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Transforming public-sector IT: An Interview with the World Bank’s CIO

Shelley Leibowitz left a top Wall Street CIO post for a chance to modernize IT at a global institution. She shares lessons learned from applying her private-sector experience.

December 2010 | byAamer Baig

Shelley Leibowitz has spent much of her career leading IT organizations at some of the financial industry’s top firms, including Morgan Stanley and Greenwich Capital (now part of Royal Bank of Scotland). A year ago, she left Wall Street for a new challenge: to become CIO of the World Bank Group. The heart of that opportunity involves modernizing the institution’s IT capabilities so that technology makes a vital contribution to its global mission of reducing poverty and promoting economic development. Shelley Leibowitz spoke with McKinsey’s Aamer Baig at the World Bank’s Washington, DC, headquarters about its new directions and managing change, as well as lessons learned during her transition.

The Quarterly: Tell us about your transition from the private to the public sector. What surprised you and what didn’t quite translate?

Shelley Leibowitz: One of the challenges for senior people coming into a new organization is that often they assume the current organization will be just like their prior one. They think they need to do things and have an impact starting day one. All that is important, of course, but I think what’s perhaps more important is to learn and understand the context. You need to understand the environment in which you’re operating to get that nuance right. It took me more than six months to really begin to understand how the organization operated—its governance, its charter, its approach. Coming from the top-tier financial firms, it’s easy to think you’ve known it all, done it all, seen it all. So there was probably a little bit of hubris.

We also asked Leibowitz what drives success in the public sector, and how she has reframed her approach since making the switch from the financial industry. Watch this brief video to hear her responses, or download a PDF of the video transcript.

Video

Leaving Wall Street for the public sector

Shelley Leibowitz, CIO of the World Bank Group, discusses the paradigm shifts she encountered after leaving the private sector.

The Quarterly: What are some of the insights from the private sector that have helped you shape a strategy for a public-sector organization?

Shelley Leibowitz: In the private sector, I was used to a very disciplined, very focused, very bottom-line type of organization where you want every dollar that’s spent to be well spent. That’s part of the DNA in the private sector. It’s not quite that in the public sector, so bringing this orientation is very relevant.

The Quarterly: Is there a private-sector model for change that has guided you?

Shelley Leibowitz: There’s no single answer, but one of the keys to major-change management is setting priorities and figuring out sequencing. You need to have clarity, focus, and structure so people can be effective and produce.

The Quarterly: In practice, what has that meant?

Shelley Leibowitz: We’re trying to break things into smaller segments, moving to a rule of 90-day delivery for everything. So there must be a visible, measurable 90-day impact, regardless of how large the project is. If your milestone is 18 months out, it seems like an awfully long slog, so having more immediate deliverables is really important, just on a psychological level. And, frankly, on a management level, this gives us clear, strong checkpoints so we know how we’re doing, so we know when things are going awry, so we can correct course along the way.

The Quarterly: Tell us about your vision for IT, or information management and technology—IMT—as you call it. How have you reframed the technology discussion at the World Bank?

Shelley Leibowitz: We use the term IMT rather than IT because technology is a channel and the vehicle and the conduit. It’s really the information flowing through that is a critical part of the equation, hence the term IMT. We have put into place a three-year vision, which really is about helping our businesses do what they need to do through the smartest, most effective use of technology.

The Quarterly: Describe some of this vision’s elements.

Shelley Leibowitz: At a conceptual level, it’s about value, agility, standards, risk allocation, and transformation.

We start with value, which above all is a focus on the value proposition of what we do, the services we provide to our clients. Agility is about being able to respond. We are a global organization trying to serve global development needs. As an example, the World Bank’s response to the financial crisis made it a very critical player with a big impact on developing nations.

Standards are important, [but] not to create bureaucracy. Rather, they allow us to create platforms to get things done quickly and effectively. Risk allocation is directly applicable from my old environment to the new one at the World Bank. No risk is not the right answer. We want to take some risks on emerging technologies. We want to take some risks on how to use technology in the economic-development process. We don’t want to take risks on things that have a much more core impact on our fiduciary and governance obligations. Finally, transformation is about the cultural and operating changes that enable all of the above.

The Quarterly: How do you launch a transformation of this magnitude?

Shelley Leibowitz: Fundamentally, it’s about the modernization of our capabilities. The transformation is led by the delivery of new capabilities, and it’s not just theoretical; we’re trying to function differently, with a very bottom-line focus. It didn’t seem to me that change for change’s sake—without seeing very quick, tangible results—would work.

The Quarterly: How are you using this capability building as a way to bring about change?

Shelley Leibowitz: One of our priorities is to empower our global and mobile workforce with technology, whether they are in a country office, a hotel room somewhere across the globe, an airport lounge, or sitting here in Washington. To do so, we need to build the ability to deliver innovative global mobile solutions going forward.

That’s one example. Another is our “access to information” policy. We are really throwing open the doors of the institution for all of our constituencies. At the World Bank, we produce critical development indicators that track how we are doing in terms of our mission of fighting poverty and of economic development. We have made those indicators much more public, much more accessible, and free. You can download them, you can compare them, you can add to them.

The Quarterly: I would imagine it’s a huge shift in philosophy when you move from restricting information to revealing as much as you can.

Shelley Leibowitz: A lot of the technology folks have worked long and hard on security, and there are still things, of course, that need to be tightly protected, from a fiduciary perspective. What we’re saying now is something very different, which is that this needs to be a porous institution, with porous walls. We want information to be available as a public good in a way that all of our constituencies can use. It’s a real change and clearly requires a shift in mind-set. This is an area where the rules are all changing, and in some ways we’re rewriting them and doing our best to navigate the new landscape.

The Quarterly: The federated operating model is a supporting element of your overall vision in governing IMT at the World Bank. What was behind the choice?

Shelley Leibowitz: Over the years, I’ve watched technology organizations swing between centralized operating models and decentralized operating models, with pluses and minuses for each. We have embraced something called a federated operating model, which is a hybrid.

At the bottom of the technology stack, for the core technology functions—such as computing, networks, and security—we have centers of excellence for shared capabilities. Here is where you want scale, leverage, efficiency, control, productivity. So these areas will be centralized.

In the middle part of the federated operating model are our application- and portfolio-management areas, where we develop and source applications for the World Bank Group’s diverse lines of business. Here we need domain expertise that can service those lines of business in a very direct way, in very close partnership with them. The application- and portfolio-management units are integrated with and embedded in the lines of business, so the model here is decentralized and distributed.

At the top is the strategic management and governance of our technology. This centralized level pulls everything together, dealing with questions like, “What is your overall strategy?” “What is your overall spending?” “What are your sourcing approaches?” “What are your risk approaches?”

The Quarterly: How have your business counterparts reacted to this?

Shelley Leibowitz: Very well. They understand the importance of an IT vision that business folks can understand and instinctively makes sense. Technology is a huge expenditure and a core part of any business, and this model allows us to contribute to the business in a way that really matters.

The Quarterly: How does innovation fit into your strategy? Given the breadth of the World Bank’s footprint, it may be a leader in some areas of innovation—perhaps beyond the private sector.

Shelley Leibowitz: I’m not sure I expected the organization to actually be as innovative as it truly is. For example, some of the bank’s work in Haiti in terms of geospatial mapping1 and some of the other things that we were able to do. The Haiti crisis mobilized people and unleashed their creativity. The issue now is how do you bring that creativity back and make it part of your DNA. A different example is how the World Bank, and the IFC2 in particular, have had a very big impact on developing communications infrastructure across the globe, in places like sub-Saharan Africa. We’ve had a hand in funding to get bandwidth to regions where it doesn’t exist, laying down fiber and getting communications in place to spur economic development.

The Quarterly: Within the World Bank, are you experimenting with innovative technologies, such as social networks?

Shelley Leibowitz: Social networking, of course, can mean everything from scheduling hiking trips on meetup.com to real business process collaboration. We are using social-networking tools for project team collaboration—all the way to using them for outreach to universities and other constituencies. It’s a way to give people access to the tremendous experts we have at the World Bank.

The Quarterly: As you move forward with your strategy, how are you motivating people? What are some of the differences with how you may have done this in the private sector?

Shelley Leibowitz: It’s very interesting because when I first started, it seemed to me like all the levers and all the motivational tools that I had in the private sector were not here or were dramatically different in the public sector. And actually, over time, I’ve come to think that that’s not necessarily the case. Clearly, the big factor that’s dramatically different is money and how people get paid. What isn’t different is passion and belief and wanting to contribute and wanting to feel gratification and wanting to feel that what you do matters. You know, I think in the private sector, the way that comes out is in terms of the client base and being in a competitive market, you really have to compete for your clients every day. In the public sector, and at the World Bank, people have such tremendous dedication and passion to our mission: to fighting poverty. To having impact in the developing world. So having a clarity of vision and having people feel that they’re making a difference is pretty good motivation.

The Quarterly: As you look back over the past year, what would you say has been your biggest success?

Shelley Leibowitz: We’ve taken a set of independent technology groups and, rather than force or mandate change, we have created a conversation about how we can work better and smarter. We’re asking, “How do we join together and spend the dollars of the institution and, just as important, the intellectual capital of the institution more wisely?”

The Quarterly: For CIOs and other top-level executives who might get a call to lead an organization in the public sector, what advice would you have?

Shelley Leibowitz: I felt privileged by the success I had achieved in the private sector and recognized that with privilege comes responsibility. The opportunity at the World Bank was, to me, perhaps a way of fulfilling that responsibility. For others considering a move to the public sector, I would advise them to do so if they can relate to and feel passionate about the mission of the organization. You really have the opportunity to make the world a better place for your children and the next generation.

The Quarterly: What about the differences in organizational culture?

Shelley Leibowitz: I think to go into any new job in any very new arena, you need to leave your ego and your value judgments at the door, because it’s just a different approach—it may take us in the public sector several years to close a large loan. I mean, that just seems incomprehensible in the private sector, but it’s a different equation. There’s a tremendous amount of planning and thought and groundwork along the way. The private sector works on a very different time horizon. And you have to decide that there’s no value judgment involved there. It’s just a different way of operating.

On the other hand, if I can take some of the learning from the private sector and from the financial industry—some of the lean-and-mean and get-it-done approach—and instill it into the public sector in a positive way, that’s a wonderful thing.

About the author

Aamer Baig is a principal in McKinsey’s Chicago office.

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