MA Insights #4

Jim Drennen, CPIM

If You Want a New Idea, Read an Old Book

The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It  by Michael E. Gerber

Is it possible that even today, many firms continue to view Lean as a collection of techniques rather than a cohesive strategy that involves every area of the organization? In search of ways of sustaining continuous improvement and going beyond tools, many invoke the term “culture” to refer to the glue that binds techniques to an overarching structure.

For a variety of reasons, how culture is approached does little in creating a unifying force that treats techniques as part of a whole. How often do we end up with mandated and reluctant compliance? While culture can be the overarching strategy that pulls everything together, as Toyota has proven time and again, the elusiveness of what culture is and how to “get” it pose obstacles of going beyond techniques to a true Lean transformation.  

Quality systems such as ISO 9001:2015 do provide a structure for processes dealing with customer focus, quality assurance, and leadership. The techniques of Lean (waste identification and elimination,  kaizen, etc.) can be included within the ISO quality system. Still, it feels like something is missing.

This got me to thinking about an “Aha” moment I felt after reading (many years ago) The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It, written by Michael E. Gerber.  

The premise of this book is that when the reality of running a business sets in, there is little time and attention for the thing that got it started in the first place. The original service or product gets lost in the snowstorm of suppliers, bankers, service issues, and all sorts of complex distractions. Intrusions from many sources steal time away from the idea (and love) that started it all. Owners end up working IN the business and not ON it. 

Here then is the “Aha” revelation that sets the framework for a coherent operational strategy, as described in Gerber’s book:  

“Act as if you planned to franchise your business.”

Think about this for a minute. Small business only succeeds to the degree its owner goes to work ON the business rather than just IN it, creating the systemic operating system that makes the business unique in the marketplace.

Nobody is saying that your business should be franchised. But pretend that you wanted to franchise your business in the middle of a rain forest or jungle. You are unable to travel there, but still you need to copy what you are doing here. What would you hand the manager in charge of setting the same business up in this remote location?

The goal is to create a written, living document containing how to setup, perform, and measure every major process within the business. It would contain the big picture and all the minute process details. Beneath this franchise umbrella, the tools of Lean can be baked into standard work with the desired outcome of repeatable excellence for every major process.

Lessons Learned: The job of managers becomes clearer: work on process; and the job title of managers changes: franchisor. Combine all standard work and ISO 9001 certification (or other quality system) to develop a blueprint to franchise your business.

Gerber further developed the e-myth concept with an excellent follow-up book, “Beyond the E-Myth.” Both books are a great read for business owners, leaders, and those with entrepreneurial plans.