Scientific decision-making, project selection and longer-term outcomes

Abstract

Analyzing data from two randomized controlled trials (RCTs) involving 382 entrepreneurs, this study explores the implications of training a group of entrepreneurs in a scientific approach to decision-making on their project selection. It provides evidence that the documented increased likelihood of project termination by ‘scientific’ entrepreneurs is associated with higher accuracy in recognizing project value. Unlike the control group, they are quicker in adjusting their expectations on project value downward before making the termination decision. This study also fills an important gap in prior research by exploring the longer-term implications (up to five years after the training began) of a scientific approach. It shows that, over the longer term, the initial discrepancy in termination rates between treated and control entrepreneurs levels out, with the control group eventually exhibiting a higher rate of project termination. Scientific entrepreneurs generate a higher number of new ideas, and a higher proportion of their projects culminate in the launch of a venture. Overall, these findings support the notion that scientific entrepreneurs are not excessively critical in their project assessments; rather, by terminating lower-potential projects earlier, they can free up resources for redeployment elsewhere.