Hey Square Readers,
We’re kicking off the third section of The E-Myth Revisited by Michael E. Gerber, and so far we’ve talked about the main roles and phases of a small business, and the principles behind designing a turnkey business. Now, let’s dive into the first part of section 3 of the book: Building a Small Business That Works.
In this first part, the author dives into strategies to actually build a better business, using the framework of a Franchise Prototype. He calls the cycle of creating and implementing improvements the Business Development Process.
Business Development Process
“Building the Prototype of your business is a continuous process, a Business Development Process. Its foundation is three distinct yet thoroughly integrated activities through which your business can pursue its natural evolution. They are Innovation, Quantification, and Orchestration.”
Innovation
Innovation in this sense is more focused on how your business operates rather than what your business sells. The author writes, “the entire process by which the business does business is a marketing tool, a mechanism for finding and keeping customers. Each and every component of the business system is a means through which the franchisor can differentiate his business from all other businesses in the mind of his consumer. Where the business is the product, how the business interacts with the consumer is more important than what it sells.”
As the author explains, innovation here can be something as simple as changing the way you greet your customers which can lead to opening the door to create a unique experience just for them, or experimenting with different uniforms. No matter what you try, keep it simple and take the customer’s point of view in order to think about how even the smallest things you do influence and affect their experience. Always ask “What is the best way to do this?” and always strive for better.
Quantification
Quantification here refers to measuring the impact of the Innovations you try. It’s important to measure absolutely everything before and after making changes in order to determine what works and what the best way is. The more you measure, the more you can improve.
Orchestration
Orchestration here is not just implementing the Innovations into best practices, but rather “the elimination of discretion, or choice, at the operating level of your business.” It’s making these decisions in advance so no decisions have to be made as you go. It’s putting the systems in place so there is only one way of doing things, and it becomes automatic.
The author reiterates that his framing of a “franchise” does not mean that you need to create a franchise business, but rather it is “simply your unique way of doing business” in a way that can be replicated every single time. He stresses the importance of this because if your customers don’t get the same great experience every time, they’ll go somewhere else.
He writes, “Orchestration is as simple as doing what you do, saying what you say, looking like you look—being how and who you are—for as long as it works. For as long as it produces the results you want. And when it doesn’t work any longer, change it!... It’s not something you do and then are done with. It’s something you do all the time… once you’ve innovated, quantified, and orchestrated something in your business, you must continue to [again].”
In our next discussion thread, we’ll finish up the meat of the book with the rest of Section 3, diving into The Business Development Program, with a step by step process to design your better business.
We’d love to hear your answer in the comments:
- What are some little Innovations that you’ve tested in the way you do business? What impacts have they had?
- What is your process of Orchestration to implement new processes and make them stick?
Feel free to share any other thoughts you have about this book. We can’t wait to hear your thoughts in the comments below!
Don’t forget to:
Happy reading,
Pesso
