Success in Industry A discussion of Putts Law

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 3 M 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 • “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 decisionmakers. • 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 Data from Scherer, F. , Ann Econ. & Statistic, 1998 5/772 >$10 M 1/74 >$1 M # Licenses >$1 M=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 gives 13. 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. ”