Nothing so practical as a good theory

‘There is nothing so practical as a good theory.’

- KURT LEWIN

On a day-to-day basis, you might not be aware of it but you are constantly using the skills of critical thinking. Whether you are shopping for food, deciding on your career, or deciding what to write about next, it is crucial that you make the right decisions. A good theory will inform your ideas and help get them across effectively. In fact, a good theory will probably allow you to do without all the fancy rhetoric and illustrations, and just focus on getting right to the point.

A theory is more than just a hunch or an untested idea. It is a set of ideas that explains the way things work. It’s generally based on evidence, either real or imagined, that is gathered together into a logical pattern.

Good theories are useful in almost any enterprise. It’s not only useful, To illustrate, think about how you’d run a company without any guidelines or format. The most successful companies are successful because of how their people think, not just what they do.

It is not some academic concept. It has applications in all aspects of life. If you are a good cook, rather than just following someone else’s recipes you can come up with your own recipes. If you are a good mechanic, rather than just following the manufacturer’s directions for fixing your car, you can design your own way to do it.

A good theory does two things at once.

• It answers questions for which there are no answers now —
• it explores how something might be — and it suggests avenues to explore, experiments to run, predictions to make.

A theory is a hint, a possibility, an intimation. It’s an idea that someone thinks is worth exploring or one that somebody already holds dear.

One of the most consequential management ideas of the past thirty years is the theory-to-practice movement. Theory-to-practice refers to a shift in focus from practice to theory in business. In earlier decades, most education and training programs in business emphasized practices, such as accounting or finance, over theory. In more recent times, programs have been oriented more toward theory, with a focus on concepts and theories in business.

A good theory is important to practice, ideas are important to execution. Knowledge, analysis, systems and structures allow us to do with less friction. Where there is friction in our businesses or in our lives, thinking is the answer.

We cannot discredit that there is some disconnect between business schools and the real world. Business schools teach mostly theorems, models and frameworks, all of which are useful for describing reality (more or less) but don’t teach us how to change that reality.

But A good theory puts the pieces of a puzzle together into a coherent and consistent whole. It matches what we see and experience with our theories: It matches historical patterns with current events; It matches headlines with history, and It makes predictions that are later verified.

A good way to develop a theory is to start by looking for things we can agree on. For example, we can agree that good products and services solve problems. To be useful to our users, they must fulfil a real need, and fill their lives with more joy, satisfaction, and value than other solutions would.

To run your company without any framework is to take on an impossible mission. The act of developing great theories will help you all along the way and may surprise you by revealing that there are approaches you hadn’t thought of.

According to Peter Drucker

“These are the assumptions that shape any organization’s behaviour, dictate its decisions about what to do and what not to do, and define what the organization considers meaningful results. These assumptions are about markets. They are about identifying customers and competitors, their values and behaviour. They are about technology and its dynamics, about a company’s strengths and weaknesses. These assumptions are about what a company gets paid for. They are what I call a company’s theory of the business.”