Public sector innovation (PSI) is an emerging multidisciplinary field that is attracting practitioners from a wide range of sectors and industries, with a correspondingly broad set of skills and experience. PSI aims to significantly improve the services that a government has the responsibility to provide by taking a user-centered, partnership-based approach, from service content development through to methods of service provision (OECD 2012). Yet the work is complex and not without risk, if undertaken without appropriate foresight, thoughtfulness, and rigor. In particular, when it comes to pursuing PSI in the design of social service policy and its provision, some of the more substantial risks lie hidden in systemic power imbalances that can easily be exacerbated, despite practitioners’ best intentions. This article uses a case study about homeless service provision in New York City (NYC) to offer a candid portrayal of undertaking research and design work in PSI. It highlights common challenges and risks, as well as best practices for mitigating them. The issue of power is examined through the lens of agency, as it’s a productive framework for helping to identify and work with the power dynamics that circulate between everyone involved in PSI design projects: the project team, research and design participants, intended end users, and the government client. In the spirit of making a pragmatic contribution to a burgeoning field, this article ultimately advocates for a reflexive practice. Working reflexively means inhabiting a mindset of self-awareness, reflection, and never ‘turning off’ as a researcher. This reflexivity enables practitioners to navigate the complexities of PSI design work, and ultimately, to better support their government agency client and those that the agency is aiming to serve.