What is wrong with Finland and how to fix it – a case example

We are living interesting times here in Finland. On one hand Finland is one of the best places in the world. We have high living standards, good public services, low income differences between social groups and a peaceful society in general. On the other hand we have lost much of the industry over the last 10-15 years that has allowed us to build this wonderful society. Combine this with the general downfall of the global economy and the Russian sanctions and the end result is that we are facing some very tough questions about how to finance our current way of living or to choose which parts of our current systems should we “trim” to cut expenses.

I’m very glad that we have finally found the courage to face some of these issues and are having a political discussion about how to make these adjustments. That’s the positive side. The negative side is that it seems the way are looking for solutions is very traditional and not innovative at all.

To me, as a casual newspaper reader, it seems that the discussion is revolving around two questions

  1. How to finance the current services in new ways?
  2. Can the level of service be reduced with acceptable consequence to our society?

In many cases these questions are probably good ones, but I would really like to see more innovation driven questions like:

  1. In what other ways can we provide the same “function” as the current service?
  2. How can we reduce costs while at same time raising the level of service?
  3. What underused resources can we discover to provide the services?
  4. To what other functions/services can we integrate the service into?
  5. How can we change the systems in such a way that the service is no longer needed?

These innovation driven questions will also lead to lower costs and create innovations we can also possibly use as exports. This is a much better end result then can come from the cost cutting questions, where the best outcome is lower costs, and the much more likely outcome is just transferring costs to another part of our society through local optimization.

There is much talk about the innovation society. Our current economic situation is a great opportunity to turn that talk into actions if we have the courage to shift our perspective and look for untraditional solutions. Innovation starts with the ability to think AND act differently.  Like Albert Einstein famously said:

“Insanity is doing the same thing over and over again and expecting different results”

A case example – monitoring environmental permits

A good case example is the issue of how to finance effective monitoring of environmental permits. A few troubling environmental incidents have brought attention to fact that due to budget cuts the officials are unable to effectively monitor companies. The proposed solution to this problem is that companies should pay the government to monitor the permits. I really dislike this “solution” because of several reasons:

  1. The companies are already paying taxes and adding other payments will make Finland a less appealing investment place when compared to other countries
  2. It is a “solution” that does not encourage any innovation around the issue.
  3. It encourages not improving the current solution because the costs will be transferred to third parties

Although I’ll admit I’m definitely no expert on the topic, I think we should be able to better. We should try to find solutions that cut costs AND improve the service, NOT just find another party to pay the bill. If the task sounds too daunting perhaps we can find solace in the fact there are good innovation tools, like TRIZ, to help us in this endeavor.

Here’s a few ideas I came up after thinking about the issue over a cup of coffee using some TRIZ tools:

  • Make the high level executives personally responsible (the fines come from their own pocket) for the environmental issues – Brazil has done this successfully in the finance industry
  • Make all the audit and reporting publicly available. Engage volunteers and environmental groups in auditing the data
  • Whistle blower programs with potentially high rewards for employees who turn in their employer. This has been done for IT licenses for example
  • Create quality circles between companies – this has led to better quality for car supply chains
  • Make an cluster collectively responsible for each other’s environmental issues
  • Offer tax benefits to companies with an excellent record if they are willing to mentor other companies
  • Use peer review between companies as an auditing system
  • Open monitoring for competition, ie it can be done by certified companies – analogous to book keeping
  • Make the next generation corporate leaders environmentally responsible by incorporating the topic into university and high school training in an effective way
  • Help companies design their processes in such an way that monitoring controls can be embedded into the actual work, instead of being an separate activity
  • Is it possible to substitute environmental permit monitoring by monitoring other available data that correlates strong with environmental issues (like safety and continuous improvement) and monitor them instead
  • Imitate the US tax system where audits are random, and the consequence severe if you get caught
  • Sell consulting to companies, not monitoring
  • Make the audits Lean, ie trim every part that does not create real value
  • Partially automate the data collection and monitoring activities and utilize big data analytics
  • R&D support for innovative ways to reduce environmental risks
  • High fines for offenders to cover monitoring costs. Those who do it by the book do not have to pay

Many of these ideas are just about improving monitoring, which probably isn’t even the right question. Most companies probably don’t set out to intentionally damage the environment. Rather it is a consequence of a lot of mistakes and carelessness. If the government could help companies fix these problems by helping them to implement an effective and empowering continuous improvement method like Toyota Kata  it would be truly a win-win scenario. Finland would benefit from better environmental responsibility and companies from higher productivity from improvements and more engaged employees. In this scenario the companies wouldn’t mind paying some extra fees.

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About teemut

https://troikka.wordpress.com/teemu-toivonen/
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