The Matrix System at Work - Independent Evaluation Group - World ...
The Matrix System at Work - Independent Evaluation Group - World ...
The Matrix System at Work - Independent Evaluation Group - World ...
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CHAPTER 5<br />
INSTITUTIONAL ISSUES AND ORGANIZATIONAL STRUCTURE<br />
Box 5.3. IFC’s 2013 Change Initi<strong>at</strong>ive<br />
IFC introduced organiz<strong>at</strong>ional changes in 2011 intended to strengthen development impact,<br />
financial sustainability, client s<strong>at</strong>isfaction, talent management, and people development,<br />
and to use global knowledge in a decentralized environment. <strong>The</strong> new system adopts more<br />
specific development goals for driving financially sustainable growth and maximizing<br />
development impact where IFC has a compar<strong>at</strong>ive advantage; strengthens alignment of the<br />
performance management system to the corpor<strong>at</strong>e str<strong>at</strong>egy and budget cycle; and<br />
restructures the investment departments to clarify roles and accountabilities. <strong>The</strong>se changes<br />
were supported by a communic<strong>at</strong>ion str<strong>at</strong>egy, milestones, and a monitoring system.<br />
<strong>The</strong> revised organiz<strong>at</strong>ional structure divides IFC into:<br />
• Global Industry <strong>Group</strong>s made up of Global Industry Departments responsible for<br />
managing global clients and partnerships, developing sector str<strong>at</strong>egies, linking<br />
advisory and investment services, and developing global knowledge networks.<br />
• Regional Client Service <strong>Group</strong>s composed of Regional Departments and Regional<br />
Industry Departments. Regional Departments are responsible for managing country<br />
str<strong>at</strong>egies, business development, and client rel<strong>at</strong>ionship. Regional Industry<br />
Departments are responsible for portfolio and transaction management, providing<br />
functional specializ<strong>at</strong>ion, and improving responsiveness, efficiency, and risk<br />
management.<br />
<strong>The</strong> new business process and incentives system include:<br />
• A revised budgeting process with vice presidents more involved in the planning<br />
phase to determine budget envelopes th<strong>at</strong> are l<strong>at</strong>er alloc<strong>at</strong>ed <strong>at</strong> the department level.<br />
Technical staff are mapped to global or regional industry units and the budget is<br />
negoti<strong>at</strong>ed and alloc<strong>at</strong>ed directly to each of the three departments (Global Industry,<br />
Regional, and Regional Industry) based on an agreed investment program and staff<br />
requirements from each department.<br />
• Staff incentives aligned with str<strong>at</strong>egic goals. Managers’ objectives are adjusted to<br />
focus on development and financial results, client orient<strong>at</strong>ion, people management<br />
and development, and contribution to corpor<strong>at</strong>e initi<strong>at</strong>ives with achievement of both<br />
quantifiable and qualit<strong>at</strong>ive development objectives included in performance<br />
measurement and compens<strong>at</strong>ion. In addition, IFC will continue its system of<br />
performance rewards linked to project outcomes and more frequent promotions<br />
enabled by a higher number of grade levels for staff.<br />
Source: IFC Road Map FY11-13- Maximizing Impact, Unlocking Our Potential (IFC 2010), FY11 Business Plan and Budget<br />
(IFC 2010); and IFC’s FY12 Business Plan & Budget (IFC 2011), IFC 2013 Change Initi<strong>at</strong>ive- an upd<strong>at</strong>e <strong>at</strong> an informal<br />
meeting with the Board of Directors (IFC 2010)<br />
5.43 Budgetary arrangements under the m<strong>at</strong>rix system were singled out by staff<br />
as well as country and sector managers as a major impediment to the Bank’s<br />
efficiency. <strong>The</strong> imbalance in budgetary authority between country units and sector<br />
units leads to a short-term focus driven by lending delivery and fiscal year deadlines<br />
r<strong>at</strong>her than str<strong>at</strong>egic selectivity th<strong>at</strong> balances short-term needs with business<br />
development to prepare for future risks or policy opportunities. <strong>The</strong> m<strong>at</strong>rix was<br />
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