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The Evidence-Based Organization:A Platform for Innovation Professor Dr Jan Recker Woolworths Chair of Retail Innovation Information Systems School, Queensland University of Technology School
“The best way to create the future is to shape it” y f p Innovation, research and customer‐orientated transformation are key to surviving a rapidly changing retail landscape according to Woolworths Ltd CEO g p y g g p g Grant OBrien. Mr OBrien addressed the QUT Business Leaders Forum today saying the investment of nearly $1 million to fund a Chair of Retail Innovation would help the sector better recognize the needs of customers customers. http://hbr.org/2012/10/data‐scientist‐the‐sexiest‐job‐of‐the‐21st‐century/ar/pr http://www.news.qut.edu.au/cgi‐bin/WebObjects/News.woa/wa/goNewsPage?newsEventID=56077
Recognizing the relevance of Evidence Seeking an understanding g g of true cause-effect relations Using flawed decision models Relying on status (confidence) rather than facts (evidence) Realizing the availability of potential evidence Opposing tradition, intuition, folklore and rules of thumb
EVIDENCE-BASED DECISIONSBasic Concepts“Relying on valid and reliable evidence Relyingand translating them into practices thatsolve problems and innovateorganizations.”
Levels of EvidenceWhich level is the basis for your decisions? le el o r
What is your source of evidence? y External Where have other organizations produced relevant evidence? Where has research produced relevant evidence? Internal Where do we produce relevant evidence? Where can we produce relevant evidence?
Example – find your internal evidence p y“What can we learn about success from within our own company?” company?
Inserting scientific principlesInserting scientific principles Positive Deviant What is the Positive Deviant evidence for Positive Deviant Positive Deviant success? Positive Deviant Who is truly Positive Deviant Sales proces performance successful? Positive Deviant Why are they truly y y y ss successful? Average Which true root causes can we insert elsewhere? Number of customers
What Causes Performance? “It’s not necessarily the process” everyone follows the same process model f ll th d l “It’s not the competition” process performance independent from local context Reward mechanisms budget, incentives, degrees of freedom Individual motivation and the willingness to ‘do something extra’ Culture: focus on safety & on customers y Creativity: finding new solutions for products, display and service; willingly deviate from standardized process process.
The Underlying Model: “Research as a Service” Inserting scientific principles into emerging evidence‐ based organizations. b d i ti Research as an innovation support service. Research as an innovation support service Novel conceptual perspectives Rigorous scientific principles Quality empirical evidence Increased research bandwidth Unbiased observation Explores evidence internally and externally Ability to develop capability.
Wrap‐Up: From Confidence to Evidence Moving to reliable, valid and ultimately credible decisions Requires data and scientific analysis capabilities Requires data and scientific analysis capabilities Can be provided by university and research institutions, but are increasingly sought as internal capability Allows capitalizing on external and i All i li i l d internal evidence for l id f organizational innovation Means levelling of hierarchies Means levelling of hierarchies “If the decision is going to be made by facts, then everyone’s facts […]are equal. If the decision is going ’ f t [ ] l If th d i i i i to be made on the basis of people’s opinions, then mine count for a lot more. “ James Barksdale13 former CEO Netscape
Key Lessons Innovations require decisions about unstructured and complex problems. Risk of failure is high. Evidence-based decision-making increases g innovation reliability, credibility and ultimately chance of success. You do h Y d have access t – b t not awareness of – to but t f internal and external evidence. Data scientists are becoming an essential resource. resource
Prof. Jan ReckerWoolworths Chair of Retail InnovationInformation Systems SchoolQueensland University of Technologye firstname.lastname@example.org www janrecker com www.janrecker.comt janrecker