I recently read the E-Myth for the first time. Actually, I read The E-Myth Revisited, which is the updated version of The E-Myth, apparently. Although cheesy in some parts, and I suspect the book was written only partially to generate revenue in and of itself but primarily to generate customers for the author’s business coaching services, the book contains some basic business wisdom and I would heartily recommend it to any new or struggling entrepreneur. The author lays out some simple steps every new entrepreneur should take, and as I’ve been following some of them, I’ve seen why they’re valuable in terms of setting up your business for long-term success. One of the major themes of the E-Myth is how to create a system for your business.
A system is a set of rules or guidelines that tell employees what to do in certain situations. When such and such happens, you do this. After this step, then this step. If this, then this, if that, then that. And so forth. That seems like pretty basic stuff, doesn’t it? And yet I never ran my business this way before. In fact, I actively resisted running my business this way.
The way I used to run a business was like this–put a bunch of smart people in a room together, give them an assignment, and then get out of the way. I was all about not micro-managing, empowering my employees, trusting people to work on their own, etc. The trouble is, it didn’t work. It’s not that micro-managing is good, or that empowering employees and being a hands-off manager is bad, it’s just that my interpretation of those words was messed up because it led me to think that having rules was a bad thing that restricted my employees and kept them from being their best. In fact, I had it all backwards.
Imagine you own a Little Caesar’s pizza franchise. Would you buy the franchise, purchase equipment, pay for a ton of marketing, and then on opening day hire a bunch of high school kids, stick them in your restaurant with boxes full of ingredients and say “There you are, go to it!” Of course not. The first thing you’d do with an employee is you would train them. You would give them instructions on what to say when answering the phone, how much cheese to put on a certain type of pizza, how long to cook it in the oven, and how to cut it. These are rules. This is a system. But is it restrictive? Does it keep your employees from being their best?
Granted, a web design firm is quite different from a Little Caesar’s pizza, and you might say that it’s one thing to work with high school students this way, and quite another to work this way with seasoned professionals. But the difference is not fundamental, it’s only a difference of degree. What a Little Caesar’s and a high-end online marketing firm have in common is that in both, there are actions that are repeated over and over again, there are situations that come up again and again, and wherever there is repetition, that’s where having a system in place makes sense.
Imagine your employees have a finite amount of mental power they can use at any given time, and a certain amount that can be used each day. Imagine your employees use 95% of their mental power taking care of basic tasks and 80% to be creative, intelligent, and at their best. The math doesn’t work. There is no room for creativity, innovation, or progression. Your employees aren’t at their best, they’re just getting by.
But there’s a solution, and it’s centered in habits. A habit is an action that is ingrained to the point where you don’t think about it. Habits use up less mental power. Habits can be created wherever there is repetition. If you can create habits in your employees to take care of the basic, everyday tasks, then perhaps the basic tasks take up 10% of their mental power instead of 95%. Now there is ample capacity for the 80% needed to be creative.
How do you create habits? By having a system in place.
The system does not restrict employees, it frees them. It frees them from confusion, which saps motivation and results in poor performance and low employee retention rates. It frees them to focus on the things that matter, the things that set your business apart, the things that employees find interesting. It frees them to notice things that can be improved with the business.
Of course it matters that you put the right system, or set of rules, in place. There are bad systems just as their are good systems, and there are systems that are mismatched for their purpose. It makes sense for a retail store to make it part of their system that employees arrive no later than 15 minutes prior to opening, since a retail establishment can’t do very well if employees aren’t there, in person, on time. But for me, that rule doesn’t make as much sense. My employees can pretty much work anytime, anywhere, and it doesn’t matter if they show up at an office at all, unless there’s a specific reason for them to be there.
Whereas I once despised “the system” because of what I thought it represented, I’ve now fallen in love with it. I don’t see it as restrictive, but liberating. I see it as the key to producing results that make clients happy, as well as creating an environment that keeps employees happy. The next few posts will detail the kind of system I’m setting up for my specific situation and the tools that are helping me.Liked it? Share it!