Evidence Based Management

The idea of evidence based management is somewhat common sense. But it is strange that many times in a management situation, people do not follow these methods. To do what is right based upon the results. It seems as though this concept is simple, yet not implemented in the common daily routine of managers. Even with the use of doctors evidence based decision making 15% of the time, they are still relying on methods learned in school, patterns of experience, and certain methods that they believe is right. But none of these assumptions that these doctors are making directly relates to the evidence from results. The even worse case is the percentage of actual managers of businesses that do not implement evidence based decision making. This is a very scary thought, and confusing to me how all of these managers still stay afloat.

It seems as though many managers are trying to move in the direction of evidence based management. The continuous improvement process can be assumed in one way or another to be evidence based. Managers are trying to move from their old ways that have always worked, and are now being subject to change. It seems as though doctors do have a better way of using evidence based management in their practices, but they are also clouded with vendors and new products that could be based upon new evidence, but might be a little over exaggerated.

The tough part about a manager being evidence based is the amount of clouds that revolve the honest truth about what really works. Everyone in the field of any type of work has data that supposedly is based on true evidence. But sometimes this is not the case at all, there so too much evidence out there, and the truth has become engulfed with clutter. Considering the amount of evidence out there, and the search for the true hard facts, there is still many paths that lead to no where. Either the data from the research is not accurate, or the evidence is not applicable to the current situation. There are many boundaries that a manager must face when transitioning into an evidence based management system and mindset.

Gary Loveman & Harrah's Entertainment

The hiring of Loveman for the implementation of new marketing strategies and operations was a great move by Harrahs. Loveman had the most significant impact in the marketing arena. The data that was collected through the club cards had to be analyzed, and used as a beneficial tool in expanding Harrahs, and better identifying certain things that each individual can do to better the company as a whole. Loveman planned on using the data collected to shape the marketing strategies he would implement. While analyzing the data, he found out that 26 percent of the gamblers produced 82 percent of the income. And, that the gamblers that produced all of this income were not the high rollers, they were just the average consistent gambler.

When Loveman realized that the main customers were not just the high rollers, he started to focus more on customer service. He implemented strategies that mainly focused on the average everyday customer. He also implemented the employee rewards to customer satisfaction. The more satisfied the customers, the more money. Loveman implemented some of the fundamental rules to a successful business. He realized that the main way to get Harrahs to grow as a company, they needed to satisfy their customers. And the only way to satisfy the customers is to satisfy Harrah's employees. Happy employees, happy customers, leads to growth, and ultimate success.

Under the leadership of Loveman, Harrahs grew to great heights. Satre eventually stepped down, and Loveman took over as the CEO of Harrahs. Even today, Harrahs shows quality customer service, and is dedicated to their customers. They still receive tons of information from the club cards, and can constantly improve their marketing strategies. I think that the data analysis, the study of the data, and the strategies that came from the sets of data was the ultimate key in the success of Harrahs.

Diamonds in the Data Mine

The strategies that Harrah's mainly followed to increase their customers was evidence based. The evidence based strategies that they followed was directly focused on their casino players. Instead of spending millions of dollars in flashy water fountains, or high class shows, Harrahs spends most of their money on the everyday customers. I think that the reasoning behind Harrah's strategies is unique, and very effective. The way they make every experience for their customers "personal", makes their profits truly rise. Since their main income is based upon slot machines, they focus on the people who play these slot machines, and in turn generate more income.

In stead of focusing on the high rollers, and the one time big spenders, they mainly focused on the everyday average joe. This was a good strategy because they knew that the average joe would come back, and be a regular customer. The regular customer focus made the people who mattered the most, and generated the most income, made Harrahs successful. I believe that this strategy is effective in many ways. The comfort level of the customers is necessary for their happiness, and their likeliness to spend more money.

The service that Harrahs provides is unique and effective. The employees are very personal with their customers, and they try to make every experience for the customers great. The outreach of their employers is one of the most important aspects of their success. This is one of the main business rules for success, and it is funny to see that most of all of the other casinos do not follow the same type of approach.

Good to Great, Or just Good?

The error in Phil Collin's great analysis was the fact that he did not find timeless, universal answers, but an average business performance analysis. The result tat cam from his study were not sustainable aspects that those certain companies have achieved. The analysis only shows the 11 companies that had the principles in common at the time of his study. The test results that came from the study of GTG, concluded that there is no empirical evidence that the GTG concepts lead to sustained great results.

One of the flaws that the system Collins set up was the study of data mining. The problem that occurs is that the data collected during data mining depend completely on the specific time period and data set gathered. In other words, things change over time. The fact that a company does well in a certain period, does not mean that they product those same numbers typically across the board. Another thought about data mining is that the data received is based on a random period of time. Random patterns that only show up in specific time periods. The only way data mining can be accurately analyzed is if we use it over a period of time, and analyze the trends of the data changing. People can then see a typical pattern of each individual company.

Another problem with the GTG analysis is the association and causation comparison. Collins associated the great firms with the five characteristics. So, in a way, he was saying that the only way for a company to be great is to have these characteristics, and these characteristics only. But this is generally not the correct way to analyze the company.

The right way to do things sounds like the fundamental scientific method. The ability to set up a theory, a hypothesis, and then sampling, testing, and drawing conclusions regarding the validity of the theory. This is the proper way to analyze a situation, idea, event, etc. The argument is that Collins did not provide any evidence of using this model.

The results that came out after the comparison of the GTG and the S&P 500 was that there was no significant difference between the returns of the GTG firms, and the S&P 500 firms. They found little evidence of the "Greatness" described in GTG. No evidence was found that the GTG firms were associated with greatness in the time period following that used by Collins to select the firms. All in all, the GTG study was shut down as a accurate way to measure great firms.

Senate Select Committee on Intelligence

Even our own government has been the victim of not implementing "Collective Group Thinking." The United States of America has not used these management skills to properly assess a situation. The biggest management team in the whole entire world, essentially, did not communicate properly. This absolutely shocks me. The fact that the management team who was doing research about invading another country, decrlaring war on another country, and killing numerous amounts of people, did not communicate properly.

If we did communicate properly in this situation, we would be in a completely different situation worldwide. Since we have made this mistake, the US has been lowered on the totem pole. The relationship between Muslims and Americans have now been changed for ever. The ball drops on American intelligence, the fact that we used old evidence prior to 1998 to make our decisions in the 2000s. I cannot believe that this management aspect was not present in the white house. It seems as though this is one of the biggest mistakes a management team can make. Usually a management mistake could potentially lose the company a lot of money. But in this situation, the lack of communication between management teams in the white house has lead to death.

All in all, this article shows that the importance of proper communication throughout a team is critical. And the lack of communication between teams members can, and will result in bad outcomes. Some more intensive than others, especially when you talk about the US, and their bad decisions leading to the loss of human life.

New Product Team Leaders

In order to have a new product introduced into the fast paced business environment that exists today, strong leaders will be critical. The leaders must portray skills and abilities to bring together the team, and complete set goals effectively and efficiently. The transformation of a specific leader to overcome the basic way of managing can have a significant impact on the success of the project. The list of leadership qualities that a person should implement into the team is very helpful. The basic way of linear decision making, and isolated incidents is in the past. The more collaborative the team is during decision making, the overall better chance a decision will be the most effective. The more people involved, essentially, the better. But, a team can be over sized for a certain situation, and people can have too many conflicting ideas. It is from experience, I believe, that an effective team size can be accurately estimated.

For a leader to succeed in all of his major goals, he has to be very committed to what he wants to accomplish. This commitment must also be passed down to all of the team members as well. If everyone one is on the page as far a "wanting" to accomplish the common goal, the project has a better chance of success. The table "The Process of Team Leader Transformation" has some very good situations that are common in my workplace. I think that this table could be passed on to the CEO if any company, and they could learn from it in one way or another.

Leaders also need to realize that everyone cannot be micromanaged, and no one should be. Leaders need to internally inspire each team member, and make them see that the decisions they make, the information that they portray, and the work flow that they decide to follow is ultimately up to the individual. The building of information-intensive environments is a important aspect of team learning. The "need to know basis" is out of date, and also does not include everyone in the step by step learning process. The more information being portrayed to everyone, the better. This way everyone one who is on the team has the chance to learn everything. The information library also makes the amount of rework minimal.

A good quote that I remember about managing. Managers should only put themselves above others in the aspects of carrying responsibilities. The team members themselves should have the freedom to become a partial leader as well, that way the team members don't feel inferior or unable to make decisions. Human interaction is another important factor in the design of a good team. The personal relationships should have a strong basis, and people should be not afraid to communicate to each other, especially the communication with the leader.

Sins of Comission

Extra pay for performance can be seen as a double edged sword. On one hand, the employees who get a pay raise due to their good performance will essentially perform better. But this is only a quick fix for the overall improvement of the employee. If given the extra pay, the employee thinks that they are doing a good job overall, and has no room to grow. The real way to better an employees effectiveness is to change the organizational culture, people's mind sets and beliefs, their knowledge and skills, and how effectively they work and communicate with each other.

It seems as though many companies just give the employees incentives/commission to keep up with the competition, but that is not where the true seed for growth is in a company. The commission idea I believe has a fine line between paying employees too much for their benefits, and too little. The more that an employee gets paid for commission, the more that employee believes that he/she is doing her job fine, and does not need to improve in any particular way. But if the company decides to pay the effective employee to little, that person will become frustrated and not want to work as hard. He/she believes that all of their hard work has not been worth the compensation. I think that all companies should adjust the system to better accommodate employees. And this can act as an incentive as well as help them do their job more effectively.

Arrow Electronics

Stephen Kaufman has two main responsibilities from a CEO's standpoint. The first is to guide the strategy of the organization. Second, is getting the right people in the right places and motivating them, so that the execution of the strategy is effective. Kaufman says that everything else is just mechanics. This puts a heavy emphasis on the people that need to be hired, and their performance evaluations. By looking at employees evaluations, he can better determine if the right people are in the right places and that those people are being effective.

A good point was brought up by Krista Boland. She stated that the comparative rating system was not the best way to give employees feedback about their performance. This was because it indirectly compared the employees to one another. Since the evaluations were based on numbers from 1 to 5, each individual employee had to be compared to one another to get the meaning of 1 and 5. So, if someone got a 2 in a certain area, they started to question who got the 5. All in all, this style of performance evaluation was not based on the individual, but the group of employees as a whole.

The results of the evaluations did not come out as expected. The managers who were conducting the evaluations did not discriminate between employees. I think that they were afraid of the fact that being critical about other peoples jobs might lead someone to be critical about their own. Since the managers were afraid to give true evaluations, everyone received a 4 or 5 on their evaluations. When everyone on received 4s and 5s, they were then under the impression that nothing needed to be improved. So in turn, the employees would not work harder, and more effectively.

All in all, Kaufman tried many different approaches to the performance evaluation rules/criteria. All of these approaches lead to inconclusive results. So by spinning his wheels trying to find a accurate performance evaluation system, did nothing. This is one of the examples that show performance evaluations to be useless. I think that the best way to have productive and efficient employees is to internally motivate them. Employees do not become more efficient after a performance evaluation, they have to be internally aware that they need to do better. Then and only then will be grow and become a better worker. You can compare this situation to the classic new years resolution, millions of people each year set a goal or standard tat they want to achieve throughout that next year. But in reality, 90% of those people who make that goal do not continue it and accomplish it. People have to be internally motivated to achieve something, not just a once a year slap in the face.

Get Rid of Performance Review

I definitely agree that the performance review process does hardly any good. The fact that your boss gets to criticize you, and tell you whats wrong with your self is supposed to help you in the workplace? This makes no sense to me. It seems like the boss should focus on the good things that the employee did throughout that year, other than focus on the main problems that need fixing. The weaknesses of the employees should be brought to their attention right when the boss sees it as an issue, not hold up a list for a year and pile it all on them at once.

Performance and pay I believe usually do come in hand-in-hand. But it is also true that the market and budget in that area also contributes to the chance of getting a raise. If the business is making more money on a certain job, the employees working on that job could have a better chance for a raise compared to employees on a lesser successful job. I believe that it is a combination of work performance, job market, and budgets that contribute to the raises.

The performance evaluation process can be argued as objective. The fact that two separate bosses can give completely different evaluations of the same employee shows that this method is not consistent. Not only is it inconsistent, I think that the process is not even accurate. From my past experience, these performance evaluations are not helpful in developing better employees.

SAS Institute

The SAS Institute seems like the perfect company. The reason for their ultimate success comes from the core values and ideas that were generate right when the company began. The continuous investment in research and development was the key difference when compared to other companies. Especially in the software technology business, continuous improvement and research for new products is an important aspect for company growth. With technology evolving each year, SAS Institute put themselves in the correct position for success.

The philosophy behind SAS Institute was the basis on how the company was developed. By holding four main principles up on the totem pole, kept the business profitable. The first and most important principal, keeping the employees happy, is the first step for business development. In order to find customers for life, customers need to be satisfied. In order to satisfy customers, a business needs to have employees to do the satisfying. In order for employees to satisfy, they need to be happy with their work. The second principal, intrinsic motivation, is a great idea. The proper way to keep employees working is to internally inspire them to do good work. This way, the employees will work and be effective without much supervision and micromanaging. The third perspective is the long-term scope on things. To look into the future and foresee the potential for anything is always beneficial. The fourth part of the management philosophy is the bottom-up decision making. Not having a clearly defined goal for finance or growth has apparently worked for SAS. I'm not really sure how this philosophy works, but it seems to just give people a mindset of "do the best you can, and things will keep getting better". This philosophy might just be a focus on a lesser management type of goal.

The recruitment and selection process for SAS is a good one. They have been focusing on a more family-friendly place that helps people deal with real life. This focus goes back to the first principal that SAS has of keeping the employees happy. The compensation focus for SAS is unique since it does not focus on commission. This way employees are more inspired to build the long term relationships with customers rather than just focusing on the sale itself. The good work environment for SAS, I believe has been an important contributor to the success of SAS. Its important to the employee to have a "normal" work day. Employees that are tired, and that work late are not as efficient. The idea that people need rest is common sense, but is sometimes overseen in the workplace. SAS's performance management theory is an important part in the development of their organizational structure.