Those Theories Are Not Just Theories, They Make All The Difference

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As a data analyst I get to work for companies in different industries, and usually with the management. It is usually the management that are not ashamed to engage an external consultant to work on their business data, the non-management staff slug it out with the data as they feel it makes them look incompetent to request the service of an external consultant formally.

The benefits and learning have been phenomenal for me. I get to see how big companies, including multinationals, operate from the management level down. And more importantly I get to notice the difference between the top performers and the just there companies. Data is the blood of every business. You can examine the health of any company by looking at its data. In fact, you can predict what will happen to a company from information gleaned from its data. And that is what I work on day in, day out.

The companies that I have worked for that are leading their industry have just one main difference from their competition that I have worked for that aren't performing great. They rigorously follow the fundamental principles. I call them those theories we all know. From workplace safety rules to marketplace innovation. They don't just take those principles as academic theories, they practice them diligently.

Unfortunately, I can't give examples from my encounters. Luckily, I can give one we can all easily understand and relate with.

Nigeria vs Norway. The oil industry. We (Nigeria) began oil exploration and commercial drilling before Norway. We started selling our oil in 1958 while Norway started 11 years after (in 1969). And we have consistently produced more oil than Norway. Over the last 43 years, we averaged a production of more than 200,000 barrels per day than Norway.

Guess what? Norway has $860 billion in their oil fund. The largest of any country. Larger than Saudi Arabia's. How did they achieve that with much less oil than Nigeria? They obeyed the fundamental principles. While we were sharing the crude oil money among the states and federal agencies, they were very transparent and set up a special account for their crude oil income. They set up a separate body to manage the income on behalf of the entire nation and the government can only draw up to a maximum of 4% from it in a year. They invested the money so that it will grow even if their oil reserve dries up.

Now they earn more from the investment return on the oil fund than from crude oil export. Their economy doesn't enter crisis when oil price goes down.

They obeyed the theories and it made all the difference 40 years later. They are doing way better than all the other oil countries with more oil than them.