Leadership Judgement Series – Part Seven
Evidence-based decisions are made using the best information available at the time, but that does not mean they should remain unchanged when the evidence moves. A leadership team might make a significant investment in a new proposition after researching customers, testing demand, assessing competitors and challenging the financial case. The decision is not rushed, the assumptions have been examined and the organisation has good reason to believe the opportunity is worth pursuing.
Twelve months later, post-launch, the picture looks different.
Customer adoption is slower than expected. Some of the buying criteria identified during the original research appear to be changing. A competitor has introduced something that reduces part of the proposition’s differentiation, while sales conversations are repeatedly surfacing priorities that barely featured when the investment was approved.
Was the original decision wrong? Not necessarily.
Given the evidence available at the time, it may have been entirely reasonable, but that is no longer the most important question. The leadership team now needs to decide whether the evidence that justified the original investment still justifies continuing it.
That distinction sits at the heart of evidence-based decisions because a good decision can become the wrong decision to continue.
Evidence-Based Decisions Do Not End When the Decision Is Made
Evidence-Based Decisions are sometimes treated as a process that culminates in a decision.
Gather the evidence, evaluate it, challenge the assumptions and decide. However, that is only half the discipline.
The Centre for Evidence-Based Management describes evidence-based management as combining critical thinking with the best available evidence, including evidence that supports or contradicts an assumption or hypothesis. It also recognises an important limitation: business environments change, meaning evidence generated in one context can become less applicable as circumstances move.
That means evidence needs to operate on both sides of a leadership decision.
Before the decision, it helps leadership understand reality well enough to make a sound judgement.
After the decision, new evidence helps leadership determine whether the assumptions behind that judgement continue to hold.
Customers keep behaving after the business case has been approved. Competitors do not stop developing because your strategy is agreed. Technology continues to change, employees learn things through execution that could not have been known beforehand and economic conditions can alter the commercial logic of a decision that once made perfect sense.
The evidence that justified a decision yesterday should not therefore be granted permanent authority over tomorrow.
Consistency of judgement does not require consistency of conclusion when the evidence changes.
The Hardest Question Is Whether the Strategy Is Wrong or Execution Is Behind
Changing course too readily is not good leadership judgement either.
New propositions take time. Acquisitions encounter integration problems. Transformations experience resistance and entering a new market rarely produces a smooth progression from business case to commercial success. Leadership teams therefore need persistence. The difficult judgement is separating normal execution difficulty from evidence that the original strategic assumptions are becoming weaker.
Example 1 – New Product
Suppose a new product is behind plan because implementation took six months longer than expected, while customers who use it continue to demonstrate strong demand and willingness to pay. The case may still be sound. Execution needs fixing.
Now imagine the same product is behind plan because customers consistently value something different from what the original proposition was designed around.
That is not simply an execution problem.
Example 2 – New Market
Consider a market-entry strategy where customer acquisition takes longer than expected because the sales operation has not yet developed sufficient local capability or that sales teams are not being motivated in the right way. These can potentially be corrected.
If acquisition economics have deteriorated because competitors have fundamentally changed pricing and customer expectations, leadership may be facing a different problem.
Organisations are often more comfortable diagnosing execution failure than assumption failure.
There is an understandable reason for that. An execution problem allows the strategy to remain intact. The organisation can change the plan, add resource, improve delivery or demand greater accountability while continuing to believe the original decision was right. Questioning the assumptions beneath the strategy is harder because it reopens the decision itself.
That does not mean every execution problem is secretly a strategic one. Frequently, the organisation simply needs to execute better. However, credible evidence-based decisions require enough intellectual honesty to ask whether “we need to deliver this better” has become a more comfortable explanation than “the evidence underpinning this may have changed.”
Changed results do not automatically invalidate a decision; changed assumptions might.
Commitment Can Gradually Become Something Else
Once a major decision has been made, it acquires organisational weight.
Money has been invested. People have been recruited. Teams have built plans around it, targets have been agreed and perhaps the board or investors have publicly supported the direction.
The leader sponsoring the decision may also have invested something less visible, namely their credibility.
Imagine a CEO who has spent eighteen months arguing that a particular acquisition, market or proposition is central to the company’s future. They persuaded the board, recruited people against the strategy and repeatedly reassured colleagues that short-term difficulties were part of the journey.
New evidence now suggests the commercial case may have weakened. The difficult part is no longer simply interpreting the numbers. The leader may also have to rewrite the internal story they have spent eighteen months telling. That is where persistence can quietly acquire motivations that have little to do with future commercial value.
Classic research into escalation of commitment illustrates the danger. Barry Staw’s original investment experiments found that participants responsible for an earlier decision could commit more resources after receiving negative feedback about that decision. Later work also found escalation effects in both individual and group decision-making settings.
Laboratory findings should not be treated as proof that every executive defending an underperforming investment is protecting their ego. Real business decisions are far more complicated, and subsequent research has also examined the conditions under which escalation does and does not occur.
The organisational risk is nevertheless recognisable.
The more leadership has invested financially, operationally and personally in a decision, the harder it can become to evaluate the next decision independently of the previous one.
The Next Pound Should Earn Its Own Justification
Consider a programme in which £3 million has already been invested. The work is incomplete and another £1 million is required. A familiar argument appears around the leadership table:
“We’ve already spent £3 million. We can’t walk away now.”
The £3 million has already been spent, but the question facing leadership today is whether investing the next £1 million represents a sensible use of capital given what the organisation now knows.
Previous investment is not irrelevant. If another £1 million completes an asset capable of generating substantial value, proximity to completion clearly matters. Contractual commitments, switching costs, customer consequences and alternative uses for the investment must also be understood.
But the original £3 million does not acquire a right to another £1 million simply because it has already been spent.
The next pound should earn its own justification.
That requires leadership to shift the conversation from:
“How much have we already put into this?”
towards:
“What future value are we buying with the next commitment?”
The same logic applies beyond capital.
- Should another year of senior management attention go into the programme?
- Should another product team be recruited?
- Should more commercial credibility be spent persuading customers that this remains the future?
- Should the organisation postpone another opportunity because the existing investment needs more time?
Past investment explains how the business arrived at its current position.
Future value should determine what it does next.
Changing Course Is Not the Same as Constantly Changing Direction
There is an opposite danger. Leadership teams can become so responsive to new information that strategy never gets enough time to work.
A poor month becomes evidence that the proposition is wrong. A new competitor triggers another change in direction. One large customer’s objection reshapes the roadmap and disappointing quarterly results cause priorities to be reconsidered before the previous decisions have had a realistic chance to produce an outcome.
That is not evidence-based leadership, but organisational instability and potentially chaos.
Particularly in growth businesses, serial course-correction can destroy focus, confuse employees and customers and make meaningful learning almost impossible because the organisation keeps changing the experiment before it knows what the previous one demonstrated.
New evidence therefore needs judgement too.
Leadership should ask whether the evidence is relevant to the assumptions on which the decision depends. Is it strong enough to represent more than an isolated signal? Does it appear persistent, rather than temporary? Is it sufficiently material to alter the economics or strategic outcome? And is it more current than the evidence on which the original decision was based?
Those are not boxes to add to another governance template.
They are simply ways of distinguishing evidence-led course correction from reactive leadership.
The objective is not to become easier to persuade.
It is to remain persuadable by evidence strong enough to matter.
Decide What Would Change Your Mind Before You Need to
One of the most effective ways to protect future judgement is to do some of the difficult thinking when the original decision is made. When a leadership team commits to a major investment, it should not only document why it believes the decision will succeed.
It should also agree what would make it reconsider.
- What assumptions are fundamental to the decision?
- Which early indicators would strengthen confidence that those assumptions remain valid?
- What evidence would materially weaken them?
- When will the leadership team deliberately reassess the case rather than simply review progress against the delivery plan?
- What circumstances would justify increasing the commitment, changing the approach, reducing the investment or stopping?
This does not require a heavyweight governance process.
It can be no more complicated than capturing the answers as part of the original decision.
The value appears later.
Twelve months after approval, when money has been spent, people have been hired and leadership reputations have become attached to the outcome, the organisation no longer has to decide from scratch what constitutes meaningful evidence.
It already agreed that before it knew whether the news would be good or bad.
That makes later rationalisation more difficult. It also changes the nature of a review meeting.
Instead of asking only whether delivery remains on plan, leadership can ask whether the conditions that made the plan worth pursuing still exist.
That is a very different conversation.
Would We Make This Decision Today?
There is one question I have found particularly useful when a strategic commitment has become difficult to assess:
If we were making this decision today, knowing what we know now and without needing to defend the past, would we make the same commitment?
It deliberately removes history for a moment. The £3 million already spent is not asking for justification. The executive sponsor’s reputation is not the issue, nor is the fact that the board approved the strategy eighteen months earlier.
What matters is what the organisation would choose today given today’s evidence.
There are at least three legitimate answers.
The first is:
Yes – The assumptions remain sound, the future opportunity still justifies the investment and the organisation simply needs to persist through current execution difficulties. That is not stubbornness, but it is evidence-based persistence.
The second is:
Broadly yes, but not like this – The opportunity remains attractive, but the organisation needs to change the route, investment level, proposition, timing or execution model. That is adaptation.
The third is:
No – Something fundamental has changed. Customer demand, market economics, technology, competitive position or another critical assumption no longer supports the original commitment.
That is when changing course becomes the stronger judgement. None of those outcomes is inherently more courageous than another. The purpose of the question is not to manufacture an excuse to stop. It is to force the current decision to stand on current evidence.
Changing Course Does Not Necessarily Mean the Original Decision Was Wrong
Leadership is often associated with consistency. Employees want clarity. Investors expect leaders to follow through and organisations cannot function effectively if every difficult period produces another strategic rethink.
However, leadership consistency should be measured at the level of purpose and decision discipline, not by requiring every previous conclusion to remain permanently correct.
Imagine a business that entered a market because strong evidence suggested customer demand, attractive economics and a defensible competitive position. Two years later, those conditions have materially changed. Leaving that market does not retrospectively prove that entering it was foolish.
The two decisions were made in different realities.
Similarly, reducing an investment after new evidence emerges does not automatically demonstrate weak conviction.
Sometimes it demonstrates that leadership is still paying attention.
Strong leaders are not loyal to yesterday’s decision. They are loyal to the outcome the decision was intended to achieve and the reality in which it now has to succeed.
That is what yielding means in the context of leadership: evidence-based decisions.
- Not surrendering because something became difficult.
- Not changing direction to escape accountability.
- Not treating persistence as a virtue regardless of what reality is saying.
It means allowing sufficiently strong evidence to alter a conclusion when the circumstances that supported that conclusion no longer hold.
Evidence-based decisions – Five Questions Before Continuing a Major Commitment
When a strategy, investment or programme is under pressure, five questions can help leadership separate persistence from defensiveness, using evidence-based decisions
1. What did we believe had to be true when we made this decision?
Return to the original assumptions rather than beginning with today’s delivery problems. Which beliefs about customers, demand, capability, economics or competition made the decision logical?
2. Which of those assumptions does current evidence now challenge?
Not every disappointing result matters equally. Identify whether new evidence undermines the case itself or simply shows that execution needs improving.
3. If we were deciding today, would we make the same commitment?
Temporarily remove sunk cost, organisational momentum and personal sponsorship from the discussion. Would the opportunity still earn the decision?
4. What future value justifies the next investment of money, people and attention?
Continuing should have to earn its case in the same way the original investment did.
5. What would cause us to change course from here?
Even a decision to continue should remain open to future evidence. Agree what would materially alter the judgement next time.
These questions do not make changing direction easier. They make continuing or changing direction more deliberate.
Evidence-based decisions – Leadership Is Willing to Update
Good leadership judgement is not demonstrated by defending every decision once it has been made, nor is it demonstrated by constantly adapting to whatever new signal appears.
The discipline lies between those extremes.
Use the best evidence reasonably available when making the original decision. Test the assumptions and allow credible challenge before committing. Then give your evidence-based decisions enough time to work, but continue paying attention.
Customer behaviour changes. Competitors respond. Costs move. Technology develops and assumptions that once accurately described reality can gradually stop doing so. Evidence-based management itself recognises that changing environments can reduce the relevance of evidence generated in an earlier context, which is why continued assessment and critical reflection matter.
A good decision can become the wrong decision to continue; recognising that does not weaken leadership credibility.
Sometimes it is the clearest evidence that judgement is still operating, because consistency of judgement does not require consistency of conclusion when the evidence changes.
So, when the next significant strategy, investment or programme reaches the point where persistence and change both carry consequences, there is one question worth asking:
If we were making this decision today, knowing what we know now and without needing to defend the past, would we make the same commitment?
Next in the Leadership Judgement Series
How Leadership Bias Distorts Business Decisions
New evidence does not arrive in a neutral environment. Experience, incentives and existing beliefs can influence what leaders notice, what they dismiss and which evidence receives the greatest weight.
In Part Eight, we look at how leadership bias can quietly distort otherwise rational business decisions — and what leadership teams can do to expose it before it shapes strategy and investment.