Strategic Innovation and Performance of State Agencies in Kenya: A case of National Social Security Fund

Abstract

State agencies are incorporated entities outside the mainstream civil service established for purposes of public service delivery. NSSF is a state agency which was instituted in 1965 under parliamentary act with a mandate of providing social security to all Kenyan employees through registration, collection prudent fund management and timely payment of benefits. NSSF is currently operating in a dynamic business environment faced with competition and evolving stakeholder needs. It is however a statutory institution which has been monopolized since inception operating under the NSSF Act No. 258 laws of Kenya. With the shifting needs of its customers, economic changes and the need to re-engineer the fund, a Parliamentary process was ignited which lead to the adoption of the new NSSF Act No. 45 of 2013 Laws of Kenya. This Law provided for both mandatory pension and provident fund to all employees unlike the previous act which advocated for mandatory provident fund only. Pension Schemes are secondary pillars of Social Security and were initially provided by private players in the industry, therefore, to safeguard the existence of these Companies, the new Act provided for the option of members to opt out of the NSSF pension fund and join any provider of choice. This opened a window of competition between the fund and the private pension providers. This necessitates the need of NSSF to implement strategic innovations in a rate which matches the evolving and dynamic business environment in which it operates in. The purpose of this study was to assess the effects of strategic innovation in performance of state agencies in Kenya. Descriptive research design was used where the target population was567 employees of NSSF within Nairobi region. A representative sample of 175 subjects was selected for the study. 122questionnaires were collected. Stratified random sampling method was employed to sample responses. Both Primary and secondary data were used. Primary data was collected using questionnaires. Secondary data was obtained at the regional headquarters during preliminary study. Data was analysed descriptively using percentages, mean and frequency distribution tables with graphical presentations using SPSS. The study established that 53% of respondents were aware of innovative solutions in the fund as majority 54.9% new that strategic innovation was very important. Further the study indicated that the fund had achieved improved levels of performance through innovations in terms of Competitive advantage, increase in revenue growth, growth in market share, increased customer satisfaction, reduction in operational cost, and improved service delivery however innovations unsuccessfully lead to improved range of products.