Gutsy, not guts

Alessandra Capezio 14 November 2018

In the business world, as in life, good decisions are best made with all of the facts at hand.

A good head for business. It’s an age-old adage, but there’s a new approach to business that’s saying gut-instinct doesn’t always have a place in decision making.

In the business world, as in life, good decisions – that is, those decisions that produce the outcomes that you’re hoping for – are best made with all of the facts at hand.

Increasingly, it is becoming evident that business managers may not be drawing on a full range of resources and information available to make decisions – which leads to what is called decision neglect.

Starbucks recently wasted millions on anti-bias training for its staff, despite the fact that evidence shows the training wasn’t effective. In fact, it has been suggested that the training Starbucks employed may actually increase discrimination.

A number of conditions – not just a day’s training – are required to change our implicit biases at work. Organisations are ultimately wasting time and resources on interventions that don’t work.

When making decisions and solving problems, managers often rely on their own experience and intuition, or the latest fads, quick fixes, or ‘best practices’ that have no basis in any scientific evidence, or are based on weak evidence.

Personality tests such as the Myers-Briggs Type Indicator (MBTI) have been over-used in organisations for years as a tool for screening applicants or for managerial development. Strange, given that CPP President (provider of the MBTI), Jeffrey Hayes, has himself stated that the test “… is not, and was never intended to be predictive, and should never be used for hiring, screening or to dictate life decisions.”

Recent evidence-based initiatives show early signs of a shift away from gut-decision making to evidence-based practice in business.

Multinational tech giant, Google, implemented an annual management survey, which provides staff with an opportunity to submit feedback about their manager. The evidence-based practice requires, among other things, that staff be trained on how to use the survey.

The survey has shown to both increase the performance of Google managers and also increase staff satisfaction by encouraging the flow of feedback reciprocity. It is one of the emerging examples of how companies are changing the way managers and business leaders are being educated.

The study of evidence-based management teaches participants a set of skills, particularly critical thinking, to help them make more evidence-informed decisions, and to help them identify problems and solutions more effectively. By helping to figure out what works and what doesn’t in business practice, risk and uncertainty are reduced.

It’s a gutsy move away from tradition, but one that will ensure the future of business.

Associate Professor Capezio will be speaking further about Evidence-Based Management at the ANU College of Business and Economics Postgraduate Masterclass Series: Executive Leadership

This event is available for professionals from a wide range of industries working in public, private and not-for-profit sectors who are looking to take the next step in their career with a postgraduate qualification from the ANU.

When: Friday 30th November
Where: National Press Club of Australia, 16 National Circuit, Barton, ACT 2600
Time: 1:00pm -5:00 pm
Cost: $30
Register here:

Alessandra Capezio is an
Associate Professor at the ANU College of Business and Economics.

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