Bappenas Strategic Change Management and Institutional Strengthening Bappenas has welcomed the Bank's support to identify a strategic change management process and assist the agency in upgrading skills for several core functions. The purpose of the project is to support an internal change management process in the National Development Planning Agency so that they are better prepared to lead the Government of Indonesia in integrative, evidence-based policy planning and performance-based budgeting.  The Office of the Vice-Minister will oversee the development of the project and its implementation alongside other institutional reforms within the agency. The proposed IDF project will be implemented in three phases.  Component 1: Institutional Diagnostic Review. The first stage of the project will focus on reviewing current organizational arrangements and systems for each step of the policy cycle: analysis, evidence-based policy planning, budgeting, and monitoring and evaluation. The diagnostic study, carried out by independent process change consultants, will especially focus on how the agency responds to complex and cross-cutting issues that are government priorities, the inter-relationships between directorates and other departments, and the structural incentives and disincentives for inter-directorate coordination and monitoring the performance of implementing agencies. Component 2: Strategic Change Plan. During the second stage, the project will develop a medium-term action plan (2011-14) for supporting institutional re-structuring and enhancing core capacities across the agency. Activities will include: conducting exchanges with governments that have undergone change management processes; facilitating a series of workshops with agency leaders and staff to align group expectations, formulate change priorities and identify key capacity gaps across the agency; developing a change strategy and corresponding annual action plans consisting of specific and concrete activities that can be feasibly implemented, including plans for how to upgrade core skills; facilitating meetings with donors and development partners to encourage participation and provide support for elements of the plan; developing and implementing a communications strategy about the change process to ensure that staff understand and support the plan. Component 3: Targeted Core Skills Development. Activities in the third stage of the project will focus on strengthening core capacities and skills identified in the strategic change plan. The proposed IDF project will provide targeted trainings, focusing on integrative policy analysis and evidence-based planning, performance-based budgeting, and monitoring and evaluation. Complementary soft skills (including leadership, project management and communication skills) will support horizontal and vertical coordination across the government and better equip Bappenas to coordinate with implementing agencies. The development objective of the proposed grant is support an internal change management process in the National Development Planning Agency (Bappenas) so that they can more effectively carry out their functions for evidence-based policy formulation, especially on cross-sectoral issues that require a "whole of government" approach, and to develop enhanced capacities for emerging roles, which may include areas such as performance-based budgeting.