On Management

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!