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Evidence-Based Management

Evidence-Based Management : Principles - Tools and Best Practices

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Evidence-Based Management

  2. 2. NO JOB IS MORE VITAL TO OUR SOCIETY THAN THAT OF A MANAGER. It is the manager who determines whether our social institutions serve us well or whether they squander our talents and resources. Henry Mintzberg The Manager’s Job : Folklore And Fact. Harvard Business Review ,, ,, RESPONSIBILITY
  3. 3. EFFECTIVE DECISION-MAKING depends on the managers' ability to base their practices on THE BEST AVAILABLE EVIDENCE rather than guts, assertions, hear-say, personal opinions...
  5. 5.  EBM is EVIDENCE-BASED PRACTICE applied to management.  The basic idea is that good-quality decisions should be based on a combination of CRITICAL THINKING and the BEST AVAILABLE EVIDENCE.
  6. 6. Source: EBM 3 4 5 2 1 Face the hard facts, and build a culture in which people are encouraged to tell the truth, even if it is unpleasant. Be committed to "fact based" decision making – which means being committed to getting the best evidence and using it to guide actions. Treat your organization as an unfinished prototype – encourage experimentation and learning by doing. Look for the risks and drawbacks in what people recommend – even the best medicine has side effects. Avoid basing decisions on :  untested but strongly held beliefs,  what you have done in the past,  or on uncritical benchmarking of what winners do.
  7. 7. Critical Thinking is one of the Top 10 Skills you need to thrive in the 4th industrial Source : The Future of Jobs revolution.
  8. 8. Evidence-Based Practice is about making decisions through the conscientious, explicit and judicious use of : ● the best available evidence ● from multiple sources. to increase the likelihood of a favorable outcome. 1. ASKING 2. ACQUIRING 3. APPRAISING 4. AGGREGATING 5. APPLYING 6. ASSESSING(Sicily Statement On Evidence-Based Practice, BMC Medical Education.) Evidence-Based Practice relies on 6 SKILLS :
  9. 9. To find the best available evidence from multiple sources : Sicily Statement On Evidence-Based Practice.  Translating a practical issue or problem into an answerable question.  Systematically searching for and retrieving the evidence.  Critically judging the trustworthiness and relevance of the evidence.  Weighing and pulling together the evidence.  Incorporating the evidence into the decision-making process.  Evaluating the outcome of the decision taken to increase the likelihood of a favorable outcome. 1. ASKING 1. ASKING 2. ACQUIRING 3. APPRAISING 4. AGGREGATING 5. APPLYING 6. ASSESSING
  10. 10. It is to use the best available evidence when making a decision by learning how to distinguish :  Science from folklore,  Data from assertions,  Fads from best practices,  Evidence from beliefs, anecdotes or personal opinions.
  11. 11. What counts as evidence : ● Every source of TRUSTWORTHY and RELEVANT information, ● Regardless of its origin (no discrimination). “In God we trust. All others must bring data.” – W. Edwards Deming
  13. 13. Scientific research published in academic journals : management research ranges from evaluating merger success, and the financial effects of incentives on performance to improving employee commitment and recruitment, etc.  Hard numbers : financial data, various statistics and rates.  Soft elements : feedback based on employee or customer enquiries (customer satisfaction, levels of job satisfaction).
  14. 14. This type of evidence is sometimes referred to as “tacit knowledge”. ● Different from intuition, opinion or belief, professional experience is accumulated over time through reflection on the outcomes of similar actions taken in similar situations. ● Professional experience reflects the specialized knowledge acquired by repeated experience and practice of specific activities, together with the ability to reflect critically on one's experiences and distill the practical lessons (Schön's Reflective Practice).
  15. 15. Stakeholders are any individuals or groups who may be affected by an organization’s decisions and their consequences. INTERNAL STAKEHOLDERS COMPANY EXTERNAL STAKEHOLDERS EMPLOYEES MANAGERS BOARD MEMBERS SUPPLIERS CUSTOMERS SOCIETY / MEDIA SHAREHOLDERS GOVERNMENT CREDITORS Stakeholder values and concerns (what is important to them) conditions their reactions to the consequences of the organization’s decisions. (eg short-term gain or long-term sustainability, employee well-being or employee output, organizational reputation or profitability, and participation in decisionmaking or top-down control)
  16. 16.  Beware of GROUPTHINK (Janis) : ''occurs when the desire for group consensus overrides people's common sense desire to present alternatives, critique a position, or express an unpopular opinion. Here, the desire for group cohesion effectively drives out good decision-making and problem solving.'' (MindTools article)  Avoid CULTURAL ALIENATION (Sigaut) : occurs when ''leaders are cut off from their base, administrations are cut off from reality, or the chain of authority lends a deaf ear to repeated warning coming from the base'' ( Work And The Social Bond).  Avoid ABSURD DECISIONS (Morel) : they ''should not be confused with simple mistakes. They are drastic and persistent mistakes. Those who make them act consistently and intensively in a way contrary to the desired aim.''(eg the Challenger explosion due to a previously identified problem of faulty joints)- Link to : Absurd Decisions and Highly Reliable Processes, C.Morel.
  17. 17. Data can be manipulated, thus influencing your decisions in a detrimental way.  Understand the ACTORS' STRATEGIES (MACTOR Method).  Beware of OFFICE POLITICS (''interferes with the information flow of a company. Information can be distorted, misdirected, or suppressed, in order to manipulate a situation for short-term personal gain''- Games At Work, Goldstein, Read, &Cashman).  Always seek the GENERAL INTEREST of the organization.  Beware of WATERMELON INDICATORS : green on the outside, red on the inside (OK / KO) – Practice random or regular audit.
  18. 18.  A STEREOTYPE is an exaggerated belief, image or distorted truth about a person or group — a generalization that allows for little or no individual differences or social variation.  BIAS is an inclination to present or hold a partial perspective at the expense of (possibly equally valid) alternatives. Bias impairs objective consideration of an issue or situation, and prevents a person from impartially evaluating facts that have been presented for determination. Read more about : Perception Biases,Logic and Decision Biases, Predictive Biases, Conformity Biases, and Probability Biases.
  19. 19.  Make use of the BLINDSPOT ANALYSIS , a technique which leads you through a process of checking your decision making against a list of common blindspots (see the related Matrix in the 'Best Practices' subsection). Link to : Decision Making In Business  A BLINDSPOT is a gap or sporadic failure we fail to identify in our reasoning or decision-making. Given that it is hidden by nature, we may not realize what goes wrong, which may lead to desastrous consequences.
  20. 20. Answer these questions in response to your current situation. If you answered “No” to any of these, do the work necessary to enable you to respond “Yes.” If you answered “Yes” to any of these, do the work necessary to enable you to respond “No.” Source :
  21. 21. ✔ Understand the “Data to Wisdom” path. ✔ Look for robust data : Critical Appraisal. ✔ Anticipate the kinds of evidence that quality decisions require. ✔ Think in terms of Value Added. ✔ Seek regular feedback. ✔ Practice Critical Thinking. ✔ Use HRO's Collective & Cognitive Meta-rules. ✔ Use the 5W Method of Factual Questioning. ✔ Use the 5 Whys of Root Cause Analysis. ✔ Use other specific tools.
  22. 22. The DIKW Pyramid / Hierarchy DATA Collection of related data with context and perspective Meaningful & useful data Organized information that provides guidance or initiates action Applied Knowledge Understanding that permits knowledge to be used NOISE and mis-information Raw / hard facts and figures INFORMATION KNOWLEDGE WISDOM Sorting Collecting Processing Organizing Analyzing Interpreting Decision Making Applying
  23. 23. Evidence is never perfect and can be misleading in many different ways. All evidence should be critically appraised by carefully and systematically assessing its trustworthiness and relevance. CRITICAL APPRAISAL BASIC QUESTIONING :  Where and how is the evidence gathered?  Is it the best available evidence?  Is there enough evidence to reach a conclusion?  Are there reasons why the evidence could be biased in a particular direction?
  24. 24. Identify the best available evidence you need in advance (before you need it) as even split-second decisions require trustworthy evidence : This is about preparing yourself and the organization to make key decisions well, even in situations of emergency, ● up-to-date knowledge of procedures etc, ● reliable instruments providing trustworthy evidence...
  25. 25. Highly Reliable Organizations (HRO) apply what Christian MOREL calls “collective meta-rules” which enable people to make well-informed and highly reliable decisions. Link to : Absurd Decisions and Highly Reliable Processes, C.Morel. These rules include : ● Working on a collegiate basis (power in decision-making shared among colleagues). ● Not punishing unintentional mistakes (error management - viewing transgressions as case law) ● Improving communication, and a better understanding of human factors...
  26. 26. Link to : Absurd Decisions and Highly Reliable Processes, C.Morel. ✔ Working on a collegiate basis. ✔ Suggesting contradictory ideas (to avoid groupthink). ✔ Monitoring consensus (expression of opposing views). ✔ Generalized interaction (systematic exchanges of information - interactions are a constant source of education). ✔ Monitoring the rifts (openings between the different parts of the organisation are sources of malfunctions). ✔ Not punishing mistakes (Error Management). ✔ Viewing transgressions as case law. ✔ Improvement in communication and visual aspects. ✔ Training in human factors. ✔ Lessons learned : Feedback from past experiences.
  27. 27. ✔ Avoiding simplifying analyses ; ✔ The need for a global vision ; ✔ A realistic appraisal of probabilities ; ✔ Not ‘sticking one’s head in the sand’ ; ✔ Sounding the alarm at the slightest provocation ; ✔ Realising that science cannot solve everything, and that sometimes one has to resort to solutions which are simple and reliable. Link to : Absurd Decisions and Highly Reliable Processes, C.Morel. Beside “collective meta-rules” HRO (Highly Reliable Organizations) also apply a series of “cognitive meta-rules” including:
  28. 28. “CRITICAL THINKING is the ability to gather and assess information and evidence in a balanced and reflective way to reach conclusions that are justified by reasoned argument based on the available evidence. Critical thinking is a key skill in the information age, valuable in all disciplines and professions. Critical Thinking in Global Challenges The University of Edinburgh ”
  29. 29. Ability to separate fact from opinion. Analyzing information objectively and accurately. Arrive at conclusions that logically follow from the available evidence Link to ThinkWatson
  30. 30. 3 KEYS TO CRITICAL THINKING R E D Recognize Assumptions : ● Ability to separate fact from opinion. ● Noticing and questioning assumptions helps to reveal information gaps or unfounded logic. ● Examining assumptions through the eyes of different people (eg the viewpoint of different stakeholders). Evaluate Arguments : ● Questioning the quality of supporting evidence. ● Understanding how emotions influence the situation. Learn to see gaps in logic, and opinion disguised as fact. ● Sorting through conflicting information. Draw Conclusions : ● Ability to bring diverse information together to arrive at conclusions that logically follow from the available evidence, without inappropriately generalizing beyond the evidence. ● Ability to avoid JTC : the jumping to conclusions bias.
  31. 31. WATSON GLASER CRITICAL THINKING APPRAISAL Critical Thinking assessments are used in professional and managerial recruitment
  32. 32. CRITICAL THINKING APPRAISAL An inference is a conclusion that a person can draw from certain observed or supposed facts. But this inference may or may not be correct. Recognition of Assumptions : An assumption is something presupposed or taken for granted. Consist in drawing conclusions from given statements, without letting your prejudices influence your judgement. Interpreting Information : consists in deciding whether a conclusion follows beyond a reasonable doubt from the facts given. Evaluation of Arguments : In making decisions about important questions, it is desirable to be able to distinguish between strong (directly related to the question) and weak arguments (related only to trivial aspects of the question). A critical thinking test will assess a person's ability to make inferences and assumptions, and to reason logically with arguments (5 sections) : 1. INFERENCES 2. ASSUMPTIONS 3. DEDUCTIONS 4.INTERPRETATION 5. EVALUATION
  33. 33. ● This simple method will enable you to explore and analyse any problem or situation by asking fundamental Wh- Questions. ● The original list was then completed with the 2H of HOW and How Much.
  34. 34. Note : The 3 MU’s of the Kaizen approach are : Muda (Waste), Mura (inconsistencies or variation) and Muri (Strain). Source : What is Kaizen (link)
  35. 35. ● Sakichi Toyoda, one of the fathers of the Japanese industrial revolution, developed the 5 Whys technique for quickly uncovering the root cause of a problem. ● The 5 Why Method is one of the 10 Principles of Kaizen (Continuous Improvement) : #8 Before making decisions, ask “why” five times to get to the root cause.
  36. 36. Why is John injured ? Because he had a fall. WHY? WHY? WHY? WHY? WHY? Why did he fall ? ...the floor was wet. Why was the floor wet ? ...there was a valve leaking. Why was the valve leaking ? ...there was a seal failure. Why did the seal fail ? was not maintained.
  37. 37.  A causal diagram like Ishikawa's Fishbone diagram will help you explore and analyse the situation at hand in a very systematic way.  The categories included in this cause and effect diagram cover the whole span of an industry : from 5 or 6 Ms (manufacturing) to 8 Ps (marketing) and 4 Ss (services).  Causes can be traced back to root causes with the 5 Whys technique. Source : Wikipedia
  38. 38. How to break down (in successive layers of detail) root causes that potentially contribute to a particular effect. CAUSES EFFECT PEOPLEMATERIALSMEASUREMENTS MACHINESMETHODSENVIRONMENT Primary Cause Secondary Cause PROBLEM OUTCOME Other Causes Source : Wikipedia
  40. 40.  The Deming Cycle (or Deming Wheel) is a very popular tool from Quality Management.  AKA the PDCA Cycle, it is a powerful approach to change and problem solving.  The Plan-Do-Check-Act Cycle serves the purpose of Continuous Improvement, and integrates feedback (the evidence you gathered).  The PDCA Cycle meets the requirements of the 3rd Principle of EBM : “Treat your organization as an unfinished prototype – encourage experimentation and learning by doing”. 
  41. 41. Link to Wikipedia
  42. 42. Plan: Identifying and analyzing the problem Do: Developing and testing a potential solution Check: Measuring effectiveness, and analyzing whether the solution could be improved Act: Implementing the improved solution fully Access article : MindTools
  43. 43.  Center for Evidence-Based Management (link)  Absurd Decisions and Highly Reliable Processes, Christian Morel (link)  Trust the Evidence, Not Your Instincts, J.Pfeffer and R.Sutton, New York Times, September 3, 2011.  The Manager’s Job : Folklore and Fact, H.Mintzberg, Harvard Business Review.  Sicily Statement on Evidence-Based Practice, BMC Medical Education.  Thinking Fast and Slow, D.Kahneman.  Models of Bounded Rationality, H.A.Simon. 
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Evidence-Based Management : Principles - Tools and Best Practices


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