Talking about strategy » evidence-based management

Evidence-based decision-making

Kim Warren — Mon, 16 Aug 2010 14:10:16 +0000

We all know this ideal is far from reality, but in Is Decision-Based Evidence Making Necessarily Bad?, Sloan Mgmt Review offers 3 levels to define the role of evidence:

to make a decision – when data really does lead to a decision
to inform a decision – when other factors such as judgment and bargaining play a role too
to support a decision – when data is looked for that confirms the decision, and crucially, when disconfirming evidence is avoided or rejected.

They make a case that such ‘decision-based evidence-making’ (!) is not necessarily bad, but seem instead to make a case for the middle category - using what useful evidence can be had, plus judgment – and offer tips:

Assess how much potential there is for evidence to support a certain decision.
Weigh the costs, benefits and risks of seeking and using evidence.
Differentiate between internal and external audiences in the use of evidence.
Make sure evidence gathered at cost and effort is reflected in decisions (assuming you looked for the right evidence, I guess).

Good tips – and I wonder how often we genuinely step back and think about these issues, rather than just get on with it?

www.strategydynamics.com

Analysis-based strategy

Kim Warren — Sat, 07 Feb 2009 10:37:34 +0000

In Sloan Mgt Review Thomas Davenport of Babson College and Jeanne Harris of Accenture’s Institute For High Performance Business in What People Want Next (and How to Predict It) show how firms like Amazon.com use unprecedented data and sophisticated technology to inform decisions as never before. Great to see so much being written now about powerful strategic management being driven by data and analysis, not just gut and emotion [has anyone done more to devalue and undermine competent, professional strategic management than Henry Mitzberg I wonder?].

Great use of business intelligence is important and good to see. I would just add though, as I think I’ve noted before, that powerful organizations go beyond predicting what people want – they look for what they could be persuaded to want, then go about developing it and doing the persuading.

How companies make good decisions

Kim Warren — Tue, 27 Jan 2009 12:56:25 +0000

McKinsey asked senior managers in companies that made good and bad decisions about their decision-making processes: who was involved, what drove the decisions, the analysis done, role of politics etc. Good to hear that hard benefits – like profits! – featured in successful decision-making disciplines. Article. More support for evidence-based management I guess.