Building Foresight in the Finnish Tax Administration (Verohallinto)
About seven years ago, a group of employees at the Finnish Tax Administration embarked on establishing a framework for monitoring their operating environment from a future perspective. Since then, foresight capabilities have become an integral part of management and strategy at the Finnish Tax Administration.
Although foresight has been a familiar concept to the Finnish Tax Administration for many years, the journey towards a more systematic foresight approach began seven years ago by an inspired group's initiative.
“I was personally interested in foresight, and I knew well the opportunities foresight could bring to organisations. I wanted to start developing this at the Finnish Tax Administration,” says Tax Administration expert Asko Torniainen, who has been a member of this group from the beginning.
The Finnish Tax Administration is the authority responsible for collecting tax resources in Finland, which are then distributed to services provided by the Finnish government. The organisation has around 5 000 employees, and it collected about 70 billion euros in taxes and tax-related payments in 2019.
For a large organisation like the Finnish Tax Administration, laying the grounds and solidifying the processes for foresight work has been a long-term process, spanning over several years. During this journey, the organisation started using the digital foresight solution Futures Platform, which helped create a common language around foresight with its visualised trend-mapping and collaboration tools.
According to Torniainen, the key benefits of strategic foresight and Futures Platform’s digital solution have been enhanced futures literacy and increased proactiveness. “Additionally, foresight produces direct input for strategy,” he adds.
Autonomous observation groups are central to foresight
In the beginning, foresight at the Finnish Tax Administration had more of a long-term and operational focus. Over time, as a group of colleagues became increasingly interested in foresight, they also began monitoring weak signals of change in their present environment.
“This group was formed naturally over a shared interest in foresight,” Asko Torniainen reminisces. The group called itself PESTLE in reference to PESTLE analysis, which is short for 'political, economic, social, technological, legal, and environmental'. The PESTLE-group led the organisation’s systematic foresight efforts.
Currently, besides the sporadically assembling PESTLE, the Tax Administration also has other autonomous foresight observation groups in various sectors, such as technology, digital economy, work environment, law, clients, and stakeholders.
The groups observe changes happening in their internal and external operational environment from the perspectives of both the Finnish Tax Administration and its clients. “The observation groups gather and process signals from their own sector,” says Senior Tax Administration Officer Jaakko Niinikoski.
The observation groups have people from diverse backgrounds, ranging from analytics to customer service. Each group has a leader who is responsible for maintaining and organising the group's activities. In addition, there are also smaller teams operating within individual groups. According to Asko Torniainen, it's essential to keep the observation groups as heterogeneous as possible to have multiple perspectives present.
“It's just that different people pay attention to different things. For example, people who like to observe and interpret phenomena are different from the ones who retrieve data and validation for the collected observations,” he describes. “However, the common denominator for everyone is that there must be an inherent passion for observing the operating environment.”
Although the purpose of observation groups is to operate autonomously, a structure is also needed for their operations - especially if several of them are appointed at the same time. Thus, the leaders of the observation groups also form an observation maintenance group, whose
purpose is to guide the organisation's foresight activities and manage communications between groups.
The observation maintenance group meets once a month to share observations from their groups and to exchange experiences, insights and ideas. Jaakko Niinikoski and Asko Torniainen are both members of this group.
Effective processes support observation teams
The operational processes of the Finnish Tax Administration's observation teams have been refined over the years. Each group has observation and analysis teams within itself, which are responsible for different tasks.
Observation groups keep an eye on signals, news, feedback, and trends related to their areas. As one source of information, the groups use Futures Platform's content database maintained by trained futurists.
The groups first write a brief, draft description of the detected signals and then collect more in-depth information about them. Signals are collected in the observation group's common Discussion Channel. According to Jaakko Niinikoski, the daily discussions taking place in these different channels are essential components of the organisation's foresight practice.
“Each observation group have access to the discussion channels of the other observation groups, which fosters larger cross-thematic observations and systems-level thinking,” Niinikoski explains. In their meetings, the observation teams then go through the collected signals and select the most important phenomena. These can be individual trends or combinations of multiple signals.
In the future, the plan is to make system descriptions and clusters of these phenomena and map out the interrelationships between them. “Sometimes, depending on the topic at hand, the observation teams can also utilise external expertise,” adds Jaakko Niinikoski.
From signals to observations - lifts to management
Once the observation teams select the most important signals and phenomena, they are delivered to the Tax Administration's management to support strategy and planning. The tax administration has a rolling strategy that is reviewed twice a year. In this context, changes in the operating environment are also considered.
“The important point here is that the observation teams have sufficient autonomy to challenge strategic policies internally,” says Asko Torniainen.
The phenomena are brought to the attention of management latest by the review stage of the operating environment. They may be presented separately or in groups, depending on their nature.
Although foresight work is already exemplary in the Finnish Tax Administration, Asko Torniainen sees it playing an even more vital role in the future.
“We are integrating foresight into the annual planning cycle, which requires more systematic action,” he adds.
“Futures Platform's visual forecasting maps enable the visualisation of future changes and the larger systems around them in an overal perspective.”
Jaakko Niinikoski, Senior Inspector, Finnish Tax Administration
Futures Platform helps visualise future directions and serves as a source of validated information
As more people within the organisation got involved in foresight activities, the groups faced a new challenge: Internally heterogeneous and autonomous groups could approach foresight in very different ways, which posed challenges to communication.
“We found that the observation groups needed a shared view of visual presentation for signals and phenomena. That is why the Tax Administration started looking for a suitable digital tool for foresight work about three years ago,” says Jaakko Niinikoski.
The criteria of the organisation in selecting Futures Platform were clear:
“Futures Platform's visual forecasting maps make it possible to visualise phenomena as well as the systems and totalities around them. The ability to add custom content was another important selection criterion.”
However, Futures Platform is not only a tool for visualising information, but also has a rich content database covering different industries and areas of activity globally. This ever-growing content is curated and continuously updated by Futures Platform's futurists.
“Although we were initially interested in Futures Platform for visualisation purposes, over time, the content database has become even more valuable to the Finnish Tax Administration than the visualisation itself,” says Jaakko Niinikoski.
Foresight advocacy, communication, and guidance
According to Jaakko Niinikoski, the perception of foresight in society is changing: “There’s a positive buzz around it now, a lot more than before. This can be seen, among other things, from the fact that the concepts of foresight have become more central in discussions,” he says.
Nevertheless, in many organisations, the challenge is to consolidate foresight practices. Even if foresight is utilised successfully in individual projects, perseverance can often be lacking.
According to Asko Torniainen, top management plays a central role in the continuation of foresight efforts. In the case of the Finnish Tax Administration, the matter was brought up to management by the original foresight group.
“Yes, it also required hard internal sales work, except that it is a philosophy that is being sold instead of a project. Once the importance of foresight is understood and communicated about, it begins to take root in the organisation’s activities.”
Now that foresight is defined in the Finnish Tax Administration’s strategy, there is a desire for more support. “When more resources are available for foresight, it creates space for a lot more positive developments,” says Jaakko Niinikoski.
One positive outcome of the Finnish Tax Administration’s foresight efforts has been the service Digi-info, which is a 30-minute virtual information session for the entire staff on technologies that will shape the future.
It is also essential for observation groups to maintain a continuous debate, in addition to the more informal discussion happening on internal communication channels. Themed discussions have been organised within groups on various topics, such as the environment and taxation or technology and taxation.
“We arrange these sessions face to face whenever possible. It is also important to involve speakers from outside the group in these discussions. Sometimes even the CEO has participated in observation groups’ themed discussions,” says Asko Torniainen.
The Finnish Tax Administration also wants to maintain awareness of the future outside the organisation: twice a year, it organises a “Futures Phenomena” event, open to all and streamed online, addressing future-themed topics together with external experts.
“Internal communication and encouragement to participate is really important and needs to be done through multiple channels. We invited well-known people as speakers to engage our staff and spark an interest in foresight,” says Jaakko Niinikoski.
External experts help find new perspectives
As foresight is an evolving discipline, foresight practices in organisations also need to be continuously updated. The Finnish Tax Administration, for example, plans to merge some of the observation groups together in the future and bring in external experts whenever new perspectives are needed.
“Our PESTLE group included one of the industry’s leading foresight experts as a permanent member of the group for a year. This brought a lot of new perspectives and ideas to the group’s work.”
The same logic can be applied to any team working with foresight. “A person outside the organisation, who is familiar with the field but isn’t too ‘involved’ in the group can bring fresh observations and perspectives to the discussions,” concludes Niinikoski.
Collecting comprehensive observations from the environment and other experts
In addition to external experts, the Finnish Tax Administration has also involved stakeholders in foresight activities.
“We have offered topics for which we need more information for thesis and research work for universities and polytechnics. We are also involved in various research projects where we agree on the themes together, but otherwise, researchers have freedom,” Asko Torniainen describes.
The Finnish Tax Administration also commissions various studies and utilises these in its foresight work. “Studies are good sources of weak signals,” adds Torniainen.
According to Asko Torniainen, Futures Platform has transformed the role of foresight at the Tax Administration from marginal work towards strategic competence through systematic action. However, the most significant value of the digital tool, he says, comes from the interesting and thought-provoking content produced by the team of experts at Futures Platform.
“In the future, we hope to be able to collaborate and discuss foresight and future changes between different organisations more effectively. For example, we would like to discuss future issues collectively among Futures Platform’s network of users.”
“We need resilience at a time when changes taking place are compolex, ambiguous, and fast. Futures Platform responds to this need with its clear and visual presentation of future information.”
Asko Torniainen, expert, Finnish Tax Administration
6 steps for consolidating foresight work in large organisations
By Jaakko Niinikoski and Asko Tornianinen, Tax Administration
1. Start implementing foresight with free experimentation.
2. Do not copy foresight models and practices directly from other organisations. Instead, apply what you have learned from others to create your own procedures.
3. Ensure the autonomy of the foresight groups, so that they can challenge existing strategic policies.
4. Set up an organisation-wide foresight group to support the work of others.
5. Integrate foresight into other processes and create workflows for utilising foresight information in different functions, such as strategy work and operational development.
6. Introduce digital tools that can be used to visualise foresight information and collect weak signals from all employees.