Evidence-based management: helping managers make better decisions

I'm Denise Rousseau. I'm a professor of Organizational Behavior at Carnegie Mellon University in Pittsburgh. I'm an organizational psychologist by training. In fact, I study work and organizational change and positive practices in making organizational change work better for the organization and the employees. This work has brought me into working to develop a new set of practices to improve managerial decision-making, which we call evidence-based management.

What is evidence-based management? Well, basically as the name implies, it's about using evidence, in a very careful way, in the practice of management and the making of managerial decisions. So I'm going to talk with you about the two areas that evidence-based management focuses on, which are improving the quality of the information that is used in the decision, and improving the way that information is used. So evidence-based management is the practice of making organizational decisions that incorporates four components. First, the conscientious use of science-based principles, and by which I mean, that the manager who's making decisions is aware of, trained in, or knowledgeable about certain basic recurring behavioral or organizational principles that are established in science to affect behavior and affect outcomes. Classic example of a science-based principle is how important it is to set specific goals, when you're trying to motivate or improve performance as opposed to vague or general or do your best goals. Second, in evidence-based management, strong emphasis on acquiring and developing information in the organization that provides valid and reliable organizational facts. One example of that would be, think about at a hospital that has had some infections that have spiked up amongst the patients. To know that we've had an increase in infections, and in terms of the raw numbers is one thing. But if we know whether the rate of infections have changed over the number of patient beds and patient days in that hospital, we have a more usable statistic to tell us whether in fact the rate of change in infections has really changed or just simply is it the fact that you've got more patients in and therefore more possibility of having errors or problems? Valid and reliable facts then mean that we have to affect how our data are used in order to be able to inform judgment. The third issue in evidence-based management is the use of decision supports and reflective judgment. I'll tell you a little bit about both of those. Decision supports would mean something like having a checklist or a framework so that when you're making the kind of decision that you might make repeatedly and you have evidence that tells you that there's a certain thing that should be included in making that decision, you use that checklist to consider, have we addressed all the issues that are important? Reflective judgment means that the manager is basically both trained in and making special efforts to think critically about the information he or she has, to test assumptions, and to be aware, that in fact, it's easy to hold a belief that's not necessarily fact-based, and to question how he or she is approaching a problem in order to make a better decision. Fourth, ethical considerations mean that we know all decisions potentially have an impact on not only the decision-maker, but on others. A key issue in making a quality decision is to consider the people who are affected by it, both directly. Let's say if we're making a decision about how to reward or motivate our employees, they would be key stakeholders. But there could also be additional stakeholders to that kind of decision, such as people in another department, other workers in the organization. That in making a decision that considers the array of stakeholders, we find that people's judgment processes are both more thorough and lead to a higher quality decision. The results of putting these four practices together are improved decision quality and more consistent use of practices by the manager and his or her organization that actually work and produce the outcomes we're trying to achieve.