Evidence-Based Management is the Road Less Traveled, Says Prof. Anthony Kovner
When organizations or businesses stumble, the search for an explanation often leads back to the quality of the evidence-gathering process. It is that process, known as Evidence-based Management (EBM), that fascinates Anthony R. Kovner, who has spent more than a decade trying to get managers to employ it when they seek ways to improve their organization’s performance and results.
Professor Kovner teaches EBM to students at the Robert F. Wagner Graduate School of Public Service, where he is a professor of public and health management and the director of the Executive MPA Program for Nurse Leaders. He is also the author of several books on healthcare management. Shortly before the publication of a chapter he recently wrote, entitled “Adventures in the Evidence-based Management Trade,” for the forthcoming Oxford Handbook of Evidence-Based Management (Oxford University Press), he sat down with NYU Research Digest (Spring 2012) to discuss Evidence-based Management.
What’s the theory behind EBM?
Evidence-based Management comes out of medicine—the idea that if you make a medical intervention, it should have a predictable and positive outcome. We said, “Why can’t we apply this in management?” Well, the truth is, it’s not a simple matter. We know a lot less about management than medicine, for which there’s a huge medical research establishment, the randomized clinical trial, and an established process for scientific review.
What professional sector does EBM most lend itself to?
To every sector. So for example, when two large health organizations decide to merge, we say, “Wouldn’t it make sense to look at the best available evidence before making a decision to merge?” Instead, a very common managerial response is: “We want to merge—let’s find the evidence that justifies it.” So these managers need to do more than just type “hospital merger” in Google? Keep in mind that all managers make decisions based on evidence. The point is, what is the quality of the evidence? It can be pretty shabby.
What’s wrong with the process as it works now?
When, for instance, two large institutions decide to merge, to what extent do they ask in advance, “What do we know about successful and unsuccessful mergers?” Generally speaking, what they do is ask the consultants, and the consultants say, “This would work in Akron.” But of course that doesn’t mean that it would work in Brooklyn. Are the merging institutions’ two geographies compatible? What about their respective cultures? It’s not that you get to a solution—these kinds of problems are too messy, too wicked, and the causation is not as clear as in randomized clinical trials. But it informs your thinking so you can see and avoid the worst consequences of what might happen.
How should the evidence gathering begin?
Three basic steps: search and locate the best available evidence, learn from best practices, and try doing your own management research. If you are studying why nurses turn over so much in your hospital, it’s important for you to understand the differences between the 12-hour day shift and the 12-hour night shift. The most important step, though, is to ask the right question, and translate your management challenge into an answerable one.
If EBM is so effective, why don’t more organizations engage in it?
That’s the $64,000 question, and it’s not an easy question to deal with. What it really is about is power and hierarchy and organizations. Let’s say an employee comes up with a better way of doing something and tells the boss about it. You’d expect the boss to say it’s a great idea, let’s do it. But in practice the boss says, “You’re insulting the way I’m managing this place,” or “If you thought of it, then how good can it be, if I didn’t think of it,” or “Go ahead and present your ideas to the higher-ups, and if they like it I’ll take credit for it, and, if they don’t we’ll blame you. “
That sounds almost insurmountable.
The trick of it is to make the politics work for you. To get it implemented, you have to get the managers to see that it’s in their political interest to practice evidence-based management. And I believe it is.”
Facebook CEO Mark Zuckerberg Recommends Book Co-authored by NYU Wagner Professor Jonathan Morduch
Facebook CEO Mark Zuckerberg is currently recommending Portfolios of the Poor, a groundbreaking book co-authored by NYU Wagner Professor of Public Policy and Economics Jonathan Morduch, for reading and discussion by the Facebook community.
The influential book is the result of systematic research on how the global poor – billions of people around the world who live on less than $2 a day – manage their money. Zuckerberg’s book club, A Year in Books, selects works with big ideas that impact public policy, society and business. Portfolios of the Poor is his 17th pick.
Professor Morduch, managing director of the Financial Access Initiative, wrote the book with Daryl Collins of Bankable Frontier Associates, who received her Ph.D. in Public Policy Analysis at NYU Wagner, and researchers Stuart Rutherford and Orlanda Ruthven.
Published in 2009 by Princeton University Press, Portfolios of the Poor: How the World’s Poor Live on $2 a Day is the first in-depth examination of how the world’s poorest households patch together financial lives.The book shows that they do so with surprising sophistication and complexity, refuting commonly held assumptions about the poor.
Over 250 families in Bangladesh, India, and South Africa participated in the study. Their financial diaries show that poor households are not living hand-to-mouth, but that most of them save and borrow with their future in mind, and maintain complex financial lives because they are poor, not in spite of it.
Faculty Director Explains NYU Wagner's New Saturday-only Executive MPA in City & State Magazine
NYU Wagner's Executive MPA faculty director, Professor Gordon J. Campbell, explains in City & State magazine why the new Saturday-only schedule is a highly attractive option for busy, mid-career professionals looking to enhance their career and make a difference. Read his article, "Making an Impact."
FAI Researching How Low-Income Americans Use Financial Products [Video]
The Financial Access Initiative (FAI) at New York University's Robert F. Wagner Graduate School of Public Service has launched an important new study to better understand the financial lives of low-income Americans.
FAI, in partnership with Bankable Frontier Associates and The Center for Financial Services Innovation, will track families in four geographic regions in the U.S. over 16 months and collect highly detailed data on household financial activity. The study promises a timely and independent look at how low-income Americans are managing their financial lives. The $3 million project is supported by a grant from the Citi Foundation and the Ford Foundation.
FAI's managing director discusses the launch of the U.S.-centered financial diaries project in this video. The managing director is Jonathan Morduch, professor of public policy and economics at the Robert F. Wagner Graduate School of Public Service at NYU.
The "Financial Diaries" methodology employed to conduct this research has been successfully applied in Bangladesh, India and South Africa. The results of that FAI research were detailed in a groundbreaking book Portfolios of the Poor: How the World's Poor Live on $2 a Day (Princeton University Press, 2009). Instrumental in broadening conceptions of global poverty, the book revealed that poor households lead surprisingly active and sophisticated financial lives, driven by the need to cope with irregular and unpredictable incomes but few reliable tools to absorb economic shocks.
"Improving access to reliable, flexible financial products and services is an important step to help poor and low-income households better manage their economic lives," says Professor Morduch. "The Financial Diaries research has proven to be an effective means of gathering important information to inform the design of these kinds of financial tools."
"The findings in Portfolios of the Poor provided an eye-opening look at the financial lives of the poor in other countries, and we're excited to use this lens in the U.S. context," says Brandee McHale, Chief Operating Officer at the Citi Foundation. "This research can fill an important gap in the current data on how low-income families in our own backyards are making ends meet and help reduce the barriers to financial well-being that these families currently face."
In the U.S., the Federal Deposit Insurance Corporation (FDIC) found that some 17 million adults live in households without any bank accounts. Another 43 million have accounts but are "underbanked," relying on non-bank services such as pay-day lenders and pawn shops. Yet, there is little concrete data about the needs, preferences and use of financial services by low-income families.
"Remarkably, more than 30 million low-income families across the U.S. lack access to traditional banking and financial systems," says Frank DeGiovanni, director of financial assets at the Ford Foundation. "This landmark study will help us to better understand their financial lives, greatly improving the ability the financial industry of nonprofits, and policymakers to meet their needs and increase the quality, affordability, and accessibility of financial services."
To conduct this groundbreaking research, the U.S. Financial Diaries team will spend one-and-a-half years with 300 families, distributed across 4 research sites-in the South, the Northeast, the Midwest and the West. Researchers will meet with families every two weeks to collect highly detailed data on household cash flows.
This methodology of regularly observing household finances over long periods of time allows researchers to identify often-overlooked strategies of financial management, such as the use of informal borrowing and lending with neighbors and family members. The study is designed to capture spending and savings habits that often remain hidden in large surveys. The findings will be published in a series of reports beginning in mid-2012.