Michael Gerber's best-seller The
e-Myth starts with some profound insights into why entrepreneurs fail,
but then he prescribes a one-size-fits-all cookie cutter solution based
on his unbridled reverence for franchises. In the process of dispelling
some important myths about entrepreneurship, he ends up creating some
new ones.
His book is based on three propositions (I'm paraphrasing):
- People starting their own businesses tend to confuse the
work of their business ("technician" role) with the work of running a
business ("manager" and "entrepreneur" roles) and often find they are
neither competent at nor fond of the latter roles.
- The solution is to create a replicable idiot-proof business
model for the business that will 'automate' the management and
entrepreneur roles, so that the business can grow without limit even
without manager or entrepreneur skills, and so everyone in the business
can concentrate on the "technician" role. This is the process of
creating a 'franchise'. "Replace yourself with a system", urges Gerber,
and have written Standard Operating Procedures for everything.
- A standard business development planning process, all of it conventional business wisdom, virtual guarantees business success.
I agree with the first proposition. That's why I have always believed
that it is folly to go into business alone. What's more, I think there
are more than three roles in
most successful businesses. There can be at least eight: You need
partners to research, to teach, to imagine, to design, to create, to
cultivate, to sustain and to connect. A successful business has people
with all these competencies, directed at affordably meeting an
identified unmet need. A sustainable
business has people that not only do these things well, but love doing
them, and whose competencies don't significantly overlap. These are
businesses in Area 3 of my graphic above, at the intersection of your
people's collective gift, passion and purpose.
Such a sustainable enterprise, which I have called a 'Natural
Enterprise', is a true partnership based on trust instead of hierarchy.
Why? Because such an organization is self-managing,
and hence is more resilient to absences of, judgement errors by and
disagreements among one or two key people. Gerber's 'franchise model'
may be fine for mass-production businesses like McDonalds whose product
line is small and rarely changes, but it will rarely work when every
product needs to be customized. You just can't automate or make such
businesses idiot-proof, because there's too much judgement and
individual craftsmanship required by many people involved. And those
who have a flair for such custom work are usually not content to work
in an inflexible business run by someone else for which they're
paid very little. Researchers, teachers, 'imagineers', designers,
creators, nurturers, connectors and sustainers tend to get impatient
when someone else (or worse, something
else, a 'system') is making all the decisions for them. For that reason
franchises and branches have notoriously high turnover, and most
franchisees (except those who are both uncreative and luck into very
profitable franchises) tend to be very unhappy people.
So I don't buy Gerber's second proposition, except for a very narrow
range of businesses that I don't think appeal to a lot of people. And
while business planning is never a bad idea, most business plans are
naive and inflexible, so what is needed more than planning is good improvisational skill.
And improvisation isn't fighting fires, it's being alert to the changes
that are affecting your business and industry and adapting to them,
and, most important of all, continually innovating.
Gerber argues that there are seven critical skills in entrepreneurship:
Leadership, marketing, money, management, client fulfillment, lead
conversion and lead generation. My experience has been that, except in
the most mundane businesses, six of these are overrated and largely
unnecessary:
- The cult of leadership in the US is foolish and dangerous;
as I've argued before, leadership is largely irrelevant to
organizational success.
- Marketing and selling (lead conversion and lead generation)
are only necessary if you aren't filling an unmet need so well that
your customers do these things for you -- viral marketing beats the
regular kind hands-down.
- Money skills are only necessary if you're caught up in the 'grow or die' myth – sustainable enterprises are organically financed.
- Self-management trumps the best hierarchical management through the wisdom of crowds.
- Client fulfillment is important, but it is inherent and intuitive
in Natural Enterprises that are meeting a real human need better than
anyone else can, where the line between supplier and client/customer is
blurred and you co-develop your products and services with your customers.
If your ambition is to create a pyramidal growing organization
providing a large volume of identical goods competently, then I'm sure
Gerber's advice will work. But is working as part of a hierarchical
machine, even one churning out a lot of profits, really
what most entrepreneurs are looking for to replace their exhausting and
boring jobs? The prototype for Gerber's book is a woman who quits her
job baking because she wants to start a baking business. Then she finds
out she doesn't want to start
a baking business, she just wants out from under a lousy boss. She
loves to bake. The problems of managing (all by herself) a baking
business almost kill her. Gerber shows her how to be the next Sara Lee:
She learns the skills Gerber thinks she needs to be a good manager and
entrepreneur.
But is this really what she, and so many others who leave their boring,
dead-end jobs (voluntarily or not), and what so many young people who
blanch at the thought of starting at the bottom of some mammoth Evil
Empire corporation, really want?
I don't think it is. And I think by perpetuating the myths that
entrepreneurship is usually grueling, administrative work, requires
lots of money, opportunism (regardless of its social and environmental
costs), endless selling and marketing, incessant growth
and mindless low-paid drones to do what the 'franchise machine'
tells them to do, Gerber is doing a bit of a disservice to most
prospective entrepreneurs.
There is a better way, one that's sustainable, joyful, egalitarian,
low-stress, responsive to real human needs, recession-proof, virally
marketed, organically financed, creatively stimulating and good for
society and the environment. It's Natural Enterprise.
Now if only I could find a publisher to get the word out.
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