(Part 2 of a 2-part series about the findings of IEG’s evaluation Knowledge Flow and Collaboration Under the World Bank’s New Operating Model). Read Part 1.
Two important goals of
Knowledge Flow is the process of bringing the right global knowledge to the right clients at the right time. Less advanced client countries want to know how more advanced countries, such as Chile, Korea, Malaysia, or Singapore, handle technical reforms. This requires the free flow of people and knowledge across Regions and the Bank Group’s organizational boundaries. It also requires customizing knowledge to country contexts. And it requires strong knowledge production, curation, and management.
Integrated Solutions address complex issues with broad, cross-sectoral, and multiservice programs involving diverse tools and knowledge. Clients’ development challenges often cut across sectors and require diverse technical expertise from different sectors, disciplines, and both public and private sectors. To provide integrated solutions staff must collaborate across sectoral boundaries on multisector approaches, programs, or projects. Integrated solutions are meant to complement, not replace, traditional single-sector projects and programs.
In the previous post for this series, I explained how IEG found that the 2014 reforms have improved knowledge flows across regions, reduced silos, and deepened our expertise in specific areas, and that the Global Theme Groups have proven to be a useful addition to the operating model. These are all positive developments.
But as with any major change to a large organization’s structure, there have been some negative impacts. Some of the negative impacts can be traced to difficulties during the implementation of the reforms in 2014-15, as I will explain.
Challenges of Implementation
The new matrix organization has remained in flux because of managerial challenges. The central change management team was dispersed when the reform became effective in 2014. This caused discontinuity in reform implementation. There is no clear line of sight from reform plans laid out in 2013–14 and what has emerged today, after many subsequent adjustments. Having a central team to oversee reform implementation and use organizational performance data to inform course corrections could have benefited us.
The timing of expenditure savings also complicated reform implementation. Budget savings were not an original reform goal. Management introduced the “expenditure review” in 2014, unanticipated by most staff. The goal was sound - to increase IBRD’s financial capacity, bringing our expenditures in line with revenues. This review targeted budget cuts of $400 million in three phases over three years, implying also a need for staff reductions. The expenditure measures have been credited with paving the way for the 2018 capital increase. But their timing during organizational reforms resulted in challenges, such as staff morale suffering.
What are the problems with the current operational structure?
Although the objective of overcoming regional silos was sound, the new model has created other barriers to knowledge flow and collaboration.
Collaboration across boundaries is difficult. The GPs are competitive and have become new silos. Managers on both sides of the matrix incur high transaction costs when working across the GP structure.
The operating model works as intended when Country Directors and Program Leaders show leadership. Country Directors point to GP collaboration as a key pain point.
Implementing the crowded operational agenda is challenging. Our operations mainstream jobs, gender, climate change, maximizing finance, citizen engagement, fiduciary controls, and other issues. Mainstreaming requires collaboration across boundaries and tends to drive costs up. We task people with integrating, coordinating, and connecting across boundaries— Program Leaders, Global Leads, Global Themes Groups—but they often don’t have the authority or enough budget to do this.
There is a large gap between the reform’s aspirations to deepen knowledge and the current reality in many GPs. Some GPs have strategic approaches to knowledge; others do not. This is because of differences in the availability of trust funds and leadership support.
The mechanisms designed to pursue knowledge excellence have met with mixed results. A few GPs made their Global Solutions Groups work largely as intended, while others recast or disbanded the model. Global Leads have unclear roles and unfunded mandates.
There are concerns with quality assurance processes, specifically around contestability and the balance of oversight responsibility.
Why these weaknesses?
The reorganization did not change incentives, behaviors, and organizational culture.
Incentives for GP staff continue to favor own-managed lending, complicating collaboration. Managers without robust lending face fragmented and uncertain budget realities.
A simpler approachto the reorganizations may have been to retain existing groups and structures and realign incentives and reporting arrangements.
More could also have been done to create metrics for organizational effectiveness and use them to inform course corrections. Better data on the quality of services to clients could help us focus on results.
Where do we go from here?
Management is aware of the imperfections in the model, and, are using the findings of this evaluation along with other data to make course corrections.
As we move forward, it is important that we focus more on incentives, culture, and collaboration mechanisms than on structure.
Bank staff still have “change fatigue”—little appetite for another major reorganization. Will more changes to the structure, the org chart, improve things? The org chart can be redrawn with the stroke of a pen, as it has been many times since 2014, but does anyone think that will induce different behaviors?
To stimulate collaboration, we need more robust mechanisms to work across the matrix structure.
The two sides of the matrix need robust, authoritative connectors. As we explained in the evaluation, the existing pool of directors in the GPs is large enough to constitute a new cadre charged with connecting and arbitrating between GPs and Country Directors in each Region. Also, Program Leaders could be used more effectively to connect the two sides of the matrix. In our evaluation work, we saw many strong examples of Program Leaders helping to make cross-sectoral collaboration, integrated solutions, and complex client dialogue happen.
Since our evaluation was completed, senior management redefined the management roles in the Practice Groups, moving toward two senior roles: Global Directors and Regional Directors.
Any changes should maintain the global flow of staff and knowledge. The globally integrated nature of the new operating model should be preserved.
We also need to deepen our knowledge and continue to enhance knowledge flow. This calls for revamped incentives. Senior management could signal support for knowledge excellence. Metrics for knowledge uptake, impact, quality, and influence would help. There should be more contestability in quality assurance. More nimble budgeting arrangements and accelerated trust fund reforms would also contribute.
The main challenge going forward is to stimulate more collaboration under the new operating model while enhancing the initial gains on knowledge flow. By adjusting our incentives, culture, and collaboration mechanisms, we can achieve the level of integration and knowledge flow we will need to offer workable solutions to the increasingly complex problems the World Bank is tasked with helping to solve.