More Mangers Are Saying: “Show Me The Evidence”

Many managers will tell you that their decisions are based on incomplete or erroneous data. This usually leads to suboptimal results. Poor management decisions are often linked to the following six issues:

1. Using obsolete knowledge (relying on previous experience)
2. Decisions based on own strengths rather than accurate analysis
3. Hype and marketing
4. Dogma and belief
5. Blind Ideology
6. Uncritical emulation and casual benchmarking

A new concept has emerged as a reaction to poor decision-making called Evidence-Based Management (EBM). This management approach emphasizes the importance of the conscientious, explicit, and judicious use of current best evidence in decision-making.

EBM encourages managers to:

1. Demand evidence and to make sure specific quantitative information is available and used
2. Examine logic—ask for backup research and pay attention to gaps in exposition, logic and inference
3. Test the evidence by using prototypes, running trial programs, pilot studies, and small experiments
4. Have a healthy respect for what is not known and can’t be known

Let’s take hiring decisions as an example. Many managers count themselves as pretty good at selecting the best candidates; however, it is sobering to learn that regular interviews have a predictive accuracy of as low as 5%! So how can you increase your success rate with an evidence based approach? Here are some of the options.

Research shows that:

• References from past employers (if you can get them) can push up the predictive accuracy to about 23%
• Personality tests can push it up further to 39%, and
• Assessments using work simulations can drive up the predictive accuracy to as high as 65%

Of course, you will never remove all risk of making a bad hire—but 65% accuracy is a lot better than 5%. Encourage your managers to use a more evidence based approach when making decisions in everything from hiring to routine, day-to-day activities and you will avoid some of the poor management decisions that often plague organizations.