How do you make management decisions? Based on age-old accepted conventions and norms or available evidence and resources?

No matter your work and position, making decisions is part of your life. Be it small choices between coffee and tea or big decisions regarding your career. The Evidence Based Management approach will provide solid objective foundations for better decision-making.

When you are a leader or manager, you often need to make decisions on your project that will significantly impact productivity, performance, and profitability. 

If you want your outcome to be positive, you need to manage your project and team based on evidence and not obsolete conventions and practices. How? By following the evidence-based management approach.

What is Evidence based management, and why do we need it in businesses?

Evidence-based management or EBM is an approach to management and decision-making using critical thinking based on the available evidence and resources. It is part of the more significant movement, evidence-based practice.

Initially, the field of medicine adopted evidence-based practices in the 1990s. Then, it was called evidence-based medicine and aimed at combining the medical practitioner’s experience, patient’s values, and the available scientific information and evidence to make clinical decisions.

Over time, various other fields, including practice education, criminology, law enforcement, public policy, social work, and the area of our discussion – management, adopted the evidence-based practices. 

Benefits of Evidence based management

Implementing evidence-based management in businesses has many benefits:

• You will be able to base your decisions on the practical results of research on managing individuals and running organizations. These theories are tried, tested, and backed up by scientific data.
• EBM relies on the experiences of industry experts and the available scientific evidence. The foundation of expertise and proof reduces errors in judgment.
• When managers stick with the norms and best practices, the team does what everyone does and doesn’t stand out in the competition. EBM brings out better performance from the team and organization.
• With this approach to making decisions, even junior managers can tackle certain situations based on the available resources.
• It allows managers to put aside their biases and take a practical approach towards tackling sensitive and emotional problems within the teams. They can conduct objective discussions and arrive at better conclusions.
• Building EBM culture at an organization helps the leaders and managers to get better at delegating. Tasks are assigned to increase both individuals’ and the organization’s performances.
• It promotes the culture and mindset of innovation and learning. It also establishes better communication and collaboration with both internal and external stakeholders.

What are the principles of evidence-based management?

Evidence-based management is based on three major components:

• The first component is proven management practices based on published research and evidence.
• The second is the experience and judgment from managers who are well-versed in that particular context and situation.
• The final component is the preferences and values of affected stakeholders.

The six steps of evidence-based management 

How do you arrive at making decisions based on evidence? By following the six steps of evidence-based management. The Center for Evidence-Based Management (CEBMa) defines it as,

Evidence-based management is about making decisions through the conscientious, explicit and judicious use of the best available evidence from multiple sources by asking, acquiring, appraising, aggregating, applying, and assessing to increase the likelihood of a favorable outcome.

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.

Sometimes, practitioners combine the aggregating and applying stages together to represent a five-step model.

Critical appraisal (the third step) is the most crucial step. Because it systematically evaluates the quality, trustworthiness, and relevance of the said evidence in the context. 

In this stage, you can question like:

• Where is the evidence gathered from, and is the source reputable?
• Is the proof biased in any way? Is it the best available one?
• Has the evidence been adequately evaluated?
• Is the proof up-to-date?

The above list can go on. These questions are essential as you gather evidence from multiple sources. You need to make sure that they are authentic, factual, and unbiased. 

Sources of evidence

Are you wondering where to gather the evidence? The sources are broadly classified into four groups:

Scientific evidence

One of the critical sources of evidence is the scientific research papers and articles published in scholarly journals. These are scientific because they are well-researched, reviewed by peers, and practically tested. 

In recent years, there has been a surge in research from management discipline. The topics deal with relevant management practices like motivating employees, merging teams, increasing team productivity, improving individual performance, decision making, better communication, and tackling difficult situations. 

Organizational evidence

No solution is one-size-fits-all. Different organizations have different management hierarchies and structures that require different approaches. These will be related to a particular industry like business, hospital, restaurant, software, and supply chain.

Organizational evidence is the information on an organization’s culture and characteristics. You need sufficient evidence like administrative data, facts and figures, expenses, market share, business metrics, analytics, management information systems, and other information. 

Experiential evidence

Sometimes, you need more practical evidence. For example, get professional consultation and judgment from people who have spent years in management and accumulated various skills over time. Experiential evidence includes inputs from managers, consultants, business leaders, entrepreneurs, and other practitioners. 

You call this tacit knowledge. It is not an intuition, opinion, or belief but the result of repeated experience and practice. As a result, they are better decision-makers and know when to apply which particular method depending on the context and culture.

Stakeholder evidence

When making a decision, you cannot ignore the people who are going to be affected. These are your stakeholders and may be individuals or groups both inside and outside your organization. They include the board members, employees, managers, customers, suppliers, distributors, shareholders, the public, and even the government.

Stakeholder values and concerns give you the frame of reference to analyze other evidence. It also helps you to prioritize certain decisions and foresee possible consequences based on your choices.

The following image provides an overview of how the quality of evidence changes with the source and the treatment.

How does the evidence-based management approach compliment Agile methodologies?

Let’s now understand how you can use EBM along with Agile methodologies. 

Scrum.org has developed an EBM guide for agile organizations to measure, manage and increase the value they receive from their product delivery. According to this framework, four fundamental values contribute to an organization’s ability to deliver business value:

Current value – It measures the value delivered by the organization to the customer through customer satisfaction, employee satisfaction, and revenue per employee.

Unrealized value – It is the value that you could realize if the organization meets all the potential needs of customers. It is measured through market share and the satisfaction gap.

Ability to innovate – The organization can deliver something new – a capability, service, product, and features that better serve customers’ needs.

Time to market – It measures the organization’s ability to deliver a new service or product quickly. These measures may be lead time and release frequency.

From the previous articles, you know that agile is all about iterative development and continuous integration. Therefore, for an organization to integrate all the works of multiple agile teams, it needs to make decisions as they impact the overall organization carefully.

EBM teaches you to inspect and measure the organization’s capabilities and make informed decisions based on the best available evidence. This approach establishes a culture of learning and continuous improvement. 

What are the strengths and weaknesses of evidence-based practice when decision-making?

Often managers lack academic training or scientific background. As a result, they tend to blindly follow the age-old “best practices” and norms which may not be the right solution for the modern problems and situations they face. 

The main strength of the evidence-based practice is that it drives the managers not to follow and make common mistakes. Instead, they make decisions based on the combined resources of scientific data, published and peer-reviewed research, practical approaches, professional expertise and judgment, and the stakeholder’s values.

Now, let’s talk about its limitations. Gone are the days where you would find research papers only in the reference sections of libraries. Thanks to the internet, you can find any scholarly journal and essay online. But it has its drawbacks too.

Often, managers may not understand the jargon-filled and intimidating journals that may require some scientific training. It takes some time to find the evidence and sort through them to find the right one. Also, there is the problem of information overload that might cause someone to drop the research altogether. 

Even if you find the best evidence, chances are it is obsolete. Or it is something that nobody has tested and implemented yet for you to know its effectiveness. So apart from gathering evidence, you need to have the skill to analyze them too. 

Conclusion

To sum up, evidence-based management is a practical framework to make better decisions. It might take some time to get used to gathering evidence from multiple sources, analyzing them, and implementing them in the decision-making process. But it is a valuable tool that helps to grow a business. What do you think of this method?