Using Business Input to Drive Reform: Feedback Tools and Applications Giedrius Kadziauskas, Consultant, Inspection Reform and Better Regulation

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

All the different forms of feedback ♦ 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, , mobile application. Performance management feedback Legal redress – constitutional guarantee Public management instrument

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?

Different stages of feedback – different needs Initializing / Planning / gaining support Who has the problem? How big is the problem? Why solution is needed? Choosing right tools Are internationally recognized tools able to solve local problems? Do businesses have enough infrastructure to use new tools – connection to the internet? Paper printing costs? Are businesses ready to use novelties ? Implementation feedback Are businesses content with the consultations they receive? Have the conduct of inspectors’ improved? Are businesses inspected less? Is it easier to find how to comply?

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

Complaints bring only bad experiences – that is not fair! ♦ 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. Very bad experience of inspection Very favorable experience of inspection Neutral experience of inspection

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.

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”

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 ♦ address and phone number dedicated to the reform – 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)

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.

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)

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