ebmgt course module 3: why do we need it?
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EBMgt Course Module 3: Why Do We Need It?TRANSCRIPT
Postgraduate Course
Evidence-based management:
Why do we need it?
Postgraduate Course
Reason 1: Mounting criticism
”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”
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.
Postgraduate Course
Trust me, I’m a manager.
Postgraduate Course
Reason 2: Accountability
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’.
Postgraduate Course
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wrong or out-of-date within 7 years of your graduation;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
Reason 3: false information
Postgraduate Course
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.
True or false?
Postgraduate Course
How evidence-based are managers?
959 (US) + 626 (Dutch) HR professionals
35 statements, based on an extensive body of
evidence
true / false / uncertain
On average: 35% - 57% correct
HR Professionals' beliefs about effective human resource practices: correspondence between research and practice, (Rynes et al, 2002, Sanders et al 2008)
Postgraduate Course
5 years? 7 years? 10 years?
Reason 4: half time value of knowledge
Postgraduate Course
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)
Reason 5: The Zeitgeist
Postgraduate Course
But the MAIN reason is .....
Postgraduate Course
Bounded rationality
Postgraduate Course
Bounded rationality
System 1
Fast Intuitive, associative heuristics & biases
System 2
Slow (lazy) Deliberate, ‘reasoning’ Rational
Postgraduate Course
Bounded rationality
limbic system and brainstem(system 1)
neo cortex(system 2)
Postgraduate Course
Systeem 1: necessary to survive
Postgraduate Course
Seeing order in randomness Mental corner cutting Misinterpretation of incomplete data Halo effect False consensus effect Group think Self serving bias Sunk cost fallacy Cognitive dissonance reduction
System 1: very prone to biases
Confirmation bias Authority bias Small numbers fallacy In-group bias Recall bias Anchoring bias Inaccurate covariation detection Distortions due to plausibility
Postgraduate Course
Errors and Biases of Human Judgment
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!)
Postgraduate Course
“The first principle is that you must not fool yourself - and you are the easiest person to fool”.
Richard Feynman
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 over-confident. I fall for every one of the biases.”
Bounded rationality
Postgraduate Course
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!
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
EBP is about the signal and the noise
Postgraduate Course
EBMgt Overcomes Limits of Unaided Decisions
Bounded Rationality
The Small Numbers Problem of Individual Experience
Prone to See Patterns Even in Random Data
Critical Thinking
Decision Supports
Research
• Large Ns > individual experience
• Controls reduce bias
The “Human” ProblemEvidence-Based Practice