posted 22 Aug 2006 in Volume 10 Issue 1
Case study: Islamic Development Bank
Kicking off KM at the Islamic Development Bank
No two organisations – however much alike they may seem – are the same. However, the different qualities that embody the Islamic Development Bank (IDB), from its history and principles to its services and clients, make it a truly exceptional institution in almost every way.
In 2002, three years before its 30th anniversary, the bank began to realise that, like many other mature organisations, it was failing to capitalise on the full wealth of its collective experience and expertise, as embedded in the minds and everyday routines of its staff. Recognising that it risked losing some of their knowledge forever – particularly as many were approaching retirement – the IDB embarked on a journey to ensure that its unique characteristics would be preserved and that employees, partners and clients could use and build on this knowledge now and in the future.
Formally opened in October 1975, the IDB aims to foster social and economic development in its 56 member countries and many Muslim communities. Through its work building hospitals and schools, financing agricultural projects or installing electrical plants it shares many similarities with other development banks.
However, the IDB must operate in accordance with the principles of Shari’ah – Islamic law – which prevents it from charging or paying interest. To abide by this tenet, the bank has traditionally relied on its shareholders for capital as well as its ability to create innovative products and services, such as sukuk, Shari’ah-compliant bonds that can be bought and sold on the market.
To finance its business the bank has developed a number of financial instruments that reflect the brainpower and innovation of its founders and the institution as a whole. But while these accomplishments define the bank’s distinctiveness, little of this work has been documented or recorded. As more young people joined the organisation and more of the founders and founding staff retired, the organisation increasingly faced the question of how best to address this transfer of knowledge.
It became clear that knowledge management (KM) held many answers. The bank already had some initiatives underway, such as the Young Professionals Programme. But Dr Abdelaziz Mustafa, director of the human resources (HR) management department and adviser (HR and KM), felt that this did not go far enough.
“Assigning younger people to older people is not enough to ensure the transfer of knowledge from the older to the younger generation. There needs to be a breathing process between generations where one cannot exist without the other. This inhaling and exhaling ensures knowledge is shared so that new generations don’t have to reinvent the wheel. There is nothing better than knowledge management activities and processes to achieve this,” says Dr Mustafa.
Adding another dimension to this scenario is the changing environment that the bank operates in and the new role it must play. On the one hand, there are increasing demands for the IDB to establish funds for the least developed Muslim states. On the other, economically strong member countries are no longer as interested in using the IDB’s fiscal resources. Instead of project finance they are looking at leadership development, technology and capacity building, and the bank is expected to provide support.
As a result, trade financing, for example, has grown from being a small department into an independent corporation promoting trade among member countries in this area.
In response to these challenges, the IDB’s president established a task force to investigate knowledge management and deliver recommendations on turning the IDB into a true knowledge-based institution. As a first step, a KM steering committee, chaired by the president, was established.
Dr Mustafa was invited to take responsibility for initiating KM activities. But as he knew little about KM at the time, his first step was to investigate the experiences of similar institutions. He quickly found out that the World Bank was considered one of the most pioneering and respected organisations in the field. “We have a very strong relationship with the World Bank and work closely with it. After explaining what we were trying to do and asking for their advice I travelled to Washington to meet them and a team of five later came to Jeddah [in Saudi Arabia] to hold a couple of seminars at the bank.”
The overriding advice Dr Mustafa took from the World Bank was the importance of developing awareness and understanding for what knowledge is within the IDB and what KM can do.
Dr Mustafa also met officials involved in KM at the European Bank for Reconstruction and Development (EBRD) in London. “The EBRD’s model was very interesting and relevant to us as the institution is similar in size and has a similar number of member countries,” he says. “I told them we’d been working with the World Bank but I couldn’t see how we could replicate its work as it was so much larger.”
The EBRD faced a similar dilemma and had therefore been working with consultants to develop a programme more suited to its needs. Dr Mustafa’s next port of call, therefore, was to the consultancy that had worked with the EBRD, Sparknow.
Following an initial phone call to discuss the IDB’s embryonic KM activities, Dr Mustafa extended a trip to Europe to meet with Sparknow programme director Paul Corney and co-founder Victoria Ward in London. The objective was to identify how the IDB could best establish a knowledge management function, including an ‘oral histories project’ to stem the bank’s loss of memory and knowledge as staff retired or left.
“Paul and Victoria explained how these assignments were complementary and how Sparknow could develop a strategy framework that would guide the bank’s implementation of a KM function,” says Dr Mustafa.
Before the meeting Corney had sent Dr Mustafa a document setting out what Sparknow felt it understood about the IDB’s KM needs and the theory that played to these areas. This ‘playback’ method became a valuable tool for the Spark team after important meetings or major project milestones to relay what it had understood back to the client. Spark was aware that the IDB did not want to emulate the World Bank’s approach to KM and was looking for a more tailored programme. It was also concerned about introducing KM to an organisation of its size and the cultural issues it might face.
In December 2004, Sparknow was appointed to help create the bank’s knowledge management strategy.
A key part of Sparknow’s work with the IDB was the planning and preparation it put into every stage of the project. Corney identified the mix of skills and competences required from the team members, who all undertook additional training in areas such as ‘appreciative enquiry’ and pin-boarding techniques.
Understanding that the IDB values process and methodology, Corney ensured the team regularly played back its findings, provided the bank with detailed agendas for its work and held weekly conference calls with Dr Mustafa’s team.
There were three main elements to the initial KM strategy:
Definitions and awareness. Taking heed of the World Bank’s advice, the IDB asked Sparknow to help raise awareness within the institution about knowledge management;
Oral histories. Picking up on the bank’s desire to harness an oral histories programme, Stephanie Colton, head of Sparknow’s story practice, led the project that was presented to the bank at its annual meeting in June 2005;
Strategic framework. The creation of an action plan for the IDB’s short and long-term approach to implementing knowledge management.
With the planning finalised, the Spark team travelled to Jeddah. “We hit the ground running,” recalls Corney. “In the first week we held a series of workshops to start introducing the bank to knowledge management and met with most of the senior staff whose support would be critical in the months ahead.”
From its team of five, four were female – a significant contrast to the IDB’s 900 almost exclusively male staff. But that proved no barrier. “Their ability to work with people in the bank without any constraints has itself been an achievement,” says Dr Mustafa. “Even now they have an office at the IDB and people ask when they are coming back.”
Over the next few months the team became a regular feature at the bank as it worked to fully understand the IDB’s knowledge needs and devise a strategic framework for knowledge management. In the process, the Sparknow team found that the bank had many innate advantages that ought to help nurture a knowledge sharing culture:
The bank had tremendous tacit, explicit and spiritual assets – qualities that would be infused in the KM strategy;
It had close and complex relationships with its member countries as they are both its owners and clients;
These relationships and the challenges presented by Shari’ah-compliant finance have led to a high degree of inventiveness and innovation;
Prayer times provided one of the few opportunities for employees to meet informally and exchange knowledge;
The bank had a rich diversity of national cultures and highly educated people, which created a natural knowledge resource;
The storytelling traditions of most member countries, the shared language of Islam and sense of brotherhood within the bank created a vibrant exchange of words that would influence its KM approach;
Knowledge management had the president’s full support, making it the theme for many of his speeches in 2005.
Alongside these advantages sat certain barriers that the KM strategy would have to overcome:
Due to members’ dual roles as clients and owners, KM at the IDB had to connect directly to their aspirations to build knowledge economies;
The bank’s strong storytelling background was at odds with its bureaucratic and task-focused culture;
Bureaucracy could bury the important intelligence that comes from missions and internal communications could be cumbersome;
The design of the IDB’s headquarter building did not invite serendipitous encounters or collaborative meetings, aside from prayer times.
Definitions and awareness
For the strategy to work, every employee at the IDB had to recognise its objectives and the roles they would play in the bank’s transformation. A number of methods were used to raise awareness and gain staff buy in.
Ward and Corney led a number of pin-boarding sessions to capture the thoughts and knowledge needs from different areas of the bank. The aim was to encourage people to contribute and share their opinions on what KM at the IDB should look like.
But the introduction of such informal techniques surprised many. “People came to the sessions expecting the consultants to give presentations; one senior director even asked where their PowerPoint presentation was. But as the session and activities progressed and people became more engaged they realised that this was a more effective method for participation, knowledge sharing and learning,” says Dr Mustafa.
In addition to the pin-boarding sessions, Sparknow held meetings with the steering committee, facilitated themed workshops to test their hypotheses, carried out one-to-one interviews to uncover existing knowledge assets and undertook an organisation-wide, online questionnaire.
To conduct the knowledge profiles and interviews, Corney worked with storytelling expert Fiona Incledon. “We wanted to drive out some of the knowledge challenges that were resident in the organisation,” says Incledon. “We outlined what we would discuss with each interviewee beforehand and asked them about their work… We asked them for examples of good knowledge sharing, who they admired at the IDB and talked about some of the challenges they have faced.”
To support the findings from the knowledge profiles, a joint IDB/Sparknow team designed an anonymous online questionnaire intended to gather information and opinions, and flush out themes from the wider organisation by giving people the opportunity to contribute their ideas. The response rate was an impressive 40%.
While the interviews and other initiatives were underway, the bank’s vice presidents nominated individuals within their divisions to be trained as knowledge coordinators to ensure that the IDB would be able to perform these KM activities after the consultants were long gone. So far, 37 people representing different functions at the bank have participated in a five-day training course to help them understand what knowledge management is, why it is important for the bank and the bank’s KM objectives.
One of the projects the knowledge coordinators will be involved in is the creation of country insight reports. “From across the different entities in the bank we do a lot of work in our member countries… We have a wealth of information that at the moment is not readily accessible even to the people working in the country.” Once collected, segmented and stored, country insights will be available to all.
Led by Colton, the project aimed to harness the many stories told by the bank’s founding staff that had never been expressed in its formal records. Colton created a brief to introduce oral histories to the organisation and then invited 11 carefully selected people to participate, including the president
Drawing on her appreciative enquiry techniques, Colton’s interviews lasted between two and four hours and uncovered many stories that had not been heard before. “Most interviewees felt comfortable casting themselves as storytellers,” says Colton.
One of her favourite quotes came from a retired director during her first interview: “As I am the first one to be interviewed, I would like to say a few words. I want to try to avoid being like the grandfather that I am, telling fairy tales that all have happy endings. I will also try to avoid giving advice or rulings.”
A team of four trained volunteers helped Colton at every stage. Having conducted the interviews, an arduous and meticulous process followed whereby each interview had to be listened to, catalogued and segmented to produce a navigable online resource.
“The IDB collection is designed to offer users the choice of how they view the information,” says Colton. “Some may want to listen to the whole interview, others may wish to listen to certain topics.” Time codes, keywords, dates and quality-control ratings were attached as markers to each segment to aid searching.
“We had to ensure the organisation understood the point and value of the oral histories,” she adds, “and in terms of the interviews, we were careful to avoid self-aggrandising and stories that [just] wallowed in the good old days.” Colton also took away a number of lessons for future assignments:
1. You only get what you ask for. Know what you want to get out of the interview. Ask open questions. Follow the journey of the interviewee – the interviewer’s questions are minimal prompts;
2. Be interested. People may think their stories do not carry any value – even very senior people;
3. Listen and do not interrupt. Let people tell their story and hold back on following up on interesting points. People need to finish their thought to feel properly heard. Interruptions, even for clarification, can throw them off course;
4. Respect. It is their story, not yours – even if you think you’ve heard it told from a different angle.
Even though the bank already had a deeply rooted oral history, the KM function continues to encourage people to share knowledge this way. Dr Mustafa describes one initiative in particular intended to unearth more pearls of wisdom. “We are launching a story competition this year that will be open to all bank staff and clients. We want people to contribute stories that show their relationships with the IDB and the different activities we engage in.”
From the development programme’s eight components, Ward and fellow Sparknow co-founder Claudine Arnold synthesised the wealth of information, findings and stories it had accumulated and tested the hypotheses that emerged with key sponsors at the bank. From the first visit to Jeddah in February to its last in May, the Sparknow team presented its report to the bank on 12 June 2005.
Presenting the findings
The challenge was to transform the 91-page ‘Strategic Framework for Knowledge Management’ report, into a two-chapter book (see below), a living document reflecting the IDB’s style, culture and essence. “We wanted to create something that was visually attractive and compelling that would get people’s attention,” says Ward.
Chapter one described the bank and what KM could bring using words and quotes from the IDB’s own people, while also outlining short and long-term actions. The second gave more practical detail behind the proposals. This living document became a tool the bank could go on working with to make change happen.
Sparknow also presented the strategic framework to the IDB’s 20-man steering group and board. The presentation was a great success. The president even put back his next meeting in order to hear more and ask questions.
Later that month, Corney joined Dr Mustafa to the bank’s annual general meeting in Kuala Lumpur, Malaysia that brought together representatives from the bank’s member countries. During the event they displayed the oral histories and sat on a panel session where they described what they had achieved and the future of KM at the IDB.
Bringing the framework to life
The IDB plans to develop its KM activities still further, including the development of communities of practice and extending access to its knowledge to people outside of the bank. In the short term, the IDB has a roadmap for guidance.
However, in the longer term it will take energy and dedication, not just from people like Dr Mustafa, but from staff across the whole of the organisation to ensure that such success sticks and that the bank can build on it.
Dr Abdelaziz Mustafa can be contacted by e-mailing email@example.com