Success in Industry

A discussion of
Putts Law
Augustines Laws

Background
Murphys 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.

Putts 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 managements 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 arent doing anything
anyway, Anonymous Senior Executive

Organization Stagnation
Stagnant
0.1
0.08

Salary Raise

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
employees looks
like this.

0.06
0.04
0.02
0
10

Merit Review Score

10

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. Augustines 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 (1980s)

13 of Thomas Edisons 1069 patents

made it to the market.

Patents

1 10

Number of Patents w Profit Greater Than

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

5/772

>$10M

1/74

>$1M

100

10

1
0.01

0.1

1
10
Profit (Millions $)

100

# Licenses >$1M=0.6%

Acronyms
Acronyms and abbreviations should be
used to a maximum extent possible to
make trivial ideas profound.
Augustines 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 MBAs/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.