In two sessions, we interviewed Eric Barends, the Managing Director of the Center for Evidence-Based Management (CEBMa). Eric is based in Amsterdam (Netherlands) and advises management teams and boards of companies and non-profit organizations on evidence-based management and development. In our first interview Eric provides an overview about the benefits of evidence-based management in business. In session two we have a look at the origin of evidence-based management, why evidence-based managers rely on fours sources of evidence and that not all evidence is created equal.
From evidence-based medicine to evidence-based management
In the first interview, you told us about the importance of evidence for management. Could you tell us about more about that? In evidence-based medicine, in the 1990s, the outcomes of randomized control trials were considered as the main, most important source of evidence - doctors wanted to know whether a particular medicine or treatment would cure a patient.
This is a question about cause and effect: when I do X, will Y come out? And of course, randomized control trails are the best way to establish a cause-and-effect relationship. Many physicians, however, were not aware of the outcomes of trials and thus there was a big gap in research and practice.
This is how evidence-based medicine began being promoted: before you prescribe something to a patient, you should check if there are any randomized control trials supporting the practice. But in the past decades it was recognized that randomized controlled trials should not be the only source of evidence - it’s also the clinical expertise of experienced doctors that counts because this source of evidence can tell you whether a particular medicine or medical treatment also applies to your patient.
Most of the medical research involves white, healthy, male adults in the age range of 20 to 40. So, what if your patient is a 75-year-old Latino woman with a serious drinking problem, and in a bad physical state. Does the evidence still apply?
Evidence-based management relies on four sources of evidence
So context is equally important in evidence-based management, right? Yes, in evidence-based management context is extremely important. So, beyond evidence from research, a second source, evidence from professionals should be taken into account. But there are two other sources you should consider as well.
In medicine that is the patient him/herself. If the patient does not take the medication or follow the treatment as prescribed, it will not have the desired effect. Take for instance diabetes. Some patients are not keen on injecting themselves with insulin. So, when the doctor prescribes injecting insulin for these patients, compliance may be lower, and the treatment will be less effective. In those cases oral medication could have a better effect.
So even when the scientific evidence shows that injecting insulin is more effective than oral medication, evidence from important stakeholders - the patient - suggests that it may be less effective when the patient feels uneasy injecting him/herself. So scientific evidence, professional expertise and evidence from stakeholders - it all matters.
What about organizational data as a source of evidence? Yes, you that is another important source - data generated by the organization itself. In the past decade, data analytics has developed as a powerful and rich source of evidence.
If you want to know whether a management intervention has had an effect, you can look at the data generated by your organization. Even if your organization yields no data analytics, comparable organizations or professional bodies might.
However, keep in mind that these are just supporting tools to good decision-making. None of the sources of evidence are sufficient in itself.
Why the quality of evidence matters in evidence-based management
When it comes to the quality of evidence, is there some sort of hierarchy of evidence quality that managers could take into account to determine which evidence matters most? If people ask about what evidence-based decision-making is, it is important to explain that there are two things that are important.
One is that a decision should be based on multiple sources of evidence, not only one.
Second is that evidence-based decision-making is about critically appraised evidence - determining its trustworthiness based on its quality.
Not all evidence is created equal. If I ask someone at a bar whether something is effective, that’s a source of evidence. But then I should ask myself whether that evidence is trustworthy. If the person just states his or her opinion based on limited or even no experience with the matter, the trustworthiness of the evidence is very low.
However, if the person has years of professional experience and has done lots of qualitative research on the matter, that’s a whole different ball game.
But even then, you need to figure out how valid his/her experience is and how trustworthy the research is.
So, you take a look at what happens and ask critically about where the information comes from. The idea is that you make explicit the evidence base. If someone asks, ‘what is your evidence’, you should be able to explain. When the trustworthy of the evidence is low, you and I could make a completely different decision based on the same piece of evidence.
It depends on you as a decision maker (maybe you are risk averse whereas I may be comfortable taking huge risks) and the organizational context: if the organization concerns a community hospital that is funded with tax payers money you will probably make a different decision than when the organization concerns a small, entrepreneurial tech startup that is funded with seed money from venture capitalists.
Added value of evidence-based management
So, if I am a manager in a mechanical engineering company, for example; should I take an evidence-based approach? What is my added value? Well, I think it's two-fold. You will make better decisions. In the long run, your organizational outcomes will increase. But again, this is not a one-off thing that you can apply successfully to one issue once and then suddenly everything changes for the better, no.
Over the long run, if you were to bring in more evidence in your decision-making processes, in the long run your organizational outcomes will improve. This means that you as a decision maker, as a board, will be more effective. Your decisions will have more impact. The other thing is about accountability: if you will be held accountable, you can say with greater confidence that you made a certain decision and you can justify it. If it didn’t work you can say that the outcome may not have been what was expected, but the decision was made based on the best available evidence.
That’s a very important point and we'll take that with us. Thank you so much for the interview, Eric! You are very welcome.
Markus is one of the founders of CQ Net - Management skills for everyone!. He holds a Master and Doctoral Degree from the Technical University of Vienna and a MSc in Organisational Behaviour from Birkbeck College, University of London. Being a dedicated "Knowledge Worker", Markus has continued his career with various private sector assignments in the management consulting, automotive and mechanical engineering industry.