It’s Time for Evidence-Based Management

Never in history have we had access to more information, on a more timely basis. Yet, every new revelation about the financial crisis has us asking, “How could so many smart people consistently make such horrendously bad decisions?” Aside from a smattering of willful corruption, the answer is that all too many crucial decisions were based on untested but strongly held beliefs; what the decision-makers had done in the past; or uncritical “benchmarking” of what “yesterday’s winners” had done.

As we rebuild from the rubble of this catastrophe, now is the time for managers to adopt an approach that will enable us to avoid similar mistakes going forward. The Trends editors argue that for the first time in history, the technology and motivations are in place to implement “evidence-based management.” As we’ll explain, this approach, growing out of best practices in the medical profession, can deliver a substantial competitive advantage to those who rigorously adopt it.

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