The practice of theory leads to success

The business consulting industry has been engaged in a game of best-practices bingo, says management iconoclast Clayton Christensen, who notes that “many of the widely accepted principles of good management are only situationally appropriate,” and probably won’t work in your particular circumstances. In fact, what’s needed for making the right strategic decisions isn’t a long reverie with the past but “good theory” that delves into the “underlying causal mechanism behind the success” and identifies the circumstances in which a solution works and doesn’t work. “The whole enterprise of teaching managers is steeped in the ethic of data-driven analytical support. The problem is, the data is only available about the past. So the way we’ve taught managers to make decisions and consultants to analyze problems condemns them to taking action when it’s too late. The only way you can look into the future is with theory. And that’s a big leap for managers to take.” The reward of thinking according to circumstances is that “things get predictable,” says Christensen, and predictability can give you a head start on success. (After bad management, unpredictability is the No. 2 reason for business failure.) And what’s next on Christensen’s agenda? He’s planning a little disruption of his own, taking on consulting goliaths like McKinsey and Boston Consulting Group with an upstart business called Innosight. He and his colleagues plan to undercut the competition with a relatively cheap ($150,000 to $350,000), significantly faster, “good enough” process for boosting growth—an idea “that is very disruptive to the big consulting firms.”

Fast Company Nov 2003