Using Business Input to Drive Reform: Feedback Tools and Applications

1. Using Business Input to Drive Reform: Feedback Tools and Applications GiedriusKadziauskas, Consultant, Inspection Reform and Better Regulation

2. “Start with a customer and work backwards” “Start with a customer and work backwards” Jeff Bezos – Founder and CEO Amazon.com Photo: Jeff Bezos' iconic laugh by Steve Jurvetson

3. All the different forms of feedback Legal redress – constitutional guarantee • Direct to inspector during the inspection. • Legal appeal against the decision of the inspectorate. • Complaint to the head of the inspectorate – the business is dissatisfied with the conduct of the inspector • Businesses addresses the media with the complaint. • Inspectorate asks the businesses for feedback – phone, mail, email, mobile application. Public management instrument Performance management feedback

4. Why do we need voice of businesses • The Goals of intervention – reduction of risks and increase of safety –rely mainly on businesses, not on inspectorates. • The businesses deliver the Good. • What are the intentions to comply/ not to comply? • How to comply more effectively? • How inspectorates and inspectors work? • How to motivate public sector to change?

5. Different stages of feedback – different needs

6. Initial steps – building the case for politicians, public and inspectorates • Heads of inspectorates, line ministries, the government does not collect and possess any information about the process of inspection (business experience).Business feedback might be their only source • Lack of data can be substituted by storytelling • Representative survey of businesses is an ultimate method –international experience in shaping questionnaires – significant costs for reformers. • Focus group if done properly – cheap and accessible method, requires relationship of trust

7. Complaints bring only bad experiences – that is not fair! Very favorable experience of inspection • Some feedback received reveals only the most negative experiences – appeals and complaints, media coverage. • There is no info about the whole range of experiences. • The experiences ranging from neutral to very bad are very important since it leaves businesses unsatisfied and nobody knows about it and cannot improve. • Good experiences cannot be rewarded and multiplied. Neutral experience of inspection Very bad experience of inspection

8. Once you are on the track – feedback is a leverage of the reform team • There is not enough feedback from the businesses about the inspection • Some feedback received reveals only the most negative experiences – appeals and complaints, media coverage. • Good post-inspection feedback extremely rarely becomes known. • Feedback allows to improve supervision and inspection by better targeting various tools on the general level and on institutional level. • Allows to monitor implementation of various tools of reform – use/usefulness of checklists, behavior of inspectors during the inspection etc. • Allows to encourage good behavior - find and assess good inspectors‘ teams; identify good inspectorates.

9. Difficulties in getting feedback from businesses • In many instances businesses are afraid to speak because of fear of retaliations; fear of liability for their own illegal activities • Reluctant to speak up since do not believe change is possible • Business associations usually represent bigger and more developed businesses  bigger businesses have different issues with inspections than SME’s. • “Businesses know and care little about the specific inspections, they are all nuisance for businesses”

10. Feedback from Businesses Lithuanian experiences • Representative survey of businesses (once a year). • Represetatives for main business associations in the Inspection reform experts commitee (with the representatives from main inspectorates, twice a month). • Draft checklist are consulted with the sectorial associatiions. (routinelty) • Ad hoc meetings with key associations when presenting progress, key measures etc. (once or two times per year) • Post inspection survey of businesses done by the inspection reform team - by phone –arround 20 respondents - allowed the reform team to have some leverage against the sceptics • Email address and phone number dedicated to the reform versloprieziura@ukmin.lt – you can mail directly reform team at the Ministry of Economy (moderate popularity) • Participation of the reform team in inspections together with inspectors – together with State Labour inspectorate, Non food inspectorate (inspectors were really scared to inspect when teamed up with the Vice minister of Economy)

11. Receiving feedback – a challenge to listen and hear • Capacity to analyze it. • Procedures how the info is processed and what decision have to be taken. • Readiness to act accordingly to findings and openness to accept results – on managerial level and inspectors level • Focus on elimination of crosscutting issues, not individual cases • Not only declaration but also the practice of listening to businesses and acting to reduce burden.

12. Representative survey.1000 companies – Lithuania 2013  Have you been inspected in 2013? 30 % – YES 70 % NO  What institution did carry out an inspection in your company  in 2013? 41 % - Tax inspectorate 25 % - Food and veterinary service 16 % - Labour inspectorate 16 % - Fire safety and rescue departments 9 % - Public health centre (same or comparable figures as in y 2012)  Have you been informed about the inspection in advance?64 % - YES 36 % - NO (same or comparable figures as in y 2012) Did the inspector use the checklist to carry out the inspection? 57 % - YES (46 in y2012) 43 % - NO (54 in y2012) What were the outcomes of the inspections carried out? 67 % - NO violations 33 % - Violations found (same or comparable figures as in y 2012)

13. Representative survey.1000 companies – Lithuania 2013 (cont.) Do you know about the reform of the business supervision system? 18 % - YES (27 in y2012) 82 % - NO (73) Do you feel that business supervisory institutions recently provide more support for businesses to meet requirements of regulations? 48 % - YES (39 in the y2012) 34 % - NO (36 in the y2012) Have you noticed recently that there is a positive change in the attitude of inspectors towards businesses - they are more polite and assist in meeting legal requirements? 69 % - YES   (64 in y2012)  17 % - NO