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2. Evidence -based management: Why do we need it?

2. Evidence -based management: Why do we need it?. Reason 1: Mounting criticism. Managers have to endure a great deal of criticism from various directions. Misuse of the position of power to one's own benefit, failure and mismanagement are the charges most commonly heard. .

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2. Evidence -based management: Why do we need it?

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  1. 2. Evidence-based management: Why do we need it?

  2. Reason 1: Mounting criticism Managers have to endure a great deal of criticism from various directions. Misuse of the position of power to one's own benefit, failure and mismanagement are the charges most commonly heard. ”Staff in the private and public sectors are addressed on a daily basis in a language which does not express their own specific reality but the make-believe world of managers. This make-believe world is dominated by objectives couched and repeated in a theatrical rhetoric: top quality, excellence and continuous innovation”

  3. Trust me, I’m a manager.

  4. Reason 2: Accountability As a result of this increasing social pressure there is an external drive for transparency which fosters an upheaval for ‘objective opinion’ and even ‘objective evidence’.

  5. Reason 3: false information • Half of what you learn will be shown to be either dead wrong or out-of-date within 7 years of your graduation; the trouble is that nobody can tell you which half

  6. Reason 4: half time value of knowledge 5 years? 7 years? 10 years?

  7. But the MAIN reason is .....

  8. Errors and Biases of Human Judgment • Seeing order in randomness • Mental corner cutting • Misinterpretation of incomplete data • Halo effect • False consensus effect • Group think • Self serving bias • Sunk cost fallacy • Cognitive dissonance reduction • Confirmation bias • Authority bias • Small numbers fallacy • In-group bias • Recall bias • Anchoring bias • Inaccurate covariation detection • Distortions due to plausibility

  9. Errors and Biases of Human Judgment • Seeing order in randomness • Mental corner cutting • Misinterpretation of incomplete data • Halo effect • False consensus effect • Reinterpreting evidence • Group think • Self serving bias • Sunk cost fallacy • Cognitive dissonance reduction • Confirmation bias • Authority bias • In-group bias • Recall bias • Anchoring bias • Inaccurate covariation detection • Distortions due to plausibility

  10. Seeing order in randomness We are predisposed to see order, pattern and causal relations in the world. Patternicity: The tendency to find meaningful patterns in both meaningful and meaningless noise.

  11. Seeing order in randomness We are pattern seeking primates: association learning

  12. Points of impact of V-1 bombs in London

  13. Points of impact of V-1 bombs in London

  14. Errors and Biases of Human Judgment • A Type I error or a false positive, is believing a pattern is real when it is not (finding a non existent pattern) • A Type II error or a false negative, is not believing a pattern is real when it is (not recognizing a real pattern) Dr. Michael Shermer (Director of the Skeptics Society)

  15. Errors and Biases of Human Judgment • A Type I error or a false positive: believe that the rustle in the grass is a dangerous predator when it is just the wind (low cost)

  16. Errors and Biases of Human Judgment • A Type II error or a false negative: believe that the rustle in the grass is just the wind when it is a dangerous predator (high cost)

  17. Errors and Biases of Human Judgment • A Type I error or a false positive: believe that the rustle in the grass is a dangerous predator when it is just the wind (low cost) DEFAULT • A Type II error or a false negative: believe that the rustle in the grass is just the wind when it is a dangerous predator (high cost)

  18. Errors and Biases of Human Judgment superstitious rituals superstitious rituals more stress = more prone to biases

  19. Errors and Biases of Human Judgment

  20. Errors and Biases of Human Judgment Erroneous beliefs plaque both experienced professionals and less informed laypeople alike. stress & lifestyle peptic ulcer

  21. Oct 2005 Peptic ulcer – an infectious disease! This year's Nobel Prize in Physiology or Medicine goes to Barry Marshall and Robin Warren, who with tenacity and a prepared mind challenged prevailing dogmas. By using technologies generally available (fibre endoscopy, silver staining of histological sections and culture techniques for microaerophilic bacteria), they made an irrefutable case that the bacterium Helicobacter pylori is causing disease. By culturing the bacteria they made them amenable to scientific study. In 1982, when this bacterium was discovered by Marshall and Warren, stress and lifestyle were considered the major causes of peptic ulcer disease. It is now firmly established that Helicobacter pylori causes more then 90% of duodenal ulcers. The link between Helicobacter pylori infection and peptic ulcer disease has been established through studies of human volunteers, antibiotic treatment studies and epidemiological studies.

  22. Errors and Biases of Human Judgment • Doctorsand managers hold many erroneous beliefs, not because they are ignorant or stupid, but because they seem to be the most sensible conclusion consistent with their own professional experience! available evidence.

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