Sunday, September 22, 2013

The theory of theories and forecasting



There is a theory of theory building developed by Clayton Christensen that was presented at a recent Credit Suisse seminar by Mike Mauboussin.  It is based on a three step process. 

I think this is a nice framework for thinking about research. The first part is making observation. We see, measure, and describe. We take those observations and start to group or categorize them. There are associations or a look for correlation or clustering of events. From the skill of categorization we start to form theories that can be tested. We can then look for other linkages and predictions. 

This process is the scientific method, but there is a stronger emphasis on the middle phase before theory, the process of categorization. We often just sort and do not move to the theory and prediction phase. 

It is worth thinking about how you go through your research process. Does it match the theory of theories? 

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