Outside Article Four

11/23/2008

 

Barney, Matt (2008). The Thee Stooges of Operational Risk: Advances in Leadership Due Diligence & Rasch Measurement. The Scientific Leader. Copyright, Human Capital Growth, Inc.

 

Link to Article

 

 

In this article Barney highlights organizational disasters caused by poor leadership and highlights the ineffectiveness of traditional assessment tools in determining organizational risks, particularly operational risks caused by poor leadership. He briefly highlights the features of Six Sigma, and further argues that traditional assessment tools fail to address organizational risks associated with poor leadership.  He advocates for the use of computer adaptive measurements select and develop executives using psychometric measurements developed by Danish statistician George Rasch and computer-adaptive technology to detect performance in high stakes decision simulations. He argues that computer adaptive measurement approaches more effective than traditional assessments such as surveys and questionnaires because they are too imprecise, take too long to administer, and are difficult to edit.

This article was of interest to me because it demonstrates the role of leadership in operational risks.  I was particularly interested in learning how organizations could mitigate risks due to leadership factors.  Inherent in this paper is the fact that operational risks can be caused by poor leadership skills. All organizations, regardless of type, need effective leaders.  This article was helpful in explaining how psychometrics could be used to select and develop transformational leaders. 

Another reason this article was of interest is because I’m exploring Six Sigma as a form of organizational change for our class project.  One of the primary criticisms of this approach is that is neglects the ‘human element’ of organizational change.  This aritilce demonstrates how Six Sigma and psychometric analysis can be integrated in order to facility effective organizational change.

Also of interest is the parallels that can be drawn from this article and various themes from this course.  One parallel is that effective leadership involves influencing others to perform tasks, which he asserts entails utilizing behaviors, traits, and rewards to inspire people to follow.  In particular he noted that leaders must be perceived as powerful, must inspire and motivate followers, must provide intellectual stimulation, and must nurture individual relationships with employees.  While Burke (2008) argues that there are many definitions of leadership, both Burke (2008) and Barney (2008) cite components of leadership outlined by Bass (1999).  Bass (1999) indicates that leadership to some degree involves inducing others to perform.  Bass further points out that an effective transformational leader must be charismatic and inspirational.  His assessments of leadership factors are consistent with the findings of the studies cited in Burke’s book as well as evidenced-based literature presented by Barney (2008). 

The themes of this course have demonstrated the complexities associated with organizational change and development.  Leadership is a key component that can determine the success or failure of an organizational.  This article was useful in highlighting considerations for mitigating operational risks due to poor leadership in organizations.