Importance of evidence-based decision making for leaders highlighted in UNSW paper

Leaders who want to better inform their decision making processes should use evidenced based frameworks to improve their commercial outcomes, a UNSW Business School expert has said. 

 

While on the surface, this advice might seem more at home in the stock exchange than in an early childhood education and care (ECEC) setting, the reality is, regardless of profit or not-for-profit status, all ECEC services need to be financially viable in order to continue providing education and care for children and families. 

 

As the recent COVID-19 pandemic, and subsequent rapid withdrawal of enrolments showed, having a sound business model which is able to absorb shocks and fluctuations supports services to remain open and operational. 

Those services who take the time to identify and implement the best available evidence to base a decision upon, following a rigorous and systematic process, will be rewarded improved teamwork and performance, UNSW Business School’s Christian Criado-Perez has said.

Evidence-based management is a framework that can help managers make decisions based on the best available evidence. While organisations often complain that they don’t have the time to go into such a rigorous and systematic process of trying to identify the best available evidence, taking such an approach puts a manager “at risk of screwing up an important decision,” Mr Criado-Perez said.

 

“It’s all about priorities really,” he continued, saying the recent pandemic is the perfect example of how evidence based decisions can be made in a rapid fashion.  

 

“In the middle of a pandemic we had to react very quickly, but that doesn’t mean you shouldn’t be aiming to base your decisions on the best available evidence,” he said. 

 

Mr Criado-Perez’s recent paper, Enablers of evidence-based management: Clues from the absorptive capacity literature, written in collaboration with others, explores evidence-based management as a framework which can help managers make decisions based on the best available evidence. It is notably one of the first papers to identify enablers of evidence-based management supported by empirical evidence. 

 

Evidence-based management is a framework that relies on four critical sources of evidence: 

1. The expertise of the decision-makers or managers themselves
2. Stakeholder concerns, which could include employees
3. Organisational data – all the data an organisation has about its employees, what has worked in the previous project, what hasn’t worked, how their customers, employees behave etc.
4. Scientific research.   

 

Once organisations, large or small, have captured all four levels of evidence, they then need to combine it all, critically evaluate the quality and then make a decision based on what can be extrapolated from these four sources. 

 

For a manager, Mr Criado-Perez said, there are a few things which can be done to make stronger evidence-based decisions. 

“You need to slow down and think critically, you have to try to make sure you are relying on multiple sources of information, and you have to try to understand the problem of what you’re addressing before jumping into a solution (which is often because of time pressure),” he explained. 

The next important step is appraising the quality of the evidence – the critical step where many organisations often fall short, Mr Criado-Perez added. 

 

As an individual, you also need to prepare for ambiguity. “You have to prepare for ambivalence, for a certain degree of uncertainty. Evidence is just indicating what is most likely to work. But, of course, there’s no guarantee. There never is,” says Mr Criado-Perez. 

 

As well as the broader points above, the paper provides a useful breakdown of additional steps business leaders can take to facilitate evidence-based management including: 

• Investing in strong information system capabilities for efficient collection and use of data 
• Nurturing a culture that embraces questioning and exploration 
• Facilitating collaboration and knowledge exchange across departments through organisational design, interdisciplinary project teams, and knowledge broker roles to de-silo organisations 
• Building strong ties with external stakeholders to facilitate the collection of evidence 

• Committing jobs, time and financial resources to innovative tasks. 

 

To review the paper and its recommendations in full, please see here.