Postgraduate Course
Evidence-based management:
Why do we need it?
Reason 1: Mounting criticism
Postgraduate Course
Managers have to endure a great deal of criticism from
various directions. Misuse of the position of power to
one's own benefit, failure and mismanagement are the
charges most commonly heard.
”Staff in the private and public sectors are addressed on a
daily basis in a language which does not express their own
specific reality but the make-believe world of managers.
This make-believe world is dominated by objectives
couched and repeated in a theatrical rhetoric: top quality,
excellence and continuous innovation”
Postgraduate Course
Trust me, I’m a manager.
Reason 2: Accountability
Postgraduate Course
As a result of this increasing social
pressure there is an external drive for
transparency which fosters an upheaval
for ‘objective opinion’ and even
‘objective evidence’.
Reason 3: false information
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 Half of what you learn will be shown to be either dead
wrong or out-of-date within 7 years of your graduation;
the trouble is that nobody can tell you which half
True or false?
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1. Incompetent people benefit more from feedback than
highly competent people.
2. Task conflict improves work group performance while
relational conflict harms it.
3. Encouraging employees to participate in decision
making is more effective for improving organizational
performance than setting performance goals.
How evidence-based are managers?
Postgraduate Course
HR Professionals' beliefs about effective human resource practices: correspondence
between research and practice, (Rynes et al, 2002, Sanders et al 2008)
 959 (US) + 626 (Dutch) HR professionals
 35 statements, based on an extensive body of evidence
 true / false / uncertain
On average: 35% - 57% correct
Reason 4: half time value of knowledge
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5 years? 7 years? 10 years?
Reason 5: The Zeitgeist
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 Evidence-based practice movements abound in
medicine, education, and public policy
 Management research from psychology, engineering,
operations research yields 1000s of studies annually
 Internet (scholar.google.com) gives ready access
 Innovative companies now hiring “chief evidence
officers”
 Public demands accountability (quality decisions that are
defensible)
Postgraduate Course
But the MAIN reason is .....
Bounded rationality
Postgraduate Course
Bounded rationality
Postgraduate Course
System 1
 Fast
 Intuitive, associative
 heuristics & biases
System 2
 Slow (lazy)
 Deliberate, ‘reasoning’
 Rational
Bounded rationality
Postgraduate Course
neo cortex
(system 2)
limbic system and
brainstem
(system 1)
Systeem 1: necessary to survive
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System 1: very prone to biases
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Seeing order in randomness
Mental corner cutting
Misinterpretation of incomplete data
Halo effect
False consensus effect
Group think
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Self serving bias
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Sunk cost fallacy
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Cognitive dissonance reduction 
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Confirmation bias
Authority bias
Small numbers fallacy
In-group bias
Recall bias
Anchoring bias
Inaccurate covariation detection
Distortions due to plausibility
Errors and Biases of Human Judgment
Postgraduate Course
Managers and consultants hold many erroneous
beliefs, not because they are ignorant or stupid, but
because they seem to be the most sensible conclusion
consistent with their own professional experience!
(system 1 will always engage!)
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Richard Feynman
“The first principle is that you must not fool
yourself - and you are the easiest person to
fool”.
Bounded rationality
Postgraduate Course
I’ve been studying intuition for 45 years, and I’m no better
than when I started. I make extreme predictions. I’m overconfident. I fall for every one of the biases.”
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Developing expert skill and intuition
1. A sufficiently regular, predictable environment
2. Opportunities to learn regularities through prolonged practice
and feedback
The management domain is not highly favorable to
expert skill and intuition!
EBP is about the signal and the noise
Postgraduate Course
“It’s hard to tell the signal from the noise. The
story the data tell us is often the one we’d like to
hear, and we usually make sure it has a happy
ending.
It is when we deny our role
in the process that the odds
of failure rise.”
Nate Silver
EBMgt Overcomes Limits of Unaided Decisions
Postgraduate Course
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Bounded Rationality
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Critical Thinking
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The Small Numbers
Problem of Individual
Experience
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Decision Supports
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Research
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Prone to See Patterns
Even in Random Data
The “Human” Problem
• Large Ns > individual
experience
• Controls reduce bias
Evidence-Based Practice