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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 O'Brien.
  Mr O'Brien 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
Evidence means ability to innovate
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 DECISIONS
Basic Concepts


“Relying on valid and reliable evidence
 Relying
and translating them into practices that
solve     problems     and     innovate
organizations.”
Levels of Evidence
Which 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 principles
Inserting 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
Finding the True Root Causes
      g
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 Barksdale
13                                                               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 Recker
Woolworths Chair of Retail Innovation
Information Systems School
Queensland University of Technology

e j.recker@qut.edu.au
w www janrecker com
   www.janrecker.com
t janrecker

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Presentation at Hargraves CONNECT: The evidence-based organization

  • 1. 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
  • 2. “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 O'Brien. Mr O'Brien 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
  • 4. 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
  • 5. EVIDENCE-BASED DECISIONS Basic Concepts “Relying on valid and reliable evidence Relying and translating them into practices that solve problems and innovate organizations.”
  • 6. Levels of Evidence Which level is the basis for your decisions? le el o r
  • 7. 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?
  • 8. Example – find your internal evidence p y “What can we learn about success from within our own company?” company?
  • 9. Inserting scientific principles Inserting 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
  • 10. Finding the True Root Causes g
  • 11. 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.
  • 12. 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.
  • 13. 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 Barksdale 13 former CEO Netscape
  • 14. 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
  • 15. Prof. Jan Recker Woolworths Chair of Retail Innovation Information Systems School Queensland University of Technology e j.recker@qut.edu.au w www janrecker com www.janrecker.com t janrecker