The Matrix System at Work - Independent Evaluation Group - World ...

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CHAPTER 1 INTRODUCTION AND CONTEXT evaluation, the terms “matrix system” and “matrix reform” refer to both the organizational structure and the accompanying institutional rules and behaviors. ADAPTING THE BANK TO CHANGING EXTERNAL REALITIES 1.6 The 1997 reforms were aimed at adapting the organization to changing circumstances and addressing concerns among external stakeholders about the role of aid in development. External circumstances changed dramatically in the 1990s with the increasing importance of private financing of development leading to a decreasing share of official development aid, including Bank financing, in total flows to developing countries. This trend has continued after a slight interruption by the Asian financial crisis. In 1987, World Bank lending represented 15 percent of all external financing for developing countries. By 2002, Bank lending had declined to 4 percent of external financing. Other changes included the opening of previously closed economies as well as a shift from a demand for development financing toward knowledge services to help client countries deal with increasingly diverse challenges across Regions, and even within the Regions. In hindsight, the introduction in 1997 of a “matrix” organization to manage the different priorities of the country and sector units was only to be expected. 1.7 The previous 1987 reform had strengthened the country focus, but quality remained a concern. 4 Country Departments housed technical staff under division chiefs. Hierarchical relationships between country and sector units and vertical Country Department structures (“silos”) hindered knowledge flows and affected operational quality. 1.8 By the mid-1990s, pressure for change was acute. The 1997 reforms tried to address these challenges through a new set of organizational arrangements, increased decentralization, and matrix management arrangements that featured dual reporting in the sector units and budget authority with the country units. Thus, the introduction of matrix management was a major element of the 1997 changes, but not the only change (see Appendix I). 1.9 It has been more than a decade since the 1997 reorganization, and concerns that the matrix system is not delivering on its promise persist. The fundamental questions that this evaluation hopes to elucidate are whether the matrix system remains suited to today’s circumstances, and whether current incentives and accountability systems support the aims of the Bank’s organizational architecture. THE 1997 MATRIX SYSTEM 1.10 Matrix organizations are characterized by their managerial arrangements, which are divided into product delivery units and client units. Individuals in matrix organizations are grouped by functions—for instance, sector experts at a development 3
CHAPTER 1 INTRODUCTION AND CONTEXT bank—and report to a product manager responsible for that function or sector. Staff members are identified for particular products and services to be delivered to a client— a government implementing a project or reform program—which is overseen by a client manager. Individuals thus have dual reporting lines, accountable to both the product managers and client managers. The purpose of this arrangement typically is to allow for better information sharing across task boundaries, better customization of services to the needs of clients, and better management of career progression in particular product areas. In the Bank’s matrix system, the client managers are called country directors and country managers; the product managers are called sector managers. 5 1.11 The 1997 matrix reform presumes that to be effective, the Bank’s operational work must be tailored to client needs and based on global technical excellence to provide quality services. Country units for understanding client needs and sector units to deliver on global technical expertise represent the two sides of the Bank’s structure. Encouraging conducive “matrix behaviors”—flexibility to work across Regions and sectors, dual reporting lines for sector staff and managers, responsiveness to diverse client needs, and the need to “get the plumbing right” through incentives and supporting budget and human resources management systems—are prerequisites for the matrix to deliver on its promise. 1.12 The matrix system was an essential element of the 1997 renewal strategy, intended to ensure consistency between reform objectives and the organization’s delivery system for operations (World Bank 1997c, 2001c). Four technical networks were created, comprising 19 Sector Boards to manage sector staff and programs. Each Sector Board was supported by a secretariat, known as the “sector anchor,” in the network VPU, which was usually, but not always, a separate sector department. 6 The matrix system was to be facilitated by dual accountability for technical quality and an internal labor market for staff mobility and renewal. An autonomous Quality Assurance Group (QAG) was established to provide independent feedback on portfolio quality. 1.13 Reform implementation was intentionally kept flexible. There was little a priori agreement on how the organizational culture would be adapted. Issues would be addressed during implementation through a participatory learning process, with indicators to monitor progress and share lessons. The design permitted variations in structure and process among regional VPUs, some of which have since been standardized while others continue to vary. 1.14 The Bank’s ability to ensure a critical mass of high-quality technical expertise and essential flows of cutting-edge knowledge is vital to ensuring development effectiveness in a setting that is more decentralized. The number of Country 4
Page 1 and 2: The Matrix System at Work An Evalua
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Page 5 and 6: Costs of Country and Sector Strateg
Page 7 and 8: Table 3.6. Total Cross-Support Sold
Page 10: Abbreviations AAA AFR ARDE ARPP BET
Page 14 and 15: Glossary Term Anchor sector directo
Page 16 and 17: GLOSSARY Practice managers (PM) Reg
Page 18 and 19: Overview The Matrix System at Work
Page 20 and 21: OVERVIEW rather than on the 1997 ma
Page 22 and 23: OVERVIEW satisfactory or better in
Page 24 and 25: OVERVIEW toward capacity building a
Page 26 and 27: OVERVIEW Innovation in the field is
Page 28 and 29: OVERVIEW Figure D. Outcomes of Bank
Page 30 and 31: OVERVIEW modernization in the corpo
Page 32 and 33: OVERVIEW management structure but t
Page 34 and 35: OVERVIEW Structure Bank-wide matrix
Page 36 and 37: MANAGEMENT RESPONSE interest and ow
Page 38 and 39: MANAGEMENT RESPONSE Management cons
Page 40: MANAGEMENT RESPONSE that reach far
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CHAPTER 3 THE PROMISE OF A KNOWLEDG
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CHAPTER 4 DELIVERING QUALITY SERVIC
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CHAPTER 5 INSTITUTIONAL ISSUES AND
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6. Conclusions and Recommendations
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CHAPTER 6 CONCLUSIONS AND RECOMMEND
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CHAPTER 6 CONCLUSIONS AND RECOMMEND
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Appendix A Matrix Management and Or
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APPENDIX A MATRIX MANAGEMENT AND OR
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SECONDARY ANALYSIS OF CASCR REVIEWS
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APPENDIX B EVALUATION METHODOLOGY a
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APPENDIX C RESPONSIVENESS AND EFFEC
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APPENDIX D EXPERIENCE IN THE TRENCH
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Appendix E Key Findings from Sector
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APPENDIX E KEY FINDINGS FROM SECTOR
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Table E.1. Country Directors and Ma
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# Other Questions Q # 7 APPENDIX E
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APPENDIX F FOCUS GROUP DISCUSSIONS:
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APPENDIX F FOCUS GROUP DISCUSSIONS:
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Appendix G Comparison of the Six Re
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APPENDIX G PROFILES OF THE BANK’S
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Appendix H Working across Organizat
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APPENDIX H WORKING ACROSS ORGANIZAT
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Appendix I Budgetary Incentives 65.
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APPENDIX I BUDGETARY INCENTIVES Bud
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APPENDIX I BUDGETARY INCENTIVES 72.
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APPENDIX I BUDGETARY INCENTIVES com
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APPENDIX I BUDGETARY INCENTIVES Fig
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APPENDIX I BUDGETARY INCENTIVES mea
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APPENDIX J WORKING ACROSS SECTORS A
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Appendix K World Bank Sector Strate
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APPENDIX K WORLD BANK SECTOR STRATE
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APPENDIX K WORLD BANK SECTOR STRATE
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Appendix L International Finance Co
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APPENDIX L IFC 2013 CHANGE INITIATI
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APPENDIX M STAFFING DATA Note: Head
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APPENDIX M STAFFING DATA Table M.7.
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Appendix N Managers Interviewed Nam
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References Barnett, Michael N. and
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REFERENCES Sy, Thomas and Laura Sue
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Endnotes 1 See Wapenhans 1992, 1994
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ENDNOTES appropriately assessed by
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ENDNOTES 46 The respondents to this
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ENDNOTES 71 See Safeguards and Sust
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