Evidence-Based Management
A data-driven approach to measure value delivered to customers.
Evidence-Based Management (EBM) is an empirical approach that provides organizations with the ability to measure the value they deliver to customers and the means by which they deliver that value, and to use those measures to guide improvements in both.
EBM consists of four Key Value Areas (KVAs)
Key-Value Area
Current Value
Reveals the value that the product delivers to customers, today.
The goal of looking at a CV is to maximize the value that an organization delivers to customers and stakeholders at the present time; it considers only what exists right now, not the value that might exist in the future.
Questions that organizations need to continually re-evaluate for current value are:
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How happy are users and customers today? Is their happiness improving or declining?
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How happy are your employees? Is their happiness improving or declining?
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How happy are your investors and other stakeholders? Is their happiness improving or declining?
A variety of things can improve CV: improving usability, improving customer or user outcomes, even creating a happier workplace. Looking at CV from the perspectives of customers or users, as well as investors, is obvious, but considering employee attitudes recognizes that employees are ultimately the producers of value.
Engaged employees that know how to maintain, sustain and enhance are one of the most significant assets of an organization, and happy employees are more productive.
A sample of Agile Tools metrics in this Key-Value Area
Annual Recurring Revenue
Is company operationally and financially predictable and stable?
Product Gross Margin
How much of sales revenue is left after costs?
Revenue per Customer
Are you getting the most out of your customers?
How is EBM related to OKRs?
Each metric can be classified in one (or two) EBM Key-Value Areas. By using metrics in your goal's key results, you can see in which of the four EBM areas you try to create an impact.