The Evidence-Based Organization: APlatform for InnovationA Platform for Innovation

Professor Dr Jan ReckerWoolworths Chair of Retail Innovation

Information Systems School Queensland University of TechnologyInformation Systems School, Queensland University of Technology

“The best way to create the future is to shape it”y f p

Innovation, research and customer‐orientated transformation are key tosurviving a rapidly changing retail landscape according to Woolworths Ltd CEOg p y g g p gGrant O'Brien.Mr O'Brien addressed the QUT Business Leaders' Forum today saying theinvestment of nearly $1 million to fund a Chair of Retail Innovation would helpthe sector better recognize the needs of customers

http://www.news.qut.edu.au/cgi‐bin/WebObjects/News.woa/wa/goNewsPage?newsEventID=56077

the sector better recognize the needs of customers.

http://hbr.org/2012/10/data‐scientist‐the‐sexiest‐job‐of‐the‐21st‐century/ar/pr

Evidence means ability to innovate

Recognizing the relevance of Evidence

Seeking an understandingg gof true cause-effect relations

Using flawed decision models

Relying on status (confidence) rather than facts (evidence)

Realizing the availability of potential evidence

Opposing tradition, intuition, folklore and rules of thumb

EVIDENCE-BASED DECISIONSBasic ConceptsBasic Concepts

“Relying on valid and reliable evidenceRelying on valid and reliable evidenceand translating them into practices thatsolve problems and innovatesolve problems and innovateorganizations.”

Levels of EvidenceWhich le el is the basis for o r decisions?Which level is the basis for your decisions?

What is your source of evidence?y

External External Where have other organizations

produced relevant evidence? Where has research produced relevant

evidence?

Internal Where do we produce relevant

evidence?evidence? Where can we produce relevant

evidence?

Example – find your internal evidencep y

“What can we learn about success from within our own company?”from within our own company?

Inserting scientific principles

Positive Deviant

Inserting scientific principles

What is the evidence for success?

Positive Deviant

Positive Deviant

Positive Deviant Positive Deviant

Who is truly successful?

Why are they truly ss p

erfo

rman

ce

Positive Deviant

Positive Deviant

y y ysuccessful?

Which true root causes can we S

ales

pro

ces

Average

insertelsewhere?

Number of customers

Finding the True Root Causesg

What Causes Performance?

“It’s not necessarily the process” f ll th d l everyone follows the same process model

“It’s not the competition” process performance independent from local context

Reward mechanisms budget, incentives, degrees of freedom

Individual motivation and the willingness to Individual motivation and the willingness to‘do something extra’

Culture: focus on safety & on customersy Creativity: finding new solutions for products,

display and service; willingly deviate from standardized processstandardized process.

The Underlying Model: “Research as a Service” 

Inserting scientific principles into emerging evidence‐b d i tibased organizations.

Research as an innovation support serviceResearch as an innovation support service.Novel conceptual perspectivesRigorous scientific principlesQuality empirical evidenceIncreased research bandwidthUnbiased observationExplores evidence internallyand externally

Ability to develop capability.

Wrap‐Up: From Confidence to Evidence

Moving to reliable, valid and ultimately credible decisionsRequires data and scientific analysis capabilitiesRequires data and scientific analysis capabilities

Can be provided by university and research institutions, but are increasingly sought as internal capability

All i li i l d i l id fAllows capitalizing on external and internal evidence for organizational innovationMeans levelling of hierarchiesMeans levelling of hierarchies

“If the decision is going to be made by facts, then ’ f t [ ] l If th d i i i ieveryone’s facts […]are equal. If the decision is going 

to be made on the basis of people’s opinions, then 

mine count for a lot more.“

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James Barksdaleformer CEO Netscape

Key LessonsInnovations require decisions about unstructured andInnovations require decisions about unstructured and complex problems. Risk of failure is high.Evidence-based decision-making increases ginnovation reliability, credibility and ultimately chance of success.Y d h t b t t fYou do have access to – but not awareness of –internal and external evidence. Data scientists are becoming an essential resourceData scientists are becoming an essential resource.

Prof. Jan Recker

Woolworths Chair of Retail InnovationInformation Systems SchoolQueensland University of Technology

e j.recker@qut.edu.auw www janrecker comw www.janrecker.comt janrecker