In theory, there is no difference between theory and practice. In practice, there is.

I found this quote from Yogi Berra quite appealing when I first encountered it. Today, I disagree. A theory is not something abstract, removed from reality. Rather, it defines a cause-effect relationship that explains what we practice. A sound understanding of theory is essential to an effective practice of management.

When practice does not match with theory, it is for one of two reasons.

The less frequent reason — though more talked about — is that the theory is not comprehensive. It can no longer explain all the situations observed in practice, and has to be updated. And when a theory is challenged, it creates debate, divergence and disagreements, and consequently, excitement. This makes a less frequent change more noticeable.

One example of this is the assumption of rationality that underpins so much of economics and finance. Over the past two decades, this theory has been revised based on insights from behavioral psychology. This has birthed a new field of behavioral economics — one that explains the interaction between human behavior and economic activity more comprehensively1.

But far more common than gaps in theory, are gaps in a practitioner’s understanding — leading to a superficial application of theory to practice. Whenever I have committed this type of error, I have first blamed the theory — it is an easy target, after all! There is no one around to defend it. It has taken me time to grasp my own limitations.

In my experience, the theory of Kaizen, which enables us to change to an elevated state in the pursuit of perfection, is comprehensive. I have applied to much of my recent professional life. And whenever I have faced challenges in applying it, I have been able to trace them back to gaps in my understanding.

Even the methods and tools proposed by Kaizen have a strong theoretical basis — though these foundations are often hidden from view. Consider 5S, a five step approach to organizing our workplace: Sort (Seiri), Set in Order (Seiton), Shine (Seiso), Standardize (Seiketsu), and Sustain (Shitsuke).

5S starts with sorting, not setting in order. This is crucial. Until we eliminate clutter, we do not free up space to organize things. I have tried to set my desk in order while it had many unnecessary items. The result — a quick return to disorder. Only by sorting first, did I create the conditions to take the next four steps. I had to understand the theory in its fullness before I was to apply it effectively.

This understanding of a theory can be developed in three steps:

  1. Learn the theory sufficiently to re-state it fully, even if my understanding is limited. This requires a working faith2, though not blind faith, in the merit of the theory. Once I grasp the theory sufficiently to re-state it, I can address whatever I do not understand with the aid of teachers and textbooks.
  2. Reflect on the theory, and, with the guidance of a teacher, grapple with and address apparent contradictions.
  3. Apply the theory, and make it a living reality.

I have found myself too quick to jump to step two, avoiding the unsexy and laborious work of learning the theory fully. I now try to make a concerted effort to step back to the first step. That is where understanding begins.


  1. Nobel Laureate Richard Thaler’s “Misbehaving” provides a fascinating account of the birth, growth and maturation of behavioral economics. 

  2. A working faith does not ask us to cast aside our questions and doubts. Unlike blind faith, it encourages inquiry and debate. However, the primary purpose of the debate is not to disprove the theory; it is to understand the theory deeply.