• Raymond Hofmann

The role of theory in management model design

Imagine going to your doctor because you’re not feeling well. Before you’ve had a chance to describe your symptoms, the doctor writes out a prescription and says, “Take two of these three times a day, and call me next week.”

“But—I haven’t told you what’s wrong,” you say. “How do I know this will help me?”

“Why wouldn’t it?” says the doctor. “It worked for my last two patients.”

No competent doctors would ever practice medicine like this, nor would any sane patient accept it if they did. Yet professors and consultants routinely prescribe such generic advice, and managers routinely accept such therapy, in the naive belief that if a particular course of action helped other companies to succeed, it ought to help theirs, too.

(from Why Hard-Nosed Executives Should Care About Management Theory, Clayton M. Christensen and Michael E. Raynor, HBR, September 2003)

The opening paragraph of this wonderful article makes the point very clear: all too often we prescribe solutions to problems without thoroughly thinking through the problem first and without having a good reason to believe that our solution will actually work.

Business and management are especially prone to this. And management model design would be not much different if management theory were not an essential part of it.

That’s why in addition to the Management Model Canvas©, the second major tool of management model design is the Management Design Library©, a repository of management theory to help inform your management model design.

Now, we understand the word theory is not very popular in management circles. But it should be. After all, a theory is “a statement predicting which actions will lead to what results and why” (to quote Clay Christensen and Michael Raynor again).

In fact, every time a manager decides on a course of action, he or she does so based on some theory in the back of their minds that leads them to expect it will lead to the results they want to achieve.

Therefore, we must always ask:

  • how conscious are we of the theories we use?

  • are these good (valid) theories?

  • do these theories apply in our specific context?

  • are they consistent with other theories we use?

  • are there more appropriate theories we could use in our context?

The first of these questions is answered with the Management Model Canvas© itself. Remember the green sticky notes which we use to identify the theory that drives the design of a particular component of your management model?

For the next four, the Management Design Library© will be helpful. Think of it as a carefully curated repository of management theory that…

  • …provides an overview of different theories by topic, in line with the basic building blocks of the Management Model Canvas©

  • …describes the essence of each theory on 1-2 pages and include links to the original author’s work if you want to go deeper

  • …qualifies each theory according to its maturity, evidence and predictive capability (true causal theory, correlation, observation, framework, model hypothesis, …)

  • …includes guidance for the use of each theory in management model design (when to use, dependencies to be aware of, pitfalls to avoid, examples and cases)

To give you an idea, here’s the kind of theory you can expect to find in our library:

  • Evolutionary advantage (Gary Hamel)

  • Disruptive innovation (Clayton Christensen)

  • Job to be done (Clayton Christensen)

  • Deep dives (Howard Yu, Joseph L. Bower)

  • Total motivation (Neel Doshi, Lindsay McGregor)

  • Integrative thinking (Roger Martin)

  • Discovery-driven planning (Rita McGrath)

  • Satisfactory underperformance (Sumantra Ghoshal)

  • Purpose of a business (Peter Drucker)

  • Execution trap (Roger Martin)

  • Responsibility of management (Peter Drucker)

  • Scaling up excellence (Bob Sutton, Huggy Rao)

  • Lean startup (Eric Ries)

  • Two-factor theory of motivation (Frederick Herzberg)

  • Tools of cooperation (Clayton Christensen)

  • ...

In terms of guidance that comes with a theory, here’s an example from “job to be done”: when you use the “job to be done” approach for innovation projects in your exploration system, you might also want to consider using the job lens for performance data in your exploitation system. If you don’t, you will quickly lose sight of the “job to be done” as the underlying causal mechanism explaining why customers buy from you once a new product or service enters production. When all you track are more traditional measures (eg, sales, profitability, market share, buyer demographics) you lose the crucial link to understand (early!) why these indicators change - for better or for worse.

Management model design has two main objectives: one is to make management models visible and to provide a language we can use to describe, challenge and improve management models. That’s where the canvas and design process should help. The other is to help make good management theory easily accessible and easy to use. That’s where the library comes in.

We will start with an initial set of 50 theories, covering all management model components. Of course, there’s a lot more than 50 theories out there that are worth considering. So the library will grow over time. And because no one knows them all, we will also open the curation process over time.

So stay tuned for next steps. In the meantime, we’d love to hear from you. Which management theories have proven particularly useful to you? Which ones would you like to see included in our library? Drop us a note or leave your thoughts in the comments section below. Thank you!


© 2019 Raymond Hofmann Management

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