Book review: The E-Myth

Few books can be called revolutionary. The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, by Michael Gerber, is one such book.

This best seller presents a compelling argument for entrepreneurs to look at their business differently. Gerber points out that many entrepreneurs start a business doing something that they love, believing that their days will be filled with an enjoyable activity. However, as the business grows, and new employees must be hired, the owner quickly discovers problems that previously did not exist.

These new employees don’t have the experience and motivation of the owner. They don’t have the same drive and desire as the owner. While the owner recognizes the need to train his employees, it is the nature of that training which often proves inadequate.

While sitting in a McDonald’s one morning, killing time between appointments, Gerber wondered why the Golden Arches were so successful. Most of the employees were teenagers possessing few job skills. Yet the quality of the service and the product was similar in every store.

Gerber realized that the company’s success derived from its approach to the business. Each step of the process was carefully analyzed, and then procedures and policies were developed. That is, a system was developed, and when followed, the system virtually assures success. Thus, a McDonald’s in Houston operates almost identically to one in London, and with very similar results.

Throughout the book, Gerber exhorts the reader to work on his job, not at it. In other words, develop a systematic approach to each job within the organization. In the process, the success of the business is less dependent upon any one individual. As with McDonald’s, the system becomes the key to success.

Of course, this is usually easier said than done. Within any business, hundreds, perhaps thousands, of tasks must be performed. Often, the owner has automatized these tasks, and performs them with little or no conscious thought. Yet, he must identify and then explain each of them clearly. Systems, and their documentation in an Operations Manual, is the key to becoming a true business owner, rather than the owner of a job.

By developing production procedures and policies, and then properly training production personnel, this transition can go smoothly. The owner can then spend his time working his business, rather than in it.