Evidence-Based Management Evidence-based Decision Process

Denise M. RousseauH.J. Heinz II University Professor of Organizational Behavior

Carnegie Mellon Universitydenise@cmu.edu1

#4 Become “Decision Aware”

Identify different kinds of decisions you face. What kinds of different approaches are used to make them? Why?

How can you determine whether you made a “good decision” when you cannot know the outcome?

Five Good EBMgt Habits

2

What Is “Decision Quality”?

Discuss a management decision you made within last year you are particularly proud of….

Why are you proud of it?

3

“Decision Awareness” Promotes Decision Quality

To manage decisions, know what decisions must be made.

A TASK FOR TODAY:Map those decisions in your area that affect key outcomes.

Who is responsible? (Are they prepared?)

What information is required? (Will it be available when needed?)

Periodically, revisit decision mgt and revise as needed.

Five Good EBMgt Habits

4

Five Good EBMgt Habits

Awareness Calls Attention to Decision Process. Proper Processes Improve Decision Quality

What is the process for making the decision?

Different processes may work better depending on…

Whether information is readily available for decision

Whether basically same decision re-occurs

Extent of uncertainty and unknown risk factors

5

Five Good EBMgt Habits

Awareness Calls Attention to Decision Process. Proper Processes Improve Decision Quality

ROUTINE DECISIONS Develop an evidence-based procedure or process for making a

quality decision that can be used repeatedly.

Validated checklists—for running an effective meeting

Protocols--structured interview questions in hiring or promotion

WHAT REPEAT ORGANIZATIONAL DECISIONS COULD BENEFIT FROM ROUTINIZATION?

6

Five Good EBMgt Habits

Awareness Calls Attention to Decision Process. Proper Processes Improve Decision Quality

DECISIONS WITH KNOWN UNKNOWNSA systematic sequence of information gathering, discussion and deliberation

WHAT IMPORTANT ORGANIZATIONAL DECISIONS COULD BENEFIT FROM A SYSTEMATIC DECISION PROCESS?

7

Beneficiary Interests/Values

Decision

OtherContributor

s

Preliminaries1—Need 2—Mode

3—Investment

Core4—Options

5—Possibilities6—Judgment

7—Value8—Tradeoffs

Aftermath9—Acceptability

10—Implementation

Decision Processes: Cardinal Issue Resolution

8

Five Good EBMgt Habits

Awareness Calls Attention to Decision Process. Proper Processes Improve Decision Quality

FOR DECISIONS WITH UNKNOWN UNKNOWNS“YOU CANNOT FORECAST BUT YOU MAY ANTICIPATE”

- Pilot-test

- Run competing experiments and evaluate outcomes

- Learning by doing with after action reviews

WHAT ORGANIZATIONAL DECISIONS WARRANT EXPERIMENTS OR MINDFUL LEARNING BY DOING?

9

#5 Reflect on Decision’s Ethical Implications

Who are stakeholders for this decision?

Possible effects?

How might the decision be altered to optimize positive

stakeholder effects and reduce negative?

ETHICAL ISSUES EXIST AT ALL STAGE OF DECISION

Five Good EBMgt Habits

10

M. Blastland & A. Dilnot (2007) The Tiger that Wasn’t: Seeing through a World of Numbers. London, Profile Books.

J. Ehrlinger, K. Johnson, M. Banner, D. Dunning, J. Kruger. (2008) Why the unskilled are unaware: Further explorations of (absent) self-insight among the incompetent. Organizational Behavior and Human Decision Processes, 105,(1) pg. 98

D. Kahneman (2011) Thinking, Fast and Slow. New York: Farrar, Straus & Giroux.

E.A. Locke (ed.), Handbook of Principles of Organizational Behavior, 2nd edition, 2009. Malden, MA: Blackwell.

D. M. Rousseau (2012) Oxford Handbook of Evidence-Based Management, New York.

D.M. Rousseau, D.M. & E. Barends (2011) Becoming an evidence-based manager. Human Resource Management Journal, 21, 221-235.

D.M. Rousseau, J. Manning & D. Denyer (2008) Evidence in Management and Organizational Science: Assembling the field’s full weight of scientific knowledge through reflective reviews. Annals of the Academy of Management, 2, 475-515.

N.Silver (2012) The Signal and the Noise: Why So Many Predictions Fail but Some Don’t. New York: Penguin.

J.F. Yates. (2003). Decision management. San Francisco: Jossey-Bass.

J.F. Yates & M.D. Tschirhart (2006). Decision making expertise. In K. A. Ericsson, N. Charness, P. J. Feltovich, & R. R. Hoffman. (Eds.). Cambridge handbook of expertise and expert performance (pp. 421-438). New York: Cambridge University Press.

J.F. Yates, E.S. Veinott & A.L. Patalano (2003). Hard decisions, bad decisions: On decision quality and decision aiding. In S. L. Schneider & J. C. Shanteau (Eds.), Emerging perspectives on judgment and decision research (pp. 13-63). New York: Cambridge University Press.

Got Evidence? References

11