Reflecting on the Contemporary Benefits of Gast’s Laws
A turn of the century systems theorist and inventor by the name of Richard Buckminster Fuller took note of the increasing pace of change that people living after 1900 were facing. He coined the term associated with this phenomenon - a ‘Knowledge Doubling Curve.’ He was interested in measuring how long it took for the amount of human knowledge to double. In his study of the increasing amount of human knowledge throughout world history he found that up until 1900, knowledge doubled every 100 years. By the time World War II came to a close, knowledge was doubling every 25 years. Thanks to things like computerization, digital data, nanotechnology, population growth, globalization and the development of the internet, human knowledge has been rapidly accelerating ever since. IBM suggests that by 2020 human knowledge will double every 12 hours (Schilling, D). This tidal wave of new knowledge is hard to keep up with. Just as one wave crests and crashes to shore, another one forms. As a result, we are always innovating and developing new ways of using this information, new ways of prioritizing this information (it isn’t all created equal), new ways of doing things with it and developing new best practices that make use of it.
However, amidst all of this knowledge doubling, let’s not overlook some of the best practices that remain relevant. Unless a previous best practice has been refuted, it remains useful and relevant – even amidst changing times. Colleges, universities and seminaries across the country provide exposure to a broad cross-section of these enduring best practices. The Bible is full of them, but so are business-related books like The Mission Primer by Richard and David O’Hallaron. When it comes to developing an excellent sense of mission, this book points to the work of Walter Gast – a faculty member in the Marquette University School of Business. Gast was focused on helping organizations expand their purpose beyond their often singular focus. While being profitable was essential to sustainability, Gast also recognized that vitality in the best organizations also required obligations other than profitability and ‘making a fair rate of return’ (O’Hallaron, R., & O’Hallaron, D). Walter Gast suggested that in order for an organization to thrive, there were several principles that they needed to keep in mind specific to their mission. His premise was based on observations specific to the winners of the Malcolm Baldrige National Quality Award. He noticed that the winners of this particular award had not only outperformed the Standard & Poors 500 stock index by a 3-to-1 margin since 1994, but also had extremely high compliance with the principles that came to be called ‘Gast’s Laws’ by Richard and David O’Hallaron.
The Six Laws
- Law 1: A business must produce a want-satisfying commodity or service, and continually improve its ability to meet needs.
[Does the mission provide a clear sense of who their customers are and what their needs of significance are? Does the mission speak to how they will meet or serve those needs?]
- Law 2: A business must increase the wealth or quality of life of society through the economic use of labor and capital.
[Does the mission of the organization speak to how it will contribute to the wealth or quality of life in their community or in society?]
- Law 3: A business must provide opportunities for the productive employment of people.
[Does the organization declare and demonstrate respect for the people it employs? “An organization is not obligated to hire people it doesn’t need. But if and when it does hire them, it has a responsibility to keep them productively employed. If business is slow, the business should exhaust every means to keep their people productively employed, even when it would be more expedient to simply flush them” (O’Hallaron, R & O’Hallaron, D).
- Law 4: A business must provide opportunities for the satisfaction of normal occupational desires.
[Does the organization declare a commitment to make jobs or positions fulfilling and meaningful? “People naturally dream of meaningful work, just compensation, leadership, recognition, training, fairness, challenges, security, acceptance by their peers, physical safety, opportunities for creativity, advancement, and a sense of participation in the conditions and rewards of business” (O’Hallaron, R & O’Hallaron, D). As with Law 3, Law 4 is focused on making the building or nurturing of respect and trust missional.]
- Law 5: A business must provide just wages for labor.
[This law depends on the particular business segment it is associated with. Law 5 asks if the mission addresses the need for compensation that is fairly tied the type of labor performed by the employees? Does it recognize the importance of competitive wages and benefits?]
- Law 6: A business must provide a just return on capital.
[“By just return, Gast means that a business should attempt to maximize its profits, subject to the constraints imposed by the other five laws” ” (O’Hallaron, R & O’Hallaron, D).
According to O’Hallaron & O’Hallaron, “An effective mission statement is a core document that defines the fundamental objectives of the organization. It is also a cultural contract between the organization and all of its constituents, including employees, suppliers, customers, and owners” (1). The bottom line is that this particular best practice in mission writing suggest that when these principles or laws are considered, the purpose of the organization becomes more virtuous and vital at the same time. One of the innovative aspects of their approach to crafting a mission with these six laws in mind, is that you can score the mission statement, awarding 1 point for each law that is fulfilled by the mission. A maximized mission would score 6 points as a result. A mission that addresses a law indirectly, might score a fraction of a point (.25, .50, .75, etc.). A mission that consciously or unconsciously fails to address one or more of these laws, might fail to score anything for that particular law and therefore it might not score as high comprehensively. Of course strict adherence to this method might add some length and complexity to the mission statement. One antidote to this challenge might be to use a more robust mission statement to incorporate some or all of these principles and then also use a mission mantra that is a single sentence long - capturing the essence of it and becoming something that can be readily committed to memory. However, considering each of these six laws – even concisely - when writing or re-writing the mission can only have beneficial results.
So before you write off this decades old mission crafting suggestion as outdated, you might want to consider some current research. In his article How To Connect With Your Company’s Purpose And Values, William Arruda states that “Most employees aren’t fully aware of – or connected with – their company’s purpose” (August, 13 2019). He reports that only 57% of those familiar with their company’s mission statement are motivated by it. In other words, they don’t see their company’s mission or purpose as engaging. Many companies miss this critical opportunity to engage their employees. They might do well to revisit Gast’s Laws as they look to the future. Leveraging even some of these laws might help build trust, commitment and engagement with their stakeholders. It might also help them move from being viewed as Crony Capitalists to Compassionate or Conscious Capitalists. And these laws aren’t just helpful to for-profits. Incorporation of some of these principles by a non-profits might lend well to their sustainability and vitality as well. The life-cycle of any organization that runs red with continual losses and lack of profitability won’t be around very long.
So as we try to swim atop the waves or new information and amidst the latest trends in best practices, we would do well to keep in mind some of the best practices that have served other organizations well in the past and have not been refuted. Our intentions matter – especially when they are written down. We have found out through research on New Year’s resolutions that any intentions that are written down have a 42% greater chance of being lived out (Dictionary.com).
Arruda, W. (2019, August). How to connect with your company’s purpose and values. Forbes. Retrieved from https://www.forbes.com/sites/williamarruda/2019/08/13/how-to-connect-with-your-companys-purpose-and-values/?sh=93a64d957edb
How do I write new year’s resolutions that stick? Dictionary.com Retrieved from https://www.dictionary.com/e/how-do-i-write-new-years-resolutions/#:~:text=Do%20write%20down%20your%20resolutions&text=In%20fact%2C%20according%20to%20one,more%20likely%20to%20achieve%20them.
O’Hallaron, R., & O’Hallaron, D. (2004). The mission primer: Four steps to an effective mission statement. Richmond: Mission Incorporated.
Schilling, D. (2013, April). Knowledge doubling every 12 months, soon to be every 12 hours. Industry Tap. Retrieved from https://www.industrytap.com/knowledge-doubling-every-12-months-soon-to-be-every-12-hours/3950