Enhancing the OD Function at the IDB
Draft v4.3
After the 2007 Realignment, the Organization Development Program within KNL has
strived to provide support in implementing matrix management and to help
organizational units in the Bank address some of the challenges brought about by
this new structure, such as the need for role clarification, greater coordination and
team work in cross functional teams. For the most part, this support has been
delivered at the unit or country team level, principally in response to requests from
individual managers to help them structure conversations that would enable unit
members to address organizational issues within the unit. As a result, the OD
Program in KNL has to date designed and delivered a dozen of two and a half day
country team workshops in the field and over fifteen two day organizational unit
planning meetings in headquarters for the last two year and a half.1 The OD
Program in KNL is re considering its mandate within the Bank, its relationship with
other units (SPD, VPF, etc.), its offerings, its staffing, and its funding model.
This paper is the interim report from a consulting project, to enhance the OD
program in KNL. Its findings, however, have broadened its scope and may very well
assist the IDB to develop a broader strategy for the OD Program, positioning it for
maximum impact and effectiveness in the Bank. As a result, references to the OD
function throughout this paper are not specific to its current location in KNL, and
apply to the OD function wherever it might be located in the Bank.
The findings are based on confidential interviews conducted by Manuel E.
Contreras, Christel Steinvorth, and the consultant between August and December,
2010, with 15 IDB managers and staff, representing a cross section of the Bank,
including 3 in COFs, and several advisors to VPs. The interview questions are
included in Annex 1, and the list of all interviewees is included in Annex 2.
The key questions that this consulting project is intended to address are:
 Given the current Bank structure and stage in the implementation of matrix
management, what are the main areas where an OD Program should
concentrate?
 What are the key interventions on which the OD Program should focus, and
how best to develop change management interventions?
1
Country team workshops (CTW) were carried out in CPE (2008 and 2010), CHA, CUR, CJA, CGY, CEC, CCR, CBR,
CBA, CPR and CNI. Organizational planning meetings were facilitated for SPH (2008 and 2010), INE, LMK (2009 and
2010), FIN, GCM (2008 and 2010), EDU (2009 and 2010), GDI (2009 and 2010), SCL, ICF, RMG, MIF, ORP and TSP.
KNL also facilitated the EXD Annual Retreat in 2009 and the Reps Annual Meeting in 2010, in collaboration with
VPC. Overall, CTW and unit planning meetings were very well evaluated by participants (circa 1,200), Reps and
Unit Chiefs, and the demand for them has been greater than KNL can satisfy.
Matt Minahan, Ed. D.
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Monday, February 08, 2016




What is the best use of the time and talents of the current OD staff, and how
to best supplement them with external consultants?
What modules and interventions should be developed in the short- and
medium-term?
How can the current OD Program in KNL make meaningful interventions with
appropriate follow-up to avoid “one-shot” events?
What communication strategy should be implemented to promote
understanding of the value and achievements of the program?
The results of the interviews are summarized here under five themes, and the
details are listed in Annex 3. The most-often mentioned items within the themes
are listed first, and only those items that were mentioned by at least two people are
included here.
Theme 1 – Major Business Challenge: The Bank’s Vision and Mandate:
In response to questions about the major challenges in implementing the Agenda
for a Better Bank and the GCI, respondents most often identified the fact that
the Bank’s vision is not widely or consistently held internally, and cited many
cases in which units that report upward through a different chain are working
toward their own ends and are not aligned around a common vision about the
future of the Bank or the region. Several said that the expanded mandates from
the GCI and Agenda for a Better Bank are still not clear at an operational level
and that they are not clear how the Bank wants them to operationalize them.
There were contrasting views expressed on the Bank’s strategy with a few noting
that now after 2 years, the Bank’s strategy is starting to age and that somewhere
in the Bank the work needs to begin on a new strategy, while several others said
that the Bank is actually too risk averse to value strategic thinking.
Theme 2 – Major Business Challenge: On the Bank’s Structure: In
response to questions about the major challenges facing the Bank, many said
that the silos are still strong, and that units are working more independently than
interdependently, with a remarkable amount of territorial behavior, with
managers protecting their own turf instead of thinking about what’s best for the
Bank as a whole or client countries. Several noted the mixed signals from the
top of VPC and VPS, and that the Bank is still big, and bureaucratic, and HQ
driven. In the opinion of many, the roles and functions of the sectors and
country sides of the matrix need to be clarified and worked out, and both need
better communication and teamwork.”
Theme 3 – Major Business Challenge: On the Bank’s Budget: Several
noted constraints from the Bank’s budget, saying that the expanded mandates
from the GCI and Agenda for a Better Bank are still not clear, and are at risk
because of the pressure on already-stretched resources. Many said that it is not
possible to include all of the new safeguards, such as gender strategies, etc.
Matt Minahan, Ed. D.
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Monday, February 08, 2016
effectively within the same resource envelope, and called it an unfunded
mandate. A few noted that the recent trend toward smaller projects is costly,
but they have been easier to implement, and are generally better designed, and
that the Bank can’t just do larger projects to save money because they are hard
for smaller countries to absorb. There were also several calls for multi-year
budgeting.
Theme 4 – Major Business Challenge: On the Bank’s Systems: There
were several comments about the Bank’s systems and business processes. Most
mention Optima with hopeful optimism, but without any concrete knowledge
about what it is actually addressing and how it will improve the Bank. Several
said that the Bank is still not agile and that its systems prevent it from
responding quickly to changing conditions in the outside world. Among those
closest to the top of the Bank, several noted that the Bank has lots of data, but
that the data is hard to access, even harder to interpret, and almost impossible
to use as management information for making decisions such as how to allocate
budgets, personnel management, financial management, etc.
Theme 5 – The Bank’s Culture: There was quite a bit of alignment in the
comments about the Bank’s culture. First and foremost, there is a desire for
more guidance throughout the system. Several said that there are many broad
programs from HQ but there is not adequate information, guidance, or support
to implement them. For example, Managing for Results seems to be OK at a
high level, but at a detailed level, the executing units don’t know how to do it.
Similarly, several complained that all of the new strategic indicators fall on the
country offices, but suddenly and without clear guidance, and they are not clear
whether to wait for answers and guidance, or “just get on with it.” Several noted
that the Bank’s culture is quite personal and unique, acting as a social structure
more than anything else, while at the same time trying to manage using rational
tools and methods, and that an Anglo culture of certainty, reliability, and
predictability does not work at the IDB. In the eyes of many, there are still
major challenges of managing and leading within the matrix. There is also a
void of “soft skills” in the Bank – the new competency framework should include
project/program management, change management, knowledge of the business,
etc.
In response to questions about the ideal role and mandate for the Bank’s OD
function regardless of where in the Bank it might be located, there was significant
demand in two broad areas, organization design, and organization development. Most
of those interviewed strongly suggested that the Bank establish an organization
design function, typically developing the business case and alternatives for making
changes to the Bank’s structure and implementing structural and process changes when
they occur. Most noted that the function should reside in SPD or another Bank unit with
a high level person to manage it, someone with the faith of senior leadership, the
Matt Minahan, Ed. D.
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executives, and the Board. Many were appreciative of the current country team
workshops and organizational unit planning facilitation offered by the OD Program in
KNL, but most strongly recommended the Bank expand the mandate of the
organization development function to include incorporation of Bankwide initiatives,
such as decentralization and safeguards, which involve coordination between different
parts of the organizational structure, including countries and sectors, and which help
support functions such as IT, Finance, and HR to align themselves with organizational
priorities. There were also specific suggestions that the OD function: Get all units
aligned around the GCI and the Agenda for a Better Bank priorities; provide support for
the development of country strategies and the alignment to deliver them; support the
roll out and implementation of the Balanced Score Card; ensure standardization across
the four regional modernization projects, and; provide change management support to
the Bankwide ERP project.
The Robust OD Function: From the interview data, it is clear that there is substantial
demand for a more fully-featured OD function, with the capacity to address larger
institutional issues and play a more vital role in the evolving business of the IDB. Based
on well established practice in other organizations and several books on the subject,2
the robust OD function has the following mandate, with capacity provided by a blend
of internal core staff and a cadre of specialized external consultants:
 Strategy development – the tools and processes for developing organizational
strategies
 Organization design – the independence and expertise to make changes to the
organization’s structure and core business processes, including the development
of options, analysis of tradeoffs among alternatives, etc.
 Organization development – the mandate and skill to implement major
institutional initiatives in a manner that also builds the human capacity of the
organization.
 Business process simplification – the methodologies to streamline the way that
decisions are made and work gets done
 Job design – the body of knowledge about how to create and define jobs that
are interesting to do and are self reinforcing with adequate feedback loops built
in
 Team building – the tools and processes for building the social fabric of the Bank,
by aligning teams around key stakeholders, goals, and deliverables
 Applied leadership development or Action Learning – the methodologies to
structure tasks and projects for high potential managers in order to give them
2
Cummings, T. & Worley, C. (2005). Organization development and change. 8th ed. Thomson/Southwestern.
Mason, OH.; Jones, B. Brazzel, M. (eds) (2006). The NTL handbook of organization development and change:
principles, practices, and perspectives. Pfeiffer/Wiley. San Francisco, CA.; McNamara, C. (2007). A fieldguide to
consulting and organizational development. Authenticity Consulting. Minneapolis, MN.; Rothwell, W., Sullivan, R.
& McLean, G. (1995). Practicing organization development: a guide of consultants. Pfeiffer/Jossy Bass, San
Francisco, CA.
Matt Minahan, Ed. D.
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broader exposure to the Bank and each other, and to address difficult business
challenges for the Bank
Chartering the OD Function: The actual mandate of the OD function is inextricably
linked to where it is located within the organization. The principles that should drive
the location of the OD function include:
 Where can the function have the maximum impact?
 Where can the function have the easiest, most direct access to the Bank’s senior
leadership and decision makers, without having intervening layers?
 Where can the function have the broadest reach?
 Where can the function best establish its own identity?
 Where can the function partner with and support other sponsors of change
within the Bank while still maintaining its independence?
There are a variety of options for establishing the location, and by extension,
determining the mandate of the OD function. Given the broad range of possible
activities, the high level of demand, and the constraints of budget and staff, one
possible approach might consider the principal roles that the Bank would assign to the
OD function, and then locate it accordingly.
Robust OD
Function
Strategy
Development
Potential
Clients
Senior leadership
Identified Demand3


Organization
Design
Senior leadership



Current
Offer
The strategy is starting to
age. “We’re more than 2
years into this strategy. We
need to start thinking now
about the next one.”
The Bank is too risk averse
to ever value strategy or
strategic thinking
There should be a unit to
manage the Bank’s structure,
business processes, and
matrix. It needs a high level
person to manage it,
someone with the faith of
senior leadership, the
executives, and the Board.
“Decentralization represents
a huge restructuring and
needs a strong OD initiative
in support of it.”
“There is definitely a role for
an organizational analysis
group.”
Where
best
located
EVP’s Office
EVP’s Office
3
Only those themes that were mentioned by at least two people are included here. “” denote direct quotes that
are illustrative of the themes.
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Robust OD
Function
Organization
Development
Potential
Clients
Senior leadership,
individual client
managers
Identified Demand3

SPD

“The Bank desperately needs
a business process
simplification function”

“Country team workshops
should be mandatory for
every team every year.”
“We will always need to build
teams.”
SPD or CFO
-- in
partnership
with
Optima
SPD or CFO
or HRD
KNL or HRD







Senior leadership for
ERP, individual client
managers
Job Design
Individual client
managers
Individual client
managers
Team
building
Applied
leadership
development
or Action
Learning
Where
best
located
Get all units aligned around
new GCI and Agenda for a
Better Bank priorities
Support for the development
of country strategies and the
alignment to deliver.
Work with Bank management
to change the corporate
culture, i.e., the Bank/client
interface.
Support the roll out and
implementation of the
Balanced Scorecard
Standardize best practices
across modernization efforts
The project needs to be
reinforced and committed to
again by senior management
The Bank should convene
conversations to exchange
lessons learned
Provide change management
support to the ERP
Need something to help
move toward managing for
results

Business
Process
Simplification
Current
Offer
Senior leadership and
HR


Country Team
Wokshops
Organizational
unit planning
meetings
KNL or HRD
On the Relationship with Optima: The Bank is making a serious commitment to
business process simplification in the Optima ERP project, revising 37 business
processes and touching just about every moving part within the institution. The
demand for change management in support of this will greatly exceed the Bank’s
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current capacity in change management, and wisely, Optima is retaining outside
consultants to provide the bulk of the change management support. It will be
important for the OD function, wherever it is located, to negotiate a carefully crafted
and limited role on the Optima effort, as the size of the project could easily overwhelm
and fully occupy the Bank’s handful of change management staff for years to come.
And, while the ERP is a huge commitment and priority for the Bank, there are also other
significant change efforts that will need support independently from the OD function. It
is important for the OD function to advise and support Optima, but in the most highly
leveraged and selective ways possible, so as to allow time and energy for other
institutional change priorities.
Staffing the OD Function: The staffing levels in the OD function should be
determined by the amount of change the organization is undertaking. A permanent
capacity in OD could be as small as 2-3 full time staff, supplemented by a flexible cadre
of outside consultants, if the organization is in a steady state. If an organization the
size of the IDB is in the process of implementing a series of major changes or
anticipates doing so, the staffing levels could be as high a 5 or 6 for the duration of the
change, with a suitably expanded roster of outside consultants.
The staffing model should draw upon two different pools of expertise:
 A small core of 3-5 Bank staff, depending upon the mandate of the function
 A larger pool of external consultants, available for assignment on a project by
project basis. These consultants would be screened and qualified for
assignments by the core Bank staff, and would located as close to the work
as possible, in DC and across the various capitals in which the Cofs are
located
Funding the OD Function: The funding model should acknowledge that there are at
least two kinds of work that the OD function would do:
 Work done in the institution’s interest, such as implementation of the Agenda
for a Better Bank and the GCI, improving the effectiveness of the matrix, etc
– which would be funded from the Bank’s core budget
 Work done in the units’ interest, such as country team workshops, country
strategy retreats, team building, etc – which could be charged back to the
recipient units
Conclusion: This consulting project was intended to consider the role of the OD
function currently situated within KNL. After interviews with 15 staff and managers from
across the Bank, it is clear that there is a need, and a demand, for a more
comprehensive OD function, with broader reach and a mandate to contribute more
directly to the effective functioning of the IDB. As expressed, the need far exceeds the
current capacity of OD staff in KNL, and it would be a complex challenge to try to
expand the function and the mandate within KNL. This paper proposes an expanded
mandate for the Bank’s OD function and encourages the Bank to make a strategic
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decision about where the function would ideally be located in order to best realize that
expanded mandate for the Bank and its clients.
Matt Minahan, Ed. D.
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Annex 1
Interview Questions:
 What are the main business challenges that your unit faces in working toward
the GCI and Agenda for a Better Bank?
 What are the major organizational challenges that the Bank faces in the next




few years? And in your unit?
What role do you see the KNL OD Program playing in the future?
Who would be its main clients?
What should be its focus and mandate?
Do you see any constraints in achieving that?
Annex 2
Interviewees:
Juan José Taccone, IDB Representative in Guatemala
Bernarda Romo-Leroux, Resource Planning and Administrative Advisor to CAN
Tracy Betts, IDB Representative in Uruguay
Vicente Fretes, Division Chief, Fiscal and Municipal Management
Kurt Focke, Division Chief, Capital Markets and Financial Institutions
Edna Diez, Division Chief, Leadership and Employee Development
Gabrielle Vetter, Human Resources Specialist
Federico Basañes, Division Chief, Water and Sanitation
Raul Tuazon, Operations Senior Advisor to VPC
Rodrigo Parot, IDB Representative in Colombia
Morgan Doyle, Sector Senior Advisor to VPS
Anna Catterton, Resource Planning and Administrative Senior Advisor to VPF
Ferdinando Regalia, Division Chief, Social Protection and Health
Silvia Sagari, Resource Planning and Administrative Principal Technical Leader
Yanire Brana, Communications Senior Specialist
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Annex 3
The detailed results of the interviews are listed in Annex 3 here, and summarized
below under five major themes. The most-often mentioned items within the themes
are listed first, and only those items that were mentioned by at least two people are
included here. Italics denote direct quotes that are illustrative of the themes.
Data Theme 1 – Major Business Challenge: The Bank’s Vision and
Mandate: In response to questions about the major challenges facing the
Bank, respondents most often identified
 The Bank needs to make sure that all share the same vision and
commitment, from projects assistants to Reps to Division Chiefs to VPs, as
there is substantial evidence that they don’t. In many cases, different
units such as VPUs, SVPUs, Sectors, Cofs, etc -- any units that report
upward through a different chain – at different levels, different locations
are working toward their own ends and are not aligned around a common
vision about the future of the Bank or the region.
 The expanded mandates from the GCI and Agenda for a Better Bank are
still not clear, nor is it clear how we are supposed to accomplish them.
 The Agenda for a Better Bank represents the views of our major
shareholders, but not the views of our borrowers. How are we supposed
to be responsive to what the client wants when we’re also driven by these
other imperatives that the clients don’t care about? “The Bank needs to


listen to its customers better, but it is hard to press governments to take
the right actions when they are also our owners.”
The strategy is starting to age. “We’re more than 2 years into this
strategy. We need to start thinking now about the next one.”
The Bank is too risk averse to ever value strategy or strategic thinking
Theme 2 – Major Business Challenge: On the Bank’s Structure:
 The silos are still strong. Units are working more independently than
interdependently. -- “These silos are made of concrete . . . and history.”
 There is a remarkable amount of turfy behavior.
 Everyone can see the signals from the top of VPC and VPS. “The game


hasn’t changed there, why would it change here?”
The Bank is still big, and bureaucratic, and HQ driven
The sector divisions are a Bank invention; there are no counterparts to our
sectors in client governments. And they really are divisions; they behave
as if their purpose is to remain independent from others. There are no
incentives for sectors to work together.
Theme 3 – Major Business Challenge: On the Bank’s Budget and
Business Processes:
Matt Minahan, Ed. D.
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Monday, February 08, 2016





The expanded mandates from the GCI and Agenda for a Better Bank are
still not clear, and are at risk because of the pressure on already-stretched
resources. “This can’t be ‘do more with less!’ ”
It’s not possible to include all of these new safeguards, such as gender
strategies, etc. effectively within the same resource envelope. “This looks
like another huge, burdensome unfunded mandate.”
The trend toward smaller projects is costly, but they’re easier to
implement, and are generally better designed. And, the Bank can’t just
do larger projects to save money because they are hard for smaller
countries to absorb.
”We can’t move from an $8B to $12B Bank without more money, budget,
and positions.”
A two year, results-based budget would save time and money
Theme 4 – Major Business Challenge: On the Bank’s Business
Processes:
 Optima is supposed to fix this, no? (several people mentioned this)
 The Bank is still not agile; it can’t respond quickly to changing conditions
in the outside world
 The Bank has lots of data, but very little management information, such
as budget management, personnel management, financial management,
etc.
 The roles and functions of the sectors and country sides of the matrix
need to be clarified and worked out. In addition “ . . . both need better
communication and teamwork.”
Theme 5 – The Bank’s Culture:
 There is a desire for more guidance throughout the system:
o There are many broad programs from HQ but there is not adequate
information or support to implement them
o Managing for Results is OK at a high level, but at a detailed level,
the executing units don’t know how to do it.
o All of the new strategic indicators fall on the country offices, but
suddenly and without clear guidance. ”So, do we wait for answers,
or just get on with it?”
o “The Bank doesn’t tell us what it wants or what is important.”
o “We need some decisions and guidance on how to shift toward
“development effectiveness,” and from outputs to outcomes.”
o There are “pockets of mystery,” because the Bank isn’t clear about

what it wants and what is really important
The Bank’s culture is quite personal and unique:
o The Bank is a social structure more than anything else, but “we’re
trying to manage the place using rational tools and methods
instead.”
Matt Minahan, Ed. D.
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Monday, February 08, 2016
o “Ninety percent of the rules are unwritten. Everybody knows

everybody else, which is fine for older staff who have been around
for a while, but which is very difficult for newcomers, and may
explain why so many of them wash out, especially as division
chiefs.”
o “We don’t have the Anglo culture of certainty, reliability, and
predictability. Everything here happens late, which slows things
down and increases transaction costs.”
There are still major challenges of managing and leading within the
matrix:
o The systemic failure is the inability of the leaders at the top (VPC
and VPS) to work together collaboratively (mentioned by several)
o Several mentioned the need to sharpen up and clarify the roles and
responsibilities of the sectors, division chiefs, and reps.
o “Accountabilities in the matrix are still very unclear. We started to
clarify them three years ago, but stopped. We need to clarify who
signs off on which document.”
o “We haven’t cracked the code of working in the matrix.”
o “Our biggest problem is managing in the matrix. Division chiefs
and Reps need to see this as not a power game or turf wars, but
just the way that work gets done.”
o “There are critical phases in our work where there is insufficient
communication between the countries and sectors.”
o There is a void of “soft skills” in the Bank – the new competency
framework should include project/program management, change
management, knowledge of the business, etc
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