Life Advice Through Management Theory and Business Strategy

When Harvard Business School’s class of 2010 invited professor Clayton Christensen (expert on disruptive technology and innovation, author of The Innovator’s Dilemma) to address them, they requested he talk on how to apply management theory principles to one’s personal life. Christensen responded by answering three questions:

How can I be sure that I’ll be happy in my career?

One of the theories that gives great insight […] is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. […] My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more MBA students come to school thinking that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people.

I want students to leave my classroom knowing that.

How can I be sure that my relationships with my spouse and my family become an enduring source of happiness?

If a company’s resource allocation process is not managed masterfully, what emerges from it can be very different from what management intended. Because companies’ decision-making systems are designed to steer investments to initiatives that offer the most tangible and immediate returns, companies shortchange investments in initiatives that are crucial to their long-term strategies. […]

When people who have a high need for achievement […] have an extra half hour of time or an extra ounce of energy, they’ll unconsciously allocate it to activities that yield the most tangible accomplishments. And our careers provide the most concrete evidence that we’re moving forward. […] In contrast, investing time and energy in your relationship with your spouse and children typically doesn’t offer that same immediate sense of achievement. […]

If you study the root causes of business disasters, over and over you’ll find this predisposition toward endeavors that offer immediate gratification. If you look at personal lives through that lens, you’ll see the same stunning and sobering pattern: people allocating fewer and fewer resources to the things they would have once said mattered most. […]

Your decisions about allocating your personal time, energy, and talent ultimately shape your life’s strategy.

How can I be sure I’ll stay out of jail?

We’re taught in finance and economics that in evaluating alternative investments, we should ignore sunk and fixed costs, and instead base decisions on the marginal costs and marginal revenues that each alternative entails. We learn in our course that this doctrine biases companies to leverage what they have put in place to succeed in the past, instead of guiding them to create the capabilities they’ll need in the future. If we knew the future would be exactly the same as the past, that approach would be fine. But if the future’s different—and it almost always is—then it’s the wrong thing to do. […]

Unconsciously, we often employ the marginal cost doctrine in our personal lives when we choose between right and wrong. A voice in our head says, “Look, I know that as a general rule, most people shouldn’t do this. But in this particular extenuating circumstance, just this once, it’s OK.” The marginal cost of doing something wrong “just this once” always seems alluringly low. […] Justification for infidelity and dishonesty in all their manifestations lies in the marginal cost economics of “just this once.” […]

It’s easier to hold to your principles 100% of the time than it is to hold to them 98% of the time. If you give in to “just this once,” based on a marginal cost analysis […] you’ll regret where you end up. You’ve got to define for yourself what you stand for and draw the line in a safe place.

The entire article is well worth a thorough read; it’s full of interesting insights and great advice.