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Theory as Metadata

Subhajit Das, 11/1/2016

In many situations, practitioners dismiss the power of management theory. It is not uncommon to hear “oh, that does not happen in real life” or “this is not how things work”. There is a constant tension between those who prescribe management theory and those who practice management about the benefits of good theory. This is especially true when theory prescribes actions that are orthogonal to those prescribed by numbers. Without fail, the numbers win over, sometimes with disastrous consequences. But the choice does not have to be between one or the other.

One way to think of theory is to consider it as metadata. Metadata is data about data. An example of metadata is the image size, resolution, date of capture and color depth of an image. Metadata helps to structure and provide shape to other data. For example, images can be easily grouped together by their date of capture thereby allowing a person to organize them easily. It is invisible when you are looking at the data. But, it has important uses. If you want to show your friend a particular photograph, you arrange all of the photographs by date and pick the date rather than photograph. You don’t view all photographs to arrive at the one that you want to show your friend.

So, what is the relevance to applying management theory? Consider the theory of new market disruption. It states that innovations created to address nonconsumption can lead to disruption of incumbents. But in the early life of the innovation, the data only shows the limited market potential of the innovation. Numbers, thus lead to dismissal of its disruptive potential. Instead, a metadata approach that utilizes theory would mean that the manager should find the data on the different ways in which the innovation can improve over time. This would mean finding data on internal and external factors that would contribute to an improvement in the innovation. A metadata approach to lead the manager to ask “what are the different ways in which this innovation can improve” rather than asking “what is the market potential of this innovation”.

Today, we are awash in so much data. Using theory as metadata can help managers to ask the appropriate questions in their quest to make sense of the future.