I recently finished re-reading Michael Gerber’s “The E-Myth Revisited”. It is one of my go-to books whenever I find an organization that appears to be dysfunctional. I find myself using parts of his model on my own organizations – since typically professional firms believe everyone should do everything. This isn’t to knock professional firms but this approach is the single biggest obstacle to healthy and effective growth that I know.
“You take corporations and I take LLC’s”, seems like a great business model for accountants but it is simply a permutation of the “You take the left and I take the right” approach to management. It doesn’t address the actual needs of the business and it doesn’t leave room for growth. How do you hire an employee to fit that sort of arrangement?
It is even worse for other types of businesses. I have worked hard to try and straighten out small businesses who grew into a disaster. It is in those instances that I find comfort in the E-Myth; technicians who didn’t want to work for a boss suddenly have the worst boss in the world and so do his 12 employees. All of whom are stepping on each other, tripping over inventory, losing tools, upsetting customers and generally eating up profits.
And in the meantime the owner is working 14-16 hours a day 7 days a week. Until he collapses. What was the owner doing in those hours? Everyone else’s job.
Organization, structure, discipline are tough to live with. I get it. As Mr. Gerber implies, you start your business because you want to simply work – you want a job. You want to do it your way, meeting your customers needs by you always being available. And, as he points out, it can’t work. You simply don’t know it yet.
The problem is inertia. Actually, that isn’t true. The problem is the owner-technician’s inertia. Try to take the owner out of the picture and you are accused of planning a mutiny. Never mind the reality that the owner has already lost control; he talked to a friend who had a buddy who hired a consultant and that consultant ended up buying the company for almost nothing. Never mind the reality that a company built around the owner is worth almost nothing.
Are you looking at a situation like that? Are you the sole owner-technician of a small business where it seems that you re-do everything your employees already did? Do you feel you are the only person qualified to make a sales call? To build the widget? To make a collection call?
Perhaps you are in a partnership and hoped that by making your best friend/employee an owner she would work 140 hours a week just like you? Re-doing everything someone else already did, calling the same customers, shipping extra widgets…
This is where I depart from the E-Myth. The author makes it sound like you can be down this path and somehow recover. Sorry, it simply isn’t going to work that way. Inertia is working against you.
Think about it. You hired a bookkeeper because you hated doing the books and it ate into the time to make a sales call and build the product. You still hate doing the books plus you don’t know how. And if you do the books who will make the sales calls? And don’t even get you started on sales people: They make deals that you can’t keep and then they leave and take the customer. No, it is better if you keep things they way they are and just work harder, right?
No. It is not better; not for you, not your business, not your employees. You can make the change but you can’t fight the inertia. You may, however, be able to start deflecting your path. The goal is not to slow you down but rather start changing the direction so that you start going in the direction you want.
More on this in my next article. Have a great day.
Accounting Clarity 