How could you work on your business rather than in it? How would you design your business if this was the model for 5,000 more just like it? One of the mistakes a technician cam make is to start a business to work in. They become slaves to their own machine. Instead, they can first design a system for results so that the business is both sustainable and a better place to work in (if they choose to.) In The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It, Michael E. Gerber writes about how to work on your business rather than in it.
Your Business is Not Your Life
Gerber writes:
"Your Business is Not Your Life The point is: your business is not your life. Your business and your life are two totally separate things. Once you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so. This is where you can put the model of the Franchise Prototype to work for you. Where working on your business rather than in your business will become the central theme of your daily activity, the prime catalyst for everything you do from this moment forward."
Prototype Your Business
Gerber writes:
"Pretend that the business you won -- or want to own -- is the prototype, or will be the prototype, for 5,000 more just like it. That your business is going to serve as the model for 5,000 more just like it. Not alsmost like it, but just like it. Perfect replicates. Clones."
Six Rules to Follow for Franchising Your Business
Gerber writes the following rules to follow to win when you play the franchise game:
- The model will provide consistent value to your customers, employees, suppliers, and lenders, beyond what they expect.
- The model will be operated by people with the lowest possible level of skill.
- The model will stand out as a place of impeccable order.
- All work in the model will be documented in Operations Manuals.
- The model will provide a uniformly predictable service to the customer.
- The model will utilize a uniform color, dress and facilities code.
Provide Consistent Value Beyond What They Expect
Gerber writes:
"What is value? How do we understand it? I would suggest that value is what people perceive it to be and nothing more. So what could your prototype do that would not only provide consistent value to your customers, employees, suppliers, and lenders but would provide it beyond their wildest expectations?
That is the question every Entrepreneur must ask. Because it is the raison d'etre of his business! It is in the understanding of value, as it impacts every person with whom your business comes into contact, that every extraordinary business lives."
Create Business Results That are Systems Results
Gerber writes:
"The model will be operated by people with the lowest possible level of skill. Yes, I said lowest possible level of skill. Because if your model depends on highly skilled people, it's going to be impossible to replicate. Such people are at a premium in the marketplace. They're also expensive, thus raising the price you will have to charge for your product or service.
By lowest possible level of skill I mean the lowest possible level necessary to fulfill the functions for which each is intended. Obviously, if yours is a legal firm, you must have attorneys. If yours is a medical firm, you must have physicians. But you don't need to hire brilliant attorneys or brilliant physicians. You need to create the very best system through which good attorneys and good physicians can be leveraged to produce exquisite results.
The question you need to keep asking yourself is: How can I give my customers the results they want systematically rather than personally? Put another way: How can I create a business whose results are systems-dependent rather than people-dependent? Systems-dependent rather than expert-dependent. How can I create an expert system rather than hire one?"
Enable Ordinary People to Do Extraordinary Things
Gerber writes:
"It's been said, and I believe it to be true, that great businessaes are not built by extraordinary people but by ordinary people doing extraordinary things. But for ordinary people to do extraordinary things, a system -- 'a way of doing things' -- is absolutely essential in order to compensate for the disparity between the skills your people have and the skills your business needs if it is to produce consistent results.
In this context, the system becomes the tools your people use to increase their productivity, to get the job done in a way it needs to get done in order for your business to successfully differentiate itself from your competition. It's your job -- more accurately, the job of your business -- to develop those tools and to teach your people how to use them."
No Extraordinary Business Depends on Extraordinary People
Gerber writes:
"The typical owner of a small business prefers highly skilled people because they believe they make his job easier -- they can simply leave the work to them. That is, the typical small business owner prefers Management by Abdication to Management by Delegation.
Unfortunately, the inevitable result of this kind of thinking is that the business grows dependent on the whims and moods of its people. If they're in the mood, the job gets done. If they're not, it doesn't. In this kind of business, a business that relies on discretion, 'How do I motivate my people?' becomes the constant question. 'How do I keep them in the mood?'"
Invent Innovative System Solutions
Gerber writes:
"It is literally impossible to produce a consistent result in a business that depends on extraordinary people. No business can do it for long. And no extraordinary business tries to! Because every extraordinary business knows that when you intentionally build your business around the skills of ordinary people, you will be forced to ask the difficult questions about how to produce a result without the extraordinary ones.
You will be forced to find a system that leverages your ordinary people to the point where they can produce extraordinary results over and over again. You will be forced to invent innovative system solutions to the people problems that have plagued small businesses (and big businesses as well!) since the beginning of time. You will be forced to build a business that works. You will be forced to do the work of Business Development that is not a replacement for people development but as its necessary correlate."
Key Take Aways
Well, this is certainly thought provoking. While I haven't really thought about creating a business, it does open possibilities. Imagine crafting a franchise where you could provide jobs for friends, family, and beyond. Imagine creating systems for results that create unique value and harness everybody's strengths and passions. That's food for thought for another day, but here's my key take aways:
- Apply the concepts to your current job. I like a lot of the concepts here, independent of whether I'm creating a new business. I can simply look at my current job and start asking better questions about how can I scale myself, scale my team, scale the business ... etc. How can I eliminate dependencies on extraordinary people? How can I enable ordinary people to do extraordinary things? ... etc
- Your business is not your life. The purpose of your life is not to serve your business. Even if you love what you do, there's more to your life than building your business or working in your business. The primary purpose of your business is to serve your life.
- Work on your business rather than in it. I like the idea of crafting a business as a system for sustainable results. Even if you do plan on working in your business, stepping out of it first, will force you to design yourself a better job.
- Pretend the business you own or want to own is the prototype. Prototype your business. I really like the idea here of pretending that your business is going to serve as the model for 5,000 more just like it. It forces you to put your thinking cap on and really engineer your business for consistent, sustainable results. It makes you think about how you'll perform the various functions in routine ways that allow for flexibility, adaptability and improvement.
- Ask what consistent value your business can provide. This is a great question that if you think deeply on it, it's actually pretty challenging. It's really a question about both unique value to the market as well as sustainable results. It's one thing to make a one-hit wonder succeed, but it's another thing entirely to create a system or factory for results.
- Create business results that are systems-dependent. Don't depend on extraordinary people. Create an expert system rather than hire one. I actually find this point challenging because I've seen both sides over the years. I think that somehow, the information age jobs and long-tail scenarios are making this model a bit fuzzier. That said, I see the meta point is to ultimately bank on your system and not on the people, so that you are not fragile and you are sustainable. I think there's another benefit to this which is that it forces you to really think about how to streamline how you do what you do.
- Build systems to enable ordinary people to do extraordinary things. Right on! Bringing out people's best is always an interesting challenge.
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