The Evolution of the Knowledge Bank

In 1996, World Bank president James Wolfensohn announced a change in the way the bank would accomplish its unchanging mission of reducing global poverty. He contended that the bank should become a knowledge bank, as focused on disbursing the knowledge assets poor and developing countries needed as it was about providing economic support for development projects. Until then, the World Bank thought of itself mainly in traditional banking terms. Its officers had considerable knowledge of economic development that they used to help define and evaluate projects, but that knowledge was generally considered secondary to the organisation’s financial assets, a tool for deciding how its capital should be employed. At this time, economists and business thinkers were describing the birth of a new global economy, where knowledge was outstripping material resources and capital as a source of wealth. Taking heed of these predictions, Wolfensohn asserted that the knowledge the World Bank accumulated through its participation in development projects around the world was as valuable as, or indeed more valuable than, its financial resources. Knowledge was a powerful poverty-reduction instrument in its own right. Putting it to good use – getting it to the bank officers and clients who needed it when they needed it – would require a new definition of the bank’s assets, new mechanisms and behaviours, and a complex set of changes in how the bank thought and functioned. The idea of the knowledge bank was revolutionary, but the process of creating it proved to be more of an evolution. In 1997, the bank’s shareholders and management agreed to finance a 30-month series of changes in how the institution did business. The concept was called the Strategic Compact and included plans to shift resources from administration to front-line operations, develop new financial products and advisory services, decentralise activities to the field, and strength the creation, sharing and application of knowledge. During the Compact’s term, some $50m a year were spent on the creation of a knowledge-management system, including the development of knowledge communities supported by knowledge managers and co-ordinators in operational units that facilitated and encouraged cultural change to foster knowledge sharing. Seven years after Wolfensohn articulated this vision, the bank’s 2003 Knowledge Forum was an opportunity to evaluate its progress and discuss what remained to be done. Carla O’Dell, president of the American Productivity and Quality Center and one of the forum participants, defined five stages of knowledge sharing: vision, strategy, pilot projects, expansion and institutionalisation. She noted that the bank was now well on its way to the fifth stage. The history of our progress and continuing efforts to turn the vision into a reality offer useful learning about what does and does not work. It also gives insights into the toughest challenges: