Evidence-Based Management: When the Path Is Missing

What does an organization have to do when it is in complete uncertainty? For example, the company doesn’t know where to go next, the next step of its journey, and where to get the mission. Of course, we can say to go and try to find a mission, but this is easy only on paper. It is hard to make a first step regarding actual experiments. So, let’s try to understand what it means to find the right path in a complex world.

First Steps

Whether we are looking at a well-established company or a group of friends looking to start their first startup - the first step is probably similar - understand the environment.

What does the environment look like? In the idea you are trying to get - who are the competitors? Is there much competition? These are just some questions our mentioned team has to ask to understand their future steps. It is essential to realize that while we can observe what’s going on next, we should not be limited by what we see but also try to look beyond it.

One of the examples of why we should look not only at the facts we can observe is the so-called survivorship bias. It is the logical error of concentrating on entities that passed a selection process while overlooking those that did not. During the Second World War, planes were reinforced at the places where the most hits occurred, but the problem was that this conclusion was based on the examination of planes that returned safely. Instead, all aircraft hit in other places didn’t return, so perhaps reinforcement could have been used elsewhere.

So, try to get the best ideas from competitors, but look around if there is anything you are missing, but stay aware.

Think About Metrics

While we have discussed four key value areas, plenty of metrics can be implemented to track those areas, and the beauty of the approach is that it is customizable. Now that you know what the future product or feature might look like - think about measuring value - metrics that are easy or cheap to track and how to implement them. There is no value in proceeding further without setting the measuring guardrails first.

The best that can happen is that you will not understand what you have just implemented. The worst can drag you straight to the bottom.

Experiment

While having to work and not-so-working ideas from the competitors is a great idea, most likely, this will not be enough for you to outcompete those who stand firm on the ground already. Start experimenting as fast as possible. Experiments are probably the best way of trying things.

Use hypotheses, i.e., the idea that you believe is true or functionality that you think customers would love, and devise a way of implementing it. You do not need to build something - instead, you can gather people who you think might use the project and ask them what they believe - either about the mockup, a brief description, or if you have enough capacity - a prototype that can do some basic operations.

It didn’t work. No worries - you spent just a few days and, most importantly, got the data as you had set the metrics before. Do metrics provide valuable insights - great, go with the future iteration of your product. If metrics are almost useless, your next move might be to adaptation of these metrics to what you need to build your future steps.

Remember, we are not looking for perfection here. Our main goal is to understand the future path and create a mission and goals for the product. Thus, even the craziest ideas might help if we try them and get valuable insights.

Acting Based on the Experiment Results

Once you have gathered insights from the experiments and proved or disproved your hypotheses, you might be ready to set the mission and goals to start building the product. And don’t get me wrong, if you want to go without these steps - you are more than welcome, there might be situations when you want to dump all the possible resources on the problem and win.

However, in a world where it is not only you who tries to win - that is a big gamble, especially if you are limited with resources.

Setting the Mission

We have discussed how to set up a mission and goals on different levels, so it is worth looking at one more time. While we know what goals and levels to set up, we must correctly process all the evidence gathered. Get the buy-in from the team, establish accountable people, and ensure you have guardrails and check-ins in place to routinely inspect what you have implemented and how it is performing.

While understanding the performance - you guessed it right- look at the critical value areas and identify the most crucial for a specific part of your business.

This will allow you to get insights without much trouble and help you not only to follow the mission but also to make sure that you are following the shortest possible path toward it.

Conclusion

We have discussed how to use Evidence-based management to find or return to the path toward the end state of your product if you are lost. While this is not a step-by-step guide, hopefully, some insights we have provided can be implemented on the scale. If you are looking for a new challenge or already have one you are trying to solve - Evidence-based management might be the right tool to look at it.