Success in Industry

A discussion of

Putt’s Law

Augustine’s Laws

Background

• Murphy’s Law– If anything can go wrong it will.

• Peter Principle– A person rises in an organization until he/she

reaches his level of incompetence.– Implies that with time the whole organization

is incompetent.

Putt’s Law

• Every technical hierarchy, in time develops a competency inversion.

– Technology is dominated by two types of people:

• Those who understand what they do not manage.• Those who manage what they do not understand.

Personal Planning

• “If you do not know where you are going any road will get you there,” Turkish Proverb

• Have a plan - Any plan will do!• "It is a paradoxical but profoundly true and

important principle of life that the most likely way to reach a goal is to be aiming not at that goal itself but at some more ambitious goal beyond it." - Arnold Toynbee

Personal Prestige in an Organization

• Attribute successes to people and failures to computers.

• To remove doubt from your actions, invoke a computer solution.

Communications

• The purpose of communication is to advance the communicator.

• The information conveyed is less important than the impression made.– It is not what you say, but how you say it.

• For Managers– A decision is judged by the conviction with

which it is uttered.

Managers

• Managers make decisions.– Any decision is better than no

decision.

• Technical analyses have no value above the mid management level.

Computer Projects

• All computer projects take longer than estimated and overrun their budgets.– Erie Canal – 12,000% over budget– Trans-Alaska Pipeline 425% over budget

• Anything that can go wrong will go wrong faster with computers

• Adding manpower to a late technology project will only make it later.

Law of Innovation

• Change is the status quo• An innovation manager cannot tell if he/she is leading or

being chased by the innovation. – Innovation managers do not commit until the objectives are

clear.

• An “innovated success” is as good as a successful innovation.

• The true measure of success in innovative projects is the size of the management's reward.

• Innovation may be the goal, but technology transfer is the business of technical hierarchies.

Laws of Innovation Management

• Management by objectives is no better than the objectives.

• But, 90% of the time, we don't know what the objectives should be. Peter Drucker

– Artificial yeast invented by Mobil Oil– A very poor 3M adhesive became the Stickies– Dry Plates lead to flexible film at Kodak

Innovation Management

• Rejection of management’s objectives is undesirable when you are wrong but unforgivable when you are right.– Tom King-Kaiser

Survival

• To get along, go along.

• Survival is achieved through risk reduction.– To protect your position, fire the fastest rising

employees first!

Promotion

• In Big Political Organizations– The maximum rate of promotion is achieved

at a level of crisis only slightly less than that which will result in dismissal.

• In Small Organizations– There is no promotion in a small organization

• Any crisis will get you fired

– Your value to the organization is the skills that you have, so get as many as you can.

Motivation

• “productivity increases exponentially with capability”, W. Shockley 1956 Nobel Prize

• It is most important to motivate the best workers!

• “We know nothing about motivation – all we can do is write books about it.” Peter Drucker

Reorganizations

• Getting Rid of the Dead Wood– Management must periodically fire the least

productive workers to improve productivity.

• Organizational Stagnation– No manager wants organizational stagnation

• Accelerating the rate that positions are changed accelerates the rate toward a competency inversion.

Reorganizations

• “Reorganization is a wonderful method of creating the illusion of progress while producing confusion, inefficiency and demoralization.” Petronius Arbiter, ~10 BC

• “There is no problem with rotating people as long as they aren’t doing anything anyway,” Anonymous Senior Executive

Organization Stagnation

10 5 0 5 100

0.02

0.04

0.06

0.08

0.1

Stagnant

Merit Review Score

Sala

ry R

aise

• “OS occurs when the punishment for success is as large as failure.”

• You can tell when your are in a stagnant organization when the salary raises across all employee’s looks like this.

Decision Making

• Decisions are justified by the benefits to the organization, but they are made by considering the benefits to the decision-makers.

• When in doubt, form a task force or committee or call a consultant.

• “The optimum committee has no members.” Augustine’s Laws

Consulting

• A successful consultant never gives as much information to his clients as he gets in return.

• The correct advice to give is the advice that is desired.

• The desired advice is revealed by the structure of the company and who in the structure is hiring you.

• The value of an idea is measured less by its content than by its compatibility within the corporate structure.

• Simple advice is the best advice.

Patents

• 300/d patent applications to USPTO

• 180/d patents

• 3/d make any money– “In One Day,” Tom Parker (1980’s)

• 13 of Thomas Edison’s 1069 patents made it to the market.

Patents

0.01 0.1 1 10 1001

10

100

1 103Number of Patents w Profit Greater Than

Profit (Millions $)

Data from Scherer, F., Ann Econ. & Statistic, 1998

5/772 >$10M

1/74 >$1M

# Licenses >$1M=0.6%

Acronyms

• Acronyms and abbreviations should be used to a maximum extent possible to make trivial ideas profound.– Augustine’s Law IX

MBA

• “An MBA - A decision that could affect you the rest of your life – if you live that long.“ N. Augustine, CEO Martin-Marietta

MBA

• America has 600 business schools• 63,000 MBA’s/year graduate• GE recruits 50 MBAs and 1950 other college

graduates annually. Forbes• “There is no value to the MBA degree,” Robert

Mills, GE University relations manager• “The best business school is the school of hard

knocks,” N. Augustine, CEO Martin-Marrietta

New Products

• “80% of all newly advertized products fail,” Frank Perdue

• “58% of all innovations ultimately fail but those originated by top management fail 74% of the time.” The Economist

• All technologies follow the S-curve

• You need to know when it is the best time to get out if your career is to prosper.

S-curve

Business Structure

• Organization Chart• Levels of management in decision making• Efficiency of the organization

• The efficiency of a hierarchy equals that of a single group raised to the power of the number of levels in the hierarch

• Example – 3 levels @80% each gives 51% total Eff.– 5 levels @80% each gives 33% total Eff. – 7 levels @80% each gives 21% total Eff.– 9 levels @ 80% each gives13.4% total Eff.

Regulations

• “As new rules are added none of the old rules are ever discarded,”

• “If you really want to mess up a company do exactly as they tell you.”