Book Summary: The E-Myth Revisited by Michael Gerber

The E-Myth Revisited by Michael Gerber · The Entrepreneur. “The Entrepreneur lives in the future, never in the past, rarely in the present. · The Manager. The ... Print|Audiobook TheBookinThreeSentences Mostsmallbusinessownersworkintheirbusinessratherthanontheirbusiness.Peoplewhoareexceptionallygoodinbusinessaresobecauseoftheirinsatiableneedtoknowmore.Understandingthetechnicalworkofabusinessdoesnotmeanyouunderstandabusinessthatdoesthattechnicalwork. TheFiveBigIdeas “Ifyouareunwillingtochange,yourbusinesswillneverbecapableofgivingyouwhatyouwant.”ThatFatalAssumption:ifyouunderstandthetechnicalworkofabusiness,youunderstandabusinessthatdoesthattechnicalwork.TheEntrepreneurialSeizureoccursthemomentyoudecideitwouldbeagreatideatostartyourownbusiness.“Everybodywhogoesintobusinessisactuallythree-people-in-one:TheEntrepreneur,TheManager,andTheTechnician.”WeallhaveanEntrepreneur,Manager,andTechnicianinsideus. TheE-MythRevisitedSummary Michaelbelievesthatthepeoplewhoareexceptionallygoodinbusinessaren’tsobecauseofwhattheyknowbutbecauseoftheirinsatiableneedtoknowmore. “Ifyouareunwillingtochange,yourbusinesswillneverbecapableofgivingyouwhatyouwant.” ThatFatalAssumption:ifyouunderstandthetechnicalworkofabusiness,youunderstandabusinessthatdoesthattechnicalwork. TheEntrepreneurialSeizure:themomentyoudecideitwouldbeagreatideatostartyourownbusiness. ThetechniciansufferingfromanEntrepreneurialSeizuretakestheworkhelovestodoandturnsitintoajob. “Everybodywhogoesintobusinessisactuallythree-people-in-one:TheEntrepreneur,TheManager,andTheTechnician.” TheEntrepreneur “TheEntrepreneurlivesinthefuture,neverinthepast,rarelyinthepresent.He’shappiestwhenleftfreetoconstructimagesof‘what-if’and‘if-when.’” “TheEntrepreneuristheinnovator,thegrandstrategist,thecreatorofnewmethodsforpenetratingorcreatingnewmarkets.” “TheEntrepreneurisourcreativepersonality—alwaysatitsbestdealingwiththeunknown,proddingthefuture,creatingprobabilitiesoutofpossibilities,engineeringchaosintoharmony.” TheEntrepreneurhasanextraordinaryneedforcontrol.Heneedscontrolofpeopleandeventsinthepresentsothathecanconcentrateonhisdreams. “TheEntrepreneurcreatesagreatdealofhavocaroundhim,whichispredictablyunsettlingforthoseheenlistsinhisprojects.” TheEntrepreneur’sworldviewisaworldmadeupofbothanoverabundanceofopportunitiesanddraggingfeet. “ToTheEntrepreneur,mostpeopleareproblemsthatgetinthewayofthedream.” TheManager TheManagerispragmatic.Withouthim,therewouldbenoplanning,noorder,nopredictability. “IfTheEntrepreneurlivesinthefuture,TheManagerlivesinthepast. “WhereTheEntrepreneurcravescontrol,TheManagercravesorder.” “WhereTheEntrepreneurthrivesonchange,TheManagercompulsivelyclingstothestatusquo.” “WhereTheEntrepreneurinvariablyseestheopportunityinevents,TheManagerinvariablyseestheproblems.” “TheManageristheonewhorunsafterTheEntrepreneurtocleanupthemess.” “WithoutTheManager,therecouldbenobusiness,nosociety.” “ItisthetensionbetweenTheEntrepreneur’svisionandTheManager’spragmatismthatcreatesthesynthesisfromwhichallgreatworksareborn.” TheTechnician “TheTechnicianisthedoer.” “TheTechnicianlovestotinker.” “IfTheEntrepreneurlivesinthefutureandTheManagerlivesinthepast,TheTechnicianlivesinthepresent.Helovesthefeelofthingsandthefactthatthingscangetdone.” “AslongasTheTechnicianisworking,heishappy,butonlyononethingatatime.Heknowsthattwothingscan’tgetdonesimultaneously;onlyafoolwouldtry.Soheworkssteadilyandishappiestwhenheisincontroloftheworkflow.” “TheTechnicianmistruststhoseheworksfor becausetheyarealwaystryingtogetmoreworkdonethaniseitherpossibleornecessary.” “ToTheTechnician,thinkingisunproductiveunlessit’sthinkingabouttheworkthatneedstobedone.” “Thinkingisn’twork;itgetsinthewayofwork.” “TheTechnicianisn’tinterestedinideas;he’sinterestedin‘howtodoit.’” “ToTheTechnician,allideasneedtobereducedtomethodologyiftheyaretobeofanyvalue.” “TheTechnicianknowsthatifitweren’tforhim,theworldwouldbeinmoretroublethanitalreadyis.” “WhileTheEntrepreneurdreams,TheManagerfrets,andTheTechnicianruminates.” “EveryonegetsinTheTechnician’sway.” “ToTheTechnician,‘thesystem’isdehumanizing,cold,antiseptic,andimpersonal.Itviolateshisindividuality.” SummaryContinued “ThefactofthematteristhatweallhaveanEntrepreneur,Manager,andTechnicianinsideus.” “Thetypicalsmallbusinessownerisonly10percentEntrepreneur,20percentManager,and70percentTechnician.” “Mostbusinessesareoperatedaccordingtowhattheownerwantsasopposedtowhatthebusinessneeds.” “Thethreephasesofabusiness’sgrowth:Infancy,Adolescence,andMaturity.” “Ifyourbusinessdependsonyou,youdon’townabusiness—youhaveajob.Andit’stheworstjobintheworldbecauseyou’reworkingforalunatic!” “Thepurposeofgoingintobusinessistogetfreeofajobsoyoucancreatejobsforotherpeople.” “There’sacriticalmomentineverybusinesswhentheownerhireshisveryfirstemployeetodotheworkhedoesn’tknowhowtodohimself ordoesn’twanttodo.” “Yourjobistoprepareyourselfandyourbusinessforgrowth. “AMaturecompanyisfoundedonabroaderperspective,anentrepreneurialperspective,amoreintelligentpointofview.Aboutbuildingabusinessthatworksnotbecauseofyoubutwithoutyou.” “AMaturebusinessknowshowitgottobewhereitis,andwhatitmustdotogetwhereitwantstogo.” “TheEntrepreneurialModelhaslesstodowithwhat’sdoneinabusinessandmoretodowithhowit’sdone.Thecommodityisn’twhat’simportant—thewayit’sdeliveredis.” “Yourbusinessisnotyourlife.” “Onceyourecognizethatthepurposeofyourlifeisnottoserveyourbusiness,butthattheprimarypurposeofyourbusinessistoserveyourlife,youcanthengotoworkonyourbusiness,ratherthaninit,withafullunderstandingofwhyitisabsolutelynecessaryforyoutodoso.” “Pretendthatthebusinessyouown—orwanttoown—istheprototype,orwillbetheprototype,for5,000morejustlikeit.” “Documentationsays,‘Thisishowwedoithere.’” “Withoutdocumentation,allroutinizedworkturnsintoexceptions.” “Documentationprovidesyourpeoplewiththestructuretheyneedandwithawrittenaccountofhowto‘getthejobdone’inthemostefficientandeffectiveway.” “Whatyoudoinyourmodelisnotnearlyasimportantasdoingwhatyoudothesameway,eachandeverytime.” Gotoworkonyourbusinessratherthaninit,andaskyourselfthefollowingquestions: HowcanIgetmybusinesstowork,butwithoutme?HowcanIgetmypeopletowork,butwithoutmyconstantinterferenceHowcanIsystematizemybusinessinsuchawaythatitcouldbereplicated5,000times,sothe5,000thunitwouldrunassmoothlyasthefirst?HowcanIownmybusiness,andstillbefreeofit?HowcanIspendmytimedoingtheworkIlovetodoratherthantheworkIhavetodo?Innovationisthemechanismthroughwhichyourbusinessidentifiesitselfinthemindofyourcustomerandestablishesitsindividuality.Quantification:thenumbersrelatedtotheimpactanInnovationmakes.“Orchestrationistheeliminationofdiscretion,orchoice,attheoperatinglevelofyourbusiness.”“Onceyou’veinnovated,quantified,andorchestratedsomethinginyourbusiness,youmustcontinuetoinnovate,quantify,andorchestrateit.”“Thinkofyourbusinessasthoughitweretheprototypefor5,000morejustlikeit.”“YourBusinessDevelopmentProgramisthevehiclethroughwhichyoucancreateyourFranchisePrototype.” TheProgramiscomposedofsevendistinctsteps: YourPrimaryAimYourStrategicObjectiveYourOrganizationalStrategyYourManagementStrategyYourPeopleStrategyYourMarketingStrategyYourSystemsStrategy 1.YourPrimaryAim Butbeforeyoucandeterminewhatthatrolewillbe,youmustaskyourselfthesequestions: WhatdoIvaluemost?WhatkindoflifedoIwant?WhatdoIwantmylifetolooklike,tofeellike?WhodoIwishtobe? Michaelbelievesgreatpeoplearethosewhoknowhowtheygotwheretheyare,andwhattheyneedtodotogetwherethey’regoing.“Greatpeoplehaveavisionoftheirlivesthattheypracticeemulatingeachandeveryday.”Michaelbelievesthatthedifferencebetweengreatpeopleandeveryoneelseisthatgreatpeoplecreatetheirlivesactively,whileeveryoneelseiscreatedbytheirlives,passivelywaitingtoseewherelifetakesthemnext.“Thedifferencebetweenawarriorandanordinarymanisthatawarriorseeseverythingasachallenge,whileanordinarymanseeseverythingaseitherablessingoracurse.” Beforeyoustartyourbusiness,orbeforeyoureturntoittomorrow,askyourselfthefollowingquestions: WhatdoIwishmylifetolooklike?HowdoIwishmylifetobeonaday-to-daybasis?WhatwouldIliketobeabletosayItrulyknowinmylife,aboutmylife?HowwouldIliketobewithotherpeopleinmylife—myfamily,myfriends,mybusinessassociates,mycustomers,myemployees,mycommunity?HowwouldIlikepeopletothinkaboutme?WhatwouldIliketobedoingtwoyearsfromnow?Tenyearsfromnow?Twentyyearsfromnow?Whenmylifecomestoaclose?WhatspecificallywouldIliketolearnduringmylife—spiritually,physically,financially,technically,intellectually?Aboutrelationships?HowmuchmoneywillIneedtodothethingsIwishtodo?BywhenwillIneedit? 2.YourStrategicObjective “YourStrategicObjectiveisaveryclearstatementofwhatyourbusinesshastoultimatelydoforyoutoachieveyourPrimaryAim.”“Howbigisyourvision?Howbigwillyourcompanybewhenit’sfinallydone?Willitbea$300,000company?Amillion-dollarcompany?A$500-millioncompany?”“Atthebeginningofyourbusiness,anystandardsarebetterthannostandards.”“Creatingmoneystandardsisnotjuststrategicallynecessaryforyourbusiness;itisstrategicallynecessaryforyourlife,fortherealizationofyourPrimaryAim.”“ThefirstquestionyoumustalwaysaskwhencreatingstandardsforyourStrategicObjectiveis:WhatwillservemyPrimaryAim?”“HowmuchmoneydoIneedtolivethewayIwish?Notinincomebutinassets.Inotherwords,howmuchmoneydoyouneedinordertobeindependentofwork,tobefree?”Theultimatereasontocreateabusinessofyourownistosellit.“AnOpportunityWorthPursuingisabusinessthatcanfulfillthefinancialstandardsyou’vecreatedforyourPrimaryAimandyourStrategicObjective.”“HowdoyouknowwhetheryouhaveanOpportunityWorthPursuing?Lookaround.Askyourself:DoesthebusinessIhaveinmindalleviateafrustrationexperiencedbyalargeenoughgroupofconsumerstomakeitworthmywhile?”Whenaskedwhatkindofbusinessthey’rein,mostbusinessownersrespondwiththenameofthecommoditytheysell.Alwaysthecommodity,nevertheproduct.Thedifferenceisthecommodityisthethingyourcustomeractuallywalksoutwithinhishand.Theproductiswhatyourcustomerfeelsashewalksoutofyourbusiness.Whathefeelsaboutyourbusiness,notwhathefeelsaboutthecommodity.Understandingthedifferencebetweenthecommodityandtheproductiswhatcreatingagreatbusinessisallabout.“What’syourproduct?Whatfeelingwillyourcustomerwalkawaywith?Whatishereallybuyingwhenhebuysfromyou?”“Peoplebuyfeelings.” 3.YourOrganizationalStrategy “Mostcompaniesorganizearoundpeopleratherthanaroundaccountabilitiesorresponsibilities.”“Theresultisalmostalwayschaos.”WithoutanOrganizationalChart,everythinghingesonluckandgoodfeelings,onthepersonalitiesofthepeopleandthegoodwilltheyshare. AnexampleofanOrganizationalChart: APositionContractisasummaryoftheresultstobeachievedbyeachpositioninthecompany. 4.YourManagementStrategy Youneedamanagementsystemtosuccessfullyimplementamanagementstrategy.“Asystemisasetofthings,actions,ideas,andinformationthatinteractwitheachother,andinsodoing,alterothersystems.” 5.YourPeopleStrategy Yourpeoplewanttoforabosswho’screatedaclearlydefinedstructureforactingintheworld.Theywantastructurethroughwhichtheycantestthemselvesandbetested.Thisstructureiscalledagame.The degreetowhichpeoplebuyintoyourgamedependsonhowwellyoucommunicatethegametothemattheoutsetofyourrelationship.YourPeopleStrategyisthewayyoucommunicatethisidea. Afewrulestokeepinmind: NeverfigureoutwhatyouwantyourpeopletodoandthentrytocommunicateagameoutofitNevercreateagameforyourpeopleyou’reunwillingtoplayyourselfMakesuretherearespecificwaysofwinningthegamewithoutendingitChangethegamefromtimetotime—thetactic,notthestrategyNeverexpectthegametobeself-sustaining.PeopleneedtoberemindedofitconstantlyThegamehastomakesenseThegameneedstobefunfromtimetotimeIfyoucan’tthinkofagoodgame,stealone 6.YourMarketingStrategy “Forgeteverythingbutyourcustomer.”“Demographicsandpsychographicsarethetwoessentialpillarssupportingasuccessfulmarketingprogram.”“Ifyouknowwhoyourcustomeris—demographics—youcanthendeterminewhyhebuys—psychographics.”“Ifyourcustomerdoesn’tperceiveheneedssomething,hedoesn’t,evenifheactuallydoes.” 7.YourSystemsStrategy Therearethreekindsofsystemsinyourbusiness: HardSystemsSoftSystemsInformationSystems. “HardSystemsareinanimate,unlivingthings.”“SoftSystemsareeitheranimate—living—orideas.”“InformationSystemsarethosethatprovideuswithinformationabouttheinteractionbetweentheothertwo.” RecommendedReading IfyoulikeTheE-MythRevisited,youmayalsoenjoythefollowingbooks: The7DayStartup:YouDon’tLearnUntilYouLaunchbyDanNorrisbyDanNorris AnythingYouWant:40LessonsforaNewKindofEntrepreneurbyDerekSivers DeepWork:RulesforFocusedSuccessinaDistractedWorldBookbyCalNewport BuyTheBook:TheE-MythRevisited Print|Audiobook RelatedLists BusinessBookSummaries PsychologyBookSummaries Self-HelpBookSummaries Or,browsemorebooksummaries.