On the importance of theory.

I fairly regularly hear people dismiss theory, especially in relation to business. The argument is essentially that unless the output is tangible, effort is wasted.

Theory is the bedrock on which strategy is built. Many will disagree with me and say that data, or experience is the key, but I don’t buy it.

Data, without analysis, judgement, and interpretation, is just information.

Experience lies. What worked before will only work the same way today, assuming all relevant factors are the same. And they aren’t, even if we ignore the fact that you probably don’t know all of the relevant factors.

Theory is what lets you take data, insights, and experience and figure out a plan. 

The important thing to note here, is that many people misunderstand the word theory. As in, when creationists argue that evolution is ‘just a theory’. 

Theory doesn’t mean ‘guess’. Theory means ‘the best possible explanation of a system or thing, given the data available’. Theory means tested and supported empirically.