
31Designing the Empirical Tests
DESIGNING THE EMPIRICAL TESTS
There are two types of empirical tests that we have conducted: contem-
poraneous and predictive.
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Each is described below. In these tests, we
assigned two variables (representing dimensions of value creation) to
each of the four quadrants and then chose a proxy for each of these
eight variables, as explained in Figure 3.1 .
A few words on these proxies are in order. Let us start with the Control
quadrant. The two measures of value creation in this quadrant are
quality and efciency. Ideally, we would like to measure quality by
directly assessing the quality of ...