Books: A good decision-maker will always weigh the evidence

Senior managers too often allow hunch, hope and imitation to shape their strategy rather than the hard facts. Chris Hyman finds this book a necessary corrective.

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Last Updated: 31 Aug 2010

Asked why managers often choose to rely on bad advice rather than sound evidence when making decisions, management commentator Peter Drucker replied: 'Thinking is very hard work. And management fashions are a wonderful substitute for thinking.' His response forms the basis of Hard Facts, Dangerous Half-Truths and Total Nonsense.

As CEO of one of the UK's largest services companies, should I be worried?

I think not. Like Jeffrey Pfeffer and Robert Sutton, I view evidenced-based decision-making as a critical factor to sustainable success. With this in mind, I'd certainly recommend this book to Serco's senior managers and future leaders.

As the authors declare, organisational leaders cannot continue to rely solely on decision-making based on 'hope or fear, what others seem to be doing, what senior leaders have done and believe has worked on in the past, and their clearly held ideologies; in short, on lots of things other than the facts'.

Although it's clear that we all rely on our personal experiences and values to guide our decision-making, leaders who differentiate themselves time and again are the ones who trust their instincts but also use properly researched evidence to make decisions. That does not mean that their well-honed instincts are without value, but these should drive their demands for evidence, rather than replace it altogether.

The authors sum this up at the beginning of the book with the following three questions: 'Is my preference for a particular management practice or approach solely or mostly because it fits with my intuitions about people and organisations?' 'Do I require the same level of proof and the same data regardless of whether or not the issue is one I believe in?' And, most important: 'Are my colleagues and I allowing our beliefs to cloud our willingness to gather and consider data that may be pertinent to our choices?'

But what is evidenced-based management? Is this theory just another management fad that will come and go, like most of the others? No. This is different. For a start, the authors don't espouse a whole new set of principles, and there is a noticeable lack of 2x2 matrices purporting to solve all our problems.

What this book has, however, is a logical argument. Pfeffer's Law (as he calls it) states that 'instead of being interested in what is new, we ought to be interested in what is true'. This doesn't just mean introducing good systems and knowledge management techniques; it goes to the heart of any organisation - behaviours.

With the right facts and evidence on the table, organisational hierarchies are flattened and power dynamics are changed. 'Formal authority, reputation and intuition' are replaced with 'data'; and 'warriors' are replaced with 'accountants'. If only life were that simple, for there is a perennial battle in many interactions across all organisations - that between decision-making based on evidence versus strong personalities.

At times, there is nothing more difficult than to challenge a leader with the evidence that contradicts their opinions. But I would contest that we owe it to all our stakeholders, no matter how large or small the company, to insist on the facts at every opportunity.

What is the cost to industry of, for example, poor decision-making? Why do about 70% of mergers fail to increase - and, at times, actually destroy - shareholder value? More focus on hard facts and evidence would enable many more organisations to take the profitable course, to make the best big decisions and to correct little ones.

But what struck me most about Hard Facts, Dangerous Half-Truths and Total Nonsense is the conclusion that evidenced-based management is the 'exception rather than the rule' today, and that this applies across the board from work/life integration to selecting talent; from structuring rewards to, ultimately, leadership itself.

This is a passion of mine and underpins my belief in the way organisations should run at their most effective in order to create sustainable high performance. Naturally, we could always do better, and there will always be a time when facts and evidence are simply not enough to make the required decisions. But for me, they should always be the starting point.

It sounds simple, but having read this book and the numerous illustrative examples that the authors provide, I was surprised to find how often this is overlooked.

This volume provides rich opportunities for those leaders and companies that actually implement an evidenced-based approach. The question remains: who will have the courage and wisdom to do it?

Hard Facts, Dangerous Half-Truths and Total Nonsense Jeffrey Pfeffer and Robert I Sutton Harvard Business School Press £16.99

- Chris Hyman is chief executive of Serco Group

BOOKSHOP

All the books reviewed are available from the MT bookshop. To order, call 08700 702 999 or visit www.mtmagazine.co.uk. P&P at £1.95 will be added to each order.

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Leadership

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