I've read The E-Myth Revisited and I've heard Michael Gerber speak, but I have a business partner who has not and will not. I believe in my entrepreneurial vision for our company, but my partner is not convinced. He prefers doing technical work (which other employees should do) and he swears by the adage "If you want it done properly, then do it yourself." His attitude is definitely holding back our growth plans. Any suggestions?

from Michael Lloyd


Partnerships present challenges as well as opportunities. A partnership can potentially have profound impacts on your business, your role in the business and in your life. Entering into a partnership should not be done without careful forethought and attention to detail.

There is wisdom in the old business adage: "He who has a partner has a master." This may not be true in your case, but it highlights the point that in a partnership, some business questions will always require mutual evaluation before decisions can be made.

First and foremost, it is critically important that you and your partner agree on a single strategic objective for the business. (see Chapter 13 of The E-Myth Revisited for more on defining a strategic objective). Until you both are 100% committed to a single vision for the business, you will be working at cross-purposes. At best, it will be difficult to achieve your goals. At worst, you will end up distrusting one another and nothing will be accomplished. Make very sure that all partners are committed to a shared vision for the business, and that they agree on the direction in which the business should go.

Also important is definition of your individual roles in the company. Define these roles and their differing responsibilies as specifically as you can. Include in these job descriptions the sorts of decisions and actions each partner may take individually, and which decisions and actions will require agreement of the other partner. In general, strategic decisions that affect the business as a whole will require partner agreements, while tactical decisions within individual areas of accountability may be made alone.

If you and your business partner disagree on the shared vision or clear role definitions, then you will need to negotiate until either agreement is reached on these key points, or you agree to dissolve your partnership. Does this seem too harsh a choice? ...not when compared to working for years at cross-purposes, towards different objectives, with opposing management methods and different definitions of progress. Imagine the chaos that could erupt if you and your partner made separate, incompatible decisions regarding an employee or a customer. Multiply that disruptive potential by the number of your employees, the number of your customers, and the number of business cycles per year. This potential for trouble is reduced greatly if partners agree to work towards a single strategic objective for the company.

It's also important to get professional advice when constructing (or re-modeling) a partnership. We recommend you meet with a skilled corporate merger attorney and solicit his or her advice on the legal structure of the business. You will want a business structured to shield the partners from inappropriate liability, has maximum tax benefits, and with clearly-defined stipulations should one partner wish to sell their interest in the business. Defining important points clearly and comprehensively will minimize your exposure to unforeseen legal, financial and personal events.

The Approach

As an E-Myth Business Coach, I often talk to small business owners trying to solve key frustrations. My advice to them is to search for underlying causes of frustration, i.e., the business conditions that are causing the problems. This is a fundamental step that our clients sometimes ignore. Clients will often try to 'fix' a frustrating problem without understanding why the problem occurred. A result of this sort of 'fix' is often to blame others or blame themselves.

A Blame-free Environment

Given frustrations, and instead of blaming themselves thinking "it’s all my fault" or blaming others thinking "it’s all their fault" business owners must ask themselves, "What is causing these frustrations to occur? What standard procedure is missing (or isn't being followed) that is allowing these frustrations to exist?"
If business owners can think in terms of searching for the cause of the problem, rather than concentrating on fixing blame, they will be on their way to building a system to repetitively and predictably solve that problem. If one continues to be reactive and implement quick-and-dirty sorts of fixes, the frustrations may temporarily subside, but they will always return.

I've often asked my clients to stop and notice when they feel frustrated in their business. I advise them to consider exactly what is going on in the business at that point in time, and to write it down in a notebook. That way, they can more easily see what the frustrations are, and can examine them more closely. Example entries may read 'Bob in Sales was late again today, missed an important customer telephone call", or 'Shipping dept. didn't send package on time, customer didn't receive package as promised", or "electrician mistake resulted in 1.0 hour power outage." Noting these frustrations will help them to examine true causes & effects later on.

Underlying Conditions

After noting problems for a few weeks, clients can reflect on their notes and deal with them strategically. Common themes of frustration should be more clearly visible, such as multiple occurrences in one department, trouble on a given team, more problems on Tuesdays, more issues at 1PM, delivery problems when its raining, sales trouble at the beginning of each month, issues with particular clients, etc. If common elements can be identified and analyzed, it will be easier to systematically pinpoint what has to change, and to document standard procedures to deal with the issues.

Awareness of real underlying causes and the application of systematic solutions will help clients to prioritize changes and systematic solutions, versus blaming people and coming up with short-term fixes. Without this shift in thinking, expect Key Frustrations to regularly return.

How have you approached frustrating conditions in your business? Share your thoughts with the community.

The recent spate of damaging hurricanes is a stern reminder of how suddenly disasters can strike businesses and devastate communities. While your business may not be located in an area prone to hurricanes, you could still be vulnerable to other kinds of natural and man-made disasters such as fire, tornadoes, earthquakes, floods, landslides, or terrorist attacks. Your life and livelihood, as well as those of your employees, and the very health of the community, could be at stake. Are you prepared?

To be able to recover and thrive after a disaster situation requires a comprehensive disaster response plan, which you should develop and have in place long before an actual disaster strikes.

Basic steps you should take now include:

• Purchasing and storing emergency supplies, including food, water, blankets, flashlights, etc.
• Creating a written plan for how you will deal with people and property in an emergency, including how you will:
  
  
  • Evacuate or shelter people.
  • Care for the sick and injured.
  • Account for all people in the building.
  • Maintain communication between employees and managers after the building is vacated and telephone services aren’t working.
  • Secure new office space or work equipment, if needed.
  • Hook up utilities (telephone, Internet, power, water, etc.) at the new location.
  • Secure and recover cash, valuables, and other inventory.
    
    

• Making sure all employees have at least two contact phone numbers to call for emergency assistance and return-to-work information.
• Meeting with your insurance agent or broker and finding out exactly what losses your policies will and will not cover, and your policy deductibles and limits.
• Creating a list of alternate suppliers and vendors, in case your primary ones are knocked out of action by the disaster.
• Inventorying assets and keeping this list stored off site
• Deciding what records you will need access to, and making sure you have copies of such things as lease agreements, real property deeds, property and inventory photos and backup computer files
• Designating specific personnel to be responsible for critical parts of the plan.
• Practicing evacuating your building and accounting for all employees within the building.
• Reviewing your plan at least once a year.
• See http://www.ready.gov/business/index.html for more information about how to create your own plan.
  
  

During an actual emergency you should:

• Try to stay calm. Your employees will take their lead from you. If you and your managers remain calm, employees will be less likely to panic.
• Remember your priorities employees first, data second, everything else after.
• Let your designated people take the lead. Check in with them to make sure they have the support they need.
• Execute your plan.
  
  

After an emergency you should:

• Locate and contact your employees. Find out what kind of assistance they need at home and, if possible, direct them to community resources.
• Keep them informed about when you need them to return to work.
• Contact your insurance agent to make any necessary claims. Give your agent a copy of your most recent inventory list.
• Execute your plan to secure any needed workspace, equipment, utility hookups, etc.
• Contact your customers. Find out what they need from you. Let them know when you will be up and running.
• Contact your suppliers and vendors. Find out as much as you can about their ability to keep you supplied with needed products and services. If necessary, begin to contact alternate suppliers and vendors.
• Review your budget and make the necessary adjustments to your revenue and expense forecasts.

Clearly, a little planning now will go a long way later. The more thorough your disaster recovery plan is, the sooner you will be able to:

• Get your business up and running.
• Serve your customers.
• Pay your employees.
• Contribute to the resumed functioning of your community.

Available Resources

E-Myth is pleased to announce that, as a member of the Institute for Business and Home Safety (IBHS), we are able to make various IBHS publications available to our E-Myth community for free through our Web site.

Please visit www.e-myth.com/disasterprep/, where you can download excellent disaster recovery and business continuity planning documents, such as:

• Open for Business toolkit
• Business continuity forms
• Getting Back to Business Brochure
• Property protection checklists
• Disaster plan folders

We highly recommend that you take advantage of these resources, which will not only save you time and money in planning for a disaster in advance, but will also assist you in getting back on your feet after a crisis has occurred.

A lot depends on you. Make sure you are prepared.

The E-Myth Revisited proposes that owners of businesses that are not working should start again. This time they need to translate their vision into a management system, and to control their unpredictable employees through this system. I agree completely with this philosophy. My question is concerned with the practicalities of achieving this for a business with 25 employees. Sarah, in the book, had downsized to one, and moving forward was not complicated by any employees. How would you install a management system within an existing business with 25 employees, all of whom have been creating their own form of unpredictability? What difficulties do you envisage?

from Jill Tydeman


Thanks for your thoughtful question.

Your question is one that we have heard often here at
E-Myth:

"How do I get my people to do what I want?"

The answer that we give is the same whether you have 25 employees or 2 employees:

"You can't! You can't get your people to DO anything!"

As you've mentioned, the core philosophy behind the E-Myth Point of View on Management is the idea that businesses should be systems-dependent, NOT people-dependent. The secret of successful business management--successful people management--is systemization. Systems free your people to pay attention to the things that matter while all the routine things take care of themselves. Systems raise the level of performance of your people. The E-Myth management strategy is the same for companies with 2 employees, with 25 employees, or with 150 employees!

That being said, in Chapter 16 of The E-Myth Revisited, Michael Gerber expands on this answer by explaining that business owners have to create an environment for these systems in which doing it is more important to your people than NOT doing it. A place where doing it well becomes a way of life for them.

Sarah (the overwhelmed, overworked technician in The E-Myth Revisited) had indeed downsized. As the book describes, she "got small again" and retreated back into the infancy stage of her business's life cycle, after having stood on the threshold of growth and the adolescent stage. She had gotten lucky with the recruitment of a capable, enthusiastic employee named Elizabeth. She depended on this employee's skills and experience. And, she paid the price for this dependency when Elizabeth abruptly quit, leaving Sarah feeling abandoned and, again, overwhelmed.

In contrast, let's turn instead to the example of the hotel owner described in Chapter 16 as a model for the E-Myth approach to management. The owner of the hotel created a consistent, predictable, worthwhile experience for his customers. And, he did it through his employees.

So, how did he do it?

The owner communicated to his employees that they had an opportunity to make a choice, the RIGHT choice. He did it by making sure that all of his employees understood the IDEA behind the work they'd been asked to do. The owner got his employees excited and got their "buy-in" by expressing intentionally and specifically what the idea behind the work was, which is more important than the work itself. The hotel owner was looking for "players in his game" and his first step was to COMMUNICATE to them about what the rules of the game were at his hotel by sharing with them the IDEA behind his hotel.

You, as the business owner, must take full accountability for what's going on in your business in the area of management. Your first step is to undergo a fact-finding mission to find out what is currently true in your business through employee surveys and conversations with your managers. Finding out what is currently true in your business is KEY to planning your management strategy for the future.

Then, you must lead the company in the direction you intend it to go by setting standards through a management system in which all managers, and all those who would become managers in your company, are expected to produce RESULTS. These are the "rules of the game" and they are the foundation of your management system.

Once you have created these rules, you need to invent the way to manage it through systems. There are four components of these systems: How we do it here; how we recruit, hire, and train people to do it here; how we manage it here; and, lastly, how we change it here.

And, of course, all of these systems must be documented in your operations manuals, taught at your school, managed to, and improved upon, and discussed among you and your people.

You asked about difficulties we might envision in implementing a management strategy with your employees. Here at E-Myth, "difficulties" are seen as "opportunities." The best way to solve frustrations or bust through resistance presented by your employees is to establish a consistent and open place for them to discuss issues that come up during regular weekly meetings with you or their managers. You can then use these meetings to turn employee "issues" into opportunities for improvement in your system structure. Employees must feel heard by you or their immediate manager and, in turn, be respected for expressing their opinion! This will sustain their buy in to "play the game."

If you create a game worth playing, communicate and support employees who are excited about the game, and continue to improve the rules of the game, your business WILL consistently be a winning game for everyone involved in it!

Ralph Waldo Emerson suggested, "If you build a better mousetrap, the world will beat a path to your door." At E-Myth Worldwide, we tell clients, less poetically, that "if there's a way to do something, there's a better way to do something." In other words, differentiate or become irrelevant.

But differentiation simply for its own sake can be a wasted exercise. Is the new mousetrap really better? That's open to interpretation, and the market -- your customer -- will decide. To remain competitive, you have to create products or provide services that approach, as closely as possible, what the customer considers "ideal."

Your opportunity to differentiate yourself from your competition exists in that gap between what your customers can currently get and what they really want.

And your product -- whatever it is -- isn't just the things or services you sell. Your real product is the total shopping/buying experience.

A recent Wall Street Journal article explored the newest innovation from furniture retailers -- and it has nothing to do with design or fabric. Rather, its focus is on delivery times. Surveys determined that customers' biggest complaint was wasting an entire workday waiting at home for the delivery.

With access to GPS tracking, wireless laptops, cell-equipped drivers, and on-line traffic reports, some stores now promise delivery within a two-hour time window, instead of the usual eight. If this represents the ideal to busy customers, it could be the differentiating factor in their purchase decision.

A happy customer doesn't need to know why she's happy, but you do! And, if you don't, you better find out!

First, ask yourself: "What's standing in the way of my clients getting exactly what they need? And what would it look like if we could actually deliver that?"

Consider everything you know or suspect about your customer. Become that person in need of your service. Be very picky, and assume that nothing is impossible. Now imagine the perfect product that meets, as closely as possible, what you determine are your customers' ideal choices.

You can organize your thinking around six broad categories:

• Functionality. What does your product actually have to do to completely satisfy?
• Sensory impact. How should your product ideally look, feel, taste, and/or sound to meet customer expectations?
• Conscious associations. Some people are naturally drawn to state-of-the-art products; others respond to superior performance, price, safety, or reliability. Learn enough about your customers to know which conscious associations resonate with them.
• Unconscious associations. Colors, shapes, scents, and experiences unconsciously attract or repel us. I have a client who test-marketed an enzyme-based cleaner. Sample shoppers selected bottles labeled "safe," "gentle," and "environmentally friendly," but avoided bottles that included the word "enzymes."
• Pricing and Value. The lowest-bidding contractor may, or may not, be seen as the most desirable choice. For many customers, "low-cost oil change" is compelling, while "low-cost surgery" is not. That a restaurant is expensive may be its biggest draw.
• Access and Convenience. Is your being "local" an important consideration for your customers? Or is having a nation-wide presence more so? Is it important to your customers that you're open on Sundays? Do you need to offer "live" operators, or do your customers prefer voicemail?

Remember: Tiny changes often make the difference between ordinary and extraordinary in your market. Once you've uncovered a better mousetrap that will add value from your customers' point of view -- create a system to deliver it. Don't let it occur by accident. Make sure your customers are getting exactly what they want, every time they ask, and watch them beat a path to your door.