Evidence-Based Management: Where to Start?

If you haven’t read my article about evidence-based management's history and core principles, I recommend you do so by following the link: https://hackernoon.com/evidence-based-management-in-business-will-it-make-a-difference

If you have decided to start implementing evidence-based management in your organization, I would like to talk about the first steps.

The whole idea is to use the objective evidence of our work to steer towards a better/faster/more efficient way to achieve the goal. While we can aim to uncover the best path, it will be extremely hard or almost impossible if we do not know where we are going. So, let's start by understanding the organization's vision and mission.

If you understand your organization's vision and mission, skip to the next section. If you are unsure - let’s take it simple and try to understand both for a well-known company - SpaceX.

Vision and Mission

The Vision, which can be derived from their statement, would be something similar to “make multi-planetary life possible,” while the Mission would be “revolutionizing space technology that will enable multi-planetary life for all people.” In other words, Vision is the ultimate direction of travel, while mission is a close objective that is the company's current focus.

Whether you are building a multi-planetary civilization, optimizing a search engine, or trying to establish world domination in the production of raw cashew snacks, it is super important for you and your company to make sure everyone in the organization understands both.

This way, when critical decisions have to be made, they can be checked for compliance with the vision and mission, and if they are, that’s probably a good decision to make.

Goals

The next step is to introduce a set of goals on different timelines: long-term (strategic, 1+ years), mid-term (or intermediate, 3-6 months), and short-term (or tactical, up to 3 months). The goals are the ultimate tools for your organization to move toward its mission and vision.

Long-Term Goals

Strategic goals are those that could be more ambitious. Ideally, they are nearly impossible and are purposefully created to guide your organization toward its mission. When we speak about mission, we still need to figure out what our product or general solution might look like. It is good to start framing an authentic look for a long-term goal. Whether it is a certain market penetration or a specific level of revenue per customer, make sure the direction of an organization toward the long-term goal is a step toward your mission and vision.

Medium-Term Goals

Intermediate goals should be refined and understood before even starting. Whether this is a new proposition for the customer, a redesign of your current infrastructure, or an entirely new marketing approach - this is an essential step to set boundaries for a couple of months that will help you to try a hypothesis, idea, or experiment with the information you already have.

You still have to remember about the principles of Agile and be ready to give up the goal if it makes sense that you are not able to fulfill the goal, but if you ever decide to make a change - think what else can be done to get closer to the strategic goal and take appropriate decisions.

Short-Term Goals

Ideally, an iterative process can be achieved by a team or set of teams in a really quick period of time and, if failed, will not cause much harm to the whole organization and its mission. Think about improving customer experience, creating new opportunities for them, and using these propositions as a testing ground to get feedback and help from those higher-level goals that will lead you to success in the broader picture.

Measures

It is important to be able to track progress with measures that can be counted and visualized in order to understand how all goals contribute to the mission and vision.

In Evidence-based management, these measures are called Key Value Areas:

• Current Value (CV)
• Ability to Innovate (A2I)
• Time two market (T2M)
• Unrealized Value (UV)

Current Value

Quantifies the value that the product delivers today. It can be represented by factors that are low on Wall Street, such as Revenue per Employee, Product Cost ratio, and other measures that are more specific for your business, such as Employee Satisfaction, Customer Satisfaction, Clicks to order, etc.

Unrealized Value

These are usually the metrics directed towards potential growth, i.e., potential market share that the product might achieve if it better meets customer needs or the difference between the customer's ultimate experience and the current level of experience.

Time to Market

These are metrics that are widely adopted by the industry as DORA metrics, as well as other metrics that show how fast the value is delivered to the customer, i.e., Lead Time, Time to Learn, Time to pivot, etc.

Ability to Innovate

This is an extremely important metric that is usually shadowed by other, more catchy metrics and is also the hardest to measure. The amount of technical debt, average number of defects per release, the time needed for the release process, amount of known vulnerabilities, and skills distribution in the team/organization are good examples of this key area.

Most organizations need to improve their understanding of why they are taking too long to introduce change or make decisions, and the ability to innovate can help.

What Next

Once everyone understands the vision and mission, has a clear set of goals, and knows how to measure their progress with four key areas, there is a big room for improvement. As it says in Scrum Guide - “Easy to learn but hard to master.” You will probably see lots of potential improvement areas and make many mistakes.

But as soon as your progress is transparent (Transparency), you know what went wrong (Inspection), and you can change (Adaptation) - you are on the right path to success.