What is evidence-based management?

As a business leader, what tools do you use to make important decisions? You may have endless amounts of data to support your choice, but you rarely rely on one source of information. Whether you realise it or not, other factors always come into play – such as personal beliefs, stress levels and access to resources. Unfortunately, these things don’t always result in the best outcomes.

This is where evidence-based management comes into play. Created in the 1990s by Canadian-American physician Dr David Sackett, evidence-based management has quickly spread to other industries, like education, nursing, and criminology, and now, you can apply it to your professional life.

What is evidence-based management, and what are its benefits? Read on to discover how this decision-making strategy can improve your leadership style.

What is evidence-based management?

Evidence-based management – also known as EBM or EBMgt – is a practice of making managerial and people-related decisions based on critical thinking and reliable, relevant evidence.

Critical thinking is the ability to analyse information objectively and make a careful and considered judgement based on the available facts. A recent survey by Brandon Hall Group claimed that critical thinking is the single most important skill for leaders and managers in all organisations. So the better you are at thinking critically, the better evidence-based manager you will be.

An evidence-based manager uses scientific data and information to answer team members’ questions, inspire strategy decisions and create long-term plans. They may also refer to academic research and literature in psychology, behavioural economics, communications, and sociology to help them make informed choices. They then carefully consider the entire body of evidence and critically assess the situation to make the best choice possible.

Read 5 Steps For Improving Your Decision-Making Skills.

Why is evidence-based management important?

As a senior leader, the choices you make within an organisation affect many people and situations, such as:

• Your team members and their health, engagement and morale
• The company’s reputation and revenue
• Your clients’ satisfaction and overall experience

However, you’re not superhuman, and you can’t get it right all the time. Good or bad, your upbringing, family and personal experiences affect the choices you make. You may be unconsciously swayed by other people’s opinions or a charming but misinformed ‘business guru’.

Either way, these factors won’t result in an optimal outcome because none of these decisions was based on evidence, ultimately affecting your company’s bottom line. Evidence-based management makes for more effective and accountable leaders and provides better business results.

What sources of evidence do I use?

According to the principles of evidence-based practice, there are four sources of evidence you should consider before making your decision. While every category is important, the quality and availability of each may differ depending on your circumstances.

Scientific literature

Perhaps the most accurate and reliable source of evidence, scientific literature includes peer-reviewed research and primary research from trusted, unbiased industry sources.

Internal data

Assess your company’s hard data to inform your decision. This will make a far more accurate judgment than basing your choice on personal experience.

Professional expertise

Connecting with industry association members and networking with fellow peers can provide you with more well-rounded perspectives on your decisions.

Stakeholder values and concerns

For better or worse, your decision will financially affect your stakeholders. Consult with them through focus groups, internal surveys or enterprise discussion management tools like Infinity, Clarizen, Asana or Monday.com.

How can I become an evidence-based manager?

The Chartered Institute of Personnel and Development (CIPD) and the Center for Evidence-Based Management (CEBMa) have created a six-step process to help you become a successful evidence-based manager.

1. Asking: Translating a practical issue or problem into an answerable question
2. Acquiring: Systematically searching for and retrieving the evidence
3. Appraising: Critically judging the trustworthiness and relevance of the evidence
4. Aggregating: Weighing and pulling together the evidence
5. Applying: Incorporating the evidence into the decision-making process
6. Assessing: Evaluating the outcome of the decision.

The most important step in this process is step 3 – appraising the evidence. Here, you must evaluate the quality and accuracy of the evidence. After all, this is what you’ll be basing your decision on – and incorrect information will lead to a poor decision.

To critically appraise your evidence, the CEBMa recommends that you ask yourself these questions:

• Where and how is the evidence gathered?
• Is it the best available evidence?
• Is there enough evidence to reach a conclusion?
• Are there reasons why the evidence could be biased in a particular direction?

By answering these questions, you’ll be able to prioritise and think critically about your sources rather than taking them at face value.

What are the benefits of evidence-based management?

It reduces errors in judgement

Many business leaders pride themselves on their strong sense of intuition. But even the most experienced leaders can make a snap, instant judgement based on their mental prepossessions, prejudices or uncreative thinking. And according to this 2015 study, many people don’t recognise their own biases.

Evidence-based management eliminates irrational thinking and bias and replaces them with scientific, irrefutable facts. It’s systematic and requires you to study other similar cases. You can then ‘zoom out’ of your situation and see everything more clearly, giving them objectivity and clarity.

It increases accountability

You are responsible for ensuring that your decision-making process adheres to the highest standards possible, as it will ultimately affect your team members, organisation, department and projects.

Taking an evidence-based management approach allows you to use the best available evidence. Taking such a structured approach to your decision-making process increases transparency and accountability, improving your reputation and authority within your field.

Australian Institute of Business is a registered higher education provider with an array of high-quality tertiary programs for busy working adults, including our Fast-Track MBA. Learn more about our MBA.