Stamford University Bangladesh

Department of Public Administration

Master of Public Administration
Course name
Managing Change and Innovations in public
Sector
Course code
MPA 506

Assignment on
Final Exam
Sir Aka firowz ahmad
Professor

Submitted by
Mohamud Abdirahman Hirsi Ali
ID: MPA-07105040

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Contents Pages
1- Effective Organizations: Bridgespan’s Organization Wheel 3
2- The Link between Organizational Effectiveness and Results 5
3- Room for Improvement 6
4- Becoming the organization more Effective 8

5- Strategy for Changing Organization’s Culture 11

6- Examples of the challenge of culture change at the World Bank 14

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Effective Organizations: Bridgespan’s Organization Wheel

Summary:- Effective organizations create results, and to be fully effective, organizations must
exhibit strengths in five core organizational areas—leadership, decision making and structure,
people, work processes and systems, and culture.
"Too many people are involved in every decision."
"Staff complain about unclear and changing priorities."
"No bench strength exists in the leadership ranks to take on new tasks."
"Staff are duplicating work and reinventing existing processes."
Organizational inefficiencies like these are all too familiar to nonprofit leaders. And they come
with a high cost: lower potential for making progress toward the important societal challenges
and opportunities nonprofits seek to address.
our study suggests that there is significant room for organizations to improve their organizational
effectiveness across all five categories ( leadership, decision making and structure, people, work
processes and systems, and culture). While many nonprofits owe their initial success to visionary
leadership, only systematic development of each of these five areas will lead to the managerial
strength required to sustain growth and outcomes. Organizations need to establish and
communicate clear priorities, make roles and responsibilities explicit, create clear connections
across organizational silos, and develop the talented people they attract, or they will fall short of
their full potential for impact.

Bridgespan finds that truly effective organizations exhibit strengths in five key interrelated
areas:
1- Leadership
2- decision making and structure
3- people
4- work processes and systems
5- and culture
Effective organizations also pay attention to 10 key characteristics across these five areas: -
For example, effective leadership requires having a clear vision that is translated into well
understood priorities, and supported by a cohesive and aligned leadership team.

N Elements Characteristics
o
1 Leadership - Clear vision
- Cohesive and aligned leadership team

2 decision making and structure
3 People
- Clear roles and accountabilities for decisions
- Organization structure that supports objectives
- Organization and individual talent necessary for success
- Performance measures and incentives
aligned to objectives

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 4 work processes and systems - Superior execution of programmatic work processes
- Effective and efficient support processes and systems
5 Culture - High performance values and behaviors
- Capacity to change

As Exhibit 1 suggests, these elements are interconnected; strength in one area offset by
weakness in another does not appear to result in sustainable improvement. All five elements
must be strong to create a highly effective organization.

Culture is linked to and affected by each area of the organization wheel. As such it enables
organizations to meet their strategic goals to achieve impact. In fact, because it is about how
people in the organization behave, it can be either a powerful ally or a real barrier to
implementing a strategic change. Because of its linkages to other areas of the organization wheel,
Bridgespan has found that levers that change behavior are often found within these other areas of
the organization wheel (see Exhibit 2 below). Therefore, leaders who need to change culture to
support strategy need to determine what levers in other areas of the organization wheel will
support the right behaviors.  For example, these may include choices about what people to have
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in the organization, how to align them to priorities and motivate them, who has what decision-
making authority, how people are expected to work together using key processes, etc.

These five elements are interconnected; strength in one area offset by weakness in another does
not appear to result in sustainable improvement. All five elements must be strong to create a
highly effective organization.
our study suggests that there is significant room for nonprofits to improve their organizational
effectiveness across all five categories. While many nonprofits owe their initial success to
visionary leadership, only systematic development of each of these five areas will lead to the
managerial strength required to sustain growth and outcomes. Organizations need to establish
and communicate clear priorities, make roles and responsibilities explicit, create clear
connections across organizational silos, and develop the talented people they attract, or they will
fall short of their full potential for impact

The Link between Organizational Effectiveness and Results

The lack of a common measurement of performance in the nonprofit sector makes it difficult to
prove the link between organizational effectiveness and results quantitatively. In the for-profit
world, however, barometers such as profitability and shareholder value make this assessment
possible. Consider the research of Bain & Company, the for-profit strategy consulting firm.

In 2003, Bain surveyed more than 500 companies about their organizational effectiveness and
also measured the market performance of those companies. Eighty percent of the respondents

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from the "strongest financial performers" rated their companies "highly effective," while only 14
percent of the total pool of respondents did so. Bain also developed an in-depth diagnostic survey
to assess the companies' performance in five areas: leadership, decision making and structure,
people, work processes and systems, and culture. The bulk of respondents from the smaller,
high-performing group gave their companies much better marks across the board than did their
more average-performing peers.

The lessons emerging from Bain's research are clear: effective organizations deliver results, and
strength across all five elements is required. Our experience working with nonprofit
organizations has borne this out repeatedly.

Room for Improvement

The link between organizational effectiveness and results puts a premium on understanding how
nonprofits function organizationally. Our analysis indicates that while nonprofits have some
tremendous organizational assets, weaknesses in other areas hold them back from achieving their
full potential for impact. For example :

 Leadership: Nonprofit leaders tend to establish strong visions and build strong teams.
These same leaders, however, seem to be less effective at translating a compelling vision
into a set of explicit goals and corresponding priorities. They're even less effective at
communicating priorities throughout their organizations.
 Decision making and structure: The ability of people to coordinate and work well
together across organizational boundaries is an area where nonprofits tend to run into
difficulties. Decision-making roles and processes also appear to be a significant
weakness.
 People: Nonprofits appear to attract good talent and do well placing the right people in
the right jobs. However, these employees do not feel that their work is well aligned to the
priorities of the organization. What's more, organizations on average have some difficulty
evaluating, developing, and rewarding staff consistent with the organizations' priorities.
This finding is not surprising, given leadership scores on setting and communicating
priorities. Further, nonprofits in general do not appear to prepare adequately for
leadership transitions and succession; this area emerged as the biggest weakness overall.
 Work processes and systems: Nonprofit employees, on both the program and
administrative sides, appear to be skilled and motivated. Working conditions, however,
hamper their effectiveness. In particular, work processes are not well defined and
resources are scarce. While this last point did not emerge strongly in the survey data, in
our work with nonprofit organizations working conditions crop up repeatedly as a major
impediment.
 Culture: Culture is a clear strength. Interestingly, however, ability to execute change is a
weakness. This finding may also correlate to the relatively low leadership score in setting
priorities. Nonprofit leaders cannot effectively change the direction of their organizations
if they do not know what their priorities are and what they want the change to
accomplish.

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These findings are consistent with our experience working with and observing many nonprofits:
namely, for the most part, they are strongly led but under-managed. Many nonprofits have
inspirational and visionary leaders who attract hard-working people with great passion for the
cause at hand. However, these same leaders often find it difficult to implement and codify the
kinds of mechanisms that would help these highly motivated people be as productive as possible.
Good managers know how to bring discipline, structure, and process to bear, and this is where
nonprofits seem to be most lacking.

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Becoming the organization more Effective

The key to becoming more effective, then, is to invest in management capabilities—in short, to
move to a place where the nonprofit is not only strongly led, but also strongly managed. As
noted, our research suggests that nonprofits need to take a holistic approach towards improving
effectiveness, shoring up management capabilities across the board. A good place to start is with
the areas our research has shown to be most prone to weakness. The following five sets of
questions can help an organization's leadership team assess those areas and set a purposeful
course towards improvement. Given that many of the issues illuminated by our survey data link
to unclear or poorly communicated strategic priorities, we recommend beginning with that
challenge.

1. Are we clear on the strategic priorities that will enable our organization to achieve our
desired impact over the next several years? Have we communicated our strategy clearly
enough that everyone within the organization understands where we are going, why, and
how we will get there?

Clear priorities are the "north star" against which an organization can align its people, structure,
and processes, and build its culture. When an organization's leader has established clear
priorities, he or she has essentially defined what "success" will look like. Against that goal, it
becomes easier to determine which programs or initiatives are essential, and which are not, and
to allocate resources accordingly.

Take, for example, an organization that serves students who are at-risk for dropping out of high
school. Where does that organization draw the line in terms of serving these young people? What
if an opportunity arises to help recent dropouts get back into school? Or to help younger students
move out of the "at-risk" category before they enter high school? Or to strengthen the home lives
of these students? Unless the leadership team has established and communicated what matters
most it can be difficult to chart a course in the face of such options.

One way to determine if your organization has clear priorities is to ask each member of the
senior management team to make a list of its top five priorities for the next one to three years.
Once you've compared the lists, you'll be able to see whether the team members are on the same
page. If they are, you'll next want to determine whether the priorities are well communicated
throughout the organization. To begin to find out, ask a representative sample of managers at the
next level down to engage in the same exercise. These simple exercises will help you determine
if your challenge is clarifying priorities or if you need to work to on communicating the priorities
to enable alignment to them.

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2. Given the organization's priorities, what decisions are truly critical? Is it clear who is
responsible (and who has the authority) to make those decisions?

With clearly communicated priorities come more consistent decisions, given that decision
makers throughout the organization are guiding their choices with the same compass. That said,
ample room often remains for refinement of the decision-making process itself. A well-defined
decision-making process leads to more efficient, responsive, and transparent decisions, with less
role confusion and therefore less conflict.

Establishing and implementing a strong decision-making process is a complex endeavor—one

that is hard to do well. So it may be valuable to use a management tool specifically designed to
help an organization's leaders unravel the decision-making process, clarify roles and
responsibilities, and set clear expectations for decision making going forward. The process of
using such a tool can help leaders get past preconceived notions of structure and more fully
engage in a holistic approach to their organization.
 

3. Who in our organization must work closely together to achieve these priorities, and does
our structure enable them to do so?

Identifying the work that's critical to achieving the organization's priorities, who does that work,
and how it delivers the desired outcomes helps reveal which people need to work together and,
ultimately, whether the current structure facilitates their work.

Organizational design experts in the for-profit and nonprofit sectors alike talk about the
"grouping and linking" of work. They find that most leadership teams pay a lot of attention to
how work is grouped: around geographies, for example, or product lines or functional areas such
as finance or human resources. Most, however, pay less attention to how people need to work
together across these groups, and thus fail to put in place the kinds of structural mechanisms that
can make such coordination easier. Without these mechanisms, people end up working in their
own silos. The fallout ranges from wasted time (as people try to find information that isn't
readily available to them), to poor quality work (when the right input isn't incorporated), to poor
execution (because stakeholders critical to implementation fail to buy in).

To help people work together more effectively across departments or groups, start by identifying
critical areas where such work takes place. Then narrow that list to the areas that link back to the
organization's top priorities. Armed with this information, creating explicit linking mechanisms
becomes a more manageable endeavor. Some organizations use cross-functional working teams.
Others tap staff members to serve as liaisons between departments—for example, asking a
finance manager to work with a specific program.

4. Do we have the right people and capabilities to achieve our priorities, and do our people
feel that their goals and measures align with these priorities?

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One way to assess and improve the effectiveness of your people is to determine how they are
aligned against the organization's priorities. For each priority, identify who is working on it and
compare it to items that are of lower priority. Ask yourself, do I have enough people against
things that matter? Are my best people allocated against the things that matter the most? Have I
taken lower priority work away from these people so that I am sure they will succeed? Doing this
can be especially critical in times of change, be it regrouping after layoffs or embarking on a
growth trajectory. These are the times when management team members tend to take on new
responsibilities, sometimes overextending themselves and under-resourcing critically important
areas.

It's also important to maintain the connection to the organization's high-level priorities when
setting individual performance goals and assessing staff performance. Too often, performance
reviews are "check-the-box" activities. It's easier for participants to take reviews seriously—and
feel that the process is valuable—when individual goals are clearly linked to the organization's
overall goals. Performance reviews also should lead to action, influencing skill development
plans, future job assignments, promotions, and rewards. Consider an example from another
nonprofit that offers mentoring services. Leaders had told staff members that the organization's
priorities included increasing the number of mentoring matches each staff member set up,
maintaining the quality of the matches, and balancing matches across easy- and hard-to-serve
communities. During performance reviews, however, staff were assessed and rewarded only on
the number of matches—the easily quantifiable metric. As one middle manager put it, "Staff
members are routinely put in a position where they have to make a choice between actually
doing their jobs well and appearing to do their jobs well." When this feedback was shared with
senior leaders, they redesigned the process to include data and qualitative feedback on these
other dimensions. They also began to reward employees who had performed well against all of
the organization's priorities. This change has contributed to improved employee morale, and it is
expected to drive more balanced performance across the organization's priorities.
 

5. Have we defined the work processes and tools to enable our people to be effective as they
address our top priorities?

Time spent clarifying and honing work processes, and making them explicit and accessible to
employees can reduce rework and reinvention. The effort can also contribute to consistency and
improving levels of quality. This is gold to any nonprofit, but it's particularly valuable when an
organization is struggling to increase impact on a tight budget or embarking on an expansion
plan.

In addition to getting the processes right, deploying tools and technology can also increase
organizational effectiveness. With limited funds available, many nonprofits are hesitant to make
these kinds of investments, but they can have a huge payoff. Consider one large youth-serving
organization whose leaders discovered that completing essential documentation after each case
interaction was a major source of stress for staff members. The process was labor intensive and
time sensitive. As a first step towards addressing the problem, the organization tested voice-
recognition software that allowed staff to dictate their notes, which were then automatically
transcribed. Not only did the software cut documentation time in half, but staff members also

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began to find the task much less onerous. In fact, the organization's leaders believe that adopting
this technology has been a major contributor to improved staff retention, increasing quality while
reducing hiring and training costs.
 
Progress towards becoming a more effective organization means progress towards increasing
your impact. Whatever your organization's strengths and weaknesses, a purposeful and holistic
effort to improve effectiveness will be worthwhile—not only for your employees and volunteers
but, above all, for those your organization seeks to serve.

Strategy for Changing Organization’s Culture

Changing an organization’s culture is one of the most difficult leadership challenges. That’s
because an organization’s culture comprises an interlocking set of goals, roles, processes, values,
communications practices, attitudes and assumptions.

The elements fit together as mutually reinforcing system and combine to prevent any attempt to
change it. That’s why single-fix changes, such as the introduction of teams, or Lean, or Agile, or
Scrum, or knowledge management, or some new process, may appear to make progress for a
while, but eventually the interlocking elements of the organizational culture take over and the
change is inexorably drawn back into the existing organizational culture.

Changing a culture is a large-scale undertaking, and eventually all of the organizational tools for
changing minds will need to be put in play. However, the order in which they deployed has a
critical impact on the likelihood of success.

In general, the most fruitful success strategy is to begin with leadership tools, including a vision
or story of the future, cement the change in place with management tools, such as role
definitions, measurement and control systems, and use the pure power tools of coercion and
punishments as a last resort, when all else fails.

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Frequent mistakes in trying to change culture include:

 Overuse of the power tools of coercion and underuse of leadership tools.

 Beginning with a vision or story, but failing to put in place the management tools that
will cement the behavioral changes in place.

 Beginning with power tools even before a clear vision or story of the future is in plac

10 tips for driving a culture change that is provided by Sabapathy :

1. Define desired values and behaviors. Do people understand them and how they relate to
day-to-day behavior? Come up with behavioral descriptors for each value you define and
articulate how those would translate into actionable behaviors at all levels—from
secretaries to middle managers to executives, Sabapathy advises.

2. Align culture with strategy and processes.  Do your mission, vision and values line up
with your HR processes, including hiring, performance management, compensation,

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 benefits and the promotion of talent? 

3. Connect culture and accountability. It is easy, particularly in difficult times, to forget

the values you set in place to define your company, he says, citing Enron and WorldCom
as examples. However, companies have a better chance at weathering disaster if they take
responsibility for their actions, Sabapathy says. 

4. Have visible proponents. For culture change to stick, it must be a priority of the CEO
and board of directors. “Show the board a framework for understanding organizational
culture and its impact on performance,” Sabapathy says. Work with the board to create a
standing performance objective for the CEO that evaluates culture.

5. Define the non-negotiables. When contemplating a culture change, look at your current

culture and call out which aspects you want to retain. Determining what’s not up for
debate is particularly important during mergers and acquisitions, when leaders of two or
more organizations must figure out how to blend identities.

6. Align your culture with your brand. Culture must resonate with both employees and
the marketplace. To accomplish this, HR increasingly is partnering with marketing, he
says. This is especially relevant in our current online world, where today’s bad customer
experience can become tomorrow’s viral sensation.

7. Measure your efforts. Help demonstrate the effectiveness of your efforts by

implementing employee surveys and analyzing gaps between desired and actual behavior.

8. Don’t rush it. Changing a culture can take anywhere from months to several years. Start
by making sure there’s a clear rationale for why the company should change, he advises. 

9. Invest now. Don’t wait for staff and resources that may never come. “It takes years of
investment to get to that point where [your culture] just automatically becomes part of
how you behave and act,” so begin whatever way you can. 

10. Be bold and lead. You don’t have to be in a position of influence to have influence.
“When we step up, it encourages others to step up as well,” he says. 

Culture Is a Result

It is important to remember that culture is a result, not a lever. Nonprofit leaders cannot simply
define new values and goals and share them in the hope that everyone will get on board with a
new strategy. Instead, leadership must commit to a new vision for the organization’s culture,
decision-making must support that desired culture, managers must give staff incentives that align
with the desired goals, and processes and systems must be engineered to drive the desired
behavior. As the stories from The Children’s Village and Liberty Resources illustrate, nonprofit
leaders who pull the right levers for cultural change can positively and profoundly transform
their organizations.

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Examples of the challenge of culture change at the World Bank

These lessons are evident in successive efforts to change the organizational culture of the World
Bank over a period of almost half a century.

The World Bank represents a particularly difficult case of organizational culture change. Its
formal goal—development—is ambiguous. The institution itself is a peculiar mix of a
philanthropic foundation, a university and a bank. As an international organization, it is owned
by the governments of the world, with a resident board of directors and their staffs who are ever
present and ready to second-guess the management.

In a broad sense, the World Bank is a great success. It’s easy to forget that fifty years ago, India,
China and Korea were seen as basket cases requiring Western charity in perpetuity: today, they
are independent economic powers in their own right, as a result in part to the implementation of
economic policies that the World Bank has been coaching them over many years.

But the remaining development problems in the poorest countries, particularly in Africa, remain
intractable. And the new global issues such as the environment present new challenges for the
World Bank to play a different role from the past.

Successive presidents have come and tried to change it, mostly with little success.

Robert McNamara: World Bank President 1968-1981

The most successful president by far in terms of changing the culture was Robert McNamara.
After a career at the Ford Motor Company, of which McNamara became head in 1960, he was
the U.S. secretary of defense from 1961 to 1968 and president of the World Bank from 1968 to
1981.

His most lasting accomplishment at the World Bank is, for better or worse, that he introduced
hierarchical bureaucracy, with its attendant goals, roles, accountabilities, values and
communications.

And we know how he did it. On his arrival at the World Bank in May 1968, McNamara quickly
took charge. John Blaxall, a young economist at the time, recalls being summoned to
McNamara’s office shortly after his arrival, being handed a stack of annual reports, and asked to
assemble multiyear financial statements—something that hadn’t been done before. McNamara
penciled in his left-handed scrawl on a white-lined pad the headings that he wanted. The columns
across the top were the past five fiscal years, and the rows were the standard balance sheet and
income statement items. How soon could he have it ready? Blaxall gave him a date and observed
with concern that McNamara carefully wrote it down.

Within six weeks, McNamara had a set of tables covering all major aspects of the Bank Group’s
activities, with totals for each five-year period and detail for the past five years. Blaxall recalls
McNamara poring over the sheets full of numbers, exclaiming with some animation: “This is
really exciting, John!”

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McNamara then asked the senior managers in the President’s Council of the bank to fill in the
numbers for the next five years for the activities under his responsibility. The immediate reaction
was that it couldn’t be done, to which McNamara replied that they should do it anyway—and
have it ready within a month.

It is not surprising that the five-year lending plans submitted by the geographical units had little
correspondence to the five-year plans prepared by the technical units. And the financial
projections put forward by the disbursement department were unrelated to either.

It was at this point, in early summer 1968, that McNamara announced to the senior managers that
in the future, the World Bank would have only one sheet of music from which everyone would
play. Ensuring the necessary consistency would be a key role of the programming and budgeting
department. The game plan was not a narrative but rather a set of standard tables—a bunch of
numbers—through which McNamara managed the organization for the next thirteen years.

As a result, McNamara transformed the World Bank from a small, sleepy, financial boutique into
a large, bustling, modern corporation, expanding lending more than tenfold in the course of his
thirteen-year tenure.  He dramatically increased the World Bank’s role in agriculture and
education and opened up new lines of business in health, population, nutrition, and urban
development. He articulated a new role for the World Bank in alleviating global poverty,
passionately calling attention to the plight of the poorest 40 percent of the world’s population
who had been essentially untouched by development lending. But his most lasting
accomplishment is that he introduced hierarchical bureaucracy.

It’s interesting to note what McNamara didn’t do to bring about the culture change:

 He didn’t change the managers or bring in his own staff. He basically worked with
people who were already there. When he needed something he couldn’t get from the
existing management, he drew on young people from within the organization like Blaxall.

 He didn’t start by reorganizing: It was only four years after his arrival (in 1972) that
McNamara finally got around to a reorganization, which was needed in any event
because the organization had grown so much. By this time, his management systems and
philosophy were firmly in place.

McNamara thus arrived with a clear vision for the organization: it was to be a lending
organization that was lending a great deal more money. He had a clear idea of the management
he wanted introduced: hierarchical bureaucracy. He introduced systems and processes that
focused everyone’s attention on his vision of the World Bank as a rapidly growing lending
organization and the type of management required. Those systems are still largely in place today
and still guide management action.

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Tom Clausen: 1981-1986: Strategic planning

Tom Clausen came from being head of the Bank of America, in which role he was named as the
“best manager in America”. After his stint at the World Bank, he returned to the Bank of
America, where he was once again voted “best manager in America”.

However, at the World Bank, he found it difficult to make his mark. He spent much of his time
trying to figure out how the organization functioned. He could see that the organization lent a
great deal of money, but the goal of lending—development—remained fuzzy.

Clausen’s response was to launch a major strategic planning exercise, of which the end
result, like most such corporate exercises, was essentially to continue with “more of the same”.

Clausen relied principally on management tools, and lacked any clear vision of where he wanted
the organization to go. As a result, it kept going in the same direction.

Barber Conable: 1986-1991: Reorganization

Barber Conable’s background as a Republican congressman from New York led him to approach

his new job as a political challenge. The organization that he inherited had become slow,
bureaucratic and unresponsive to its stakeholders. Conable’s response was a massive
reorganization, combined with mild downsizing. The hope was that the reorganized organization
would emerge lighter, nimbler and more client-focused. The reality was that the old culture
quickly reemerged, despite the new managers and the new structures. The culture easily
survived.

Here the reliance of power tools resulted in short term disruption but no long-term change.

Lew Preston (1991-1995) came from being head of JP Morgan. As a banker, he accepted the
World Bank as a bank, and in the four years that he served as president, he made no significant
effort to change it.

James Wolfensohn: 1995-2005:  New structure, new managers

James Wolfensohn came from a career of investment banking. Unlike his predecessors, he had
spent a number of years thinking about the World Bank and in fact trying to become its
president. He was a candidate when McNamara retired in 1981, but he was told he was ineligible
as an Australian citizen. He adopted U.S. nationality and succeeded in becoming president in
1995.

Upon his appointment, it was reported in the press that he intended to remove the entire cadre of
senior managers. He denied the report at the time, but over the next couple of years, he did
exactly that.

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He also launched a massive reorganization that preoccupied managers and staff for several years,
though as in earlier reorganizations, the culture re-emerged largely unscathed from the
experience, despite the changes in personnel and structures.

More importantly, he also took steps to clarify the goal of the organization. In 1996, he espoused
knowledge management as a strategic goal of the organization, calling it “the Knowledge Bank”.
(I served as director of knowledge management from 1996-2000.)

In 1998, he succeeded in introducing a World Bank mission statement—the first in its entire life.

To fight poverty with passion and professionalism for lasting results. To help people help
themselves and their environment by providing resources, sharing knowledge, building capacity
and forging partnerships in the public and private sectors.

The goal was for the first time clearly focused on fighting poverty. However as all of the
management systems and processes remained focused on getting out the lending program, the
mission statement has still had little operational impact.

Thus, Wolfensohn’s ten-year term was marked by a lot of energy and effort to introduce change.
The organization became more decentralized, with a younger and less experienced staff, but not
fundamentally different. It was a still a bank lending money for development, in accordance with
the systems that McNamara had put in place almost forty years before.

Wolfensohn did have a vision for the organization as an organization dedicated to relieving
poverty, but failed to put in place the management systems that would support and reinforce that
vision.

Paul Wolfowitz: 2005-2007: New blood from outside

As a leading neoconservative, and Deputy Secretary of Defense, Paul Wolfowitz was a major
architect of President Bush's Iraq policy and its most hawkish advocate. His appointment as
president of the World Bank was controversial.

Wolfowitz arrived with a change agenda to move the organization towards a more conservative
stance. He tried to do this by bringing on board some of his neoconservative lieutenants as
managers. By and large, the organization, which has no tradition like the US government of
bringing in new managers from outside, responded like an immune system reacting to invading
pathogens.

 In effort to identify and put an end to corruption, Wolfowitz brought on two US nationals
formerly with the Bush administration, whom he appointed as close advisors to flush out
fraud. Their work proved divisive.

 Another appointee ran into problems when he tried change policies on family planning
and climate change towards a conservative line.

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After serving a tumultuous two years, Wolfowitz resigned, following revelation of a promotion
that he had arranged for his companion. Obviously, a personal scandal brings any change effort
to a screeching halt.

Robert Zoellick: 2007-to date

After the tumult of the brief Wolfowitz era, Zoellick’s calm tenure with no bold moves was a
relief to many. His recent discovery of the World Bank’s role in providing data to the world
shows how long it can take an incoming president to understand, let alone manage, this intricate
organization. As he enters the final year of his five-year term, there is no indication from
President Obama as to whether he wants the former Bush hand to stay on. Zoellick has made no
statement about his own plans.

Meeting the challenge for the future

As of mid-2011, the World Bank remains a slow-moving traditional hierarchical bureaucracy,

with an inward-looking perspective. The mission statement of 1998 dedicating the organization
to the relief of poverty is largely unsupported by the management roles, systems and structures
which still drive the organization to focus mainly on lending for individual development projects.
While filled with talented staff, the organization as a whole is underperforming. It lacks the
agility to cope with the diverse challenges that the world now faces.

Overall, the World Bank is desperately in need of a radical change in management. If no change
occurs, it will become less and less relevant.

Lessons for the next president

If the next president is to achieve the needed change, he or she should learn from the success of
Robert McNamara and the failures of his successors, as well as other successful change efforts in
large organizations, such as Alan Mullaly at Ford [F] or even Steve Jobs at Apple [AAPL]:

 Do come with a clear vision of where you want the organization to go and promulgate
that vision rapidly and forcefully with leadership storytelling.

 Do identify the core stakeholders of the new vision and drive the organization to
be continuously and systematically responsive to those stakeholders.

 Do define the role of managers as enablers of self-organizing teams and draw on the full
capabilities of the talented staff.

 Do quickly develop and put in place new systems and processes that support and
reinforce this vision of the future, drawing on the practices of dynamic linking.

 Do introduce and consistently reinforce the values of radical transparency and continuous

improvement.

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 Do communicate horizontally in conversations and stories, not through top-down
commands.

 Don’t start by reorganizing. First clarify the vision and put in place the management roles
and systems that will reinforce the vision.

 Don't parachute in a new team of top managers. Work with the existing managers and
draw on people who share your vision

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