7 Laws a manager must remember

1) Murphy's Law

This is arguably one of the best known and widely quoted laws out there. It was named after Captain Edward Murphy, an engineer in the US Air Force who created it in a fit of frustration. In its simplest form, it says "Anything which can go wrong, will". Many of you might have experienced a corollary of Murphy’s Law in daily life while standing in a queue. The queue in which you stand seems to always move the slowest. Although you cannot do much about selecting the right queue, in the world of business a manager can use this law to be prepared. In this day and age of highly complex and interconnected decisions, it is prudent to have a contingency plan (or many) if the one you choose doesn’t work out. Software projects may overshoot their deadlines, demand forecasts may go horribly wrong because of sudden rise in raw material prices, or the marketing campaign which you so carefully thought up of may go haywire because the competitor trounced you with a newer product. As a manager, you are paid to make decisions, and unless you learn to anticipate things which can go wrong, you won’t be making much progress in your career.

2) Parkinson's Law
"Work expands so as to fill the time available for its completion."

This is another law which is quite well-known in the scientific and business community. This was first coined in an article in the Economist in 1955, and time and again it has proved to be true. On the outset, this law simply seems to point that it is important not to procrastinate. A manager is supposed to be efficient in doing his work and in allocating the time required for its completion. But if one digs deeper, one can find out at least two hidden meanings.

One is the principle of budgeting. The actual resources for a project will expand to its budgeted amount. This is a very commonly used practice by functional heads while deciding their annual budget. Rather than improving their department’s efficiency by aiming to cut down on the actual resources used, managers actually allow the bloating of resources so that their forecast looks accurate. Moreover having a higher budget for their department can increase their prestige. An effective manager should instead proactively measure and fight any unnecessary bloating of resources.

The second implication of this law is from the field of Economics. It hides in it one of the basic mechanisms of supply and demand. In the long run, the demand for a product increases to match its supply in order to achieve equilibrium. Although in Economics the reverse is also easily true, once the supply decreases, the demand for that product also decreases (due to higher prices). This is not so easily seen in the business world. If the time available for a project decreases, there is a highly likely chance of it overshooting the old and even the newer deadlines by a significant amount. Thus the Parkinson’s Law enables you to prepare your project plans more carefully.

3) The 80/20 Law

The 80/20 law, also known as the Pareto Principle was actually framed by Juran, one of the leading exponents of quality in manufacturing organizations. This law has been empirically observed to be true in so many situations that it has become universally applicable. In its most general form, it states that 20% of the causes drive 80% of the consequences. In a business environment, it can be applied to many situations - 20% of the employees do 80% of the work, 20% of projects will take up 80% of the resources, 20% of the employees get 80% of the salary(?) etc. A variant of this was even used controversially in GE by Jack Welch to categorize employees into three bands. He exhorted the organization to make the top 20% “feel loved.” Application of this law can help a manager to find out which resources are costliest, which customers are most valuable, which employees are hard-working and thus focus resources on these important causes.

4) Hurst's Law
Complexity can neither be created nor destroyed. It can only be displaced.

This law parallels an oft-repeated adage, "Problems cannot be solved." For every problem you solve, there arises at least one problem equal in complexity to the 'solved' problem. Business consultants would do well to keep in mind this law. Armed with a heap of tools and techniques, consultants work to re-engineer business processes and re-structure hierarchies, promising an effective and efficient organization. But many a times they fail to foresee that the new structure is simply creating new complexities which have not improved the overall condition at all. Managers grappling with supply chain issues can also keep in mind this law to ensure the proper flow of information and resources. The entire value chain needs to be looked as a whole to ensure that the complexity is not simply shifting within the organization. They should instead find ways how it can be actually shifted out of the system.

5) Parkinson's Law of Triviality
Organizations give disproportionate weight to trivial issues.

Anyone who has been in a meeting that seemed to last forever has come across this law. The frustration multiplies when your bosses are the ones who guide the meeting and you're but a pawn in the meeting. A very common tendency of managers is to jump into the problem immediately without structuring or organizing the facts first. By not spending time to understand the requirements, one tends to pick up the most obvious problem that comes across and work towards solving that first. But the most visible problem may not be the most important. Following this approach proves to be very wasteful in terms of both time and resources. A manager should keep this caveat next to the Pareto Principle in importance and ensure that by assigning priorities to the problems in front of him, he can apply his resources in the right order and in the right proportion.

6) KISS principle
Keep it simple, stupid

The importance of being precise is constantly hammered by B-schools into students. However a mistake which most newly-minted managers make is to confuse precision with verbosity. Managers are made the butt of many jokes on how they use complex words and phrases even for describing something simple. Thus, “we sell toothbrushes” may turn into “we provide complete oral hygiene”.

Though it is important to be precise to prevent errors, such precision should come from simplicity. As Einstein said, any fool can make things bigger and more complex. It takes a touch of genius and lot of courage to move in the opposite direction.

Saying that your organization engages in continuous value creation may look good in mission statements but a manager should be able to simplify things. Not in a way to leave out any particular detail, but so as to be able to explain the 4Ps or Maslow’s hierarchy to a 4-year old child. Spouting out management jargons may impress your peers at the annual industry seminar but will always leave your subordinates confused after they come to you for clarification.

7) Unintended consequences
Any action taken purposefully will produce some unintended consequences.

This is a law which parallels Murphy's Law, but unlike its more famous counterpart, this adage actually allows positive side-effects. This may ensure that a company may find a new use of a previously scrapped product because the government has changed regulations or even the fact that getting fired from a job gave you a chance to develop that entrepreneurial spirit in you.

Although possibly apocryphal, the story of how 3M failed in its quest to develop super glue and instead created one of the most useful inventions in history – the Post-it note is proof enough of this concept. Another example of this law at work in the business world is Adam Smith’s invisible hand concept. An individual aiming to better his interests may actually produce certain consequences which were totally unintended in the beginning. This law ensures that a manager keeps in mind that there could be results which no one has thought of before. He can then take steps to minimize the damage as much as possible. Of course if the side-effect is positive, a manager can claim the action to be intended and well thought of.