Site Map Contact UsHome

Why Hard-Nosed Executives Should Care About Management Theory

By Clayton M. Christensen, Michael E. Raynor

Theory often gets a bum rap among managers because it's associated with the word "theoretical," which connotes "impractical." But it shouldn't. Because experience is solely about the past, solid theories are the only way managers can plan future actions with any degree of confidence. The key word here is "solid." Gravity is a solid theory. As such, it lets us predict that if we step off a cliff we will fall, without actually having to do so. But business literature is replete with theories that don't seem to work in practice or actually contradict each other. How can a manager tell a good business theory from a bad one? The first step is to understand how good theories are built. They develop in stages: gathering data, organizing it into categories, highlighting significant differences, then making generalizations explaining what causes what, under which circumstances. For instance, professor Ananth Raman and his colleagues collected data showing that bar code-scanning systems generated notoriously inaccurate inventory records. These observations led them to classify the types of errors the scanning systems produced and the types of shops in which those errors most often occurred. Recently, some of Raman's doctoral students worked as clerks to see exactly what kinds of behavior cause the errors. From this foundation, a solid theory predicting under which circumstances bar code systems work and don't work is beginning to emerge. Once we forgo one-size-fits-all explanations and insist that a theory describes the circumstances under which it does and doesn't work, we can bring predictable success to the world of management.

Article available for purchase at Harvard Business Review

Related Insights

Books from Innosight:

Seizing the White Space: Business Model Innovation for Growth and Renewal

Read more

An Impact Story from Innosight:

Syngenta – how can you build the capabilities to meet growth targets year after year?

Read more

The payoff we received from our work with Innosight is even more profound than we had hoped for.

Joseph Dzialo
President, VF Jeanswear, Lee Brand

Grow with Innosight

Interested in learning how Innosight can help your organization?

Contact us

Meet our team and explore what it's like to work at Innosight.

Careers