As the World Bank's first ever chief executive officer, Kristalina Georgieva aims to guide the institution through a culture shift to become more agile, collaborative and effective, she told Devex in an exclusive interview.
The new CEO has already taken on the institution's legendary bureaucracy by cutting the frequency of regular meetings in half, significantly reducing the length of project documents and shortening the comment process. Her mandate extends to the core responsibilities of “strategy, staff and systems,” she told Devex, ahead of the World Bank’s annual spring meetings, which kick off on Tuesday. Georgieva is re-examining how each of those three areas can foster a bank that promotes collaboration across its institutions and draws in more private sector finance. Ultimately, reforms will aim to bolster the bank’s growing emphasis on results.
Georgieva assumed her role as head of the World Bank’s two main lending institutions — the International Bank for Reconstruction and Development, and the International Development Association — in January 2017. President Jim Kim created the role to put the World Bank on a more “equal footing” with its private sector affiliates, the International Finance Corporation and the Multilateral Investment Guarantee Agency, both of which have CEOs, she explained. Her role was also intended to free the president to take a more strategic role overseeing the institutions within the World Bank Group, she said.
“We need institutions to be agile and adaptable to change.”— Kristalina Georgieva, World Bank CEO
“What is happening in the world is that change is more profound and it comes faster,” Georgieva told Devex. “We need institutions to be agile and adaptable to change … so my first priority is to build the strength of IBRD and IDA in our capacity to anticipate change, respond and act as we see it coming,” she said.
Georgieva’s new role sees her returning to the institution where she worked between 1993 and 2010, followed by a seven-year absence as European Union commissioner for international cooperation, humanitarian aid and crisis response, and then as European Commission vice president for budget and human resources, which put her in charge of the EU’s $175 billion budget and 33,000 staff.
Agile strategy, staff and systems
The World Bank already has a well defined strategy, captured in its Forward Look vision document published last year, and reported by Devex to reduce poverty and raise the income of the poorest 40 percent of the population in developing countries by 2030. The CEO’s job is to translate that strategy into something meaningful for staff, Georgieva said.
As well as overseeing staff working on the IBRD and IDA, Georgieva manages the vice presidents responsible for the regions and global practices within the World Bank to make sure that “operationally we are on the same page and give our teams a sense of purpose,” she said.
Georgieva said it is her responsibility to make sure the World Bank uses systems that are “enablers and not disablers,” to make the institution robust enough to be effective in today’s more challenging operating environment, she said.
One program aimed at optimizing systems is the Agile Bank program, which initially selected nine “Agile Fellows” from different parts of the institution to spend a year developing ideas about how to make the institution more streamlined, nimble and innovative. The bank can then adopt and scale up the best initiatives. The program started last August, before Georgieva took over and is being implemented with the Boston Consulting Group. Georgieva immediately saw the value of the project, she said, and has accelerated its roll out. The bank is currently recruiting the next cohort of fellows, she said.
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Examples of the kinds of reforms fellows have proposed include developing a more flexible programmatic lending approach that would allow management to reorient tranches of funding during implementation.
This could prove an especially useful tool in fragile countries and emergency situations, according to Samir M. Suleymanov, the head of the newly created strategic initiatives unit set up to support the work of the CEO.
Another Agile project is developing a customized “risk-based flight path” approach to project preparation, through which identified risks would be prioritized over general ones in the project approval process.
“Ultimately the Agile Bank targets culture change across the organization,” Suleymanov explained. “[It] creates a safe space and empowers staff to find, test, pilot and scale those improvements to processes, systems, decision making, behaviors and products.”
Georgieva said the agile program has “gone viral” among staff, who are increasingly questioning how things are done. She told Devex she is delighted by the enthusiasm, and wants to make sure good ideas are seized and acted upon.
“What I can do is make sure that these good ideas are not fireflies — they flash and disappear — there is a way to catch this light and then beam a pathway for everybody else,” she said.
Collaborative work with the private sector
President Kim has recently indicated that the World Bank will move away from traditional lending models and instead focus on enticing private investors to put their money into emerging markets. The World Bank is encouraging stronger collaboration between its different financing arms — IBRD/IDA, IFC and MIGA — to tailor support to member countries.
“What Dr Kim is proposing is a higher degree of discipline and a more systematic assessment of where concessional money should go … asking ourselves, can we use the capital we have in a more impactful manner,” Georgieva said.
In Vietnam, for example, the World Bank is working to boost the solar sector. Georgieva described how, in the past, an IBRD loan officer would put together a comprehensive $500 million project in which the bank supported everything from regulatory reform to solar production.
Speaking a week before the World Bank Annual Spring Meetings start in Washington, D.C., on April 18, World Bank President Jim Kim outlines a different vision of development finance — one that crowds in commercial finance — and talks about the organization's role in bringing it to reality.
Under Kim’s new vision for the bank, the staffer would first think: “What out of this work can the private sector fund, and what can we do to make that happen?” she suggested. Instead of a $500 million project, the IBRD now provides a loan package focused on instituting regulatory reforms and seeding initial storage capacity. “And then the private sector will do the rest,” Georgieva said.
This could also mean, for example, passing projects to the IFC, which could partner with the private sector to expand financial capacity or build demonstration projects, she said.
Creating this mindset shift within the bank — toward a greater emphasis on private capital — will require incentivizing and rewarding staff for doing their jobs differently. With that in mind, the CEO has put aside discreet resources to fund staff teams working on the development of new innovative instruments and solutions, particularly those that boost private sector engagement and mobilize commercial financing or focus on developing results and outcome-based instruments.
A strong motivator for her staff is “being given resources to do what you think is right,” Georgieva said.
A third key area of work for the CEO is what she described as “a relentless focus on results,” a “strong suit” of the bank already, she said. “I believe that at a time of growing needs and where resources are not quite following, a results focus is even more important.”
“What we want to see more is results defined as collective achievement across the [World Bank] Group.”— Kristalina Georgieva, World Bank CEO
For Georgieva, this agenda is linked to cross-collaboration between the World Bank, IFC and MIGA. “What we want to see more is results defined as collective achievement across the Group,” she said.
In practice, this will also mean an expansion of the World Bank’s use of project payment mechanisms, which fund project outputs rather than inputs. These are generally known as pay-for-performance, or P4P, and performance-based financing, or PBF. Other tools include development impact bonds and social impact bonds, through which investors fund a consortium of implementers to deliver services, and then a government or donor repays the investors according to the results achieved. The bank’s first pilot DIB is set to start in Palestine later this year, targeting youth unemployment.
Only three months into the job, Georgieva is already shaking things up within an institution notoriously resistant to change, as President Kim discovered when he implemented a set of major reforms in 2014. The changes were met with resistance from staff, as Devex reported at the time.
A World Bank veteran, Georgieva said she brings a maternal touch to the task of ushering in change, describing herself as a “mother to everyone” — on the one hand caring for staff, who she described as highly motivated and talented, but also handing out “tough love in making sure we all stretch and deliver to the best of our capacity,” she said.
Devex reporters Michael Igoe and Sophie Edwards will be on the ground at the World Bank Spring meetings April 18-22. Stay tuned to Devex for coverage and follow @Sophie_Ed1984 and @AlterIgoe.