In one of my previous posts Evidenced-Based Management: Using Business Intelligence/Analytics to Drive Value, I wrote on how organizations can successfully utilize Evidence -Based Management (EbM) to turn information into actionable knowledge and make informed decisions that drive performance improvements.
With the advent of big data, the challenge on organizations is to collect, analyze and interpret the right data which is then converted into insightful information and used for critical decision making. They need to ensure that the available evidence is used to make the best decisions, avoid relying on a narrow information set, create powerful knowledge by thinking outside the ‘information box’ and base their decisions on well-researched evidence.
According to Bernard Marr in his book, The Intelligent Company: Five Steps to Success with Evidenced-Based Management, one of the reasons organizations experience strategic failure and even catastrophe collapse is making decisions based on what seemed to have worked in the past or gut reaction without considering changes in the customer, market or competitive dynamics. This belief that ‘It worked before, so it will work again’ has proved to be the death-knell for many leaders and organizations.
In order to improve performance, organizations must implement the knowledge they possess. They must substitute talk with action and make decisions that result in significant change. This means moving from ‘knowing’ to ‘applying’ knowledge. However, to make this applying happen, there is need to have the right context or environment whereby appropriate structures, incentives and frameworks are in place to help you turn that knowledge into action.
It should be noted that if the culture is inappropriate or misaligned, becoming an EbM organization will become a challenge. To avoid failure or sidelining of implementing an EbM programme, management must address the cultural challenges inherent within the organization. If you want to build a knowledge-to-action culture, Bernard Marr suggests the following seven steps:
- Have passion for learning and improvement. Leaders must encourage employees to form the mindset that ‘work is learning’ and ‘learning is work’. They must also provide the space and tools to make this mindset a practical reality. Organizational learning is at the centre of a performance-driven culture and this takes place when individuals and teams engage in dialogue, reflect, ask questions and identify and challenge values, beliefs and assumptions. An enabled-learning environment should allow people and teams to challenge strategic assumptions, refine strategic thinking, learn and make better evidenced-based decisions with which to improve future performance.
- Ensure leadership buy in. This is critical to make EbM a reality. Organizational leaders have to show visible commitment to EbM and analytics, and need to explain the importance and role of evidence-based management in their organization-wide communications.
- Develop widespread analytical capabilities throughout the organization. This is critical for systematically turning data analysis into insights and actions that lead to significant competitive advantage.
- Use judgement. In making analytics work, employees at all levels must balance facts and judgement. Many organizations fall into the information paralysis trap whereby they are forever searching for new information and never making any decisions. Organizations must work out when to stop collecting and analysing, and start doing.
- Share information. A knowledge-to-action or EbM culture can only be successfully developed if there is a willingness to share information across the organization. Everybody should feel responsible for performance. This means staff work together and are allowed to come up with new ideas, challenge and improve performance without them being afraid of getting punished for being wrong.
- Reward EbM. In order to create an EbM culture, organizations must learn to celebrate success, reward effort not just success, reward straight away and balance rewards for individual and corporate performance. Linking reward and recognition to performance sends a clear and unambiguous message to the organization that EbM matters.
- Build an appropriate IT infrastructure. IT is simply an enabler of EbM. The right IT infrastructure compromises of:
- Databases, data warehouses, data marts etc. to store the data
- Networks and connections to share the information and to make it accessible
- The software to analyze and share the data.
Concluding Thoughts: Implementing EbM involves many challenges; structural, process, technological and cultural. Not addressing these challenges will lead to EbM programme failures. It is therefore important to create a culture in which performance is recognized as a priority. Doing so can have a significant and tangible impact on success.