Quality Management Principle 6: Evidence-based Decision Making

It is better to be approximately right than precisely wrong: Warren Buffet

Introduction

Based on the result of the examination, parents discuss with the child and decide for which subject the child needs additional support (tuition!). Based on the TRP rating (although flawed!), advertisers choose their future investment. Angel investors invest in startups based on their business plan (although the success rate is around 10%!).

Does it mean only ‘evidence-based decision making’ results in success or the power of insight, creativity and ability to pick the right data also helps in making the appropriate decision?   

Objective

Decision making is a complex process and often it involves a lot of uncertainty. Generally, decision making is based on inputs received from different verifiable and non-verifiable sources which increase the possibility of objectivity. Decisions based on old beliefs, success or hunch feeling may not result in a high success rate. But Evidence-based decision making helps the organization and individuals to take concrete steps with greater objectivity & confidence and builds confidence in a significant way.

Definitions: ISO 9000: 2015

          Objective Evidence (Cl 3.8.3): Data supporting the existence or verity of something.

Detailed Information

The Quality Management Principles are not specific to any one industry and can be applied to organizations of any size and type.

As per ISO 9000: 2015, clause 2.3, following are the 7 principles of Quality Management

1. Customer Focus
2. Leadership
3. Engagement of People
4. Process Approach
5. Improvement
6. Evidence-based decision making
7. Relationship Management

 For the sustained success of the organization, the concept of ‘Evidence-based decision making’ should be understood and effectively implemented. A structured approach should be coherently followed for consistent results across all the processes.

Why Evidence-Based Decision making is prudent?

• Increases the probability of getting the desired results
• To understand the cause and effect analysis
• To understand potential unintended results
• To enhance objectivity in decision making

How the process of ‘Evidence-Based Decision Making’ can be initiated?

• Plan: For monitoring the process performance,

                    Identify the processes where data is needed for effective & efficient decision making.

                    Ensure that people are competent in capturing and Analysing the data.

                    Identify the parameters which need to be monitored

                    Plan the frequency of capturing the data

• Do:

                    Gather the data from different processes at a defined frequency

                     Ensure that the data is captured from the reliable sources

• Check:

                     Verify that the data is authentic, correct and secure

                      Ensure that data meets the intent

• Action:

                      Analyse the data

                      Take a suitable decision based on the available data with experience and intuition

 Key outputs of Evidence-based decision making

• Management Review minutes (output)
• Action plan for customer complaint and rejection
• Action plan for internal rejection, scrap, rework repair etc.
• Actions on the result of a customer satisfaction survey (perception)
• Actions based on competency mapping and training need identification (TNI)

 What benefits the organization can achieve?

• Improved assessment of process performance and achievement of objectives
• Accuracy of decision making will improve
• Adequate justification and credibility for taking any crucial decision
• Enhances the capability of challenging any decision and justification
• Improves operational efficiency and effectiveness

 Present Challenges:

• How often the source of data is reliable?
• How often the persons who are recording the data are competent for it?
• How often the top management is willing to base their decision on an isolated incident or adequate sample size?
• How often the data is used for decision making?

References:

ISO 9000: 2015

ISO 9001: 2015

IATF 16949: 2016

This is the 88^th article of this Quality Management series. Every weekend, you will find useful information that will make your Management System journey Productive. Please share it with your colleagues too.

Your genuine feedback and response are extremely valuable. Please suggest topics for the coming weeks.