Do you manage by opinion, by experience, or by fact?

‘Management by Fact’ is one of the values exhibited in high-performing organizations. Management by Fact is a philosophy of management. It is about understanding, with data, where you are and determining the most appropriate way to intervene to improve performance.

As leaders, we must learn how to “extract larger meaning from data and information to support evaluation, decision-making, improvement and innovation” (Baldrige Criteria for Performance Excellence). Becoming a fact-based manager is about understanding how to use data to manage. Understanding what data to collect, how to examine data, how to interpret data, and how to determine when to intervene (and when not to intervene!). All in all — how to make decisions based on data, rather than on opinion or just past experience.

Many, many organizations manage by opinion. In this style of management, when faced with a situation, a group of people is brought together for a discussion about the situation. Everyone gives his or her opinion about what should be done. This type of management decision-making can involve very lengthy and often heated debates. If a decision is reached, it may because a person had the ‘loudest voice’, or someone was very persistent and wouldn’t ‘back down’, or it was deferred to the most senior leader in the room.

Management by experience is a bit better than managing by opinion. This style brings together people who have had experience in the area under discussion. The problem is that often people’s experience in the area is dated (particularly if the people discussing it are leaders). They are not intimately involved with the current practices; for example, a senior leader’s direct experience in the area may be dated. Therefore management by experience may not be reliable.

Managing by fact is the most effective style. It is based upon understanding what data is needed to make a decision, getting the data, and properly interpreting the data to come to a decision. This type of decision-making can also involve groups, but more often than not it involves the use of decision-making tools. In an excellent organization, the bias is towards fact-based management.

To be an effective fact-based manager, one must become a manager of process. We can use numbers (measures) to listen to the ‘voice of the process’. We can ‘hear’ the process if we know how to look at and interpret the numbers.

A lot of your time as a manager/leader should be looking at data to determine if there is a need to improve performance. But how many managers do this? For many leaders, managing this way will be a change. A change, that when made well, will promote improved performance results.