Transformational Change in MDBs: A View from Independent Evaluation - Marvin Taylor-Dormond | Asian Development Bank

Raising Development Impact through Evaluation

Transformational Change in MDBs: A View from Independent Evaluation - Marvin Taylor-Dormond

Speech | 25 October 2018

Speech delivered by ADB Independent Evaluation Director General Marvin Taylor-Dormond at the Islamic Development Bank 3rd Evaluation Symposium on 25 October 2018, in Jeddah, Saudi Arabia

H.E. Dr. Bandar bin Mohammed Hajjar, President, IsDB Group

Vice Presidents, Director Generals and Directors,

Honored guests, Friends, Colleagues, ladies and gentlemen

As-salamu alaykum!

A pleasant good morning to all!

Thank you, Brother Anasse Aissami, for so kindly inviting me to address this 3rd IsDB Evaluation Symposium here at the historic and vibrant city of Jeddah, particularly on the subject of institutional transformation and change, and the role and lessons from independent evaluation on this topic.

Introduction

It is certainly fitting to speak on the subject of transformation at this time and place, when the IsDB is working towards a deep institutional change after 44-years of a successful history, to better serve the region and its member countries. Revitalizing its strategies and processes is in lockstep with the growing and more complex dynamism of the region where the IsDB plays its important developmental role. The emphasis on inclusiveness, connectivity and Islamic Finance Sector Growth of the IsDB 10-year strategy as well as the six pillars of the President’s Five-Year Plan (P5P), which represents his transformative vision for the Bank, are aligned with the needs that its country members and beneficiaries are currently facing.

When examining the alignment of these strategic intents with the SDGs, of particular notice for me is the unequivocal commitment of the P5P to environmental sustainability, in my view, bridging a gap in the 10-year strategy. Closing a similar gap that I see in the 10-year strategy alignment with the SDGs concerning gender equity would also be desirable. These are precisely the two themes that we will be examining in detail tomorrow.

The recent 2018 Nobel Prize in Economics awarded to William Nordhaus and Paul Romer celebrates their work on technological innovation and long-term economic growth. Paul Romer said that, “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. Growth springs from better recipes, not just from more cooking.” The right ingredients and the order to use them are fundamental for promoting progress. I therefore believe that by emphasizing partnership, science, technology and innovation, appropriate blend of knowledge and finance, institutional competency, project quality and impact as well as environmental sustainability, as the President has called for (add to this gender equity), as key ingredients of its transformation process, the IsDB is assembling the right ingredients to produce long and lasting development results for the benefit of its members.

The IsDB effort for transformation is similar to the one that other MDBs such as the WB, the IDB and the ADB have recently undertaken and continue to experience. These processes have generated valuable lessons and we must profit from them, as I will point out in a moment.

To start with, the question is:  what does it take for an institutional transformation such as the one envisioned by the IsDB to be cemented over time?

Borrowing from a series of concepts that we developed in an evaluation on the subject of transformational engagements done under my direction at the World Bank Group, we can define a transformational process as one that leads to deep, systematic and sustainable change with the potential for large-scale, long lasting impact and development. This is the kind of change that we all envision when engaging in a deep institutional redirection.

And in my experience as a leader and evaluator in government and MDBs, there are five critical principles to observe for this sort of transformation to occur:

  1. Existence of a clear and shared vision for change within the organization;
  2. Guaranteed commitment and ownership of the process by the large majority of the institution;
  3. Development of institutional capacity and effective execution along the way;
  4. Introduction of a robust monitoring and feedback process based on a well-defined How-To and a clear set of indicators of success;
  5. Use of strong independent evaluation for accountability and learning on the results of the intended transformation.

Let me briefly refer to what I mean by these principles:

I pointed out to the existence of a clear and shared vision within the organization. A clear vision is critical to show the way and motivate the organization. This is evident. However, a clear vision is insufficient if it only exists in the hearts and minds of the leadership. Rather, it needs to be shared and understood by all members of the organization. It is the responsibility of the leadership not only to define the road ahead but also to constantly persuade and influence the members of the organization that the rewards of an uncertain but brighter future proposed by the transformation is better than the benefits of the certain but less productive present.  This by no mean is easy, for as policy and politics teach us, those who benefit from the tangible present tend to be more active -openly or silently- than those who will benefit from the promised future.

I referred to a guaranteed commitment and ownership of the process by a large majority of the organization. Related to clarity and understanding of the vision across the organization is the need for a critical mass to be truly committed to advance the vision and demonstrate strong ownership of it. And associated to this is the need for promoting the collective sharing of every manifestation of success, to maintain a sense of belonging and joint accomplishment during the transformation process. It is striking how often this simple principle is overlooked.

I spoke of development of institutional capacity and effective execution along the way. As much as the members of the organization are committed and show ownership, if the capacities, meaning the skillsets, organizational structure and processes, are not in place or if the execution is poor due to lack of discipline, resistance or similar, the crystallization of the vision will not occur. The limits of good visions and plans are defined by the resources and implementation standards that are invested in achieving them.

I mentioned the introduction of a robust monitoring and feedback process, based on a well-defined How-To and a set of clear indicators of success. I mean, clearly define not just why, where and what but also how you will get there and what success looks like.  And then Keep pace of the transformation process through explicit and implicit metrics, as well as ensure adaptation while moving on. I am referring to explicit and implicit measuring approaches during the transformation process because while measuring is important, as Cameron has said, “Not everything that can be counted counts, and not everything that counts can be counted.”

Finally, I identified the use of strong independent evaluation for accountability and learning as critical. While monitoring and feedback are important instruments for managing the transformation process, it is only through independent evaluation that the true results of the transformation can be judged. Evaluation as we know is a systematic process to objectively measure the quality, value and significance of policies, strategies, programs and projects. Evaluation needs not to be only ex-post or summative but it can immensely contribute through formative or real-time assessments, especially during a transformation process.

In fact, real time assessments can provide precious opportunities for learning, as many of our institutions have demonstrated in recent transformational initiatives.

With these principles in mind, I would like to point out to three processes that MDBs, in my experience, often find challenging to reform. First is the process of increasing the value of their knowledge services or improving the blend of finance and knowledge. Second, is coordinating their sovereign and non-sovereign structures and services. Third is rapidly upscaling their technological platforms with evident results.  

On the first, the reality is that while there is a need to increase financial commitments, our countries are demanding more unique and integrated solutions, enhanced by knowledge, to address their development problems; and our Banks need to improve their performance in this area. The challenge is to design appropriate methods to capture, store and deliver knowledge, both as an input and as a service.

On the second process, the effectiveness of our Banks is boosted when private and public sector intervention are well articulated. While the modus operandi of each of these two business lines must be respected, the common goal of promoting development and fighting poverty should prevail. There is no excuse to the need to act as One Bank Group.

Concerning the needed improvement of our technological platforms, resources do not seem the be an obstacle in our institutions; however, changing old ways of operating and designing the right platforms for the unique business of our banks has often proven to be challenging.

Value added by Independent Evaluation in MDBs

Let me elaborate further on the fundamental value added by independent evaluation in MDBs whether in normal times or in periods of transformation.  Independent evaluation is a central function in our institutions to promote accountability and learning. Allow me to say a word on each of these two dimensions.

With regards to accountability, the relationship between the Board and management pertains to what in economics and business we call the principal-agent dilemma.

Just as in any corporation or elected government, countries represented by the Board (principal) have entrusted upon management (agent) a mission and a set of resources, with the expectation that management delivers on such mission.

Because of asymmetric information, the depth of knowledge that the Board commands on the organization is normally insufficient for it to effectively perform its oversight function. Management command more and better information about the institution than the Board.

True independent evaluation helps closing this information gap and therefore supporting management to discharge its accountability duty and the Board to execute its oversight function. In other words, independent evaluation in MDBs helps both parties for them to effectively play their respective institutional and development roles.

Independence should receive the highest support not because of the interest of the evaluation department but because of the corporate commitment to promoting international standards regarding transparency, accountability and effective oversight of the mission entrusted to our institutions.

With respect to learning, the immense wealth of knowledge accumulated through serious independent evaluation should be put to work.

The influence of independent evaluation can take the form of what our discipline calls: a) Contextual use; b) Advocacy use; and c) Instrumental use. That is, utilization of evaluation as a source of reference for Bank’s operations; use of evaluation for supporting or promoting an interest or a cause of the Bank; or application of evaluation for decision-making purposes.

In other words, the spectrum of the learning function of evaluation is extensive and must be thoroughly explored by our organizations, taking advantage of every opportunity to enhance our ability to learn from successes and failures.

The evaluation function can do its best to address these two dimensions of our work. However, while independent, the evaluation function should not be isolated. Hence, all internal stakeholders – evaluators; management and staff; and the Board must work in harmony for independent evaluation to play its expected role.

Evaluators: Must be relentless in seizing opportunities to produce evaluations that are strategic, timely and relevant, and proactively stimulate the knowledge side of their work.

Management and staff: Must be open to enforce accountability as well as to learn from the lessons provided by evaluation on institutional successes and failures.

And the Board: Must be tenacious in exercising its accountability and oversight functions as well as in promoting the use of knowledge to improve operations and impact.

In sum, colleagues, my central message is that during transformational processes, a close attention to the set of principles as well as to the behaviors of the parties concerned that I have referred to, can greatly help our institutions to successfully renew themselves.  It can also help capitalize on the value added by the independent evaluation function. And this can only happen through the concerted effort of Board, leadership and staff, all acting as one Bank.

Conclusion

Precisely, let me close my remarks by quoting a Bedouin proverb that says, “The broth is cooking, and now we have to act as one”. The IsDB’s recipe for better development effectiveness has been set forth and it is now cooking. By working together as one, I trust that the IsDB will be able to accomplish the development ambitions it has embraced. And as you move forward with your institutional transformation, let me assure you that you will always have in us – especially IED - a trusted and reliable partner in development at your side.

Thank you – Shukran!