A Different Approach to Change

A DIFFERENT APPROACH TO CHANGE

“Before coming to the World Bank I’d been in organizations that were going through dramatic, but what you might call mechanistic, change,” says Dorothy Hamachi-Berry, then VP of human resources at the International Finance Corporation (IFC), the part of the World Bank that invests in private enterprise in developing countries. “Typically, a new leader would come in and there would be a ‘burning platform,’ some compelling reason that you had to destroy everything and start again. This approach never seemed to work in any of the places I knew. When I first came to the Bank in 1996, we had a new leader, and we were sending hundreds of our top managers through university executive development programs. They were all being exposed to the same change model, but, lo and behold, nothing was changing. That’s when I started to ask, is there a different model? I knew the alternative had to start from aspiration, and the aspiration of our clients.”

At the time, the Bank was trying to address organizational problems that had long limited its effectiveness. For example, rather than having “country managers” based in Washington, the Bank was relocating people in such positions to the actual countries. The idea was to get managers “on the ground” and thus more in tune with their clients’ needs, desires, and goals. At the same time, professional networks were created to deepen the Bank’s global knowledge base, and a new matrix organization was put in place.

In 1989, a learning project began with the Bank’s Mexico team (at this time Hamachi-Berry was still human resources VP for the whole World Bank) and the human development team, those working on health and education. She recalls: “We had a great country team but they were struggling with this new way of doing business in the matrix.” After a two-day foundational workshop, the team worked for several months with learning tools like dialogue, systems thinking, and personal mastery, with the overall aim of helping clients clarify their development aspirations. One of the long-standing problems at the Bank was its inability to work across its own internal boundaries to get funding through to innovative on-the-ground projects. “In Mexico, we got the clients, country team, and network people working together in a new collaborative way, which had happened infrequently in the past. As a team they worked together to develop solutions to problems, rather than the Bank coming in with a prescriptive approach. The results were exciting projects where you could see impact, like a new way of delivering education and health services to children in remote mountainous areas. It was a great prototype showing what could happen if Bank staff worked with clients to enable clients to drive their own development process, rather than the other way around. And pretty soon we had demand for more projects.”

About this time Hamachi-Berry moved from the World Bank to the IFC, because there was an opportunity for similar innovations within the top management. She built on what she had learned in Mexico. “We never used terms like ‘organizational learning’ or talked about The Fifth Discipline because it sounded too academic and the ideas would lose their power. Instead we talked about building aspiration—our own and our clients’—and the capacity for dialogue and inquiry.”

The printed project date precedes the arrival date Hamachi-Berry gives above, so the chronology needs checking.

Initially, there was little demand for work with the learning tools from the investment officers. It was simply not the way they worked. “Our investment officers were deal makers, and dialogue and inquiry were not their style. It was like pulling teeth. But Peter Woicke, the IFC CEO, recognized the value of this sort of approach, so we concentrated on working with his management team. Peter was patient, and it took a couple of years but eventually you could see the results in how people interacted and what they could do together. People learned to be candid, to openly disagree, and to be intentional about surfacing conflicts rather than skating around them.” The first turning point came when several of Woicke’s direct reports wanted to undertake similar development processes with their own teams. “Gradually a lot of the basic learning practices started to show up in how people worked. The IFC is the one part of the Bank group that has a bottom-line focus: commercial success and having a development impact are both important. Because people could track business impact, the value of the work was more readily apparent. Today, the work is totally demand-driven, and we get lots of requests for capacity-building help from line managers themselves.”

Hamachi-Berry and her colleagues got another test of the longer-term impacts of their cultural change efforts when Woicke retired a year before this account. “What would happen when the CEO champion for this approach was gone? We knew that many very successful innovations like this get shot down or fail to spread despite their success. But this work has influenced policy and strategy changes, and our business has doubled in the last six years. In fact, we’ve had three consecutive years of record growth and profitability—we’ve never done so well in our history. I think our success has been helped a lot by having so many line managers who embody a spirit of vision and who have included others in building a learning environment. Once you have a few of these people in an organization you build momentum, and everything gets much easier.

“Our ability to work together and with our clients is leading to better investment decisions, which are building more successful businesses, which can have more impact on sustainable development. This alignment between business and development success has been our aim all along. It’s clear, looking back, that it took real patience, the sort that is often missing in change efforts, and a willingness to lead by example rather than just sending everybody ‘off to the program.’ Peter’s extensive management experience outside the Bank seemed to have convinced him that inquiry and real aspiration mattered, and he was willing to take the time needed for him and his team to develop their own capacities. And that dovetailed with the patience it took [before] people could see evidence of practical results and then want to build their own capacities.”