Success in Industry

1. Success in Industry A discussion of Putt’s Law Augustine’s Laws

2. 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.

3. 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.

4. 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

5. Personal Prestige in an Organization • Attribute successes to people and failures to computers. • To remove doubt from your actions, invoke a computer solution.

6. 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.

7. Managers • Managers make decisions. • Any decision is better than no decision. • Technical analyses have no value above the mid management level.

8. 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.

9. 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.

10. 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

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

12. Survival • To get along, go along. • Survival is achieved through risk reduction. • To protect your position, fire the fastest rising employees first!

13. 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.

14. 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

15. 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.

16. 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

17. 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.

18. 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

19. 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.

20. 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.

21. Data from Scherer, F., Ann Econ. & Statistic, 1998 # Licenses >$1M=0.6% Patents 5/772 >$10M 1/74 >$1M

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

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

24. 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

25. 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.

26. S-curve

27. 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.

28. 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.”