In two sessions, we interviewed Eric Barends, the Managing Director of the Center for Evidence-Based Management (CEBMa). Eric is based in Amsterdam (the Netherlands) and advises management teams and boards of companies and non-profit organizations on evidence-based management and development. In this first session Eric discusses the foundation of evidence-based management and its benefits in business.
What is evidence-based management and why is it important?
Hi Eric, it’s great to have you. What is evidence-based management and why is it important? Evidence-based management (EBM or EBMgt) is basically a tool, a method with which you can make better decisions. If you make decisions in your daily life, you use your brain and you use information. The idea of evidence-based management as a decision-making tool is that you make better decisions if you make sure that the input in your brain is trustworthy.
So, if you would use what we call ‘evidence’ from external sources - such as research findings, experience from other people or yourself, or data from your organization - you will make better decisions than when use only your personal judgement or experience.
That sounds very straight-forward. Is evidence-based management common? Indeed, it’s kind of a no-brainer, but the problem is that most people don't fully realize this, because human beings are very good in making quick decisions based on intuition etc. Especially simple practical decisions; should I have a Cappuccino or should I have an Espresso? What should I eat? 99% of the decisions we make are based on the limited information that's hanging around, or your gut or your intuition, and that’s alright.
However, the moment you need to make an important decision, such as within a professional context, it is important to consult more sources of evidence.
What is ‘evidence’ in evidence-based management?
What do you mean by ‘evidence’? Evidence is information regarding a particular claim or a choice to make. For example, a claim could state that if you do X, Y will come out. Should I trust this claim, yes or no? If it is an important decision, you should get more information and ask:
How do you X will lead to Y?
By what mechanism does it work?
How much X is needed to get Y?
What evidence do you have that this would work for my company?
It’s a simple example but basically evidence-based decision-making is an approach that comes to us naturally.
However, when we formalize it, for instance in the realm of business, people suddenly believe it’s very complicated. But it's not. It's what you typically do when you make an important decision or when you want to figure out whether something is likely to be true. In particular when the outcome has an impact on a lot of people or a lot of money is involved, it is important to consult multiple sources of evidence.
Evidence-based Management and organizational performance in business
Do you think that when an executive or manager or professional uses EBM as a tool in their business, does it have an impact on organizational performance? Yes, but not immediately. It is the same like having a healthy lifestyle. Will you grow older when you have a healthy lifestyle? Yes, but you need to continue your healthy lifestyle for a long period, maybe the rest of your life.
The same goes for the evidence-based approach: it is something you apply to a wide range of topics over a long period of time.
Evidence-based management examples
What are some examples of where you can apply EBM in business? You can apply it to almost all issues in an organization, such as
decisions about the recruitment of employees,
decisions regarding how you would rate the performance appraisal of employees,
how you work together,
how to increase the motivation of employees.
But you have to keep in mind that it’s not a one-off type of thing. You won't change the financial performance of your organization by taking a one-time evidence-based approach to a single issue. It's a process, a general, overall approach. It's an organizational paradigm that you apply to all important decisions being made in your organization.
How to implement an evidence-based management approach
That sounds great. Is it a lot of effort to implement an evidence-based management approach? A lot of executives think they don't have the time for that. But it is always a trade-off between how much evidence should you consult and how important the decision is in the end.
What is the impact of the outcome of the decision made?
When it's about implementing a whole new strategy, I would say take several weeks, maybe even months, and really look at all the sources of evidence. After all, it is about the future of the company.
But when it's a simple thing like ‘are we going to have a meeting tomorrow, yes or no?’ I would say ask your most important stakeholders whether they feel it's necessary to have that meeting, which will take only an hour or so. In this case, you don't need to do a randomized control trial or do an evaluation of all the available research on meetings to see what the best option is.
But now let’s assume your CEO is inspired by Ricardo Semler - a famous management guru who feels that management does not have a lot of added value. In his company Semler has abolished all meetings in because he feels that they don't contribute. So, if you want to do something like that in your company - getting rid of all the meetings - then that’s a different story. In that case, you should start by asking.
What is the problem you are trying to solve by cancelling all meetings?
Then I would take a look at the scientific research on meetings and consult the evidence from practitioners and stakeholders:
Do they agree that getting rid of all meetings is a good idea?
Do they see downsides to or unintended negative consequences?
Do you see alternative solutions that may work better?
And yes, that takes time, but only a few days. So you can take an evidence-based approach in a short period of time. Sometimes weeks, but often days, or even hours. It really depends on the topic, the available evidence, and the impact of the decision that you make.
It’s really important what you just said, that many executives, managers and professionals just think it takes too much time and dismiss taking an evidence-based approach altogether. But as you said just now, this is simply not correct. I’m afraid that many executives, managers and professionals don’t realize that there is an abundance of scientific evidence available on topics that are relevant to organizations. In hospitals every physician and nurse knows that you need to wash your hands before you get involved with a patient.
They also know why that’s important: two centuries of research have demonstrated that hands are the main pathways of germ transmission during interaction with patients. In addition, physicians learn about hypertension, cardiovascular disease, etc. and are generally aware of the research evidence on these topic.
We know from the Rynes study that managers are less knowledgeable, in fact, in many cases that they don't know anything about the available scientific evidence. So before executives even get into the popular, cutting-edge solutions promoted by fancy consulting firms, they should first learn the basic, evidence-based insights on the most important managerial topics.
Center of Evidence-based Management (CEBMa)
How does the Center for Evidence-Based Management (CEBMa) play into this? As CEBMa we mainly focus on the education of (future) managers; so that during their training, their vocational education, they learn two things:
How to take an evidence-based approach to organizational issues
How to to learn about the basic, fundamental insights from the scientific evidence.
For example, every manager should know what we know from research about recruitment, employee selection, organizational change, entrepreneurship, motivating people, performance, etc. before they even get to the workplace.
Unfortunately, there is still a long way to go. If you ask experienced HR managers ‘what is the most reliable predictor of future performance?’, they often come up with all kind of and suggestions and personal opinions, but only a few are aware of the 80 years of research on this topic.
So, evidence-based management is also about empowering people in terms of knowledge, skills and critical thinking. Yes, exactly.
This is great, Eric. Thank you so much for speaking to us.
Markus is one of the founders of CQ and leads trainings in the area of Management and Mechanical Engineering. He holds a Master and Doctoral Degree in Economics and Computer Science 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.