Decision making is the essence of management, which explains why so much attention continues to be focused on how to do it better. In recent years, much has been written about evidence-based — or fact-based — decision making. The core idea is that decisions supported by hard facts and sound analysis are likely to be better than decisions made on the basis of instinct, folklore or informal anecdotal evidence. One need look no further than the shelves of the local bookstore to see an unprecedented collection of well-written titles extolling the virtues of data and analysis, such as Competing on Analytics (Davenport and Harris), Moneyball (Lewis) and Super Crunchers (Ayres). These books, like decision-making courses in business schools and the prescriptions of management consultants, focus on how to improve decision outcomes through improved process and technique. Many organizations have heeded the call and have invested heavily in data processing infrastructure and analytic tools, based on the assumption that better evidence-based decisions will follow naturally from these investments. While this focus on evidence is a welcome change from “thin slicing” or purely instinctive or intuitive snap judgments, these prescriptions tend to downplay the more fundamental questions: What is the relationship between evidence and the decision process that an organization actually uses? Why is evidence collected in the first place?
The Leading Question
Managers want ‘fact-based’ decisions. Are they getting them?
- Evidence is not as frequent an input to decisions as suggested by the business press.
- Not all decisions use evidence in the same way. Evidence can be used to make, inform or support a decision.
- Managers need to be aware that evidence is shaped by subordinates to meet perceived expectations of company leaders.
Our research and consulting experience suggests that evidence is not as frequent an input to a decision process as suggested by the popular press. For example, we recently studied a major North American financial institution as it considered a proposal to change its enterprise e-mail platform from one technology to another. The organization had conducted two prior reviews of e-mail systems from major vendors and had twice recommended remaining with the existing supplier. However, the head of a small but influential and profitable division of the company advocated switching platforms in order to provide better integration with a specialized tool used only within his division.