Profile & Background
The IDB is the main source of multilateral financing and expertise for sustainable economic, social, and institutional development in Latin America and the Caribbean. The bank’s Structured & Corporate Finance Department (SCF) is responsible for the financing of large banks and private sector investments.
Challenges
SCF faced a critical turning point. SCF provides loans to the private sector and must strive to meet loan volume targets and rates of return. The organization’s lending targets were significantly increased, creating new pressure to increase loan deal throughput. But, by definition of their mission, SCF must also work to drive social and environmental developmental outcomes.
Hence the key question: How does an organization of driven bankers with clear profit motives also create a culture to ‘do good’ and generate developmental impacts?
Solution
SCF chose to implement a deliberate strategy and execution process to drive change. Leadership and a large number of participants across the organization worked intensively over four months to create a new vision, strategy map, balanced scorecard and strategy review process to provide the mechanism for focus and alignment.
Results
With the new strategy in place, SCF leadership established a Strategy Management Unit with functional authority and the appropriate skills to manage the strategy execution cycle. Today, SCF is driving the unification of loan volume and developmental outcomes through strategy management review meetings that reinforce the focus on the clarified strategy, the measures of progress, and the execution of their strategic initiative portfolio.
Conclusion
Organizations that face conflicting priorities require a foundation and language from which to provide clarity and to communicate expectations across a workforce. A disciplined strategy management approach, as shown be IDB SCF, represents a proven best practice to accomplish this change and to realize improved results.