Mats Sjöstrand, Utredningen om den statliga regionala förvaltningen, Sverige
When I talk about the development of the Swedish Tax Agency, I usually begin by stating that I was involved in a 38-year-long journey, from 1972 and onwards. For the last 10 years of the journey I was Director General of the Agency. And I intend to immediately disappoint you all – there is no standard recipe for how to implement a major change. But in hindsight, you can draw some rather obvious conclusions.
1. A government agency must always stay in touch with the society of the day. Society in the 1970s or the 1980s was very different from that of today. An organisation can be a little head of, or a little behind, the times, but if it falls too far behind, it is perceived as hopelessly backward. On the other hand, if it is too far ahead, it is often said to have succumbed to the siren song of organisational consultants (or streamlining consultants). And the organisation’s employees won’t sing along.
2. Piet Hein was right. He stated in a Grook ‘Things Take Time’. Achieving real and lasting change in the way an organisation works takes time. It is not that you have to wait for everyone in the organisation, but enough people have to be on board to achieve sustainability over time. I once met a colleague who headed the tax authority in a non-European country. He claimed that in three months' time he had changed a heavy compliance-control apparatus to a citizen-friendly, service-oriented and ‘warm-hearted’ organisation. This of course was not true – through a thick layer of varnish of beautiful films and colourful printed material, he had succeeded in portraying the image of a change that in reality never took place.
3. A steady process of ongoing development is always better than a mixture of fast and far-reaching changes, followed by a period of standing still. The Swedish Tax Agency has had the opportunity to experience such a process of ongoing development. From the year 1971, when the agency was founded, until 2009, the agency had four Directors General. On average we held our posts for almost ten years each. In short, we were able to build upon what had already been achieved.
4. Every large organisation has a culture, a soul. This can be influenced and should be influenced. But it can never be disregarded. The reason why modernisation projects fall short is that often those wishing to implement them do not understand or respect the organisation’s internal culture.
5. It never works to have a grand and long-term plan for modernisation efforts. Too much can happen during the time it actually takes to implement such a plan. You must have a vision and a goal to strive for. But if you create a schedule for what is to be achieved in year one, year two, year three, and so on, the plan is doomed to fail.
These five points are, as I said, quite obvious. Nevertheless, the belief that they can be ignored and that a three-month effort – to achieve outcomes that demand 10 years of work – happens time and time again.
When looking at the substance of such processes of change and limiting ourselves to what has been important for a national tax authority in the past 10 years, two different fundamental issues stand out: customer service and trust.
The business sector talks about customer segmentation. In the public sector, including the type of organisation a tax authority runs, the citizens and companies the agency serves must also be segmented. It is not possible to act in the same way towards an ordinary tax-paying senior citizen as you would toward a professional tax criminal. If this were done, trust in the agency would quickly erode among those who essentially want to do the right thing. Insight into the significance of gaining the trust of citizens and companies results in a change in the way of working, such as by reducing controls afterwards and increasing efforts to provide assistance in advance.
Another fundamental insight for a tax authority is that it is not possible to control your way to correct tax payments. Controls are necessary and important, but if the tax system is working reasonably well, it is even more imperative to preserve voluntary payments, in other words, through various types of simplifications and service efforts to make it easy to do the right thing.
Keeping pace with the times, or preferably a little ahead of them, accepting that fundamental changes take time, respecting – but influencing – the internal culture, having a clear and logical ‘ideology’ for change. Self-evident, really. No magic, just hard work!
A tax authority must serve to ensure that society receives the resources needed to do what is wanted and that the burden is divided in a reasonable way among the citizens. This year we have also seen terrible examples in Europe of poorly managed public administrations that have lost the trust of the population. If we in the Nordic countries are to maintain our high ambitions within the welfare area, our public institutions must function well. How will this happen in the future? I will now hand over the baton to Jens Terp, who is head of Frie Børnehaver og Fritidshjem in Denmark.