July 21, 2021

Management: Evidence vs. Confidence - EBM

One personality trait we look for in managers is confidence. And rightfully so: It is needed to be able to make decisions and stand by them in adverse circumstances.

The manager personalities I have met in my years of consulting, training and coaching management in transformation contexts have mostly had this in common. As different as they may be in levels and areas of expertise, in age and gender (although, to be truthful, especially regarding the latter there is still not so much diversity here, in my experience), in the “big five” (Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism) – they all display a high level of confidence.
Whether this be partly pretend or all real, it is what got them into the position they are in. Of course: You need to show confidence to convince people to put you in a position of power.

The pitfall of this lies in the reality of our complex world, in which the context of decisions to be made is often “VUCA” (meaning: volatile, uncertain, complex, ambiguous) or nowadays even “BANI” (meaning: brittle, anxious, non-linear and incomprehensible). There is a consensus today that our systems are essentially interwoven, and that it is virtually impossible to “decide on a plan and then stick to it” over a longer period of time. Cause and consequence are no longer fully assessable in advance.
So, having lots of confidence in your decisions and standing by them no matter what may be exactly what brings about the crash of a system, the downfall of an organization.

Management today needs to be aware of their not-knowing, to recognize that there are too many unknowns and even unknown unknowns out there to make good decisions that last a (product’s/organization’s) lifetime – or even a year. Managers need not to lose their confidence, but to question and challenge their own decisions regularly. Management needs to be open to adapt.

What can help management find their way through decision making processes that steer the company? What can support them in putting their assumptions to the test, in order to make better decisions?

It is empirical data, it is evidence, clearly. Managers need to apply the simple approach of empiricism:
Create transparency on all levels, on their own assumptions, on the product/service as well as on processes. Inspect together including all perspectives. Adapt when necessary. Then do it again. And again.

What we call Evidence Based Management (EBM) is an approach with a scientist’s point of view: Find data to back up your assumptions, run experiments to prove or disprove your hypotheses. There is no other way than to make assumptions and formulate benefit hypotheses. In order to start doing anything at all. But it becomes dangerous when we rely on these assumptions as truths, and do not try to challenge them anymore. Then confidence can be false and misleading.

Making our assumed realities transparent is the first step – creating clear goals, whether they be strategic, intermediate or immediate tactical ones. Management needs to start focusing on outcomes when setting these goals. Then the people who help reach these goals, the employees delivering the business value, can support management in coming up with the right measures to identify if the goals are reached. These will drive the right behaviors, those that truly enable the org to reach the set goals.

Formulating outputs and activities will then be the next steps – but without regular inspection and adaptation of goals (outcomes), we might run fast into the wrong direction, once we start focusing on measures and activities only.  

Evidence Based Management is a framework (see at Scrum.org) to support management in identifying, driving and measuring the Key Value Areas of any profitable organization: current value delivered to customers, unrealized value, ability to innovate, and time to market.

Modern management – or better yet, contemporary leaders – focus on driving overall Business Value, on delivering value to their customers and external as well as internal stakeholders. This can only be done in an agile – meaning: adaptive, responsive – way, iteratively and incrementally, through inspecting and adapting early and often.

Let’s stay confident. Let’s be so confident that we do not fear questioning our decisions and our decision making processes. Let’s take a scientist’s stance instead of going with our gut feelings only. Our guts may point us into the right direction, but our empirical stance will lead us to success.