How can management follow medicine’s lead and rely on evidence, not on half-truths?

A good question to ask all those ’seat-of-the-pants’ managers and decision makers: How would you like it if you found that your medical practitioner didn’t look at the evidence and engaged in a similar ‘gut-feel’ decision making in matters concerning your health?

Prior to research by the French physician Pierre-Charles-Alexandre Louis in 1830, doctors believed that removing a few pints of a person’s blood would help cure all sorts of ailments. Lewis conducted clinical trials that helped convince physicians to abandon bloodletting based on actual clinical evidence. Lewis became the “Father of Epidemiology” and led the medical profession towards evidence-based identification and treatment of diseases.

Managers frequently base their business decisions on hope, fear, dearly held ideologies, what others are doing, and what they have done in the past – in short, on lots of things other than evidence.

In a Stanford Social Innovation Reviews article, Jeffery Pfeffer and Robert Sutton make the case for an Evidence-based Management Movement. Like evidence-based medicine, evidence-based management can help managers figure out what works and what doesn’t, identify the dangerous half-truths that constitute so much of what passes for wisdom, and reject the total nonsense that too often passes for sound advice.

Seven Rules for Appraising Business Ideas:

  • Make sure the cause came before the effect
  • Remember that correlation does not mean causation
  • Don’t rely on success (and failure) stories: People have terrible memories and after identifying winners and losers, people selectively remember information that reflects these different outcomes.
  • Be suspicious of gurus and breakthroughs.
  • Take a dispassionate approach to ideologies and theories: Learning is difficult when people are driven by ideology rather than evidence.
  • Treat old ideas as if they are old ideas
  • Admit uncertainties and drawbacks

You can read the full article on Guy Kawasaki’s blog here.

You may also want to read the book Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management where the authors use hard evidence to debunk many of the modern management practices.

(From Guy Kawasaki’s blog.)