Evidence-Based Management Evidence-based Decision Process Denise M. Rousseau H.J. Heinz II University Professor of Organizational Behavior Carnegie Mellon University 1

#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?) Who is responsible? (Are they prepared?) What information is required? (Will it be available when needed?) What information is required? (Will it be available when needed?) Periodically, revisit decision mgt and revise as needed. Five Good EBMgt Habits 4

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 UNKNOWNS A systematic sequence of information gathering, discussion and deliberation WHAT IMPORTANT ORGANIZATIONAL DECISIONS COULD BENEFIT FROM A SYSTEMATIC DECISION PROCESS? 7

Beneficiary Interests/Values Decision Other Contributors Preliminaries 1—Need 2—Mode 3—Investment Core 4—Options 5—Possibilities 6—Judgment 7—Value 8—Tradeoffs Aftermath 9—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, 2 nd edition, 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, 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, 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 ). 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 ). New York: Cambridge University Press. Got Evidence? References 11