Business Theories for Successful Life

May 31, 2015
Clayton Christensen, a Harvard Business School professor, is a leading authority on innovation, a successful entrepreneur and a church leader. In his recent commencement address, he shed light on how we can use business theories to guide our life.

Success in business as well as in life depends on how well the strategy is defined and implemented. “For me,” Christensen affirmed, “having a clear purpose in my life has been essential.” When Christensen was a Rhodes Scholar he was in a demanding academic program . Despite that, he spent one hour every night reading, thinking and praying about his life’s purpose. Christensen added that if he had spent “that hour each day learning the latest techniques for mastering the problems of autocorrelation in regression analysis”, he would have misspent this time. The tools learned in class can only be applied few times a year, but the knowledge of the purpose of life can be applied every day.

Business disasters are caused by managers who fail to judiciously allocate resources. Similarly in life, we often fail because we overinvest in our careers and underinvest in our families. We try to seek temporary happiness but ignore the source of lasting bliss—our families.

Finance and economics teach us that while evaluating alternatives we should ignore fixed and sunk costs and make decisions based on the marginal costs. When we are lured into doing something wrong for just that “one time”, we fall prey to the lure of marginal cost. If we cross this line once, we will cross this line over and over again and self-destruct. Therefore, Christensen says that it is easier to hold on to our principles 100% of the time than it is to hold them 98% of the time.

Christensen articulated the yardstick by which we can measure our success in life. “Don’t worry about the level of individual prominence you have achieved,” he said, “worry about the individuals you have helped become better people…Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success.”

- Manish Shah, Chicago