Implementing Evidence Based Management




In today’s competitive environment, an organisation’s strategic success depends on its ability to identify, collect, analyse and interpret data. Managers are constantly being bombarded with information overload, and most of the times it becomes difficult for them to establish what is important and what is not.

The key to making strategic decisions is not collecting loads and loads of data and storing it in piles and piles of files. Raw data plays no part in aiding purposeful decision making. For example, knowing the number of customers who are dissatisfied with your product or service is not key enough. There is also need to understand why this is so.

One discipline that managers can use to aid decision making and drive value is Evidence-based Management. This technique helps organisations find meaningful insights from the data and information they gather and act on those facts to build competitive strategies. It involves the use of business intelligence and analytics to drive decision making.

Successful organisations have managed to leverage their information technology infrastructure and business intelligence applications to support evidence-based decision making. Instead of viewing information technology infrastructure and business intelligence applications as a cost to their businesses, they see investment in these applications as levers of organisational success that improve business processes.

In deploying the evidence-based management framework within their organisations, managers should follow the following five steps:

1. Define Objectives and Information needs: The process of collecting data and information is not only time consuming, but could also be very expensive. Therefore, there is the need to exactly clarify the reason why you’re collecting data, and what it is that you expect to know from the data. One of the best ways is to identify the output deliverables of the organisation, the core activities required to deliver the output and the value drivers. Once you have established the purpose of your organisation, it will help you focus only on data that is relevant to you.

Different organisational functions, for example, marketing, sales, human resources, production etc have different information needs hence there is need to identify their information needs before any data is collected.

2. Collect the data: For evidenced-based management to be successful there has to be meaningful and relevant data which meets your information needs. Both qualitative and quantitative data collection methods should be employed. However, care should be taken that you understand the strengths and weaknesses of each collection method.

The data source, timing, sequence and frequency of data collection, and the person responsible for collecting, measuring and reviewing the data play an important part in determining the validity and reliability of the data.

By employing the use of information technology to collect data, it allows data to be collected, for example, directly from the customer and get stored in a data warehouse before it is tempered with. The data can then be retrieved later to aid decision making.

3. Analyse the data: This involves turning the collected data into relevant insights for decision making. Data should not just be collected, stored and allowed to accumulate in databases or files. Rather, there should be an analysis of that data to extract insights that help build competitive strategies.

Business intelligence and analytic applications have the advantage of helping you report, analyse and present data. They help you identify the root cause of the problem and help test assumptions, better understand your markets and customers, set up quality targets, produce more precise forecasts and better predict future revenues, profits and cash flows. They also help you understand how various elements such as brand reputation, customer service, staff engagement or customer loyalty might drive future performance. Because of their predictive nature, analytics will help you identify what is likely to happen in the future thereby enable you craft strategies capable of improving operational performance.

4. Present the data: This involves delivering the right information to the right people at the right time. As mentioned earlier on, different organisational functions have different information needs. Thus, it is crucial that the information presented is relevant to that audience and also not too late for timely decision making.

Research has shown that visuals are key to engaging the minds of your target audience. For example, you could employ the use of bar graphs, line graphs, pie charts, histograms, pictographs and tally charts to present your data and information. These help highlight the important facts and are easy to understand. You could also employ the use of performance dashboards to monitor performance. This involves the use of traffic lights colour coding system to identify where performance is off target.

5. Make Evidence-based Decisions: This involves turning information collected into knowledge for better decision making. Rather than doing what everyone else is doing, or what you have always done, they key is finding evidence from the information you have collected, analysed and presented and act on those facts. It is about putting aside belief and conventional wisdom and instead, making more informed and intelligent decisions based on new evidence.

With evidence-based management, they key is not replicating what your competitors are doing, but rather, following deeply accepted yet un-examined ideologies.

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