The E-Myth is a small business classic by Michael Gerber. He has spent several decades helping small businesses get a better grip on what is holding them back. The main premise is that different personalities in us run our businesses. When these characters do not reach a compromise, the venture fails. They include technicians who deal with the technical issues at the workplace. And equal to the technician is the manager and the entrepreneur. These are all part of the new business owner and these personalities are in all of us. While we may be highly inclined towards one of them, we possess all of them. If you want to run a successful venture, all the three must play a role. Here’s how Gerber breaks them down:
- The entrepreneur is a dreamer. He sets out something new to do. His life, thoughts, and actions are in the future, thinking of what could be instead of the present. Under normal circumstances, he or she is irritated by the sluggish movement of the world.
- Technicians have high expertise and technical ability. In most cases, they offer services like cooking, writing computer coding and maintenance. Technicians are happy doing what they do at the expense of other tasks. By ignoring other duties, the chances are high that these people end up failing- at least in the entrepneurial sense.
- A manager is a detail oriented person. He or she is an individual who aspires to see an organized world without flaws and surprises. He remembers everything including paying suppliers and bills on time.
All three of these components are necessary for the foundation of a successful business. Much of Gerber’s book goes over how to consolidate all three of these personalities into one successful entrepreneurial venture.
How to Grow
For an enterprise to flourish, they must grow beyond the owner A business that depends wholly on the proprietor is not a business but a burden to the proprietor. Every time you take a vacation gets sick the business stops running. That’s not a business, that’s a job.
A real business relies on the operating procedures. You as the reader should strive to make real systems and document them. In that way, you can stop working in the business and work on the firm. You need time to create a going concern entity that can stand alone. You do this through a commitment to standard operating procedures. The model that Gerber uses again and again (and many others in this space do too) is McDonald’s. You can go to any McDonald’s in the world and get a quarter pounder with cheese that looks exactly the same. That is standardization. That allows McDonald’s to hire just about anyone to do the job. Because the process is so refined, detailed and time tested.
Innovation, Quantification, and Orchestration
Gerber has a few terms that he uses in order to explain this process:
- Innovation is the creativity applied in the production of a product efficiently and profitably. Change is essential if you want to improve and move ahead of the competition.
- Quantification and innovation determine which idea works. If you cannot measure it, how will you ascertain the effect of the change in the firm? Before you inject money and other resources to the enterprise, check the returns. In this way, you will know whether it is worth it or not.
- Orchestration involves the standardization of the idea that works. Enlist any idea that you standardize as a standard working procedure.
This is the three step process that every successful business, Gerber argues, uses to create a simple and effective system of standardization. Overall the book brings a lot to the table. However, there is a large amount of repetition. Additionally, Gerber brings his own poetic inclination to the book which for the hardcore business and self development reader can get a little tiresome. Overall, we give the book 4 out of 5 stars. It is worth a read, especially if these concepts are new to you, but if you have read other materials on standardization and franchise thinking you can probably keep moving.
Find out more about Michael Gerber and other works he’s produced on small business development by visiting his website.