Learning by Doing: Installing Design and Innovation Capabilities in City Government through Digital Service Transformation

When Digital Transformation Means Digitising Processes Rather Than Redesigning Services

São Paulo is one of the most complex cities in the world: 11 million inhabitants, 72 administrative bodies, 130,000 public servants, and more than 1,000 public services involve a major governmental challenge. For four years, its Municipal Secretariat for Innovation and Technology (SMIT) had been working on a digital transformation agenda for 500 of those services. The political will was there, the technology was available, and the team was committed.

But by 2020, a structural limitation became apparent: services were being put online —forms digitised, processes transferred to portals— that lacked a proper understanding of who was actually using them and what made the interaction difficult in the first place. The result was a digital infrastructure that replicated existing friction rather than eliminating it. The promise of digital transformation was not being realised because it was missing a clear understanding of what was its fundamental motivation and justification: the improvement of citizen’s experience of government.

The challenge was both methodological and cultural. SMIT’s teams had the technical skills to digitise the elements of services; what they lacked was a distinct and shared notion of digitalizing processes centered on citizen’s experience. Without user research, without co-design, without structured prototyping and testing, each team made different decisions based on individual judgement, institutional inertia, or technical convenience. There was no common language, no shared toolkit, and no strategy that could systematically incorporate the citizen’s perspective.

The stakes were high. São Paulo’s deep inequality meant that the people most dependent on public services—those who could not afford private alternatives—were precisely those affected the most when those services were hard to access, understand, or complete. When digitalization is restricted to formal, but not functional, improvement, the gap is deepened, not reduced..

The city needed a way to transform not just the services, but the mindset and method of the public servants who designed them.

Learning by Doing: Building Human-Centred Design Capabilities through Real-Service Challenges

The programme was structured around a fundamental premise: the best way to install innovation capabilities in public servants involves themselves to apply design tools to the real challenges they encounter every day. UNIT and States of Change designed an experiential learning programme—100% remote and online, developed during the pandemic—with a double objective: developing capacities in participants and delivering digitally transformed services within the same process.

Before the first training session, UNIT facilitated synchronisation sessions with the municipal offices leading the process—CTD and (011).lab—to co-define what digital transformation meant for São Paulo, identify the services to be worked on, and build a shared foundation for the programme. CTD staff were trained as co-facilitators, ensuring that when UNIT’s involvement ended, the methodology would remain inside the institution.

The programme ran in two cycles. Cycle 1 was a three-month prototype: six workshop sessions with 19 participants from five secretariats, working on five services. The cycle was simultaneously a learning programme and a test of the methodology itself. At the end of Cycle 1, participants were surveyed and a characterisation questionnaire designed, so that the refined Cycle 2 could be adapted to participants’ actual backgrounds, tools, and digital literacy levels.

Cycle 2 ran for five months: 12 weekly sessions of three hours each, with 30 participants from five secretariats working on five new services. Three modules—Exploration, Experimentation, and Implementation—moved teams from user research and problem framing through rapid prototyping and testing to packaging their solutions for handoff to the development team. The Double Diamond process from the Design Council structured each session, combined with States of Change’s six innovation competencies framework as the capacity-building backbone.

A key design feature was the cross-secretariat learning architecture: all teams participated in joint sessions, which created structured opportunities for civil servants from different units to test each other’s prototypes, share reference analyses, and build relationships that would otherwise never form in a city administration of 130,000 people. The programme was not designed to produce outputs; it was designed to install a new way of approaching public problems.

More than a training programme, this was a replicable methodology for human-centred digital transformation in city government.

Networks and Collaborations

The project was developed in collaboration with the Secretariat for Municipal Innovation and Technology (SMIT) through two units: the (011).lab, the city’s government innovation laboratory, and the Digital Transformation Coordination (CTD), responsible for digital service delivery. CAF — the Development Bank of Latin America — was the programme funder and strategic partner; States of Change contributed the innovation competency framework and co-facilitation; UNIT led programme design, instructional design, and facilitation.

Participating secretariats across both cycles included the Secretariat of Health, the Secretariat for Environment, the Secretariat of Finance, the Secretariat of Human Rights and Citizenship, the Office of the Municipal Attorney General, and the Secretariat of Culture. The cross-secretariat architecture created structured opportunities for civil servants from different units to test each other’s prototypes and build connections that would otherwise never form in a city administration of 130,000 people.

Training that Produces Both Capabilities and Transformed Services

The programme achieved its double objective. By the time both cycles concluded, all five services from Cycle 1 were live and accessible through the SP156 portal; three of the five from Cycle 2 had been digitised and deployed, with the remaining two in active development.

But the more significant outcome was the shift in how participants understood their own role in the digitisation process. Before the programme, CTD teams operated as technical executors —they received a service from a secretariat and digitised it. After the programme, the teams who had gone through the learning cycle had a new mental model: digital transformation starts with user research, not technical specification. This shift was documented in participants’ own self-reported competency assessments and in the qualitative testimonies gathered at the end of both cycles.

The competencies developed were specifically those needed for public sector design: exploring problems from the perspective of extreme users, understanding service systems holistically, iterating prototypes with real citizens, and framing digitisation challenges as design problems rather than technical ones. Participants explicitly noted that these capabilities were transferable to all future challenges they would face, not only the specific service worked on during the programme.

The internal co-facilitation model was a critical structural choice. By training CTD and (011).lab staff to co-facilitate during the synchronisation sessions, the programme ensured that the methodology would remain embedded in the institution after UNIT’s involvement ended. The city now has a cadre of internally trained co-facilitators capable of running future cycles independently.

The collective learning generated across sessions had an unexpected institutional value: civil servants from the Secretariat of Health, Finance, Human Rights, and Environment—who under normal circumstances would never meet in a working context—became collaborators, tested each other’s services, and built connections across a city administration that rarely creates such opportunity. In a government of 130,000 public servants, cross-unit trust of this kind is rare and meaningful.

A Replicable Model for Citizen-Centred Digital Transformation in Latin American Cities

The São Paulo case demonstrates something that digital transformation programmes across Latin America have rarely managed to prove: that it is possible to simultaneously build innovation capabilities in public servants and deliver concrete digitised services within the same process, at scale, under pandemic conditions.

The dominant model for digital transformation in the region is technology-led: procure a platform, migrate services, measure uptake. What this programme demonstrated is that the deeper transformation is methodological. Governments that invest only in technology will produce digital services that replicate analogue friction. Governments that invest in the capacity of their public servants to understand, design, and test from the citizen’s perspective will produce services that are genuinely easier to use—and that reduce, rather than reproduce, inequality of access.

The experiential learning model—learning by doing on real institutional challenges—is more effective than classroom training precisely because it produces both skills and results simultaneously. Participants don’t complete a course and then apply what they learned; they apply it as they learn it, which means the organisation gets transformed services and trained staff from the same investment. This double-return logic is replicable across any city or public institution that needs to move both its services and its workforce forward.

The conditions for replication documented in the programme report—authority buy-in, a trained facilitation team, collaboration platforms, time commitment from participants, diverse team composition, and facilitation flexibility—constitute a practical blueprint that other municipalities can act on. São Paulo is not a typical Latin American city in scale, but the structural challenge it faced—digitising services without transforming the people and process behind them—is universal. Unit and States of Change’s methodology is designed to travel.

The digital transformation of public services, understood as a human-centred design challenge rather than a technical migration, becomes an axis of public governance—not a back-office operation, but a designed commitment to citizens who cannot opt out of their dependence on the state.