2010-09-05
The Working "ON" Your Business Myth Exposed
In our article Revisiting the E-Myth we debunked a couple of common misconceptions about the E-Myth Point of View.
Firstly, that the business owner should never do the technical work of
the business and
Secondly that every business should be franchised. You can read the full article here, but the point was that you needn’t abandon the technical work you love nor do you have to create the next McDonald's. If you love the technical work of your business, then by all means, do the work you love! Just make sure you build a business that supports you doing what you love. And if you build your business as if you were going to franchise it, you will benefit from a business that runs predictably and efficiently, without being dependent on you.
This week we want to explore two more “common myths” around the E-Myth.
These misconceptions are around the concept of “working on it,
not just in it.” which is the key idea behind the E-Myth inc case you hadn't read Michael Gerber's books yet.
You’ve heard the idea of “working on it, not just in it” before, but what does it
really mean? In essence, it sums up the key entrepreneurial mindset that
we strongly advocate: the idea that ultimately your business your
product that you produce; that as an entrepreneur you’re looking for more than just
making an income, but ultimately you want a profitable, sale-able business that produces
consistent results and that is not entirely dependent on you. i.e. passive income, or sell it as an income producing asset.
Let’s take a look at these two often misquoted and misinterpreted aspects of the E-Myth “working on it, not just in it” approach:
#1 Misconception : Working on your business is about documenting systems.
Documenting a system or process is not the same as implementing that same system. When you document a system, you’ve written down the specific repeatable steps to achieve a specific result. The act of writing your system down certainly has much value: it helps you think through the steps and sets standards and it is also a way to effectively communicate the system to others; but the writing it down is not the most important part of developing a system. Implementation on the other hand—the act of carrying that system out, of testing, and revising until it accomplishes the desired result—that's where the real working on your business happens.
Remember that the business development cycle, the elegant and simple rule of developing and sustaining a business, involves Innovation, Quantification and Orchestration. If you have an idea (Innovation) and then jump right to documenting and implementing (Orchestration), then you’ve missed the vital Quantification step that tells you that what you’re doing is actually the right thing to do to produce the desired result.
Let’s use a simple example to illustrate our point. Perhaps you’ve identified that your shipping process is desperately in need of streamlining. So you put on your “working on it” hat and develop a shipping action plan. You write down the steps that you think are the most efficient way to get a package out the door and hand that new system to the person in charge of shipping and viola! You’ve documented a system, handed it to somebody else to execute and now you’re done. Not quite.
The critical component that’s missing from this step, and one that will likely have negative repercussions on your business development process, is Quantification. Quantification is absolutely essential to working on your business. In addition to writing it down, you have to practice it, observe it, test it—and then modify it based on trying it. And then you keep on testing it until you can get positive, proven outcome. That is how you create a system that produces consistent, transferable results. That’s how you work on your business.
Documenting is just one piece of implementing a system—it’s not the whole thing. A business full of Action Plans that do not produce great business results are just a waste of time.
#2 Misconception : A business owner should only do entrepreneurial work.
How many times have you felt frustrated because you weren’t able to spend the time you wanted on the entrepreneurial—or strategic—work of the business? You’re so busy working in the business that you never have time to work on it.
Well here’s some good news: working in it and working on it are not mutually exclusive. In fact, most successful business owners have to work in their business while they're working on it (particularly in the beginning of transitioning from self-employment to creating a business). It might be out of necessity; your organization might just be too lean for you to step out of the daily activities. Or you may need to go back "in" for a period of time when it's time to improve your existing operation to stay competitive. Or you may love the technical work of your business so much that you don’t ever want to give it up completely.
No matter what the reason, working in the business gives you the hands-on experience and intimacy that you simply can’t get when you’ve checked out of the daily activities of the business. Working in it gives you the unique insight into what’s truly working (and not working). One company we worked with required all of their employees (from the CEO to the receptionist) to take part in job shadowing to expose each employee to the many facets of the business. You don’t know what it means to work an assembly line or answer a phone cue until you’ve actually done it. The perspective it provides makes you a better leader with a more holistic understanding of your business.
What’s important is that you must approach all of the working in it that you have to do with a working on it perspective. That’s how you apply the entrepreneurial mindset.
When you put on rose-colored glasses the world looks rosy, right? Tinted glasses show you things in a color that makes ordinary objects look new and different—even beautiful. So how do you work on your business while working in it? You need to put on your “working on it” goggles.
Put your goggles on and use the entrepreneurial mindset throughout your day. It doesn’t have to get in the way of the work you have to do; rather it will enhance that work and bring a more objective perspective to your everyday routine. When you’re interacting with a customer, take note of how the conversation goes, of the things you might be able to do to facilitate better communication. When you’re ordering parts from a vendor, you’ll probably find that you have a method that could be documented and then delegated for somebody else to do. If you’re a Realtor giving an open house, do some market research and ask visitors how they heard about the open house, what brought them to that house on that day.
Ultimately, working on your business is about your perspective. We've always advocated that if you want to change your business, the first thing you need to do is to change the way you think about your business. So1
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