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Kelly Johnson's Rules

Kelly Johnson, the founder of the Lockheed "Skunk Works," established fourteen basic operating principles  to govern his talented personnel and top secret projects.  Among those who work in the "Skunk Works", these rules were as consecrated and revered as the Ten Commandments and the Holy Bible.

The exact wording of the rules has evolved over the years. Later sets of the rules often to substitute the word "customer" for the military and "vendor" for contractor.

Kelly's Rules

• Rule Number 1
  The Skunk Works' program manager must be delegated practically complete control of his program in all aspects. He should report to a division president or higher.
• Rule Number 2
  Strong but small project offices must be provided both by the military and industry.
• Rule Number 3
  The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people (10 percent to 25 percent compared to the so-called normal systems).
• Rule Number 4
  A very simple drawing and drawing release system with great flexibility for making changes must be provided.
• Rule Number 5
  There must be a minimum number of reports required, but important work must be recorded thoroughly.
• Rule Number 6
  There must be a monthly cost review covering not only what has been spent and committed but also projected costs to the conclusion of the program. Don't have the books ninety days late and don't surprise the customer with sudden overruns.
• Rule Number 7
  The contractor must be delegated and must assume more than normal responsibility to get good vendor bids for subcontract on the project. Commercial bid procedures are very often better than military ones.
• Rule Number 8
  The inspection system as currently used by the Skunk Works, which has been approved by both the Air Force and the Navy, meets the intent of existing military requirements and should be used on new projects. Push more basic inspection responsibility back to the subcontractors and vendors. Don't duplicate so much inspection.
• Rule Number 9
  The contractor must be delegated the authority to test his final product in flight. He can and must test it in the initial stages. If he doesn't, he rapidly loses his competency to design other vehicles.
• Rule Number 10
  The specification applying to the hardware must be agreed to in advance of contracting. The Skunk Works practice of having a specification section stating clearly which important military specification items will not knowingly be complied with and reasons therefore is highly recommended.
• Rule Number 11
  Funding a program must be timely so that the contractor doesn't have to keep running to the bank to support government projects.
• Rule Number 12
  There must be absolute mutual trust between the military organization and the contractor with very close liaison on a day-to-day basis. This cuts down misunderstanding and correspondence to an absolute minimum.
• Rule Number 13
  Access by outsiders to the project and its personnel must be strictly controlled by appropriate security measures.
• Rule Number 14
  Because only a few people will be used in engineering and most other areas, ways must be provided to reward good performance by pay, not simply related to the number of personnel supervised.

• The "Unwritten" Rule Number 15
  Never deal with the Navy.