Thursday, August 04, 2005

The E-Myth Revisited, by Michael E. Gerber

The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, by Michael E. Gerber

The first theory of this book is that there are three warring personalities inside each businessman: the Entrepreneur, the Manager, and the Technician. The Entrepreneur is the dreamer, the one with all the ideas. The Manager is the pragmatic one, the planner. The Technician is the doer, the one that makes it all work. All three of these are inside every successful professional to some degree. Striking the proper balance between the three is the trick; too much Entrepreneur and business accomplishes nothing, too much Manager and the business doesn’t grow, and too much Technician and the business withers on the vine to due lack of attention. This makes a lot of sense to me; I see a lot of the last two types in me and not much of the first.

The second theory is that the franchise model is business plan that gives the highest chance for success. A business that is franchised needs repeatable, documented processes for virtually everything. With clear documentation, you can be assured that the job gets done regardless of who is doing it. Ideally, you try and remove all the skill from the job, replacing it with a system. Think of an assembly line; if all someone does all day is tighten the same bolt over and over again as it passes by on a conveyor belt, the position takes very little training and not much skill. Many people instinctively buy this argument when it comes to individual contributors, but Gerber holds that it applies to management as well. “You may think that the successful implementation of a management strategy is dependent on finding amazingly competent managers — people with finely honed “people skills,” with degrees from management schools, with highly sophisticated techniques for dealing with and developing their people. It isn’t. You don’t need such people. Nor can you afford them. In fact, they will be the bane of your existence.” I love this quote, especially the bit about management schools. Of course, my friends with MBA’s don’t exactly agree. :)

First Sentence:
The E-Myth is the myth of the entrepreneur.

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