From Michael Gerber’s “The E-myth Revisited”
My Favorite Quotes from “The E-myth Revisited.”
“The question has often been asked of me, “What do the owners of extraordinary businesses know that the rest don’t?” Contrary to popular belief, my experience has shown me that 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 problem with most failing businesses I’ve encountered is not that their owners don’t know enough about finance, marketing, management, and operations—they don’t, but those things are easy enough to learn—but that they spend their time and energy defending what they think they know. The greatest businesspeople I’ve met are determined to get it right no matter what the cost.”
“an idea that says your business is nothing more than a distinct reflection of who you are. If your thinking is sloppy, your business will be sloppy. If you are disorganized, your business will be disorganized. If you are greedy, your employees will be greedy, giving you less and less of themselves and always asking for more. If your information about what needs to be done in your business is limited, your business will reflect that limitation.” (p. 6)
“The technical work of a business and a business that does that technical work are two totally different things! But the technician who starts a business fails to see this.” (p. 13)
“The problem is that everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician. And the problem is compounded by the fact that while each of these personalities wants to be the boss, none of them wants to have a boss. So they start a business together in order to get rid of the boss. And the conflict begins.” (p. 19)
“Well, that’s the kind of war going on inside the owner of every small business. But it’s a three-way battle between The Entrepreneur, The Manager, and The Technician. Unfortunately, it’s a battle no one can win.” (p. 23)
“The Entrepreneur lives in the future, never in the past, rarely in the present. He’s happiest when left free to construct images of “what-if” and “if-when. The Entrepreneur creates a great deal of havoc around him, which is predictably unsettling for those he enlists in his projects. As a result, he often finds himself rapidly outdistancing the others.” (p. 24)
“Every strong entrepreneurial personality has an extraordinary need for control. Living as he does in the visionary world of the future, he needs control of people and events in the present so that he can concentrate on his dreams.” (p. 24)
“An Entrepreneur does the work of envisioning the business as something apart from you, the owner. The work of asking all the right questions about why this business, as opposed to that business?” (p. 32)
“So the work of an Entrepreneur is to wonder,” I continued. “To imagine and to dream. To see with as much of herself as she can muster the possibilities that waft about in midair someplace there above her head and within her heart. Not in the past but in the future. That’s the work the entrepreneurial personality does at the outset of her business and at each and every stage along the way. I wonder. I wonder. I wonder. Just as every inventor must. Just as every composer must. Just as every artist, or every craftsperson, or every physicist must. Just as every baker of pies must. I call it Future Work. ‘I wonder’ is the true work of the entrepreneurial personality.” (p. 33)
“The Technician is the doer. “If you want it done right, do it yourself” is The Technician’s credo.” (p. 26)
“As long as The Technician is working, he is happy, but only on one thing at a time. He knows that two things can’t get done simultaneously; only a fool would try. So he works steadily and is happiest when he is in control of the work flow. As a result, The Technician mistrusts those he works for, because they are always trying to get more work done than is either possible or necessary.” (p. 26)
“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.” (p 26)
“The Manager is also a problem to The Technician because he is determined to impose order on The Technician’s work, to reduce him to a part of “the system.” (p. 28)
“To The Manager, however, work is a system of results in which The Technician is but a component part. To The Manager, then, The Technician becomes a problem to be managed. To The Technician, The Manager becomes a meddler to be avoided.” (p. 28)
“The managerial personality is pragmatic. Without The Manager there would be no planning, no order, no predictability.” (p 25)
“Where The Entrepreneur craves control, The Manager craves order. Where The Entrepreneur thrives on change, The Manager compulsively clings to the status quo. Where The Entrepreneur invariably sees the opportunity in events, The Manager invariably sees the problems. The Manager builds a house and then lives in it, forever. The Entrepreneur builds a house and the instant it’s done begins planning the next one.” (p. 25)
“Unfortunately, our experience shows us that few people who go into business are blessed with such a balance. Instead, the typical small business owner is only 10 percent Entrepreneur, 20 percent Manager, and 70 percent Technician.” (p. 29)
“It is self-evident that business, like people, are supposed to grow; and with growth, comes change. Unfortunately, most businesses are not run according to this principle. Instead most businesses are operated according to what the owner wants as opposed to what the business needs.” (p. 34)
“It’s easy to spot a business in Infancy—the owner and the business are one and the same thing. If you removed the owner from an Infancy business, there would be no business left. It would disappear!” (p. 35)
“But then it changes. Subtly at first, but gradually it becomes obvious. You’re falling behind. There’s more work to do than you can possibly get done. The customers are relentless. They want you; they need you. You’ve spoiled them for anyone else. You’re working at breakneck speed.” (p. 36)
“Infancy ends when the owner realizes that the business cannot continue to run the way it has been; that, in order for it to survive, it will have to change.” (p. 38)
“To be a great Technician is simply insufficient to the task of building a great small business. Being consumed by the tactical work of the business, as every Technician suffering from an Entrepreneurial Seizure is, leads to only one thing: a complicated, frustrating, and, eventually, demeaning job!” (p. 39)
“You just can’t play the role of The Technician and ignore the roles of The Entrepreneur and The Manager simply because you’re unprepared to play them.” (p. 42)
“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! “And, besides, that’s not the purpose of going into business. “The purpose of going into business is to get free of a job so you can create jobs for other people.” (p. 40)
“Every business that lasts must grow into the Adolescent phase. Every small business owner who survives seeks help. What kind of help do you, the overloaded Technician, go out to get?” (p. 43)
“To produce effectively, Harry needs something The Technician-turned-business-owner isn’t capable of giving him—a manager! And the lack of one causes the business to go into a tailspin.” (p. 52)
“You come face to face with the unavoidable truth: You don’t own a business—you own a job! What’s more, it’s the worst job in the world! You can’t close it when you want to, because if it’s closed you don’t get paid. You can’t leave it when you want to, because when you leave there’s nobody there to do the work. You can’t sell it when you want to, because who wants to buy a job?” (p. 54)
“In short, Sarah trusted Elizabeth blindly. Sarah simply wanted to believe in Elizabeth. It was easier that way. Because if Sarah trusted blindly, if she simply left it all up to chance, she wouldn’t be forced to do the work she didn’t want to do. The work of coming to agreement about what her relationship with Elizabeth was about. What role each of them was there to play. What it meant for Sarah to be an owner and Elizabeth to be her employee. What it meant for Sarah to set out the rules of the game that she was expecting Elizabeth to play.” (p. 60)
“So, in this context, a business that ‘gets small again’ is a business reduced to the level of its owner’s personal resistance to change, to its owner’s Comfort Zone, in which the owner waits and works, works and waits, hoping for something positive to happen.” (p. 62)
“Simply put, your job is to prepare yourself and your business for growth. “To educate yourself sufficiently so that, as your business grows, the business’s foundation and structure can carry the additional weight.” (p. 64)
“Will you be wrong at times? Will you make mistakes? Will you change your mind? Of course you will! More often than not. But, done right, you will also have contingency plans in place. Best case, worst case. And sometimes you will simply fly by the seat of your pants; you will go with the flow, follow your intuition. “But all the while, even while you’re guessing, the key is to plan, envision, and articulate what you see in the future both for yourself and for your employees. Because if you don’t articulate it—I mean, write it down, clearly, so others can understand it—you don’t own it!” (p. 64)
“The Business Format Franchise not only lends its name to the smaller enterprise but it also provides the franchisee with an entire system of doing business.” (p. 83)
“No, companies like McDonald’s, Federal Express, and Disney didn’t end up as Mature companies. They started out that way! The people who started them had a totally different perspective about what a business is and why it works.” (p. 68)
“Forced to create a business that worked in order to sell it, he also created a business that would work once it was sold, no matter who bought it. Armed with that realization, he set about the task of creating a foolproof, predictable business. A systems-dependent business, not a people-dependent business. A business that could work without him.” (p. 85)
“The third reason IBM has been so successful was that once I had a picture of how IBM would look when the dream was in place and how such a company would have to act, I then realized that, unless we began to act that way from the very beginning, we would never get there. In other words, I realized that for IBM to become a great company it would have to act like a great company long before it ever became one.” (p. 69)
“The Entrepreneurial Model 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). Said another way, the Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important—the way it’s delivered is.” (p. 73)
“To The Entrepreneur, the business is the product. To The Technician, the product is what he delivers to the customer.” (p. 74)
“In short, for this business model of ours to work, it must be balanced and inclusive so that The Entrepreneur, The Manager, and The Technician all find their natural place within it, so that they all find the right work to do.” (p. 76)
“You might say that the hamburgers could be fatter, or less fatty, or this or that. But what you couldn’t say—what you could never say—is that McDonald’s doesn’t keep its promise. Because it does. Better than just about any business in the world, McDonald’s, the love of Ray Kroc’s life, still keeps its promise, long after Ray Kroc has gone. It delivers exactly what we have come to expect of it every single time.” (p. 88)
“At McDonald’s, they called it the University of Hamburgerology, or Hamburger U. There, the franchisee learned not how to make hamburgers but how to run the system that makes hamburgers—the system by which McDonald’s satisfied its customers every single time. The system that was to be the foundation of McDonald’s uncommon success.” (p. 93)
“Because if the franchisor has designed the business well, every problem has been thought through. All that’s left for the franchisee to do is learn how to manage the system.” (p. 94)
“So, now you have it: the Franchise Prototype is the model you’ve been looking for. The Franchise Prototype is the model of a business that works. The balanced model that will satisfy The Entrepreneur, The Manager, and The Technician all at once.” (p. 95)
“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.” (p. 100)
“How can I create a business whose results are systems-dependent rather than people-dependent? Systems-dependent rather than expert-dependent.” (p. 100)
“A business that looks orderly says to your customer that he can trust in the result delivered and assures your people that they can trust in their future with you.” (p. 103)
“All Work in the Model Will Be Documented in Operations Manuals Documentation says, “This is how we do it here.” Without documentation, all routinized work turns into exceptions.” (p. 104)
“As I left, something in me decided not to go back. It certainly wasn’t the haircut—he did an excellent job. It wasn’t the barber. He was pleasant, affable, seemed to know his business. It was something more essential than that. There was absolutely no consistency to the experience.” (p. 106)
“The unpredictability said nothing about the barber, other than that he was constantly—and arbitrarily—changing my experience for me. He was in control of my experience, not I. And he demonstrated little sensitivity to the impact of his behavior on me. He was running the business for him, not for me. And by doing so, he was depriving me of the experience of making a decision to patronize his business for my own reasons, whatever they might have been.” (p. 106)
“What you do in your model is not nearly as important as doing what you do the same way, each and every time.” (p. 107)
“Go to work on your business rather than in it, and ask yourself the following questions: • How can I get my business to work, but without me? • How can I get my people to work, but without my constant interference? • How can I systematize my business in such a way that it could be replicated 5,000 times, so the 5,000th unit would run as smoothly as the first? • How can I own my business, and still be free of it? • How can I spend my time doing the work I love to do rather than the work I have to do?” (p. 109)
“Innovation, then, is the mechanism through which your business identifies itself in the mind of your customer and establishes its individuality. It is the result of a scientifically generated and quantifiably verified profile of your customer’s perceived needs and unconscious expectations. It is the skill developed within your business and your people that is constantly asking, “What is the best way to do this?” knowing, even as the question is asked, that we will never discover the best way, but by asking we will assuredly discover a way that’s better than the one we know now.” (p. 121)
“Begin by quantifying everything related to how you do business. I mean everything. How many customers do you see in person each day? How many in the morning? In the afternoon? How many people call your business each day? How many call to ask for a price? How many want to purchase something? How many of product X are sold each day? At what time of the day are they sold? How many are sold each week? Which days are busiest? How busy? And so forth. You can’t ask too many questions about the numbers. Eventually, you and your people will think of your entire business in terms of the numbers.” (p. 123)
“Orchestration is the elimination of discretion, or choice, at the operating level of your business.” (p. 124)
“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.” (p. 124)
“And when it doesn’t work any longer, change it! The Business Development Process is not static. It’s not something you do and then are done with. It’s something you do all the time. In other words, once you’ve innovated, quantified, and orchestrated something in your business, you must continue to innovate, quantify, and orchestrate it.”
“I believe it’s true that the difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next.” (p. 139)
“If you were to write a script for the tape to be played for the mourners at your funeral, how would you like it to read?” (p 137)
“You built it so that it would work better than anyone else’s business. You invented a turn-key solution to your specific kind of business’s problems. A little money machine. An absolutely predictable little business that does what it promises to do every single time.” (p. 152)
“An Opportunity Worth Pursuing is a business that can fulfill the financial standards you’ve created for your Primary Aim and your Strategic Objective.” (p. 153)
“I want the business, All About Pies, to be all about caring, not about pies. “And if the business is all about caring, then everything we do in the business, everything the business ‘looks, acts, and feels like,’” she said to me with a smile, remembering the story I had shared with her about Tom Watson, “then everything the business is will be a reflection of that, a reflection of caring. Caring will be the true product of my business, not pies.” (p. 164)
“Most companies organize around personalities rather than around functions. That is, around people rather than accountabilities or responsibilities. The result is almost always chaos.” (p. 167)
“Who’s accountable for making certain that the store is manned? When the widgets go bad, who’s accountable for correcting the condition? When the books are unbalanced, who’s accountable for balancing them? When the floors need cleaning, when the windows need washing, when the shop needs opening or closing, when the customers need tending—who’s accountable for producing the results?” (p. 169)
“Jack and Murray sit back and look at the completed Organization Chart of Widget Makers, Inc., and smile. It sure looks like a big company. The only problem is that Jack and Murray’s names will have to fill all the boxes! They’re the only two employees. But what they have effectively done is describe all the work that’s going to be done in Widget Makers, Inc., when its full potential is realized.” (p. 173)
“Jack and Murray know that a Position Contract is not a job description. It is a contract, rather than just a description, between the company and an employee, a summary of the rules of the company’s game. It provides each person in an organization with a sense of commitment and accountability. Accountability literally means “stand up and be counted.” Therefore, the Position Contract is the document that identifies who’s to stand up and what they’re being counted on to produce.” (p. 174)
“But as employees, at the very bottom of the organization. Doing Tactical Work, not Strategic Work. Tactical Work is the work all technicians do. Strategic Work is the work their managers do. If Jack and Murray’s business is going to thrive, they have to find other people to do the Tactical Work so as to free Jack and Murray to do the Strategic Work.” (p. 179)
“Each of them asks, “What would best serve our customer here? How could I most easily give the customer what he wants while also maximizing profits for the company? And at the same time, how could I give the person responsible for that work the best possible experience?” (p. 180)
“And when he finds the right person, Murray hires him, hands him the Sales Operations Manual, has him memorize the words in it, dress to code, learn the systems, and finally, go to work. Using the Sales System, Murray innovated, quantified, and orchestrated. At that moment, at that exact instant, Murray moves up to the position of Sales Manager and begins the process of Business Development all over again. Because at that moment, Murray has taken the most important step in freeing himself from the Tactical Work of his business. Murray has replaced himself with a system that works in the hands of a person who wants to work it. And now Murray’s job becomes managing the system rather than doing the work.” (p. 182)
“it’s critical if you are to begin your business all over again that you’re able to separate yourself from the roles you need to play. To become independent of them, rather than these roles becoming dependent on you.” (p. 185)
“The System will become your solution to the problems that beset you because of the unpredictability of your people. The System 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.” (p. 187)
“And exactly the same scenario has occurred each and every time I’ve returned. But after that first time I was never asked my preferences again. I had become a part of the hotel’s Management System. And never once has it let me down. The system knows what I like and makes certain that I get it, in exactly the same way, at exactly the same time.”
“What exactly had the System provided? A match, a mint, a cup of coffee, and a newspaper!” (p. 192)
“This is our Operations Manual. As you can see, it’s nothing but a series of checklists. This one is a checklist for setting up a room.” He opened the book to a yellow page. “This group of pages is yellow. Everything in the Manual is color coded. Yellow has to do with Room Setup. Blue, with Guest Support Services. For instance, when we light your fire at night, put the mints on your pillow, and so on. “Each checklist itemizes the specific steps each Room Support Person must take to do his or her job.” (p. 194)
“If you want it done,” I tell them, “you’re going to have to create an environment in which ‘doing it’ is more important to your people than not doing it. Where ‘doing it’ well becomes a way of life for them.” (p. 197)
“I mean, it wasn’t just that he took it seriously—everyone I’ve ever worked for was serious about his business—it was the kind of seriousness he had. “It was as though the hotel was more than just a hotel to him. “It was like the hotel was an expression of who he was, a symbol of what he believed in.” (p. 198)
“He said, ‘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. The most menial work can be a piece of art when done by an artist. So the job here is not outside of ourselves, but inside of ourselves. How we do our work becomes a mirror of how we are inside.’” (p. 199)
“He wasn’t looking for employees so much as for players in his game. He was looking for people who wanted something more than just a job.” (p. 202)
“Are you beginning to understand that systematizing your business need not be a dehumanizing experience, but quite the opposite? That in order to get your people to do what you want, you’ll first have to create an environment that will make it possible? That hiring people, developing people, and keeping people requires a strategy built on an understanding of people completely foreign to most businesses?” (p. 210)
“You, as the Shareholder, as the owner, as the COO, as the VP/Marketing, as the VP/Finance, whatever positions you take, must take full accountability for what’s going on in your business. “And to do so, you must lead the company in the direction you intend it to go. “And that means you must set the standard. “And one of the most important set of standards you must establish is a Management System through which all managers, and all those who would become managers in your company, are expected to produce results.” (p. 214)
“Your Marketing Strategy starts, ends, lives, and dies with your customer. So in the development of your Marketing Strategy, it is absolutely imperative that you forget about your dreams, forget about your visions, forget about your interests, forget about what you want—forget about everything but your customer!” (p. 218)
“If Mature businesses, such as IBM, McDonald’s, Federal Express, and Disney, take such things seriously, then how can you not do the same? Your business is far more fragile than a big business. So if anything, you must take marketing more seriously than a big business does.” (p. 226)
“Who are my customers, specifically? What is their Demographic Profile? “How do you answer that question? You ask them! “You ask each and every one of them, by having them complete a questionnaire in return for a free pie! “The free pie is the price you pay for that information.” (p. 228)
“you have to be interested in everything your business needs. You have to become a student of the art of business and the science of business. And that’s the ‘what to do’ part of all this. Do you realize how much marketing money is spent by companies like McDonald’s, Federal Express, Disney, and Walmart to get it just right? Do you realize how much time and attention companies like Pepsico and American Express spend to get their brands just right? And how easy it is to miss the mark? And what it costs them if they do?” (p. 230)
“In a small business you simply can’t afford to spend the money they do. But you can afford to spend the time, the thought, the attention, on the same questions they ask.” (p. 230)
“The sign on my shop, the floors, the walls, the display cases, the tables, my people’s uniforms, and so forth. In other words, all of the visual elements of my business and the way they all fit together. In fact, when it’s all done correctly, the entire business should look like one fully integrated, beautifully designed system.” (p. 250)
“every written or verbal communication with anyone who comes into contact with your business is a Soft System. What so few of us understand is the power of those words when they are totally integrated. That your recruitment script, and your shop’s name, and the training you conduct in your school, and the words in your customer brochures, and your ads, everything you say, must work together just as the visual components of your shop must work together, to make one powerfully effective message.” (p. 251)
“That you are All About Pies, and that there is no one, absolutely no one else like you. “There is no one else telling the same story.” (p. 251)
“most small businesses fail. And the reason is obvious. We bring our chaos with us. We don’t change. We try to change “out there.” We try to change the world by starting a small business—but we stay the same!” (p. 259)