It’s unfortunate how the word ‘theory’ has been misused in everyday speech such that it has lost its original meaning. These days ‘theory’ is considered synonymous to ‘impractical’, ‘unrealistic’, and even ‘speculation’. The result of this misunderstanding is significant: Students take important lessons for granted by discounting them as mere theory, preferring, instead, to find part-time work that provides practical experience. Employers tend to favour applicants with substantial practical experience because mere academic background, they reason, does not add much value to the company. Also, businessmen have an affinity towards advice from well known CEOs and high-ranking individuals because these are based on practical experience and thus are more reliable than textbooks.
I believe that such reasoning is largely uninformed, ignoring the true definition of theory as well as the processes involved in formulating theory. The “Theory vs. Practical Experience” debate is a result of this ignorance, and I believe that such a debate is missing the point and should not exist in the first place.
What is a theory?
Contrary to popular belief, a theory is not a ‘guess’, or ‘speculation’. Neither is it meant to be ‘unrealistic’ or ‘impractical’. A theory is an explanation of reality. A well-developed formal theory is a statement that predicts the consequences of a particular action. It also states why such consequences occur. Thus if we were to create a theory ‘template’ using only two sentences, we might come up with:
“If we do A, then B will happen.”
“This is what’s happening now and here are the reasons why…”
Why do we need theories?
Well developed theories are important to us in three ways:
- They help us know what causes a certain event to occur. If the event has a positive impact, then we will know what to do to cause it to happen. If the event has a negative impact, then we will know what to do to prevent it from happening.
- They also inform us about the necessary circumstances that have to be present before our actions can cause a certain event to occur.
- They serve as take-off points for analysing failures. Sometimes, failures occur even when management does exactly what the theory says. A well developed theory provides practitioners and researchers enough information to conduct a focused analysis that can lead to refinements of the theory itself.
A theory’s life
Like a product, a theory also goes through different stages in its lifetime. It starts from being simple, crude, and lacking predictive power and gradually becomes comprehensive and highly predictive as it is refined throughout its lifetime. The three major stages that a theory goes through in its life are as follows:
- Descriptive. This is the stage where a theory describes a certain phenomenon but is not developed enough to identify why it occurs and what circumstances contribute to its occurrence.
- Categorisation. In this stage, the theory may differentiate between “editions” of a certain phenomenon. This stage is critical since these “editions” may have different causes and require different circumstances before it can occur.
- Predictive. This is the stage when researchers have verified a set of hypotheses that state the causes of a phenomenon and the circumstances that must exist for the phenomenon to occur. In short, the theory will now take on the form “If we do A, then B will happen because…”
It’s important to note, however, that while this is the normal course of a theory’s life, some researchers and so-called ‘experts’ have been known in the past (and present) to submit a theory as if it was already in its predictive stage when, in fact, it was still in still in its descriptive stage. Following such an underdeveloped theory is dangerous since, while it may apply in one case, it has not yet been proven to apply in other cases that have different circumstances. Thus, it helps to acquire the ability to differentiate between underdeveloped and well-developed theories. How to do that is beyond the scope of this article, however, and the reader is referred, instead, to the paper by Christensen and Raynor listed at the end of the article.
Practical experience is often understood as a person’s first-hand experience of something (usually, work-related) in an uncontrolled environment (e.g. outside the classroom). Practical experience has, for as long as I can remember, been treated as the polar opposite of theory. It took me a while to realise that this view is, in fact, misinformed. Practical experience is not the opposite of theory. Rather, practical experience leads to the development of theories! When an individual encounters a certain phenomenon through first-hand, practical experience, that individual will tend to form a description of that phenomenon in his head so that he will be able to recognise that same phenomenon when it re-occurs. Repeated exposure to that phenomenon will lead that individual to differentiate between “editions” of that phenomenon which will eventually lead him or her to conclude that “If I do A, then B will happen because…” You will notice that this is not at all different from the lifecycle of a formal theory. Thus, practical experience contributes to the development and refinement of an individual’s theories. We then begin to understand that when an employer states that he values practical experience over academic performance, what he really means, even if he doesn’t realise this, is that he wants his employees to hold high-quality theories within their minds. The employer is also assuming that it is only practical experience that determines the quality of personal theories.
Formal Theories and Personal Theories
So far, we have implicitly identified two types of theories: personal and formal theories. We’ve defined in the first few sections of this article what a formal theory is and how it goes through three different stages in its life. Personal theories, meanwhile, are those that one individual forms through practical experience. We can differentiate between the two in many ways. First, a personal theory is based on a single individual’s experience while a formal theory is collated by researchers from the experiences of many individuals. Second, a personal theory is often formulated and validated by only one person while a formal theory is formulated and validated by many individuals through peer reviews. Third, formulation and refinement of a personal theory is often “accidental”, a by-product of a person’s practical experience. Formulation and refinement of a formal theory, on the other hand, is often conducted deliberately. Finally, a personal theory is enriched with tacit knowledge specific to the individual’s reality while a formal theory is often stripped of circumstances and factors that are too unique to be applicable to the majority of an event’s instances.
All Three Constructs Are Important
When a person says he values practical experience over theory, what he really means, without realising it, is that he, quite wrongly, values personal theories over formal theories. What he doesn’t understand is that all three constructs (practical experience, personal theory, formal theory) are critical components of a system that an individual uses to understand and effectively deal with the world around him (see diagram below).
In this system, an individual can make use of formal theories as a starting point for developing personal theories. Without formal theory, a person will be left to formulate his own personal theories from scratch. In such a case, while it may be possible for that person to come up with equally well-developed personal theories, it will most likely require more effort and time than would have been necessary. Also in this system, the practical experience and personal theories of individuals are important in formulating formal theories. Without these, well-developed formal theories will be difficult to formulate.
It’s important to realise that in the workplace, what matters is NOT the amount of practical experience or theoretical background that an individual has. What matters is how much an individual is able to effectively deal with the realities around him. Theory and practical experience are just complementary means to that end.
(Author’s note: The definition of a theory, its importance, and life-cycle are all derived from the paper by Christensen and Raynor 2003 as listed below. I encourage you to read that article for a more detailed discussion on the matter)
Christensen, C. M. and M. E. Raynor 2003. Why Hard-Nosed Executives Should Care About Management Theory. Harvard Business Review. September. [PDF]