Baseball and the Limits of Conventional Wisdom

Does the latest management trend -- evidence-based management -- complement or confuse our current management practices?
by | July 4, 2007
 

Many of us who lead organizations view the steady parade of new management trends with wariness. Quality circles. TQM. Downsizing ... rightsizing ... and now ... brightsizing! The list is endless, and the promised results often go unrealized.

Now along comes "evidence-based management," and some of us already wonder why we should pay heed to this latest trend. Unlike other such practices, evidence-based management is based on outcomes, uses up-to-date data and directly influences daily decision-making.

Before we dismiss this practice as obvious or too elementary, consider the ways in which many of our organizations currently make decisions. Jeffrey Pfeffer and Robert Sutton, whose work in this area was featured in a January 2006 Harvard Business Review article, explain that what often "passes for wisdom" in an organization is actually outdated information, unproven traditions, personal experience, our own highly held beliefs and "casual benchmarking."

Because information acquired firsthand, however inadequate, feels more reliable than solid research, many of us, say Pfeffer and Sutton, rely on strategies that worked for us in the past but may be inappropriate for our current organization's mission, stakeholders, and environment.

How can public-sector managers move beyond conventional wisdom to practice evidence-based management? For starters, we can look to that great American past time -- baseball.

In his book Moneyball, Michael Lewis describes how the Oakland Athletics' visionary general manager, Billy Beane, systematically assembled a team that for years has enjoyed sustained success, despite having one of the smallest budgets in the game. Beane knew he would never have a bankroll the size of many of his competitors, so instead he looked for "inefficiencies" in the game. Beane sought out "new baseball knowledge" that flew in the face of conventional wisdom, particularly about which types of players could make the grade.

So, how do we as managers replicate the success of Billy Beane and the Oakland A's? First, we need to be clear about what it is that we're trying to accomplish. Having a crystal-clear understanding of what our organization is best at, what it's passionate about, and what drives its economic or resource engine is what separates great companies from the merely good ones, according to Jim Collins, author of Good to Great.

Further, we need to understand the distinction between outputs (what we do) and outcomes (what the impact of what we do is). It's easy to convince ourselves that measuring outputs, the product of our organization's performance -- documenting the number of potholes we fill and taking a head count of the citizens we respond to in a given day -- sufficiently demonstrates the value of our programs and services. Outcomes, however, measure the actual impact and benefit of a program or service to our customers and stakeholders. These metrics are critical for public organizations; if what we do doesn't make a difference, rather than waste resources we should re-evaluate and realign our programs and services -- or stop doing them altogether.

In implementing the practice of evidence-based management, it is critical to gather the most current data about our organization and use that information to establish appropriate performance objectives and measures. By rigorously assembling the right evidence and program metrics, we can document that what we do actually produces the outcomes desired, and in the most effective way. This is the Holy Grail of successful management.

Lastly, we must carefully consider what the data and information we've collected tells us about our organization's future direction. Evidence-based management forces us to consider which programs we should continue, which ones we should drop, and which new initiatives we should pursue. Only by rigorously weighing all the facts -- and not the hype, the organizational sacred cows, and our own feelings, skills, and management styles -- can our organizations deliver tangible outcomes.

One example of a local government that has employed evidence-based management successfully is Palm Beach County, Fla. Troubled by the increasing gap between the needs of its children and families and the resources available to address those needs, in 1986 citizens voted to establish the Children's Services Council of Palm Beach County.

Following two decades of operation and newly identified evidence-based programs in the fields of early childhood and after-school programming, the council was ready to move to the next level of program and system development and accountability. It did so by ignoring the conventional wisdom and, instead, developing a logic model system of nonprofit providers who focus relentlessly on improving outcomes for children based on documented evidence of program success.

"Working from an outcome and data-driven position provides Palm Beach County investors -- the taxpayers -- with the information they need to quantify their investments," CSC CEO Gaetana Ebbole says. This approach also provides CSC staff with validation of the value of their hard work. "Finally, and most importantly," says Ebbole, "the CSC's data-driven position lets the children and families that the organization serves know they can count on the council because they themselves have succeeded."

The 2005-2006 program results support the Palm Beach County CSC's approach. A few indications that the rigorous use of data to evaluate performance moved this organization forward are decreased infant mortality and teen birth rates; significant increases in the provision of services such as nursing home visits, family therapy and case management; lower absenteeism and discipline referrals; and more school grade promotions among elementary school children who participated in one or more CSC programs.

The Palm Beach County CSC is just one example of how public managers can use evidence-based management to clarify the focus of their initiatives, curb waste, eliminate ineffective programs and deliver results that matter to their constituents. Like most successful approaches to management, the theory behind the practice is deceptively simple. But just as Billy Beane of the Oakland A's ignored the conventional wisdom of baseball's front office to build one of the most successful teams of the last decade -- a model now being replicated by other franchises -- we as managers should use new knowledge, performance measures and logic to implement this eloquently simple leadership practice within our own organizations.

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