The top 10 laws of project management

Conference Paper 19 October 2008

Kinser, John

How to cite this article:

Kinser, J. (2008). The top 10 laws of project management. Paper presented at PMI® Global
Congress 2008—North America, Denver, CO. Newtown Square, PA: Project Management
Institute.

Abstract

From Murphy's Law of “If anything can go wrong, it will,” to the more obscure Parkinson's Law:
“Work expands to fill the time available,” project management is subject to a variety of laws.
The vernacular of project management includes numerous sayings and proverbs, most without a
creditable source and of variable value to the practitioner. This paper looks at 10 of the most
important principles of project management, from both inside and outside the field, to glean
lessons for most projects. Each law's author, origin, and corollaries are explained, and the
fundamental concept is examined with regard to its application in improving project
performance.

Introduction

As projects grow in size and complexity, the Project Management Institute's A Guide to the
Project Management Body of Knowledge (PMBOK® Guide) Third edition (Project Management
Institute, 2004) also expands. The PMBOK® Guide grew from 37 processes and 176 pages in
1996 to 44 processes and 390 pages just 8 years later. Research and writing continues to enlarge
the field to the point that the average practitioner would have to forgo managing projects
altogether if they were to try to keep up with the growth of the knowledge domain. This paper
uses the Top 10 List paradigm as an attempt to distill this mass of good practices into
something usable in our daily work as project managers.

The Laws

1. Augustine's Law: “A bad idea executed to perfection is still a bad idea.” (Brainy Quote
2007)

Norman R. Augustine is a former Chairman and CEO of Lockheed Martin and a writer of wry
observations on business and life including a large number of “laws.” One corollary is: A good
idea poorly executed is of no use to anyone.
Validating the Project's Strategic Alignment

No single decision in project management has more importance than choosing which projects
to perform. When choosing the projects that go into the portfolio, any idea of strategy or
prioritization is often lost. Projects are initiated at many levels without any overarching strategic
planning, and schedules and budgets are then arbitrarily trimmed to fit the emergent needs of the
organization. The most underappreciated concept with regard to all project initiation is that of
opportunity cost (von Wieser, 1889). For every project we select to do, we are giving up the
opportunity to do an essentially infinite number of other projects (Kinser, 2008). All projects
need to be carefully examined to make certain that they align with the organization's strategy and
deliver the most value compared with other potential endeavors.

Using Control Gates in the Planning Process

Running a complex process all the way to the end before performing any quality assurance
increases the likelihood of losing all of the value created. Yet, many projects proceed all the way
to receiving approval of the project management plan without any kind of control gates. A
control gate is a point at which significant product or project management deliverables (e.g.,
preliminary or final product design, work breakdown structure, risk management plan) are
examined to verify completeness and quality before more work is performed. The ideal time to
validate return on investment is early and often, since relatively little money is spent in most
projects during planning relative to execution. As Leonardo da Vinci once said, “It's easier to
resist at the beginning than at the end.”

2. Lakein's Law: “Failing to plan is planning to fail.”

Alan Lakein is a self-help writer focusing on personal time management. Lakein is a proponent
of dividing one's tasks into lists of A, B, and C priorities to get the most important things done
first. The law was originally stated as “By failing to plan, you will free very little, if any, time,
and by failing to plan you will almost certainly fail…” (Lakein, 1974, p. 45). A corollary is:
“Exactly because we lack time to plan, we should take time to plan” (Ibid.).

Avoiding the “Just Do It” Mentality

Too often an organization rushes planning and values the execution of the project above all else.
“At the outset of a project no one is doing project work; rather they are doing project planning,
which is often wrongly interpreted as doing nothing” (Graham & Englund, 1997, p. 68).
Planning is how we deal with the temporary and unique characteristics of projects; 21 of the
processes in the PMBOK® Guide reside in the planning realm (PMI, 2004). Remarkably, in the
classes that I teach, project management is the most overlooked deliverable during the creation
of the work breakdown structure (WBS). Project management should be a top-level element in
the WBS with further decomposition focusing on the planning deliverables—generally
documents—to emphasize the fact that work is being done and products are being created. The
very first of these deliverables, the project charter, should initiate the link between the project's
vision and the necessity of planning.
Planning to Plan: Setting Expectations in the Project Charter

The project charter should address, in part, a summary milestone schedule, a summary budget,
and assumptions (PMI, 2004). The “project management plan approved” milestone should be a
major element of any schedule, since the plan defines how the project will be executed,
monitored, and controlled (Ibid.). Likewise, if the planning process is to consume project
resources rather than be treated as an overhead function, it should be a line item in the summary
budget. In any case, an assumption should be written—in hard numbers—stating the
organization's willingness to support a given amount of effort to produce a valid project plan.
Once this charter is approved, the project manager can use it to defend their planning time
instead of falling prey to the “Just Do It” mentality.

3. Saint Exupéry's Law: “Perfection is achieved, not when there is nothing more to add, but
when there is nothing left to take away.”

Antoine de Saint Exupéry was a French aviator, writer, and philosopher. An author of over a
dozen books largely inspired by his experiences as a pilot, he is most known for his children's
tale The Little Prince. The law was originally stated as “In anything at all, perfection is finally
attained not when there is no longer anything to add, but when there is no longer anything to take
away . . .” (Saint Exupéry, 1939, p. 42). Corollaries are: The “keep it simple, stupid” principle
(KISS) in engineering and “Deliver to the requirement, no less, and just as importantly, no
more…(Kinser, 2008).

Verifying the Work Breakdown Structure

As the fundamental scope planning tool and the foundation for many other elements of the
project plan, the importance of the WBS can hardly be overstated. Each element must be defined
and assigned, and the correctness of the WBS decomposition must be verified. We must
determine “that the lower-level WBS components are those that are necessary and sufficient for
completion . . .” (PMI, 2004, p. 116). The project team can most effectively address these “tests”
of sufficiency and necessity by examining the WBS from the bottom up. For each level, they
should ask, “If we complete all of these deliverables, will the corresponding higher-level
deliverable be complete?” Equally important, however, is to “remove” each element and ask,
“Can we still create the deliverable above?” Only then can we be sure to deliver the required
scope, no less—and just as importantly, no more.

The Problem with Exceeding Expectations

Too many organizations and project managers define success as exceeding goals or expectations
when, in fact, delivering a project under budget and ahead of schedule is just as bad, or even
worse, than delivering it over budget and behind schedule. Our misguided attempts to exceed
expectations can cause problems ranging from padding estimates through tying up resources
needed elsewhere, to sacrificing other projects of more value to the organization. Project
managers must champion the idea that perfection is delivering exactly to the requirement.
4. Fitzgerald's Law: “There are two states to any large project: Too early to tell and too
late to stop.”

Ernest Fitzgerald, an engineer, manager, and former U.S. Air Force employee, is known for his
work as a whistleblower that revealed waste in military contracting. Fitzgerald's original First
Law of Program Management, includes the corollary: “Program advocates like to keep bad news
covered up until they have spent so much money they can advance the sunk-cost argument; that
it's too late to cancel the program because we've spent too much already” (Stevenson, 1993, p.
305). Another corollary is: Projects have momentum: once started they become increasingly
difficult to stop.

The Deliverable Orientation and Earned Value Management

Earned value management (EVM) is best thought of as a control system for projects (Kinser,
2007). By creating the project baseline, collecting the right measurements, and comparing these
using EVM formulas, we can determine what corrective actions need to be taken. By focusing on
deliverables through all of these steps, we remove much of the uncertainty that can mask true
project performance. Because the cost performance index (CPI) becomes remarkably stable after
the 20% completion point in the project, it is vital that EVM be used as early as possible to
communicate the actual status and forecast endpoints. In this way we overcome the “too early to
tell” state (Christensen & Heise, 1993).

Project Termination is Not the Same as Failure

Because projects have momentum, too many of them that should be ended are not. The mindset
of “a killed project equals a failed project” can elicit undesired behaviors from many
stakeholders. A project that is discontinued could be the best money you never spent; sunk cost
is just that. It can never be recovered, but can always be increased. “You need to identify and
terminate infeasible projects early. Sending a message to project managers that project
termination threatens their career will tempt them to continue projects that should die” (Bohem,
2001). A poorly performing project should never be considered “too late to stop.”

5. Parkinson's Law: “Work expands to fill the time available.”

C. Northcote Parkinson was a teacher and writer who captured the public's imagination in the
mid-1950s with his satiric writings on government and business. Originally stated as “Work
expands so as to fill the time available for its completion,” this law has wide implications for
projects (Parkinson, 1957, p. 1). Corollaries are: “It is the busiest man who has time to spare”
(Ibid.); and, any project without an established due date will take an infinite amount of time.

Deadlines for Everything

If given an hour for a task, an individual will take an hour; given a day, he or she will take a day.
A person may start the activity at the last possible minute (the student syndrome), perform it in a
leisurely manner, or gold plate the deliverable (Goldratt, 1996). This is why the “busiest man”
corollary exists; an individual will theoretically deliver in the shortest amount of time when they
have the least time to spare. Only by imposing tight, but realistic deadlines on every element
of the project, from meetings to final completion date, can we hope to overcome this aspect of
human nature.

Implications for the Critical Path Method (CPM)

In many projects, a Gantt chart is created in the software tool and the project starts with a poor, if
any, idea of true activity sequencing and CPM dates. Without this, every activity must be
managed as if it is critical, leading to a great deal of wasted effort. A network diagram containing
this information allows the project manager to answer a host of invaluable what-if questions and
gives him or her enormous power over the schedule. Unfortunately, widely sharing the network
diagram can put that same power into the wrong hands. According to Parkinson's Law, most
people will start any assigned activity on its late start date, consuming all float and turning all
paths critical. If any activity then exceeds the planned duration, the entire schedule slips.

6. Constantine's Law: “A fool with a tool is still a fool.” (Ambler & Constantine, 2000, p. 124)

Larry Constantine is a software engineer and designer credited with seminal work in the
Structured Design approach to software development. One important corollary of this law is: “A
fool with a tool is a more dangerous fool.”

Why Project Management Methodology is “Software Agnostic”

The PMBOK® Guide makes only broad references to software and information systems,
recognizing that project management can be performed using purely manual methods. This is
reflected by the fact that the most advanced technology used by the participants in the majority
of our classes is the humble Post-it® note. The problem with providing tools to all and sundry
is that if you give a man a hammer, everything starts to look like a nail. The average project
management software is focused on the creation of the schedule, yet many people believe that if
they hand you a file from this tool, they have given you a project plan. A person given more
power without effective training in its use is indeed more dangerous.

Applying Leverage Through the Wise Use of Tools

Only after understanding the principles of project management can one make effective use of
automated tools. When performing CPM or EVM calculations in class, I tell participants that this
is something that they will probably never do again manually unless they are sitting in the project
management professional (PMP®) Exam. The real value of the exercise then comes from seeing
what is going on “under the hood” so that they follow the flow of the data and numbers through
the technique and appreciate the final results. Turning people loose with project management
software before doing this is akin to allowing a child to use a calculator for math homework
before they can perform the basic functions without one. Once the concepts and processes are
understood, enormous leverage can be applied by the use of appropriate tools.

7. Graham's Law: “If they know nothing of what you are doing, they suspect you are doing
nothing.” (Baker, Campbell, & Baker, 2007, p. 28)
Robert J. Graham is a professor, consultant, and author of many books in the field of project
management focusing on people and effective communication. One corollary to his law is: If
someone tells you too much about what they are doing, they may actually be doing nothing.
When a rhetorical “What are you up to?” results in an interminable recitation, there is a good
chance that not much is being accomplished.

Using the Communications Management Plan

It is widely acknowledged that about 90% of a project manager's time is spent in

communications, yet it is one of the simplest, most overlooked items in a typical project plan. In
most cases, the communications management plan should be the first project management
deliverable created after the charter, since it guides our interactions with all project stakeholders
for planning and the rest of the project life cycle. Some organizations will even create a team
operating agreement (TOA) before the creation of the project charter. As a core element, the
communications management plan will be the subject of numerous references throughout a well-
written project plan.

Stakeholder Management and (Re)setting Expectations

The setting of unrealistic expectations is a major factor in stakeholder dissatisfaction and in the
perception of project underperformance or failure. This is only a perception, however, because it
is reasonable to consider the true failure to reside with the holders of the expectations themselves
if they were unrealistic from the start. Further examination will most often reveal unrealistic
expectations as the real culprit in project after project that is described as any or all of the
following: underdelivering scope, over budget, behind schedule, and in trouble or in crisis,.

News about the rebuilding of the World Trade Center almost 7 years after 9/11 is a perfect
example. “The schedule and cost estimates of the rebuilding effort that have been
communicated to the public are not realistic,” wrote Chris Ward, executive director of the Port
Authority, which owns the site and is responsible for the biggest projects on it. “Indeed, it is time
that the design of that complex project be made to conform to real budget and schedule
expectations, which will require tough decisions that have not been candidly addressed up to
now” (Roug, July 1, 2008).

8. Murphy's Law: “If anything can go wrong, it will.”

Although entire books have been written about this law and its origins, it is now generally
credited to Edward Aloysius Murphy, Jr., who was an American military pilot and aerospace
engineer involved in the research and development of safety systems for aircraft (Spark, 2006).
The corollaries to this law are innumerable, but two are addressed below.

Managing Stakeholder's Risk Tolerances

All stakeholders exhibit a certain tolerance for risk, ranging from a belief that “Murphy was an
optimist” to an unwillingness to accept almost any level of uncertainty in a project (Murphy's
Laws and Other Observations). The project manager must work to align the tolerances of
stakeholders with the level that is judged appropriate for the successful completion of the project.
The organization's tolerance for risk and the concept of risk homeostasis should also be
considered (Wilde, 2001). Wilde posits that people and groups have a target level of risk that
they are comfortable with and that they will accept more or less risk in individual cases to stay at
that level. This implies that an organization will adjust the acceptable risk in individual projects
to balance risk overall to the desired state.

Using Risk Management Planning to Control Murphy

Clearly the absolute phrasing of Murphy's Law is an overstatement, but the spirit of the law is
that of defensive design. One should try to figure out what a user could do wrong and try to
reduce or remove that possibility. The law only addresses the probability of the risk and also
assumes that all uncertain conditions or events are negative. The formal risk management
process recognizes that both probability and impact must be considered and that some risks can
present positive opportunities. Keeping another corollary in mind---“If everything seems to be
going well, you have obviously overlooked something”---helps emphasize the importance of the
risk identification process (Murphy's Laws). Just the act of conceptualizing a risk removes its
most damaging characteristic, that of surprise.

9. O'Brochta's Law: “Project management is about applying common sense with

uncommon discipline.” (Zozer, Inc, 2008.)

Michael O'Brochta is an author, lecturer, trainer, and consultant. As senior project manager at the
CIA, he led the project management and systems engineering training and certification program
to mature practices agency-wide. One of his corollaries is: “Great project managers have
mastered the basics and have the discipline to adhere to them” (O'Brochta, 2008).

Project Management is Not Rocket Science

Many people outside as well as those new to the field of project management believe it to be a
highly technical, mathematically laden enterprise. No wonder the two most feared aspects of the
PMP® Exam are the critical path method and earned value. CPM requires that we are able to
follow an arrow and perform the challenging operations of addition and subtraction. EVM is
even more worrisome, since it introduces the advanced concepts of multiplication and division.
Although the knowledge domain does of course encompass much more, the most involved
techniques even mentioned in the entire PMBOK® Guide are probability distributions and Monte
Carlo simulation. Clearly, there is something more (or maybe less) to good project management
than math and engineering, and that thing is common sense.

Defining and Utilizing Discipline

“Return to the basics” and “Practice the fundamentals” are concepts that every coach espouses.
They apply not just in physical sports, but in all fields of endeavor. The basics of project
management are not complex, they are mostly common sense, and what is usually lacking is
discipline. Few people actually like writing status reports, reviewing old lessons learned files, or
negotiating with the customer, but it is essential to success. Discipline is doing something even
though you don't want to do it

The trick to instilling the necessary discipline is to reduce the pain involved in the doing. When
starting (or re-starting) an exercise program---say, running---the discipline required is enormous.
“It's too (hot, cold, humid, windy), or I'm too (tired, sore, busy) to run today.” There is always a
reason to not exercise anything, including self-discipline. By doing an activity regularly and
seeing the benefits, eventually the need for discipline decreases and we actually start looking
forward to exercising, “mentoring” the customer, or running a meeting per a carefully crafted
agenda.

10. Kinser's Law: “About the time you finish doing something, you know enough to start.”

James C. Kinser was an engineer, efficiency expert, and jack of all trades. Raised in the Southern
Appalachian storytelling tradition, he knew that the best way to teach something was to tell a
tale. As a corollary he used to say: “If you don't write that down, you won't remember it for when
you need it.”

The Tale of the Three Bookcases

When I was about 12 years old, my dad initiated a project to build three bookcases, one for us,
and one for both of my grandmas. He'd scared up a good bit of cherry-wood and made a detailed
pencil drawing on graph paper. Graph paper was used for everything in my house; until I went to
elementary school, I didn't know they even made paper with lines that only went in one
direction. We fired up the table saw and I got to hand him wood and act as “catcher” on the
backside. After we'd cut the wood for one bookcase, he turned the saw off, surprising me to no
end. You see, for me, things like the economy of scale, process improvement, and always being
on the hunt for a better way to do things had been bred in the bone. This led me to ask “Aren't we
going to cut all the wood, build all the bookcases, and then finish them all at once?” “No,” he
said, “I reckon we'll build one, figure out what we did wrong, and then build the other two. It'll
end up taking less time, and we'll wind up with better quality bookcases.” He paused
thoughtfully, then added, “About the time you finish doing something, you know enough to
start.”

Transitioning the Lessons Learned

Everyone has heard the truism: “Those who cannot remember the past are condemned to repeat
it” (Santayna, 1905). You cannot consider a project finished unless you learn from it. The steps
are simple, but the enforcement can be difficult until it becomes an accepted practice. Gather the
lessons learned at a meeting that will be held at closing or postproject so it doesn't get canceled.
The project manager must then create a separate report on these; a project closing form/checklist
can help make certain this is finished and published. Put the lessons in a database (here the KISS
principle applies); a three-ring binder will suffice, if necessary. Use an initiating/planning
checklist form to ensure that project managers of similar endeavors review these before baseline
approvals. Repeat these steps until the rewards become so obvious that the need for onerous
discipline is diminished.

Conclusion

Truisms are called that because . . . well, because they are true. As the field of project
management grows more complex and our jobs more challenging, it is possible to lose sight of
the basic principles. By paying attention to these 10 simple laws, it is possible to improve project
performance, deliver more value to the organization, and hopefully, make the project manager's
job a little easier.

Ambler, S. W., & Constantine, L.L. (Eds.). (2000). The Unified Process Construction Phase.
Lawrence, KS: Elsevier/CMP Books.

Baker, S., Campbell, G. M., & Baker, K. (2007). The complete idiot's guide to project
management. New York: Alpha Books.

Bohem, B. (2001, September). Project termination doesn't equal project failure. Computer, 34
(9), 94-96.

Brainy Quote. (2007). Retrieved December 1, 2007 from

http://www.brainyquote.com/quotes/authors/n/norman_r_augustine.html

Christensen, D. S., & Heise, S. (1993, Spring). Cost performance index stability. National
Contract Management Journal (25), 7-15.

Goldratt, E. M. (1996). Critical chain. Great Barrington, MA: North River Press.

Graham, R. J. (2001). Understanding project management. San Francisco: Jossey-Bass.

Graham, R. J., & Englund, R. L. (1997). Creating an environment for successful projects: The
quest to manage project management. San Francisco: Jossey-Bass

Kinser, J. (2007, May). Earned value management---A hands-on simulation. PMI Global
Congress 2007, Budapest, Hungary.

Kinser, J. (2008, March). Why less is more---The backpacker's approach to project management.
PMI Global Congress 2008, Sydney, Australia.

Lakein, A. (1974). How to get control of your time and your life. New York: Signet.

Murphy's Laws and other observations (n. d.). Retrieved July 10, 2008, from
http://userpage.chemie.fu-berlin.de/diverse/murphy/murphy2.html

O'Brochta, M. (2008, August). Great project managers PMI Global Congress 2008, Sao Paulo,
Brazil.
Parkinson, C. N. (1957). Parkinson's Law. Boston: Houghton Mifflin Co.

Project Management Institute. (2004). A Guide to the Project Management Body of Knowledge
(PMBOK® Guide)---Third Edition. Newtown Square, PA: Project Management Institute.

Roug, L.(July 1, 2008). World Trade Center construction faces more delays. Los Angeles Times
[Electronic Version]. Retrieved July 9, 2008, from
http://www.latimes.com/news/nationworld/nation/la-na-tradecenter1-2008jul01,0,7172403.story

Santayna, G. (1905). The life of reason. New York: C. Scribner's Sons

Saint Exupéry, A. (1939). Wind, sand and stars. Orlando, FL: Harcourt, Brace & Co.

Spark, N. T. (2006). A history of Murphy's Law. Lulu.com

Stevenson, J. P. (1993). The pentagon paradox: The development of the F-18 Hornet. Annapolis,
MD: Naval Institute Press.

von Wieser, F. (1889). Natural value. New York: McMillan & Co.

Wilde, G. S .J. (2001). Target risk 2: A new psychology of safety and health. Toronto, Ont: PDE
Publications.

Zozer, Inc. (2008). Retrieved October 28, 2007, from http://www.zozerinc.com

This material has been reproduced with the permission of the copyright owner. Unauthorized
reproduction of this material is strictly prohibited. For permission to reproduce this material,
please contact PMI or any listed author.

© 2008, John Kinser, PMP

Originally published as a part of 2008 PMI Global Congress Proceedings – Denver, Colorado,
USA
Example
Here's an example of how Murphy's Law can help when things go wrong.

Simon L Tod had recently been promoted to the role of Production Manager at a toy
manufacturer. He felt honored to have been chosen, and knew it was because he had always
worked hard. But as the peak production season loomed, he was feeling more and more stressed.
Things kept happening that he wasn't expecting, and they always seemed to go wrong at 5pm on
a Friday, or just as the team were starting work on an urgent order.

Simon mentioned his concerns to his boss, who suggested he apply Murphy's Law to his work to
identify what would go wrong and when.

So, on Monday Morning, Simon drew up a list of the key things he had to do that week, when
they needed to be completed by, and some of the ways they could go wrong. He also estimated
the likelihood of things going wrong in this way. His list included the following items:

Task Schedule Risks

Stuff batch of 1,000 Delivery to Customer by 8am
teddy bears on Wednesday
1 to boss for his son's birthday
Assemble 2,000 toy
(on Friday). Remainder to
cars
Customer any time on Friday.
Stuffing machine will break (10%
chance)
Stuffing Machine operative off sick
(5%)
Courier company won't deliver on
time (5% chance)
Wheel supplier sends wheels late
(20% chance)
Wheel supplier sends wrong size
wheels (10% chance)

On Monday, everything progressed to plan. It was all looking good on Tuesday morning too. But
after lunch, when there were still 200 teddy bears to stuff, Simon was called to the workshop by
an anxious Quality Control Supervisor who was holding quite the lumpiest teddy bear he'd ever
seen.

Simon picked the toy up and squeezed it. Instead of being soft and cuddly, it seemed to be filled
with solid items that crunched against each other. Soon, all became clear: the stuffing machine
operator had managed to fill the teddy bear stuffing machine hopper with car wheels. The
machine had broken these up as they passed through it, but it had still managed to fill the bears.
All of the car wheels were now in little fragments; Mostly inside furry bear bellies.

As Simon stood holding the crunchy bear, he saw the courier company van draw up outside the
loading bay doors. He now realized that Murphy's Law had predicted that something other than
the risks he'd predicted would go wrong, just before the deadline. This allowed him to stay calm
and think fast.
He got his packaging supervisor to print out extra labels to put on each bear's box, offering $200
to the first purchaser who sent a bear back to the factory, un-tampered with, correctly identifying
what the bear was filled with. The crunchy bear line turned out to be one of the company's
bestsellers that year.

Simon ordered more wheels from his supplier, who thought the teddy bear story was so funny
that he gave Simon an excellent discount, not only on the repeat order but on future orders of the
wheels too.

That left one problem to resolve – a little boy's birthday present. The new batch of wheels
couldn't get to the factory till Friday morning – which was too late. So Simon suggested that his
boss bring his son down to the factory after school on Friday for a special treat – to see his new
car have its wheels fitted. The little boy was thrilled and so didn't mind the fact he'd not has his
present at breakfast that morning.

By apply Murphy's Law, and expecting the unexpected, Simon L Tod remained in control
throughout a week that would otherwise have proved to be very stressful. Try it yourself today!
How Murphy's Law Works
by Josh Clark

Browse the article How Murphy's Law Works

Etorre’s Observation of Murphy’s Law dictates that the other line will always move faster.
Photo Liu Jin/AFP/Getty Images

You're sitting in eight lanes of bumper-to-bumper traffic. You're more than ready to get home,
but you notice, to your great dismay, that all of the other lanes seem to be moving. You change
lanes. But once you do, the cars in your new lane come to a dead halt. At a standstill, you notice
every lane on the highway (including the one you just left) is moving -- except yours.

Welcome to the aggravating world of Murphy's Law. This idiom says that whatever can go
wrong will go wrong. And it may just be right. This isn't because of some mysterious power the
law possesses. In reality, it's us who give Murphy's Law relevance. When life goes well, little is
made of it. After all, we expect that things should work out in our favor. But when things go
badly, we look for reasons.

Think about walking. How many times have you reached a destination and thought, "Wow, I
walk really well"? But when you trip over a curb and skin your knee, it's a pretty good bet you'll
wonder why this had to happen to you.

Murphy's Law taps into our tendency to dwell on the negative and overlook the positive. It seems
to poke fun at us for being such hotheads, and it uses the rules of probability -- the mathematical
likeliness that something will occur -- to support itself.
The law captures our imagination. Murphy's Law and its offshoots have been collected in books
and Web sites. Several bands are named after Murphy's Law, and it's also a popular name for
Irish pubs and taverns around the world. It was also used as the title of an action movie.

But Murphy's Law is a relatively new concept, dating back to the middle of the last century.
Magician Adam Hull Shirk wrote in the 1928 essay, "On Getting Out of Things," that in a magic
act, nine out of 10 things that can go wrong usually will [source: American Dialect Society].
Even before this, it was called Sod's Law, which states that any bad thing that can happen to
some poor sod will. In fact, Murphy's Law is still referred to as Sod's Law in England [source:
Murphy's Laws].

In this article, we'll explore Murphy's Law, its consequences and the impact it's had on our
world. In the next section, we'll look at the story behind Murphy's Law.

Who was Captain Edward A. Murphy Jr.?

Col. John Paul Stapp aboard the “Gee Whiz” rocket sled at Edwards Air Force Base.
Photo courtesy Edwards Air Force Base

Believe it or not, there really was a Murphy, and he lived in the United States until his death in
1990. Captain Edward A. Murphy Jr. was an engineer in the Air Force. Although he took part in
other engineering design tests throughout both his military and civilian careers, it was one test
that he attended -- almost as a fluke -- that gave rise to Murphy's Law.
In 1949, at Edwards Air Force Base in California, officers were conducting project MX981 tests
to determine once and for all how many Gs -- the force of gravity -- a human being could
withstand. They hoped that their findings could be applied to future airplane designs.

The project team used a rocket sled dubbed the "Gee Whiz" to simulate the force of an airplane
crash. The sled traveled more than 200 miles per hour down a half-mile track, coming to an
abrupt stop in less than a second. The problem was that, in order to find out just how much force
a person could take, the team needed an actual person to experience it. Enter Colonel John Paul
Stapp. Stapp was a career physician for the Air Force, and he volunteered to ride the rocket sled.
Over the course of several months, Stapp took ride after physically grueling ride. He was
subjected to broken bones, concussions and broken blood vessels in his eyes, all in the name of
science [source: Spark].

Murphy attended one of the tests, bearing a gift: a set of sensors that could be applied to the
harness that held Dr. Stapp to the rocket sled. These sensors were capable of measuring the exact
amount of G-force applied when the rocket sled came to a sudden stop, making the data more
reliable.

There are several stories about what happened that day, and about who exactly contributed what
to the creation of Murphy's Law, but what follows is a good approximation of what happened.

The first test after Murphy hooked up his sensors to the harness produced a reading of zero -- all
of the sensors had been connected incorrectly. For each sensor, there were two ways of
connecting them, and each one was installed the wrong way.

When Murphy discovered the mistake, he grumbled something about the technician, who was
allegedly blamed for the foul-up. Murphy said something along the lines of, "If there are two
ways to do something, and one of those ways will result in disaster, he'll do it that way" [source:
Improbable Research].

Shortly thereafter, Murphy headed back to Wright Airfield where he was stationed. But Stapp, a
man who was known for his sense of humor and quick wit, recognized the universality of what
Murphy had said, and in a press conference he mentioned that the rocket sled team's good safety
record had been due to its awareness of Murphy's Law. He told the press that it meant "Whatever
can go wrong, will go wrong" [source: The Jargon File].

That was all it took. Murphy's Law turned up in aerospace publications and shortly thereafter
made its way into popular culture, including being made into a book in the 1970s.

Since then, the law has been added to and expanded upon. In the next section, we'll look at some
of Murphy's Laws interpretations and consequences.

Other Universal Truths

Luis Enrique Ascui/Getty Images The science fiction author Arthur C. Clarke came up with
his own “unnatural law," Clarke's Third Law.

Although Murphy's Law captures the jaded, pessimistic view of the world very well, it doesn't
stand alone. Since its popularization following the rocket sled tests at Edwards Air Force Base,
shrewd observers have come up with some of their own laws.

Some have become famous in their own right, like the Peter Principle, which states that all
people will eventually be promoted to their level of incompetence, or O'Toole's Commentary on
Murphy's Law, which argues that Murphy was an optimist. There are literally thousands of rules,
laws, principles and observations that have been created since Murphy's Law. Some are funny,
some are wise and some are just plain cool. Others are old, tried-and-true observations:

 Etorre's Observation - The other line moves faster.

 Barth's Distinction - There are two types of people in the world: those who divide
people into types and those who don't.
 Acton's Law - Power corrupts, absolute power corrupts absolutely
 Boob's Law - You always find something in the last place you look.
 Clarke's Third Law - Any sufficiently advanced society is indistinguishable from
magic.
 Franklin's Rule - Blessed is he who expects nothing, for he will not be disappointed.
 Issawi's Law of the Path of Progress - A shortcut is the longest distance between two
points.
 Mencken's Law - Those who can, do. Those who cannot, teach.
 Patton's Law - A good plan today is better than a perfect plan tomorrow.

Each of these sayings explains some aspect of the universe and puts it into an easily understood
(and often funny) form. Even so, Murphy's Law remains the granddaddy of all maxims. What is
it about this law that we find so perfectly captures life? In the next section, we'll look at why
Murphy's Law is such a universal concept.
Fatalism and the Appeal of Murphy's Law

Fatalism? An untouched swimming pool is all that remains after a house was destroyed by
a tornado in Laguna Beach, Ca.
Vince Bucci/AFP/Getty Images

So why is Murphy's Law such a sound universal concept? After all, when approaching an
electrical socket with a two-pronged plug engineered to only fit one way, we have a 50-percent
chance of getting it right. Then again, we have a 50-percent chance of getting it wrong, too.
Perhaps the best explanation for our attraction to Murphy's Law is an underlying sense of
fatalism.

Fatalism is the idea that we're all powerless to the whims of fate. This notion says that the things
that happen to us are unavoidable, for example, that skinned knee. It's the idea that there's some
kind of universal law at work that takes a certain glee at toying with us.

Fatalism contradicts another concept -- free will. This is the idea that humans possess free will
and that all of our choices, along with the consequences that come with those choices, are our
own.

Perhaps our connection to Murphy's Law is the result of the collision between free will and
fatalism. On the one hand, Murphy's Law reveals to us our own undeniable stupidity. If given a
chance to do something wrong, we'll do so around half of the time. But that comes from our own
choices. On the other hand, Murphy's Law also reveals to us our lack of control, as in the case of
always seeming to be stuck in the slowest lane of traffic.

Murphy's Law doesn't prove anything. It doesn't even explain anything. It simply states a maxim:
that things will go wrong. But we forget that there are other forces at work when we consider
Murphy's Law. Allegedly, It was the author Rudyard Kipling who said that no matter how many
times you drop a slice of bread, it always seems to land on the floor butter-side down. Kipling,
the author of "The Jungle Book," among others, was making an observation that most of us can
relate to: Life is hard, almost to a laughable degree.

But with a buttered slice of bread, you must take into account the fact that one side is heavier
than another. This means that on the way to the ground, the heavy side will flip toward the
ground thanks to gravity, but it will not flip all the way around back to the top for the same
reason. It is, after all, heavier than the side without the butter. So Kipling was right -- a piece of
buttered bread will always land butter-side down.

In the next section, we'll look at Murphy's Law in math and science, and how the law can make
the things we create safer and more reliable.

Murphy's Law and the Law of Entropy

Murphy's Law is actually supported by an accepted natural law: entropy. This law is used most
often in the study of thermodynamics -- how energy changes from one form to another -- and
says that, in our universe, systems tend to end up in disorder and disarray. Entropy, also called
the second law of thermodynamics, supports Murphy's Law's claim that whatever can go
wrong, will.

Preventing Murphy's Law

While most of us appreciate Murphy's Law for its ability to explain our sense of helplessness
during certain events, others see it as a tool. At least one person sees it as a mathematical
equation that can predict the chances of processes going awry. Joel Pel, a biological engineer at
the University of British Columbia created a formula that predicts the occurrence of Murphy's
Law.

The formula uses a constant equal to one, a factor that is unconstant, and a few variables. In this
formula, Pel uses the importance of the event (I), the complexity of the system involved (C), the
urgency of the need for the system to work (U) and the frequency the system is used (F).

In an essay he wrote for Science Creative Quarterly, Pel uses the example of predicting the
occurrence of Murphy's Law when a driver needs to drive his Toyota Tercel a distance of about
60 miles to his home in a rainstorm without the clutch going out. Using Murphy's Equation, Pel
comes up with an answer of 1, meaning the clutch on the Tercel will definitely go out in a
rainstorm. While anyone familiar with a Tercel might've seen that coming, it's somehow
comforting to know that it can also be predicted mathematically [source: Science Creative
Quarterly].

Murphy's Law reminds engineers, computer programmers and scientists of a simple truth:
systems fail. In some cases, a system's failure means that the experiment must be repeated. In
other cases, the results of a failure can be much more costly.

NASA has learned this over and over again. The space agency has had numerous failures, and
although the number is proportionately small to its successes, the failures are often very costly.
Ironically, in the case of one unmanned orbiting vessel, a set of sensors had two ways of being
connected and -- just as with Murphy's original Gee Whiz test-- the sensors were all connected
incorrectly. When the sensors failed to operate the way they were designed, the parachutes that
were meant to slow the spacecraft down didn't open, and the orbiter crashed into the desert
[source: MSNBC].

It's an instance like this, in conjunction with an awareness of Murphy's Law that has caused
designers to install fail-safes. There are examples of fail-safes all around us. Some are systems
that use limited choices to reduce errors, like the mismatched prong sizes on an electrical plug.
Others are mechanisms that prevent matters from going from bad to worse, like lawnmowers that
have levers that must be held down in order for the mower to operate. If the person operating the
mower lets go of the lever, the lawnmower stops running.

Fail-safes are also referred to as "idiot-proof." But Murphy's Law still has a tendency to strike,
even when care has been taken to ensure against failure or catastrophe. This leads us to the last
law we'll relate to Murphy's: Grave's Law, which states, "If you make something idiot-proof, the
world will create a better idiot."
THE MURPHY’S LAW EQUATION
by joelpel

There are many laws in the physical sciences, most of which have mathematical equations that
govern them. Widely know laws such as the laws of electricity and magnetism, have Maxwell’s
equations. Fluid-flow is governed by the Navier-Stokes equations, and of course everyone is
familiar with Einstein’s energy to mass relation, E=mc2. Why then does an equally relevant and
useful law, Murphy’s Law, have no such foundational equation? In what follows I present an
equation to predict the outcome of Murphy’s Law.

The law, in its simplest form, states:

“If anything can possibly go wrong, it will, and at the worst possible time”

After beginning work on this project, previous work was uncovered. The work is minimal, but
there has been at least one other notable attempt1 at generating an equation for Murphy’s Law.
This equation however does not fit recorded data very well, and is very complex. More careful
analysis of the Law and recorded data, as well as personal experience, have led me to the
following new equation (the derivation of which I have not included here), called Murphy’s
Equation:

Here, PM is the Murphy’s probability that something will go wrong. KM is Murphy’s constant
(equal to one) and FM is Murphy’s factor, a very small number that can only be calculated on a
386-computer running Windows 3.1. Here we will approximate it by FM ≈ 0.01. Similar to
previous work, I, C, U and F are parameters on a scale of 1-10 describing the situation of
interest. I is the importance of the result or outcome of the event, C is the complexity of the
system, U is the urgency and F is the frequency. From these 4 parameters, virtually any event can
be described. Plugging those numbers into the equation with the appropriate constants will then
give the probability of at least one thing going wrong. To get an idea of how this works, lets look
at some specific cases.

First, to start with a simple example, lets calculate the probability of the clutch on a 1989 Toyota
Tercel ceasing to function 100km from home at night in the middle of a rainstorm. The
importance of the clutch working in this situation is obviously high, but no one is dying, so lets
estimate an 8. The system is fairly simple compared to other systems in the car, so C=5. It would
be nice if the clutch worked soon, so the urgency U would also be around 8. Finally, the clutch
only needs to work for one drive home, so the frequency is low, say F=1. Now, putting these
parameters in Murphy’s Equation shows that PM=1. Comparing to experimental data, this
number matches exactly, as the clutch did indeed cease to function at this time. Repeating this
calculation with I=7 also gives PM=1, showing the robustness of this equation.
Moving to a more complicated example, lets examine the case where the clutch has failed in the
above example, but calculate the probability that the flashlight needed to inspect the clutch
doesn’t work, the front half of the hazard lights on the car don’t work and that the trunk where
the few tools are kept has 3” of water in it (remember its raining). In this case, Importance is
about the same, an 8 or so (its hard to justify higher than this without a life or death situation).
Here, C=4, as the flashlight, hazard lights and trunk are all fairly simple systems. Because it is
raining and the driver is now stranded, the urgency can be bumped up to a 9, while F=3 (three
events need to occur). Putting these values into the equation gives a PM of 1, which is indeed
what did happen, showing that again this equation matches experimental data very well.

In summary, the equation presented here gives a new mathematical foundation to one of today’s
most recognized physical laws, Murphy’s Law. Experimental data matches very nicely with the
theory presented in this equation, and the author expects further testing will yield equally
positive results, and hopefully the adoption of this equation as a metric for predicting how often
things really do go wrong for no good reason.

References:

1) “The formula that proves that ‘Sod’s Law’ [Murphy’s Law] really does strike at the worst
possible time” British Gas News, October 7, 2004.

05.21.2007
8 Red Flags Construction Companies Should
Watch for in Financial Statements
August 9, 2013

Insights & Resources | Thought Leadership

Financial statements show not only where a construction company stands financially, but also
where it’s going. Contractors who work with their financial advisors to analyze their statements
can often catch problems early on — before they turn into bigger issues. Here are eight red flags
to look out for when reading your next statement:

1. An accumulation of cash (or lack thereof). A strong cash flow is one of the hallmarks of a
successful business. But the key word here is flow. A growing but static reserve of cash can be a
sign that your backlog is dwindling and you’re running out of work, leading to a stockpile in the
cash column.

On the other hand, if you find yourself drawing on a line of credit when payments for a given
project are slow in coming, you could be headed for trouble. A construction company should
always be in an overbilling position on a job. If underbilling is occurring, ask your financial
advisor to perform an over/under billings analysis to get a handle on this dilemma.

2. Declining equipment value. Slow periods in your business can lead to an unnoticed decrease
in your equipment’s value and force greater spending down the line. You may be tempted to
think that, because your assets aren’t getting as much wear and tear, they’re maintaining their
value.

But, just as it does for a new car driven off the lot, annual depreciation continues to steadily do
its work on your assets. Plus, you’re not buying replacement equipment at current market prices
— meaning you’ll likely pay more when you finally have to upgrade.

3. Significant liability changes. Substantially changing liabilities warrant a close look. If your
profits are dwindling, for example, certain liabilities may shrink as well, such as payments to
profit-sharing plans or deferred tax liabilities.

On the other hand, liabilities can balloon if you take out a loan to keep your construction
business afloat. Having a large amount of unsecured debt is a particularly bad sign for any
company.

4. More current liabilities than current assets. Because many contractors have seasonal swings
in their businesses, you may have more bills to pay than cash on hand at one time of the year or
another. This is something worth tracking and planning around. Also, consistently having more
current liabilities than current assets is typically a sign that you’re overleveraged.

5. Shrinking gross profit margin. Your gross profit margin is equal to your building costs for a
particular period — not including overhead, payroll, taxes and interest payments — divided by
your sales revenue for the same period.

If this ratio is dwindling, it means your production costs are increasing more quickly than your
prices, or you’re charging less for your construction services (perhaps in an attempt to gain
market share). Both trends can sink your business quickly, so track your profit margin closely.

6. Increasing ratio of general and administrative expenses to profits. General and

administrative expenses, such as rent and utilities, are less “elastic” than project expenses, such
as labor and materials. Thus, the ratio of these expenses to profits will skyrocket if your
workload sags.

Also keep an eye on indirect costs, such as insurance, that you allocate to each of your contracts.
If the amount of these rises significantly, it’s often because you have fewer contracts to allocate
these expenses to, which could spell financial trouble.

7. Receivables growing faster than sales. If your receivables start to dwarf your actual sales,
beware. It may be a sign that customers are taking longer to pay their bills — or not paying at all
— and that it may be time to revamp your collection procedures.

8. Far-off or unprofitable future projects. Although you may take comfort in the sight of a
lengthy project backlog on your financial statements, remember that not all projects are created
equal.

If you have jobs scheduled in the distant future, but nothing for the next few weeks (or months),
start strategizing how to pay your bills immediately. Quality also trumps quantity: A smaller
number of profitable jobs may prove more beneficial than a large number of jobs with slim profit
margins — or even potential losses.

Copyright © 2012 Thomson Reuters / BizActions.