Evidence Based Management (EBM).
What is EBM?
The basic idea of Evidence Based Management is that good-quality decisions should be based on a combination of critical thinking and the best available evidence. Although all management practitioners use evidence in their decisions, many pay little attention to the quality of that evidence. The result is bad decisions based on unfounded beliefs, fads and ideas popularised by management gurus. The bottom line is bad decisions, poor outcomes, and limited understanding of why things go wrong.
Evidence Based Management seeks to improve the way decisions are made. It is an approach to decision-making and day-to-day work practice that helps practitioners to critically evaluate the extent to which they can trust the evidence they have at hand. It also helps practitioners to identify, find and evaluate additional evidence relevant to their decisions. We use the following definition of Evidence Based Management, which also describes the main skills required to practice in an evidence-based way:
Evidence Based Management is about making decisions through the conscientious, explicit and judicious use of the best available evidence to increase the likelihood of a favorable outcome from multiple sources by
1. Asking: translating a practical issue or problem into an answerable question
2. Acquiring: systematically searching for and retrieving the evidence
3. Appraising: critically judging the trustworthiness and relevance of the evidence
4. Aggregating: weighing and pulling together the evidence
5. Applying: incorporating the evidence into the decision-making process
6. Assessing: evaluating the outcome of the decision taken
Why do we need EBM?
Most management decisions are not based on the best available evidence. Instead, practitioners often prefer to make decisions rooted solely in their personal experience. However, personal judgment alone is not a very reliable source of evidence because it is highly susceptible to systematic errors – cognitive and information-processing limits make us prone to biases that have negative effects on the quality of the decisions we make. Even practitioners and industry experts with many years of experience are poor at making forecasts or calculating risks when relying solely on their personal judgment.
Practitioners frequently also take the work practices of other organizations as evidence. Through benchmarking and so-called ‘best practices’ practitioners sometimes copy what other organizations are doing without critically evaluating whether these practices are actually effective and, if they are, whether they are also likely to work in a different context. Benchmarking can demonstrate alternative ways of doing things, but it is not necessarily a good indicator in itself of what would work in a different setting.
At the same time there are many barriers to evidence-based practice. Few practitioners have been trained in the skills required to critically evaluate the trustworthiness and relevance of the information they use and most practitioners pay little or no attention to evidence from the scientific literature or from the organization, placing instead too much trust in low-quality evidence, such as personal judgment and experience, ‘best practices’ and the beliefs of corporate leaders. As a result, billions of dollars are spent on management practices that are ineffective or even harmful to organizations, their members and their clients.
What counts as evidence?
When we say ‘evidence’’, we mean information, facts or data supporting (or contradicting) a claim, assumption or hypothesis. Evidence may come from scientific research suggesting generally applicable facts about the world, people, or organisational practices.
Evidence may also come from company metrics or observations of practice conditions. Even professional experience can be an important source of evidence, for example, an entrepreneur’s past experience of setting up a variety of businesses should indicate the approach that is likely to be the most successful. Regardless of its source, all evidence may be included as long as it is judged to be trustworthy and relevant.
Instead of basing a decision on personal judgment alone, an evidence-based practitioner finds out what is known by looking for evidence from multiple sources. According to the principles of Evidence Based Management, evidence from four sources should be taken into account:
Practitioners - The professional experience and judgment of practitioners
Scientific literature - Findings from empirical studies published in academic journals
Stakeholders - The values and concerns of people who may be affected by the decision
The organization - Data, facts and figures gathered from the organization
What to do next?
Substituting facts for conventional wisdom
Contact Caidema to start you and your organisations journey to become an evidence based organisation.