The E-Myth Revisited by Michael Gerber is a book that cannot be oversold on it’s benefits to anyone running, or thinking of running, a business. While American business culture is awash with gurupreneurs advocating for people to launch their own companies at hyperspeed, Gerber takes an honest, methodical, and forthright approach to advising business owners in E-Myth – most businesses fail because they end up subsuming their owners, rather than serving them.
“I think that maybe inside any business, there is someone slowly going crazy.” – Joseph Heller
What’s the E-Myth?
The E-myth is that small businesses are chiefly started by entrepreneurs risking capital to make profit. That’s simply not true. Most businesses are founded by experts of technical skills, not experts of running businesses. This is what Gerber calls The Fatal Assumption – if you understand the technical work of a business, you understand a business that does that technical work.
The Fatal Assumption is the root cause of why most businesses fail.
The technical work of a business and a business that does that technical work are two totally different things! But the technician who starts a business fails to see this. Seized by a temporary bout of entrepreneurial blindness, the technician launches a business that is integrally dependent upon them.
The tragedy deepens as the technician realizes the business that was supposed to free them from the limitations of working for others has enslaved them.
They end up working in the business, and never ON the business.
Suddenly the job they knew how to do so well becomes one job they know how to do, plus a dozen others they don’t know how to do at all. The work that was once so special, is now just another task to get through so the overwhelmed business owner can handle the rest of the headaches. It’s an endless cycle that usually ends businesses.
Gerber believes that the key to overturning the Fatal Assumption and the E-Myth is to recognize the differing personality types within every business owner.
The Three Personalities in Every Business Owner
Gerbers most brilliant insight of the book comes in the recognition of three competing personalities inside every business owner – The Entrepreneur, The Technician, and The Manager. The successful management of a business depends on the balance and curation of these personality types within the owner – without recognizing this key component, failure is inevitable.
The Entrepreneur – Focused on the bleeding edge and dreams, The Entrepreneur personality within business owners drives innovation and risk, asks what’s possible, and is obsessed with the future.
The Technician – The Technician knows the nitty gritty of the tradecraft of the business. The Technician is focused on the work, is obsessed with the present, finding solutions to enhance the technical work of the business one step at time.
The Manager – The Manager is caught between the Technician and the Entrepreneur. Obsessed with pragmatism and predictability, The Manager is obsessed with the past, wishing for models and templates to guide the development of the business.
Gerber believes that every business owner is a blend of the Entrepreneur, Manager, and Technician personality types, but the balance is out of whack.
If the personalities were equally balanced, we’d be describing an incredibly competent individual. The Entrepreneur would be free to forge ahead in new areas of interest; The Manager would be solidifying the base of operations; and The Technician would be doing what they do best.
Unfortunately, experience shows that few people who go into business are blessed with the proper balance. Instead, the typical small business owner is only 10% Entrepreneur, 20% Manager, and 70% Technician.
Every business wants to grow past the Technician Phase. In order to grow, you have to change. To change you have to develop and Gerber lays out a development cycle for business owners that ultimately leads to a mature and successful business.
The Business Maturity Cycle
Infancy/Technician Stage – This is where the business and the owner are indistinguishable from one another. The business is the owner – if the owner wasn’t there, the business would disappear. You reach adolescence by realizing you need help to grow your business past the Technician Stage.
Adolescent Stage – You realize you need help. You reluctantly hire help but instead of delegating work, you abdicate responsibility. So, your business becomes a collection of processes you only half understand because you’re a Technician trying to run things from the inside.
Beyond the Comfort Zone – This is the painful part. If you’re a Technician running a business, you are actually running a job. To grow beyond the Technician Stage, you have to develop a business that can run without you. A Mature Business Model is one that can be worked on from the outside.
Maturity Stage – Successful businesses usually start from this phase. They know where they’ve come from and they know where they are headed. Mature Businesses mix two perspectives, the Entrepreneurial and the Technical, into what Gerber calls The Entrepreneurial Model.
Turn-Key Model – Thinking like a Franchise
Gerber believes that businesses need to operate more like franchises; turn-key business models with operational processes that can be easily learned by unsophisticated users, workflows that don’t rely on technical expertise to run properly. McDonald’s, basically.
McDonald’s delivers exactly what we expect, every single time. That’s what integrity is.
By developing a Franchise Prototype you can test assumptions, build experiments and optimize your business so that it is “systems-dependent,” not a “people-dependent business.”
Creating an Expert System
Most business owners hinge their success, or failure, on the quality of workers they get. Good help is hard to find, they say.
Gerber believes that if you own a business, you can’t depend on hiring brilliant workers. If you need ‘the best,’ you will continually be disappointed. Rather than pine for better quality workers, you need to create the very best system through which good, decent workers can be leveraged to produce exquisite results.
McDonald’s doesn’t look to hire French Fry Wizards, or only those with an MBA in Hamburger Development. Anyone can walk into a McDonald’s and follow the manual on how to create a burger, and produce the same exact results whether they are in Tulsa or Tibet.
That’s the extraordinary power of a Turn-Key Business Model. Once you fully understand and create systems that result in predictable service, you’re doing the extraordinary.
Want to learn more?
Buy the damn book! –> https://www.amazon.com/dp/B000RO9VJK/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1