Theory vs Experience, Continued

I’ve written several posts that deal with the relative roles of theoretical knowledge versus experience-based knowledge in business and other spheres of life (here, for instance), and we’ve had some good Chicago Boyz discussions on the topic.

Yesterday the Assistant Village Idiot posted an email from a friend (an executive now living in China) which deals with this issue in a very insightful manner. Recommended reading; discuss there or here.

6 thoughts on “Theory vs Experience, Continued”

  1. Those are very important observations. When I was a college student, I worked part time at Sears and still remember being told by the new manager of the department I was in at the time that, once you knew how to sell something, it didn’t matter that much what you were selling. I don’t think that applies to highly technical items but it was a revelation to me at the time.

    I later worked for Douglas Aircraft as a computer programmer and thought about how much Sears needed computer management of inventory. That was 1959 and the warehouse inventory was maintained by three old ladies with index cards. They had been there (The Boyle Street Store in LA) for many years and each had three or four weeks vacation. While they were gone, no one updated their cards so, by that time, the inventory was years out of date.

    Neville Shute Norway is an example of the man who can “shed his skin” as he moves from one field to another yet retain the necessary lessons.

  2. I thought this was an extremely interesting post.

    The points ring true to me – the lack of applicable, specific knowledge, and even the deficit in understanding that it is necessary to gain the specific knowledge of an industry and company is one of the things that has hurt American management.

    What is exceptional about this post is that it also highlights a broader, more general set of business skills that are requisite for success, but also aren’t gained in a classroom or while teaching in one.

    The two sets of skills are are linked in the first comment about accurately defining the problem – which can rarely be done with very specific knowledge – and then later in the discussion about the need for flexibility in developing solutions.

    The other reason why I thought this post was so wonderful is that it describes what I have personally seen in very different types of companies that “fell” out of success. Once the top decision maker gets invested in the “hammer” strategy, things tend to snowball fast.

  3. “once you knew how to sell something, it didn’t matter that much what you were selling”…even disregarding product knowledge, this isn’t always true. For example, the sales rep who is good at selling products where the deal can be closed very quickly is not likely to be good at selling products that have decision cycles of months or even years…the lack of immediate positive reinforcement would drive him crazy, and he would also probably lack the planning skills to deal with a long-term major sale.

  4. In Tom Watson Jr’s autobiography, he gives a very interesting example of a problem with salesman fit to the product at IBM. The company had the same people selling electric typewriters that were selling the much more expensive and complex punched card systems. They didn’t devote much attention to the typewriters…which many of the reps seemed to feel were “beneath” them…and also, the typewriters were typically sold to different people in the company than the card systems were sold to.

    Watson established a separate sales force to focus only on typewriters…most likely, the people in this group were mostly not as smart, in terms of abstract thinking ability, as the people in the main sales force, but they had superb secretary-schmoozing skills.

    Typewriter sales went way up.

  5. One more thought on this…

    When the letter-writer says “academics hate business”…this may be true of many academics, but I don’t think it’s the main problem in the context of corporate management. The problem is more closely related to those academics who *like* business (ie, b-school professors) but who inculcate in their students the view that it is more theory-based and less experience-based than it actually is.

  6. I noted an exception for technical products but that was a revelation to me at the time. Sears was all retail and sporting goods and hardware were a lot more alike than they were different. That was his point. Obviously, if I was trying to sell airplanes, different skills would be necessary. IBM was not very agile in the area of selling services, as opposed to hardware, when Ross Perot was working for them.

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