Nate’s Notes 77: Paul Gustavson | Five Smooth Stones

Thanks for listening to this episode of Meikles & Dimes. Paul Gustavson has helped multiple companies grow their revenues from the tens of millions to the billions, and I love his Five Smooth Stones framework:

First, strategy is about doing similar activities differently or different activities altogether. Simply doing the same thing as others, but better, is not strategy. That’s operational efficiency. But by carefully designing one’s mission, vision, guiding principles, core values, and balanced scorecard, companies can identify their uniqueness, and understand what they say “no” to.

Second, organizations are made of processes, and not all processes are created equal. When Paul worked with Federico Faggin, the inventor of the microprocessor, they were able to organize their work around processes, creating clear ownership, which resulted in a 255% performance improvement. When thinking about processes, be clear about who “owns” each outcome. Because if everyone owns an outcome, no one does.

Third, you get what you design for. Organizations are perfectly designed to get the results that they get. So, if you want to change the results, you need to change the organizational design. For Paul, those design choices fall into 10 buckets, or levers, that can be pulled to improve organizational outcomes.

Fourth, knowledge is the purest form of competitive advantage. The ability to discover, create, codify, diffuse, apply, and renew knowledge is the purest form of competitive advantage. Also, in an organization, it’s nearly impossible to overcommunicate, and the best predictor of future performance is past performance.

Fifth, leadership is about capturing hearts and minds. Too many mergers, projects, and initiatives fail because leaders don’t capture hearts and minds. By engaging people with significant emotional experiences, metaphors, and even music, leaders can more effectively capture hearts and minds.

In summary, to design a great organization, remember Paul’s Five Smooth Stones.

It’s a simple idea. Please take it seriously.

Paul Gustavson Bio:

Paul Gustavson is an organizational design consultant who has worked with more than 60 high growth companies, in 42 countries, accruing more than 13 million frequent flyer miles, spending more than 3 years of his life on a plane.

Some of his clients include American Express, AT&T, BHP, BP, Camp Health, Cherokee Nation, Colgate, eBay, Exxon, GE, Hills Pet Nutrition, HPE Financial Services, InTandem Capital Partners, InTek, NASA, National Semiconductor, Paradigm Oral Health, Sizzling Platter, Vivint Smart Home, and Zilog, among others, and for 40 years he has served as the president of Organization, Planning and Design, Inc.

Paul is the author of three books: Running into the Wind, A Team of Leaders, and The Power of Living by Design, and more than 50 periodicals and books have referenced his work, including The New York Times, The Wall Street Journal, Business Week, and Fortune Magazine.

Since 1992, Paul has served on the advisory board of the Marriott School of Management, serving as its chair for eight years. And in 1999 Paul won the “William G. Dyer Distinguished Alumni Award” which is the most prestigious award given by the BYU Marriott School’s OLS department. Other award recipients are Stephen Covey, Kerry Patterson, and Dave Ulrich. I hope you enjoy learning from Paul Gustavson today, because I always do.