What Don’t You Know? Putting Research to Work in Organizational Decision Making

Successful managers are constantly looking for better tools to assist in decision making, yet even the strongest leaders can find it difficult to resist the hunch.  Whether it is because of previous successes or simply a ‘feel’ that has developed over a long career, managers and decision makers often rely on gut and intuition to make serious decisions.  However, there often too many stakeholders or variables involved to base major strategic decisions simply on feeling.

When used in conjunction with an effective management strategy, modern research techniques are able to quickly provide targeted and detailed intelligence and support for business decisions.  This article will explore how recent management theory can be combined with cutting-edge research techniques to give managers confidence in their decisions and provide for optimal outcomes.

As new tools and techniques of business are constantly emerging, it is critical that the management teams in all organizations, including small and medium sized businesses (SMEs), stay abreast of new approaches.  One of the more valuable new ideas to emerge is that of Evidence Based Management (EbM), described by Stanford University’s Robert Sutton as:

“…a simple idea.  It just means finding the best evidence that you can, facing those facts, and acting on those facts.  Yet surprisingly few leaders and organizations actually do it – and those that do trump the competition”.

A recent set of guidelines published by CMA Canada and authored by Bernard Marr outlined how businesses may adopt elements of EbM  to their advantage by providing a detailed description of its application as well as a simple flow chart to follow.

According to CMA Canada, a survey of 371 companies found that 65% of top performers said they had significant decision making support or real time analytical capabilities, versus 23% of low performers.  The same study found that 40% of top performers use analytics across the whole organization, compared to 23% of low performers.  Simply put, knowing what data to collect, how to interpret it, and being able to put it to use are key drivers of business success.

However, as with other operational requirements such as payroll or accounting, organizations simply may not have the resources, expertise, or time to develop a proper EbM approach all on their own.  The table below is based on CMA Canada’s publication, Evidenced-based Decision Making: Using Business Intelligence to Drive Value[1]. This table has incorporated extra elements to highlight which areas of the process should be handled by the organization and which can be best achieved with an efficient research partner.

Implementing EbM with a Research Partner

CMA Canada’s Management Accounting Guideline outlines in five steps how firms can best implement an EbM approach.  Below, this step-by-step guide has been modified to highlight where an external partner could help maximize value; but also the areas where internal development and awareness is key.

In implementing an EbM approach, firms can draw on their internal strengths to define their objectives and information needs (Step 1), and act on the findings to make evidence-based decisions (Step 5).  Meanwhile, firms that lack the infrastructure or expertise to efficiently collect and analyze data, create relevant and traceable analytics, and present the data in an intuitive way (Steps 2 through 4), can eliminate those weaknesses by finding a research partner.

Too often, firms are unable to implement the latest management practices for reasons of cost, interest, time, or other lacks of resources.  By partnering with a qualified research firm to assist with an EbM approach, such organizations can reap the benefits of more efficient management without compromising their operational efficiency in the short term.

The Model in Practice: A Case Study

In 2011, a large Canadian university was faced with a strategic planning crisis.  They saw a need to address ever-increasing competition from other universities by offering as broad a range of programs as possible; simultaneously making those programs enjoyable and accessible for students in a cost effective manner.

As a university, the school had enormous amounts of data on its current students, as well as experienced management and recruitment teams to execute an evidence-based strategic plan.  However, they were missing key data on prospective students, and were unable to gather information without the potential for bias.

The university came to us with a complete set of Stage 1 information – a clear set of strategic aims and a list of what they needed to know: what are the key drivers for students making a decision of which university to attend?  What do students look for or expect from their first year experience?  How is the university in question positioned versus its competition?

Through phased consultation, we tailored a data collection and analysis plan which involved targeted qualitative and quantitative studies conducted in key market segments and geographic regions and presented the findings to the university.

Based on the presentation and report, the university was able to make evidence based decisions regarding key programs and recruitment drives.  In less than a year, applications and student retention rates for two key programs saw considerable increases.  In addition, reputational tracking showed measureable upticks in key areas in response to recent marketing campaigns by the university.

Putting Data to Work for Your Organization

As Mr. Marr effectively argues, Evidence Based Management is an invaluable tool for managers and business leaders; as making strategic decisions based on accurate and timely information is an approach every organization should follow, regardless of their size or purpose.

The key to applying such management tools in practice is the ability to collect, analyze, and present data relevant to the decision at hand.  Just as experienced managers have a range of strategic tools at their disposal, research firms are equipped with advanced data collection and analysis tools to support informed decision making.  Understanding what you don’t know is a critical step in making the best decisions.

Alex Monk is the Director of Research and Finance at Abacus Data, and a Certified Management Accountant.  He has helped provide decision making support to clients in a number of sectors, including transportation, education, retail, banking, energy , and natural resources.  Alex can be reached at alex@abacusdata.ca


[1] Evidenced-based Decision Making: Using Business Intelligence to Drive Value, Bernard Marr; The Society of Management Accountants of Canada, 2009