening the city’s ability to sense, respond, and adapt again as new pressures emerge.

The question we’re asking is: What if cities treated each innovation as a chance to strengthen these core capabilities in city government? And what if they measured each new project that way?

Some cities are moving in this direction. In Cape Town, South Africa, for example, a standing committee brings together senior officials across departments to rapidly reprioritize resources in response to emerging risks. Rather than waiting for a full Council process, the city can move money, staff, and attention quickly—turning what could have been a one-off response to a previous crisis into an enduring capability to adjust priorities under pressure.

Experimenting with a new scorecard for mayors.

Imagine that every innovation report to the mayor had two sections:

1. Did it deliver on the immediate goals?

2. What did it do to the city’s capabilities?

The second section might feel new, but it doesn’t have to be abstract. To make this concrete, I’ll focus on three of the five dynamic capabilities mentioned above—building coalitions, learning and experimentation, and reconfiguring delivery. These are examples, not an exhaustive list.

1. Building coalitions

Instead of just recording which department “owns” a project, mayors who are determined for their teams to work across silos and with the community could ask:

• How many departments were meaningfully involved in design and delivery?
• Were community organizations, unions, or businesses in the room from the start—or only “consulted” at the end?
• Did new partnerships form that have since been reused on other issues?

The indicator here is not a shiny network map; it’s whether the city has more routes to solve problems together in the future.

In Madinah, Saudi Arabia, a franchise-style model is used to build coalitions around shared goals. What this means in practice is that cross-department teams use a standard playbook to bring businesses and community groups into city problem-solving, so coalition-building becomes a repeatable routine, not a one-off collaboration. The innovation here is less a single project than a repeatable way of convening partners around complex problems.

2. Learning and experimentation

Most project evaluations focus on whether targets were hit. But if a mayor wants to gauge whether their city is trying new ideas and learning what works, a capabilities lens could ask:

• Were there enough iterations to incorporate new insights along the way?
• Did any major decisions change because of feedback from residents or frontline staff?
• Is there a simple record of “what we would do differently next time”—and is it accessible to staff beyond the project team?

A project that doesn’t achieve excellent performance but generates honest learning, reusable tools, and better questions may be just as valuable as one that hits its numbers but teaches the organization little.

In Durham, N.C., the innovation team has turned experimentation into a normal part of city life, combining open calls for ideas from staff, resident surveys, and peer-city monitoring to identify where to run pilots. Projects are increasingly treated as learning exercises, with feedback loops that inform subsequent initiatives rather than ending with a final report.

3. Reconfiguring delivery

Perhaps the most important questions are those that ask whether the experience of delivering in a new way leaves city teams better able to address resident needs the next time:

• Did the project change any rules, templates, or processes in ways that make future change easier?
• Were new roles created, or existing ones repurposed, to give a permanent home to new ways of working?
• How long did it take to move money or staff once the need was clear, and did existing systems move faster than last time?

If each innovation leaves behind a slightly more flexible budgeting process, a more enabling procurement rule, or a data-sharing agreement, the city’s capability to adapt compounds over time.

Bogotá, for example, has gone so far as to reconfigure its delivery architecture, creating new teams that support how services are designed, governed, and delivered. These changes outlive any single project, giving the city a more flexible set-up for future innovation.

A fair objection from mayors and chief executives is that their organizations are already saturated with reporting requirements. The answer is not another thick evaluation manual. Instead, a capabilities-based approach to measurement can be lightweight but deliberate. And it can start with attaching a few key questions to every project, such as “What did we learn?”, “Which coalitions did we build?”, and “What rule or routine changed?

The point is to help leadership teams see whether their portfolio of initiatives is actually making the city more capable.

In a world of overlapping shocks—climate, health, housing, cost of living—mayors are under pressure to show quick results. That pressure will not disappear. But the cities that cope best are not necessarily those with the most impressive pilots. They are the ones that, project by project, crisis by crisis, have deliberately built up their capabilities to sense, learn, and act.