Evidence-Based Management, Teaching Managers to Make Better Decisions

Evidence-Based Management Teaching Managers to Make Better Decisions

Denise M. RousseauH.J. Heinz II University Professor of Organizational Behavior

Carnegie Mellon UniversityPittsburgh, PA USA

EBMgt is the practice of making organizational decisions based upon conscientious use of

1. Science-based principles & knowledge

2. Valid & relevant facts

3. Critical thinking aided by decision supports

4. Ethical considerations (i.e., effects on stakeholders)

What is Evidence-Based Management?

Better Decisions by Using Practices that Work (and avoiding those that don’t!)

Defensible Decisions that Stand Up to Scrutiny (using best evidence and best process)

Developing Expertise throughout a Career (experience can be a poor teacher--bad habits!)

20 years of valid experience is different than 1 year of experience repeated 20 times!

Why Should We and Our Students Care about EBMgt?

What does EBMgt Look Like?

Evidence-based Piloting?

Chesley Sullenberger, USAIR pilot, has been a visiting scholar at UC Berkeley’s Collaborative for Catastrophic Risk Management since 2007

Does research on how to make decisions to maintain safety despite technological complexity and crisis conditions

1. Use of Scientific Findings

Has written and analyzed aviation accident reports for over 20 years

2. Reliance on Reliable and Valid Organizational Facts

Used Decision Aids to Support Good Decision: As Sully considered what decision to make that day, he had his copilot review and follow all checklists on board relevant to crash landings

Formal Education to Prime His Skills: Sully is a graduate of the U.S. Air Force Academy and holds masters degrees from both Purdue University in Industrial Psychology and the University of Northern Colorado in Public Administration

3. Mindful Decision Making: Becoming Decision Aware

The last person to leave the plane, Chesley Sullenberger twice walked the plane’s aisle to check all passengers were off

Sully’s last act onboard was to grab the passenger list. Used on-shore to verify rescue of all passengers and crew

4. Ethics and Responsibility to Stakeholders

In Sullenberger’s Own Words…

“One way of looking at this might be that for 42 years, I've been making small,

regular deposits in this bank of experience, education and training.

And on January 15, the balance was sufficient so that I could make a very large withdrawal.”

How Is Sullenberger’s Example Relevant to Your Own Leadership

Development?

EBMgt is a means to improve decision quality.

It’s a career, not a course.

Evidence-based practice movements abound in medicine, education, and public policy

Management research from psychology, engineering, operations research (ETC.) yields 1000s of studies annually

Internet (scholar.google.com) gives ready access Innovative companies now hiring “chief evidence

officers” Public demands accountability (quality decisions that

are defensible)

The Zeitgeist

EBMgt Overcomes Limits of Unaided Decisions

Bounded Rationality

The Small Numbers Problem of Individual Experience

Prone to See Patterns Even in Random Data

Critical Thinking

Decision Supports

Research

• Large Ns > individual experience

• Controls reduce bias

The “Human” ProblemEvidence-Based Practice

Three approaches

Push: teaching management principles based

upon a convergent body of research.

Pull: teaching students how to find, appraise

and apply the evidence from research and

their own organizations.

Process: focus on the context, steps in

decision making and ethics

1. Get evidence into the conversation

2. Teach/Learn Evidence in Manager’s Area of Practice

2a Teach/Learn Use of Scientific Evidence

2b Use Reliable and Valid Business

3. Learn to Gather Evidence

4. Become “Decision Aware”

5. Reflect on decision’s ethical implications

Five Good EBMgt Habits

#1 Get evidence into the conversation Regularly ask “what’s the evidence…?”

Illustration- Discuss with your seatmates…

What’s a practice in your organization that you suspect might not be NOT evidence-based?

Five Good EBMgt Habits

#2 Teach/Learn Evidence in Manager’s Area of Practice

Focus on Action Principles Where Science is Clear (On-going Practice of A Professional Manager)

Focus on Business Facts based on valid metrics relevant to your decisions (On-going Practice of Responsible & Transparent Organization)

Five Good EBMgt Habits

Evidence is not the same as ‘proof’ or ‘hard facts’

... can be

- so strong that no one doubts its correctness, or

- so weak that it is hardly convincing at all

What is evidence?

Evidence of effect (do!)

Evidence of no effect (don’t!)

No evidence of effect (research!)

Don’t confuse

#2a Teach/Learn Use of Scientific Evidence

Focus on Action Principles Where Science is Clear

Rely on Science-based Sources Example: Locke’s Handbook of Organizational Behavior

(access electronic copy for free)

Peer-reviewed research, especially meta-analyses

Reduce dysfunctional variations in practice

Build effective routines, procedures, checklists

Five Good EBMgt Habits

#2a Teach/Learn Use of Scientific Evidence

Best Scientific Evidence is based on large N (sample size of

people/organizations)

well-controlled studies with comparison groups &/or longitudinal data

peer-reviewed

Five Good EBMgt Habits

Peer Reviewed Journals

#2b Use Reliable and Valid Business Facts

Best Business Facts are large numbers sampled relative to population

(not single or isolated cases, e.g. %sales/# sales calls)

linked to context (season, location, #users, etc.)

provide key indicators for business decisions

Five Good EBMgt Habits

Illustration--Discuss with your seatmates…

What indicators does your organization most commonly use to make important decisions?

Are these the “best business facts” you need to make these decisions?

What indicators would be more useful, if you could get them??

Five Good EBMgt Habits

# Medication errors in Unit 1 were 200% greater in 2011 than Unit 2’s. Is patient safety worse in Unit 1? Depends on number of unsafe incidents divided by # patients or # procedures—needs a control.

Mike has w/10 subordinates & 20% turnover while Kim has 55 employees & 10% turnover. Is retention better in one? Hard to determine. Small N’s have greater bias and are more variable.

McDonald’s stores average 300+% turnover/year. Does Mickey D. have a problem? Depends on industry comparison and business strategy.

Company A managers focus decisions on monthly cost, downtime and revenues. Company B managers focus on service quality, employee retention and profitability by customer category. So what? B’s more diverse performance criteria can promote attention to longer-term and growth-oriented outcomes. A’s narrower economic focus can promote shorter-term thinking.

Help Learner How to Interpret Business Facts

#3 Learn to Gather Evidence

Structure and pose a managerial question

Search for best available evidence (check out Google Scholar or CEBMa website)

Critically appraise information found

Apply relevant case information to decision

Write down the decision made, assumptions, and expected outcomes

Evaluate outcomes over time

Five Good EBMgt Habits

Gathering Evidence is a 5-step approach

1. Formulate an answerable question (PICOC)

2. Search for the best available evidence

3. Critical appraise the quality of the found

evidence

4. Integrate the evidence with managerial

expertise and organizational concerns and apply

5. Monitor and evaluate the results

Five Good EBMgt Habits

What kind of evidence are we looking for?

Studies with a design that best answers your question

Studies with the highest level of evidence

Getting the (Scientific) Evidence

Levels of internal validity

Explanation

Which study for which question?

Levels of internal validity

It is shown that …

It is likely that …

Experts are of the

opinion that …

There are signs

that …

Learning through play !

Try all buttons

Make lots of mistakes

Have fun!

Just do it!

Practice Searching for Evidence

Using “Google Scholar”

#4 Become “Decision Aware”

Identify different kinds of decisions learners face? What kinds of different approaches are used to them? Why?

How can you determine whether you made a “good decision” when you cannot know the outcome? (The answer to this question is what is known as “decision quality”)

Five Good EBMgt Habits

“Decision Awareness” Promotes Decision Quality

To manage decisions, know what decisions must be made.

Map out decisions that affect key outcomes. Who is responsible? (Are they prepared?)

What information is required? (Will it be available when needed?)

Five Good EBMgt Habits

Five Good EBMgt Habits

Awareness Calls Attention to Decision Process. Proper Processes Improve Decision Quality

What is the process for making the decision?

Different processes work better…

- for routine decisions (create validated checklists and action plans)

- for decisions with known unknowns (systematic sequence of considerations)

- for decisions with unknown unknowns (pilot-tests and trial/ experiment)

Decisions have an “aftermath” and a “pre-math” that a good manager actively manages. Is the decision well-managed? Help make it so.

Using Evidence Well Requires Your

Own Critical Judgment

#5 Reflect on Decision’s Ethical Implications

Who are stakeholders for this decision?

Possible effects?

How might the decision be altered to optimize positive

stakeholder effects and reduce negative?

Five Good EBMgt Habits

Scientific Principles for Effective Teaching

Set learning goals (2-5)

Pre-test: where does learner stand on learning goal before course

Build opportunities for practicing those learnings throughout

course (curriculum)

Post-test: Measure progress on each learning goal and provide

feedback

Feedback & Redesign: Use feedback to make course more

effective over time

Five Good EBMgt Habits

Turning evidence into practice

Evidence based management:closing the gap between research and practice

Turning Evidence into Practice & Practice into Evidence

Turning evidence into practice

J. Ehrlinger, K. Johnson, M. Banner, D. Dunning, J. Kruger. (2008) Why the unskilled are unaware: Further explorations of (absent) self-insight among the incompetent. Organizational Behavior and Human Decision Processes, 105,(1) pg. 98

E.A. Locke (ed.), Handbook of Principles of Organizational Behavior, 2nd edition, 2009. Malden, MA: Blackwell.

D. M. Rousseau (2012) Oxford Handbook of Evidence-Based Management, New York.

D.M. Rousseau, D.M. & E. Barends (2011) Becoming an evidence-based manager. Human Resource Management Journal, 21, 221-235.

D.M. Rousseau, J. Manning & D. Denyer (2008) Evidence in Management and Organizational Science: Assembling the field’s full weight of scientific knowledge through reflective reviews. Annals of the Academy of Management, 2, 475-515.

R.C. Schank, D. Llyras & E. Soloway (2010) The future of decision making. New York: Palmgrave Macmillan.

J.F. Yates. (2003). Decision management. San Francisco: Jossey-Bass.

J.F. Yates & M.D. Tschirhart (2006). Decision making expertise. In K. A. Ericsson, N. Charness, P. J. Feltovich, & R. R. Hoffman. (Eds.). Cambridge handbook of expertise and expert performance (pp. 421-438). New York: Cambridge University Press.

J.F. Yates, E.S. Veinott & A.L. Patalano (2003). Hard decisions, bad decisions: On decision quality and decision aiding. In S. L. Schneider & J. C. Shanteau (Eds.), Emerging perspectives on judgment and decision research (pp. 13-63). New York: Cambridge University Press.

Got Evidence? References

Turning evidence into practice

Appendix: How to conduct a CAT

CAT: Critically Appraised Topic

CAT: Critically Appraised Topic

A Critically Appraised Topic (CAT) is a structured, short (3

pages max) summary of evidence on a topic of interest,

usually focused around a practical problem or question. A

CAT is like a “quick and dirty” version of a systematic review,

summarizing the best available research evidence on a topic.

Usually more than one study is included in a CAT.

Examples: http://www.cebma.org/presentations/

CAT: structure

1) Question (PICOC)

2) Background / context

3) Search strategy

4) Results / evidence summary

5) Comments (limitations)

6) Conclusion

7) Practical relevance

8) References

Asking the Right Question?

Asking the Right Question?

Does team-building work?

Does leadership development training work?

Does management development improve the performance of managers?

Does employee participation prevent resistance to change?

Is 360 degree feedback effective?

P = Population

I = Intervention (or success factor)

C = Comparison

O = Outcome / Objectives

C = Context

Answerable Question: PICOC

Scenario: You are a consultant, your client is an insurance company, there are plans for a merger, you have heard that the other company has a different culture, you want to know if this will effect the outcome

P = Organizations with a different corporate culture

I = Merger

C = Organizations with a similar corporate culture

O = Long term profitability

C = Profit organizations, competitive market

Answerable Question: PICOC

Search terms

Operationalise your Pico elements!

O = long term profitability?

Share holder value? Return on investment? Return on

assets? EBIT? Employee productivity? Profit margin?

Competitive position? Corporate image? Innovation

power? Market share? Customer satisfaction?

The problem with finding evidence:

the abundance of literature

Searching Evidence

Searching evidence

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Postgraduate Course

… and not unequivocal

Searching Evidence

Evidence-based Searching

In a systematic and transparent way searching for the “best” evidence

Part of EBMgt where decision maker is not a ‘subject matter expert’

Searching Evidence

What kind of evidence are we looking for?

1. Studies with a design that best suits the research question

2. Studies with the highest level of evidence

Searching Evidence

Searching evidence

Where do we search?

Databases

ABI/INFORM

Business Source Elite

PsycINFO

Web of Knowledge

ERIC

Google Scholar

Searching evidence

How do we search?

Search Strategy

Search Strategy

1. Determine subject

3. Select Keywords

4. Select Suitable Information Sources

5. Run Search Query

2. Formulate Answerable Question

Search Strategy

Why do we need a search strategy?

Promotes deeper learning about your

question

Leads to better yield of quality research.

Saves time in the long run.

Two search strategies

Search strategy

Building blocks methodSnowball method

(Don’t forget to use pointer knowledge along the way)

Snowball method

Starting from one book or article, you search for other literature on the same topic.

Snowballing to older publications by finding out which

publications were used by the author (see bibliography of

book or article).

Snowballing to more recent publications by finding out

how often that book or article has been

cited by other authors (see Web of

Knowledge or Google Scholar).

Synonyms or

related terms

• ….

• ….

• ….

• ….

Synonyms or

related terms

• ….

• ….

• ….

• ….

Synonyms or

related terms

• ….

• ….

• ….

• ….

Building blocks method

Synonyms or

related terms

• ….

• ….

• ….

• ….

Keyword 1 Keyword 2 Keyword 3 Keyword 4

AND AND AND

OR OR OR

Example: You are a consultant, your client is an insurance company, there are plans for a merger, you have heard that the other company has a different culture, you want to know if this will effect the outcome

P = Organizations with a different corporate culture

I = Merger

C = Organizations with a similar corporate culture

O = Long term profitability

C = Profit organizations, competitive market

Search terms

P = Organizations with a different corporate culture #2

I = Merger #1

C = Organizations with a similar corporate culture

O = Long term profitability #3

C = Profit organizations, competitive market

Select Keywords

1. Underline the most important keywords

2. Number the order of importance

corporate culture: organizational behavior/character, corporate identity

merger: acquisition, take-over, fusion, combination, unification

profitability: profit, advantage, return on investment, shareholder value

The keywords of your search query may be enough.If not, select more words by using:

Select keywords

synonyms

alternate spelling, translations

related terms / words / subjects

narrower or broader terms

www.scholar.google.com

www.scholar.google.com

useful search

specifications