| Carnegie Mellon Today | Feature Stories | > Workout
« Back to Page 1

In 1996, Psychological Contracts in Organizations wins the prestigious George R. Terry Book Award—bestowed by the Academy of Management to recognize outstanding contributions to the advancement of management knowledge. Rousseau dedicates the prize-winning book to her ailing father and presents a bound manuscript to him as a gift on his 70th birthday. With pride and excitement, he sits down and reads the preprint of his daughter's tome from cover to cover, refusing to let anyone else see it first.

The story could end neatly here—a scholar devotes her career to improving employment relationships because of the hardships of her father. Finally, after decades of research, she honors him with her success. But for Rousseau, the story doesn't end here because her father's words during that ride in the VW won't go away" "We've got to find ways to keep work from grinding men down. Grinding men down. Grinding men down."

"I really didn't think that I made any progress on that goal—that hope," she says. "Sure, my book said things that were true and important, but that's a far cry from actually motivating a change in the way people are treated."

Rousseau grows increasingly frustrated that her research isn't reaching the practicing managers who stand to benefit most—from the barista shift-supervisor at your neighborhood Coffee Tree to Wall Street executives. "For a long time, I had the hope that if I just did the research and tossed it over the transom that somebody would catch it and apply it," she says. "But as I approached my 30th year in this profession—I'm a slow learner—I said to myself, 'Denise, this just isn't working.' You can do a lot of studies and have no one but another academic ever read them."

So she begins searching for ways to close the "research-practice gap'—the failure of managers to base their day-to-day decisions on any findings from the vast body of best available scientific evidence, choosing instead to rely on intuition or personal experience, or to follow unsubstantiated, over-simplified advice from trendy, how-to business books.

These are the ideas preoccupying Rousseau as she completes her term as the president of the Academy of Management in 2005 and prepares to give a keynote address at the organization's annual meeting. The natural, assumed choice would be for her to recount her well-respected studies on psychological contracts in the workplace. Instead, she takes a risk before the oldest and largest scholarly management association in the world. "I knew it was my big chance, because they had to listen to my speech even if they didn't agree," says Rousseau. "So I proposed the idea that we aren't doing what we think we are—that is, we're giving students models and examples, but we aren't teaching them the underlying scientific principles. And I sounded the call for evidence-based management."

Evidence-based management involves deriving principles from scientific evidence and translating them into practices that solve organizational problems. That means knowing where to gather research findings, having the skills to interpret them, and understanding how and when to apply them to managerial decisions. Healthcare professionals have been doing this since the 1980s, when the medical community recognized that patient outcomes would be better if decisions were based on the best available research instead of clinical experiences or gut instincts, says University of Toronto management professor Gary Latham, president of the Society of Industrial and Organizational Psychology, the field's main academic organization. Medical professionals today have online services that provide ready access to appropriate clinical practice—supported by peer-reviewed research, based on recommendations of healthcare experts.

"Before that, doctors often used to go on intuition rather than fact," says Latham. "And the same is still true for managers. They might read something by [former General Electric CEO] Jack Welch and think, 'Gee, if it worked for Jack, then it will work for me.'" But if you are critically ill with a mysterious ailment, he asks, do you want your doctor combing the archives of the New England Journal of Medicine for answers, or heeding the advice from a column in last week's Parade Magazine? The stakes in management might not literally be life-or-death, but they can be momentous. When managers learn to use scientific evidence—and use it well—Rousseau has no doubts they can make better decisions that lead to better outcomes for their organizations, employees, and clients.

Take the example of John Zanardelli, whom Rousseau calls the "quintessential evidence-based business manager." Zanardelli is CEO of Asbury Heights, a western Pennsylvania residential care facility for the elderly. A public health specialist by training, he regularly gathers and analyzes data linking customer experiences and employee behavior with his firm's financial performance. He uses the data, along with evidence gleaned from the academic literature, to help resolve organizational challenges.

(Continued …)

1 2 3

TalkBack
Leave a comment about the story


Comments are moderated and will be published at the moderator's discretion.

Comments

“Intriguing article. . .where can I find out more about new database. Are you looking for help developing the summaries? ”
– Kim Saunders MAPW'83

“Sigh.

I graduated from the Heinz School 15 years ago and am presently a partner in a large law firm. I stumbled across a discussion concerning evidence-based management several months ago, which prompted my further investigation. The problems with evidence-based management are several but I'll limit my criticisms to the three most obvious issues.

My first criticism is that we've already been down this road. Every few years, someone trots out a "new" theory that's supposed to revolutionize modern management, e.g., contingency theory, systems theory, TQM, etc., and each “new” theory becomes the focus of countless hours of discussion and analysis in board rooms and memoranda, classrooms and exams. Yet these theories are invariably discarded as businesses and business-schools learn and relearn the obvious, i.e., “bad” managers make “bad” decisions, a circumstance only marginally alleviated by training. Consequently, to the extent management theorists believe that evidence-based management is special, they are reminiscent of Sisyphus, in that they apparently believe the hill will be different this time. Rather than attempt to introduce an entirely new discipline, it might be more prudent for business schools to take advantage of the preexisting infrastructure found in law schools, where the emphasis on rational analysis and the application of fact to theory is paramount, and require students to audit an introductory-level class in contracts or legal principles.

“But wait,” wail the masses, “evidence-based management really is DIFFERENT! It relies on really GOOD facts assembled by really SMART people!” Suffice to say, this is a distinction without a difference and prompts my second criticism. The basic premise fueling evidence-based management, i.e, discarding biases, preconceptions and habits in favor of current, best evidence, will invariably lead to “better” results, ignores the fundamental role of personal differences between and among managers. Some people are risk-takers while others are more conservative in their decision-making. Some people are pushovers while others go to the mat over every single issue. Some people are driven by ideological imperatives and see facts as messy inconveniences to be retrofitted around preconceived goals and objectives. Frankly, I’m skeptical of any theory that purports to “solve” the problem of ineffective and inefficient decision-making by management but refuses to acknowledge that better information will invariably take a backseat to personal choice and individual predilection. I’ve been in enough boardrooms and conferences with corporate officers and directors to state without equivocation that smart people with the same facts often disagree about what the facts mean, much less what response the facts require. Evidence-based management cannot solve this problem.

My third criticism of evidence-based management is that it assumes that information is somehow unavailable to managers, or that managers might make better decisions if they focused more on the information available to them. As already noted, this assumption ignores personal choice and individual predilection. More fundamentally, however, this assumption ignores the fact of bad decision-making notwithstanding the extraordinary amount of information already available to managers, a circumstance perhaps best illustrated by reference to the Madoff scandal and the Bush administration’s dogged insistence that Iraq possessed weapons of mass destruction. In regard to the former, consider the example of Fairfield Greenwich Group, a New York feeder fund which was one of the central investors in Madoff’s ponzi scheme. Notwithstanding the fact that it was apparently fairly common knowledge among institutional investment houses that Madoff’s results were unrealistic and untrustworthy, and despite Fairfield’s understanding concerning the requirements of appropriate due diligence, Fairfield invested billions with Madoff, a situation presumed to be the result of the lucrative commissions earned by Fairfield’s principals. In regard to the latter, it is patently obvious that the Bush administration possessed all of the information necessary to avoid a confrontation with Iraq, a circumstance underscored by the repeated assurances of U.N. weapons inspectors that Iraq possessed no WMDs, assurances made prior to former President Bush’s decision to engage. Superior information, it seems, is not necessarily the mother of better outcomes.

In sum, good management isn’t a function of superior information, or at least not directly so. Rather, good management is a function of superior people. Indeed, I don’t think it’s stretching the truth to posit that the most important decisions any manager makes are her hires. Hire dolts with poor interpersonal skills and the result is predictable. Hire narcissists who see the “i” in “team” and the outcome is invariable. Hire folks who are capable and thoughtful, however, and the end-product is much different regardless of the management theory you apply. In the end, no matter what you call it, results are driven by people, and the repeated attempts by management theorists to reduce human individuality and intuition to a hard science simply underscores the fundamental flaw in their approach.
”
– D. Calloway

“ I have often lamented the fascination managers have for popular, ungrounded business books and their near total ignorance of management research, e.g. my post on Misreading Business.

http://mayogenuine.com/blog/misreading-business/

That is one of the reasons I required my MBA students to read and report on at least three articles from refereed journals. After, that is, I explained to them what an academic journal was and why it mattered. Apparently most had made it through college without ever encountering the species.”
– Tony Mayo