The E-Myth Revisited by Michael E. Gerber

How highly I recommend:
9/10
This book is about how to create a business system that is a reflection of who you are. In this way, you can create an extraordinary and original business that runs itself and ultimately markets itself.
Published on:
October 14, 2020
Written by:
Sebastian Hallqvist

The people who are exceptionally good in business aren’t so because of what they know but because of their insatiable need to know more. The greatest businesspeople I’ve met are determined to get it right no matter what the cost.

Those mundane and tedious little things that, when done exactly right, with the right kind of attention and intention, form in their aggregate a distinctive essence, an evanescent quality that distinguishes every great business you’ve ever done business with from its more mediocre counterparts whose owners are satisfied to simply get through the day.

This book is about such an idea—an idea that says your business is nothing more than a distinct reflection of who you are.

The problem is that everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician.

To The Entrepreneur, most people are problems that get in the way of the dream.

The Manager is the one who runs after The Entrepreneur to clean up the mess. Without The Manager there would be no planning, no order, no predictability. Without The Entrepreneur there would be no mess to clean up.

If The Entrepreneur lives in the future and The Manager lives in the past, The Technician lives in the present. He loves the feel of things and the fact that things can get done. The Technician is a resolute individualist, standing his ground, producing today’s bread to eat at tonight’s dinner.

The typical small business owner is only 10 percent Entrepreneur, 20 percent Manager, and 70 percent Technician. Most businesses are operated according to what the owner wants as opposed to what the business needs.

“Don’t you see? If your business depends on you, you don’t own a business—you have a job. And it’s the worst job in the world because you’re working for a lunatic!"

A mature business knows how it got to be where it is, and what it must do to get where it wants to go. Companies like McDonald’s, Federal Express, and Disney didn’t end up as mature companies. They started out that way!

The Entrepreneurial Perspective starts with a picture of a well-defined future, and then comes back to the present with the intention of changing it to match the vision. It looks at a business as if it were a product, sitting on a shelf and competing for the customer’s attention against a whole shelf of competing products (or businesses). The true product of a business is not what it sells but how it sells it. The true product of a business is the business itself.

How can I create a business whose results are systems-dependent rather than people-dependent? Systems-dependent rather than expert-dependent?

Without orchestration, nothing could be planned, and nothing anticipated—by you or your customer. If you’re doing everything differently each time you do it, if everyone in your company is doing it by their own discretion, their own choice, rather than creating order, you’re creating chaos. Every founder of every great Business Format Franchise company, whether it is franchised or not, knows one thing to be true: if you haven’t orchestrated it, you don’t own it!

Innovation is the heart of every exceptional business. Innovation continually poses the question: What is standing in the way of my customer getting what he wants from my business?

As with Mature companies, I believe great people to be those who know how they got where they are, and what they need to do to get where they’re going. Great people have a vision of their lives that they practice emulating each and every day.

Unless your Business Strategy and Plan can be reduced to a set of simple and clearly stated standards, it will do more to confuse you than to help.

The commodity is the thing your customer actually walks out with in his hand. The product is what your customer feels as he walks out of your business. What he feels about your business, not what he feels about the commodity. Understanding the difference between the two is what creating a great business is all about. (This is also what strategic UX is about).

Only when the Sales Operations Manual is complete does Murray run an ad for a salesperson. But not for someone with sales experience. Not a Master Technician. But a novice. A beginner. An Apprentice.

“If I only indulge my preferences, I will never be able to replace myself with anyone other than another owner, someone just like me, someone with the same interests as an owner, someone with the same goals as mine.”

Think of your business as a Franchise Prototype. You are going to create a Management System. The System will become your management strategy, the means through which your Franchise Prototype produces the results you want. It will transform your people problems into an opportunity by orchestrating the process by which management decisions are made while eliminating the need for such decisions wherever and whenever possible. And the more automatic that System is, the more effective your Franchise Prototype will be.

It’s not the big things the customers talk about; it’s always the little things. The most menial work can be a piece of art when done by an artist. The work we do is a reflection of who we are. If we’re sloppy at it, it’s because we’re sloppy inside. If we’re late at it, it’s because we’re late inside. If we’re bored by it, it’s because we’re bored inside, with ourselves, not with the work.

In this context, the degree to which your people “do what you want” is the degree to which they buy into your game. The game has to be real. You have to mean it. The game is a measure of you.

What is the result of all this? Giving your customer a sense that your business is a special place, created by special people, doing what they do in the best possible way. And all being done for the simplest, most human reason possible—because they’re alive!

It’s not your customer’s Conscious Mind that has to make the decisions. It’s your customer’s Unconscious Mind. If anyone cared to do it, it could probably be proved that no one yet has ever made a rational decision to buy anything! So when your customer says, “I want to think about it,” don’t you believe him.

If you know who your customer is—demographics—you can then determine why he buys—psychographics.

In fact, there isn’t a function or position within the company that is free of asking marketing questions, if by marketing we mean, ‘What must our business be in the mind of our customers in order for them to choose us over everyone else?’

To do what? To deliver the promise no one else in your industry dares to make!

Hard Systems are inanimate, unliving things. My computer is a Hard System, as are the colors in this office’s reception area. Soft Systems are either animate—living—or ideas. You are a Soft System; so is the script for Hamlet. Information Systems are those that provide us with information about the interaction between the other two.

A selling system is a Soft System.

To approach any part of your business as though it were separate from all the rest would be lunacy, because everything in your business affects everything else in your business.

Freedom does not come automatically; it is achieved. And it is not gained in a single bound; it must be achieved each day.

Meaning, it seems to me, is the product of caring, not vice versa. What we care about we value.

You should know now that a man of knowledge lives by acting, not by thinking about acting, not by thinking about what he will think when he has finished acting. A man of knowledge chooses a path with heart and follows it.

If the world reflects a lack of good sense, it’s because each one of us reflects the same. If the world acts as if it doesn’t know what it’s doing, it’s because each one of us acts the same. If the world is violent, and greedy, and heartless, and inhuman, and often just plain stupid, it is because you and I are that way.