Saturday 17 October 2015

Base52 Growth Club - Autumn book review

We held our first Base52 Growth Club meeting this month. At every meeting we will be having a book review and the book for this quarter is 'The E Myth Revisited' by Michael Gerber. The popularity of the book was underlined by the fact that around about a third of those attending the meeting have already read it.

The 'E' in the book title stands for 'Entrepreneur' and Gerber describes the myth that most small businesses are run by heroic entrepreneurs, battling all obstacles and emerging successful against the odds. In fact, he explain, most small businesses are started by technicians - an accountant starting an accountancy business, a plumber starting a plumbing business and so on. The problem is that many of these erstwhile entrepreneurs remain as technicians and as a consequence their businesses remain in infancy, or at best reach a chaotic adolescence. The owners are often overworked, stressed and feel trapped by their business. The vast majority never reach maturity where the owner has some freedom and space to guide and develop the business further.

Part of the solution is for business owners to wear 3 different hats and adopt different behaviours depending on the needs of the business. The roles he describes are the entrepreneur (the visionary), the manager (the organiser) and the technician (the doer). 

The other big idea behind the book is to run a small business like a franchise. He gives the example of McDonalds  which, he argues, didn't become a great business just because it has great products. It became a great business because it has great store design, great customer service processes and great production processes. In short it is how McDonalds does business that makes it great, rather than what it sells.  He describes what he calls the 'Turn Key Revolution' where these business franchise formats principles can be put into practice by small business owners, to dramatically improve their outcomes.

The story is told through the eyes of Sarah who starts a pie making business inspired by her late grandmother and a love of baking. It quickly becomes a nightmare with Sarah trapped by her business and lurching from crisis to crisis. Gerber plays the role of the wise consultant who coaches her in the 'franchise' principles and gradually leads Sarah out of her predicament to achieve greater success and fulfilment.

It's a good and easy read and one I recommend to all business owners. I have read it many times and each time I pick up something new from it. For a relatively new business, struggling to manage growth, it is a 'must read' with some practical tips to help you move on to the next stage.

If you would like to come to a future growth club meeting and share your favourite business book with other business owners please let us know.

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