Reflect & Learn

Recent developments have put the IMF in the spotlight. We might be jumping on the bandwagon but we think the IMF provides an interesting opportunity to discuss organizational assessment. Rest assured, it won’t be based on the recent scandal!

This year, the IEO — the independent evaluation of the International Monetary Fund — released its evaluation of the “IMF Performance in the Run-Up to the Financial and Economic Crisis” which mainly consisted of the assessment of the performance of the IMF prior to the financial and economic crisis and looked into the surveillance practices that were in place.

The evaluation resulted in a harsh but necessary critique of IMF practices. In short, the evaluation said that the IMF failed to see the signs leading up to the financial crisis due to several organizational reasons, most notably:

·         Cognitive biases and groupthink e.g. it was believed and remarked widely throughout the organization that a financial crisis could not happen in a large advanced economy. This is a cultural phenomenon typically found by assessing organizational norms and values (motivation in our assessment).

·         Organizational structure e.g. because the IMF operates in silos, information is not shared beyond units and departments. The organization was therefore not able to connect the dots and predict the crisis. 

We have argued that organizational assessment is an essential component or tool for every organization.  OA provides an opportunity to study organizational results and detect the factors that support or hinder their achievement. In this case, the IMF IEO uncovered some organizational practices that significantly affect the performance of the IMF. It is also very important to note that the IMF board and senior management both accepted these criticisms and indicated they would make changes. 

In this case, OA was used as an ex post review.  Today, organizations are using OA as a diagnostic assessment.  What are your thoughts and experiences?  Let us know how you are using or would like to use OA!