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Episode 19: Book Review: E-myth Revisited by Michael Gerber

In this episode, Liz and Nelson discuss the classic business book recommended to us by more business mentors than any other: The E-Myth Revisited by Michael E. Gerber. Join us as we discuss the nuts and bolts of effectively managing a team, prototyping and documenting your business systems, training, orchestration, accountability and so much more!





SPEAKERS

Liz Sears, Nelson Barss


Liz Sears 00:01

Welcome to the Business greater than you podcast, where we dive deep into the stories of men and women who have successfully transcended the frazzled solopreneur life and built prospective teams with better lifestyle and income.


Nelson Barss 00:13

I'm Nelson Barss, the founder and owner of Utah Independent Mortgage Corp.


Liz Sears 00:18

and I'm Liz Sears, founder and co-owner of My Utah Agents.


Nelson Barss 00:21

We're excited for you to listen, interact and grow with us. So please share your comments below. And let's get started. All right. All right. We are ready for our first book review episode.


Liz Sears 00:37

Yes, I'm excited about this one


Nelson Barss 00:39

We are going to take some time to talk about the E Myth revisited. Probably the most famous book that I ever hear about when it comes to small business starting a business. Just about everybody will recommend this to someone.


Liz Sears 00:53

Yeah, Michael Gerber is brilliant. And it's funny because I've read this book several times over the last couple of decades and reading it this time, especially with the intent of talking about it here. I'm like, Oh, my gosh, there's so much applicable stuff that didn't apply to me last time. So I didn't really pick up on it. But now reading it this time. I'm like, dang it. I should have read it again. Right when I opened my business. So


Nelson Barss 01:15

yeah, I read it. I probably haven't read it in 20 years. I read it in business school. And I thought I got this, you know,


Liz Sears 01:23

yeah, this is brilliant.


Nelson Barss 01:24

And I just getting ready for this podcast reviewing it. I'm like, Oh, wow, there's a lot that I am not doing in my business that I should be doing. It has to be better this and that. So very excited to dive into it. First, let's just define what the title means. What is the E Myth?


Liz Sears 01:40

So it’s the entrepreneur myth that people think that there's a certain way that it's all going to happen if you love, I love how he uses the baking pies person in the book consistently, where because she's really great at baking pies, she should open a bakery that bakes pies. And then life will be fantastic.


Nelson Barss 01:59

Yeah, so he defines it a couple times in the book. The first one, I kind of caught me off guard because I, I've always heard the entrepreneur myth is, if you're a good technician, doesn't necessarily mean you're going to be a good business owner. Right? If you can bake pies doesn't mean you can run a pie shop.


Liz Sears 02:16

Right.


Nelson Barss 02:16

But at the very beginning, he says, you know, the myth says that small businesses are started by entrepreneurs, risking capital to make a profit. And he says this is simply not so. We're not entrepreneurs, a lot of us who start a business, you know, me, I'm just a mortgage guy. Right?


Liz Sears 02:35

Yep.


Nelson Barss 02:36

thinking that I could do it better than the guy I was working for previously. And I think most of us who've tried it, get humbled eventually, like ok…


Liz Sears 02:44

Sometimes really fast we get humbled.


Nelson Barss 02:47

Or you find yourself just trying to mimic what the other company was doing. Right? I find myself wanting to just establish the same company that I used to work for, and all the same patterns and policies and everything. So that's the myth, the myth is that everybody's a good entrepreneur, and that technicians should start their own business. And it's just not true. So what the difference is, what is the difference? I mean, running a business, we talk about it on this podcast a lot, right? It's about, you know, has nothing to do with mortgages, for me, it's not about credit reports. It's not about closing on time. It's hiring. It's training. It's recruiting, it's firing, it's managing. And that's the…


Liz Sears 03:38

It's being the diplomat. There's so much to it, and having the vision, you know, the entrepreneur portion of this, of knowing where you want to go and building everything accordingly and rolling people into your dream of what it is that you're building together.


Nelson Barss 03:54

Yeah. The vision to me, when I read about the vision in here, the entrepreneurial vision and how important that was, I felt a little bit like I've lost that edge in my company, the last year or so, I don't think I've been extremely visionary, I don't think I've really been focused on the future. It's kind of more about survival and the day to day.


Liz Sears 04:19

And I think that's something that most everybody I've talked to, that has a business says is that you almost go through seasons of time where you're really leaning towards the vision, the building, everything like that. And then it's almost like you get too far in the future. And your day to day isn't caught up. And so you have to back off and then come back to the day to day and get that going. And as you get sucked into the busyness of the day to day everything, you're like, What is my vision? What am I even working for?


Nelson Barss 04:44

Well, and okay, so what you're saying to me, goes along with what he says about three different personalities, right, the entrepreneur, the manager, and the technician. I feel like, for me, especially, they they're three competing interests, and like you said, sometimes the pendulum swings towards one too much, or towards the other one.


Liz Sears 05:04

Well, let's actually talk about what those three artists are the entrepreneur is the person looking into the future. They're the ones who have the vision, they can see how it can all play out, they want to create all of the job descriptions, and the different pieces and the structure and all of that.


Nelson Barss 05:19

An entrepreneur creates a great deal of havoc around him.


Liz Sears 05:22

That to. Very much so


Nelson Barss 05:25

A lot of people who are the manager type or the technician type get annoyed by the entrepreneur, right? Thinking about change. Implementing new things.


Liz Sears 05:33

And I've been accused of changing things too many times, because I can see how it'd be so much better if we do this.


Nelson Barss 05:39

I do think you have a strong entrepreneurial personality. You're a visionary, for sure.


Liz Sears 05:46

For sure.


Nelson Barss 5:46

Okay, the manager. This is the pragmatic, manager, planning, organizing. To me, this is probably where I spend way too much of my time, right? I'm way too in the weeds. It says in here, the entrepreneur thrives on change. Manager thrives on the status quo, clings to the status quo.


Liz Sears 06:08

Yep. And the manager is the one almost looking in the past, they're taking all of the data, seeing how it worked, what implementation of the systems and the processes already there, and analyzing.


Nelson Barss 06:19

So here's the question I have before we go on to the technician. In this book, he's talking about each of us have these different personalities inside of us, right? Do you find it tempting to try to just ignore the other two parts in you and just find other people to do it?


Liz Sears 06:41

Yes.


Nelson Barss 06:41

And where's the balance for you?


Liz Sears 06:42

So, I very much prefer to be the visionary and coming up with what's going to make things better, smoother, faster, efficient, effective. And so if I can find someone to do the other pieces, that just makes me so happy, but I have found that I almost abdicate too much on that. Because I'd rather just, “yeah, you take it, you run with it, do a great job, let me know if you need anything,” type thing. And that's kind of come back to bite me a little bit too, because if I am too much looking into the future, and not considering what we've already got, where we've already been, and you know, the whole “he who doesn't study history is doomed to repeat it.” So taking that more into consideration.


Nelson Barss 07:26

Okay. Well, I think for me, my goal is to balance these three or to spend time in each three and even working on my time management to where, you know, I've got a time block now, in my week that says work on the business. It’s a two hour segment where I'm free to decide and think about the future and make policy changes or, you know, a lot of times it's like, I know there's a checklist I'm supposed to make, I’ve been putting on that off for three weeks. And now I'm finally going to do it.


Liz Sears 07:57

Yep, Shannon and I have our meeting like, that our business name- Well, first, our initials are Shannon Olsen, Liz Sears, so SOLS, and so we named our company Empowered SOLS. And so that's what we- obviously spelt SOLS- and so that's what we call our visionary meeting that we have every week is our empowered SOLS. So we start off by just seeing if there's anything between us that may have come up the past week, any decisions we made that the other needs to be made aware of, and then what are our visions, what's the next piece we're building on. So that's been helpful. Especially because, she and I- there are times when I get sucked into the manager role, and I really, really like that, too, I'm totally somebody who loves spreadsheets and analyzing data and running the numbers and things like that. And ever since I was a little kid, I would get sucked into all of that. So it's also like you said, the whole time block of making sure I'm hitting each piece.


Nelson Barss 08:54

So the technician is the doer. I think that's what we mostly visualize ourselves doing when we- well, I don't know, maybe some people start a company and visualize themselves never doing the technician work ever again. I think I remember we interviewed Nuria, who has a title company. And it stood out to me that when she started her company, she knew she couldn't do the title work anymore. She couldn't be the escrow officer. And she decided not to, and that was a huge leap of faith in my mind from her. Something that I've wanted to do many times, and never had the courage to do it in my company is to say, “Okay, I'm not gonna do loans, just gonna run the business.”


Liz Sears 09:33

And same thing was Shannon, with my Utah stagers, that she was never the technician.


Nelson Barss 9:38

Never from the start.


Liz Sears 9:40

Yep. She just bought it and had other people doing it.


Nelson Barss 09:41

But I think a lot of technicians, they think they're just going to be a technician and it's gonna be better.


Liz Sears 09:46

Yeah, I don't have a boss now. Nope. Your job is now your boss. Your company is your boss.


Nelson Barss 09:51

Your job becomes the boss. So I do have one quote I want to share from Michael Gerber here: “The fact of the matter is that we all have an entrepreneur, manager and technician inside us. And if they were equally balanced, we would be describing an incredibly competent individual.” That’s on page 28. And I think that should be, in my mind, a goal; is to manage my time and my focus and make sure that I'm doing all three, I think the manager piece gets ignored. He talks a lot in the book about that that widget case study where there's an entrepreneur, and there's technician work, but nobody's doing the managing, and it just blows up.


Liz Sears 10:31

You know, just because we have mentioned religion a couple of times in here, I remember once reading a personality assessment test, and a lot of people tend to think that their personality is the right one, and the other personalities are the wrong ones, and they see that, and I remember somebody wants telling me that Jesus Christ is all four personalities, he’s just all the good parts. And I was like, “Huh, that's an interesting thing to strive for.”


Nelson Barss 10:56

A balanced individual.


Liz Sears 10:58

Yeah, so now, also striving for entrepreneur, manager and technician, and that would be an incredibly competent individual. I love that.


Nelson Barss 11:04

You know, speaking about personalities; personalities, that topic of personalities, and the disc tests and the Enneagram. Something I've really gravitated to a lot in my life- I had a chance to teach a class, a college class about communication, where we focused on personalities, everybody took a test. And we spent the whole semester, and it was the disc test, so we talked about the D’s and the I’s and the S’s and the C's. And then, recently, I was reading a book on the Enneagram, and it was interesting to hear the perspective that a personality is a facade, right? It's not necessarily a good thing, or something, even to be proud of. It's like, you're hiding behind a mask, right? The nice guy persona or the driven persona. He even talks in this book about organizing your company around personalities versus roles. And I think there's room in the conversation for personality, but I've just learned to caution that- like you say, the balanced personality probably would be someone who isn't trying to mask anything, or hide anything, they're kind of able to be all four, or whatever categorize you're doing, at any given time. So that's interesting. I don't know, side tangent about personalities.


Liz Sears 12:24

You know what, though, it’s something that all business owners, the more that they learn about, and the more that they know how to navigate, it can help them be more successful. So I think that's fascinating and completely appropriate.


Nelson Barss 12:37

Okay, any thoughts about- he gives us three stages of a business: Infancy, Adolescence, and Maturity.


Liz Sears 12:43

Yes. And that is such a- you know, Tony Robbins, the business master I went to, they talked a ton about that as well, and they even talked about how it can even go past maturity into old age. And then, if you're not careful, that you can actually have your business atrophy and then go out of business if you're not willing to shift with it, and so I love how he starts with the infancy stage. And just talking about how, as a baby business, when you just have…


Nelson Barss 13:15

You’re doing it all yourself, basically right?


Liz Sears 13:16

Yeah, every single job role.


Nelson Barss 13:18

Wearing every hat. I think that's pretty normal, I mean, I think, in some ways, it is a great way to start your company, and as long as you're, like they say in here, starting with the end in mind, and you're building and you're acting as if- there's a great quote in here from the founder of IBM, who talks about how the reason why his company was successful is because he had a vision from the start of what he wanted it to look like, and he realized, “we're gonna have to act like that now. We're gonna have to be the IBM that I envision today.”


Liz Sears 13:52

Yeah, there was a real estate company that, when they very first opened, they would answer the phone, “international headquarters,” they're like, someday we will be. And I love in here, where he talks about when you first start working, sometimes it's ten-twelve-fourteen hours a day, seven days a week, and even when you're at home, you're at work. And so this is where it's also so important that you do create some sort of boundaries, which he talks about later in the book. But just knowing at the very beginning, the owner and the business are one, and they're the same thing. It’s all you.


Nelson Barss 14:25

Yeah, and this is what we're trying to do with this podcast, right? We want to help people who are in the infancy stage, they've got a business, they've got deals flowing, business flowing, but it's time to hire. It’s time to build a team. And he gives us some ways not to, and some ways to, the management by abdication instead of delegation. I think we've all experienced that, where- and my philosophy has been that, a lot of times, a failed employee is my own fault because I didn't have the right policies, procedures and training in place for them to succeed. I just hoped they'd show up and rock and kill it and be great, and I could just enjoy the fruits of that. But it’s never been that way.


Liz Sears 15:10

Not yet. Not yet.


Nelson Barss 15:13

Well, and I think for me, a lot of it's been slow, right? Just the training process is time consuming. They have to watch me and then I have to watch them. And you can't skip too fast ahead. This is- we just finished interviewing Eric Barlow, and that was his- he said that multiple times, take it one step at a time.


Liz Sears 15:33

Yeah. And I love that, here's the actual quote, when they were talking about how if “your business depends on you, you don't own a business, you have a job. And it's the worst job in the world because you're working for a lunatic.” And then the next part, it talks about “the purpose of going into business is to get free of a job so that you can create jobs for other people.” And that is really where the whole- not only are you creating jobs for other people, so there's fulfillment and meaning of that, making a difference, having an impact and a legacy, but it also can be very profitable when you follow all the right steps and do it the right way.


Nelson Barss 16:17

So he takes us through the adolescent stage, I mean, it's kind of fun to read his stories, there's just more balls in the air now more balls to drop, right? Because they're just more juggling happening and if you're not managing it well, then you could turn around and run right back to the infancy stage. Right? He talks about getting small again, where an entrepreneur may find that, “oh, that was too hard. All the balls dropped, it was a disaster, So-


Liz Sears 16:43

I'm just gonna do it myself.


Nelson Barss 16:44

I’ll do it all myself now. Right? And then how common that is, for small business to try to grow, to get to that stage, and get burned, and go right back to just solopreneur.


Liz Sears 16:54

Right, so, any of you listeners, if that's ever been you, or if you're tempted to do that, get this book, there is so much good information in here about how to stop. In fact, a running narrative throughout the entire book, is that “all about pies” lady, and how he takes her from being that working for a lunatic to embracing her entrepreneur and not just living as the technician. And so then growing to the next level- by the way, her name is Sarah, so that way, I stopped calling her the pie lady.


Nelson Barss 17:25

Before you go on to maturity, one thing he points out that I think is important, and this may be where my business is right now. He says, surviving in adolescence could be the worst place to be. So, “if you are in adolescence, you're consumed by the business and the possibility of losing it, so you put everything you have into it. And for whatever reason, you manage to keep it going day after day, fighting the same battles in exactly the same way you did before. You never change night after night, you go home to unwind only to wind up even tighter in anticipation of tomorrow.” So that's- I think that's the messy middle, right? That's where you're trying to create a business that runs smooth, but still so much depends on you.


Liz Sears 18:12

Yeah, and we talk about the messy middle a lot. And I love one of the quotes a friend of mine said, he goes, “it's normal for your business to go through the dump at a point in time, the point is don't set up camp there.”


Nelson Barss 18:23

And that's what he's saying, setting up camp, I think there are a lot of businesses that forever live in that mode, right? There is an owner, who's still the hub of everything that has to happen in the office, there are employees, they don't feel very empowered, the owner is not enjoying the lifestyle he wanted when he or she started the company, it's kind of the worst place to settle in and exist. Okay, so let's talk about maturity. I don't even know where that part is in the book.


Liz Sears 18:52

They're talking a lot about the comfort zone, and we can get stuck in there, And we can get stuck out of there.


Nelson Barss 19:00

“A mature business knows how it got to where it is and what it must do to get to where it wants to go. Maturity is not an inevitable result of the first two phases.” I thought that stood out. It's not automatically just going to come right. It's going to take intention to get there.


Liz Sears 19:16

Specific, intentional work.


Nelson Barss 19:20

So he gives us a model for how to build- At that point, we get to part two of the book where we talk about the turnkey revolution, right. And he goes into the story of Ray Kroc and McDonald's and- by the way, have you ever seen that movie, The Founder?


Liz Sears 19:33

No, but I've heard it's amazing. It's pretty


Nelson Barss 19:35

It’s pretty good. It doesn't really paint a great picture of Ray Kroc though. He does, in this book, he kind of makes Ray Kroc out to be-


Liz Sears 19:42

Well, Ray Kroc was just kind of brilliant. When he walked into McDonald's he saw “this runs like clockwork, this is turnkey.” And so, the whole concept that is also talked about in this book, is that when you build your company, you want to build it with the potential of franchising, and he says, not because you're going to do it, but just because, when everything is systematic, as a franchise would need to be, and training for the lowest skilled person possible to do the job, that is what makes it profitable. Because if you're structuring your business where everyone that works for you has to be extremely intelligent, extremely skilled, you are really building yourself into a box. Because being able to find people to fill those positions can be very difficult, especially in our current labor market.


Nelson Barss 20:30

When I reviewed this, I thought about my company. I feel like what we do is pretty dang complicated. I've seen some businesses who break it down into an assembly line, or who try to parcel out the work into very small bite size pieces, and I've resisted that, probably unwisely, to the point where we're pretty dependent on good people to do a good job. So I've started to think about what can I do in my business to try to simplify some of the jobs, get more entry level people in, still give them room to grow, but take the people I have now and help them be more trainers, managers, leaders, and lets bring in some new fresh faces that can do pieces of the job and learn the business step by step.


Liz Sears 21:21

I love that. You know, another thing that he talks about in here, on page 74, he says, “the entrepreneurial model does not start with a picture of the business to be created, but of the customer for whom the business is to be created. It understands that without a clear picture of that customer, no business can succeed.” Because what we ended up doing as entrepreneurs is we build what we want to run, not necessarily what will service the clients the very best. And so if we build it around our clients, always with them first, and then what we want to build second, that is how you get a successful business.


Nelson Barss 21:55

He goes through an example of the widget company, right? The first time was a disaster. And then he says, let's take a step back, and let's do this the right way. And this is later in the book, but he's talking about; first, the two partners are going to sit down and they're going to draw an organization chart, and they're gonna decide what each role needs to be, and there might be fifteen roles, but there's only two guys, so then they have to sign out who's going to do each role.


Liz Sears 22:18

Well, even before that step, the one thing that kind of blew my mind, because I'm like, “I didn't do this” is they listed out the roles, and for them it was eight roles, and then they wrote the entire job description, and then they wrote the contract for it, then they divvied it up.


Nelson Barss 22:31

And then they had to commit to each other to fulfill that job contract.


Liz Sears 22:35

They signed the contract. And they said, “I am in charge of this job description and this role until we hire someone to replace me.” And then the next thing that they did is, as they took on the roles, they perfected the lowest level first so that they could hand it off. Instead of perfecting the upper levels first, so that they could do a better job while still having to do the lower ones too. I thought that was brilliant.


Nelson Barss 22:58

So I have a question. Do you have an organization chart for your company?


Liz Sears 23:01

We do, yes.


Nelson Barss 23:02

Is it updated?


Liz Sears 23:03

I think the last time we updated it was about six months ago. So it's probably time to look at that again. Although, I will say that- Ooh, in fact, this is so pertinent to this book right now. So our Director of Operations, we've actually, since we lost both of our front desk people for different reasons, and our transaction manager, we said, “we originally created their job descriptions around their strengths and weaknesses instead of what we need the role to be.” And it's not as efficient and effective (those are my two favorite words, apparently, today) as it could be. And so we tasked our director of operations to rewrite the job descriptions. I thought it was going to be a three-to-four-hour project. Well, we hired a business coach to work with her to build it out, found out it's like a fifteen-to-twenty-hour project. Three-to-four hours is what I thought, fifteen-to-twenty is what it actually is. And the first thing that they did was they identified all the tasks and projects that need to be done, what are the top twenty percent, what are the strengths, the skills and the knowledge that each role would need to have, and then how to train accordingly to maximize on those. And from our other coaches said, “the twenty percent, the most important, if they can do that, they got a job. If they can only do the eighty percent, which is the less important, they don't. But if they want a raise and a promotion, they got to do all of it.” But to do that, you have to know what is the twenty percent of each role. So not just the job description, but also the role too.


Nelson Barss 24:32

So, I'm just thinking about how I've built my business, and I'm thinking have I built it around personalities, or have I built it around job roles? And I think both, we tried really hard to define the position first, write up a job description, and then start interviewing and try to find someone who has a personality that would match that position. But I think one thing that I've failed to do is stay strong to those job duties, instead I get someone in and they don't like it after a few months. And then I'm like,

“Okay, we're going to mold a job to you, we're going to create a job that meets your perfect world because I want to keep you I want you to stay.” And instead of just holding them accountable to the job, and if it doesn't fit, it doesn't fit, we ended up morphing the business plan.


Liz Sears 25:19

This one business coach about the twenty and eighty percent, he goes, “I don't care if they mix and match the eighty percent, but that twenty percent stays with the role. If they can't do it, they don't have the job.” So it gives a little bit of flexibility, but not on the things that end up leaving you completely imbalanced, when you go to hire the next person, you're like, “well, what's their job description now?”


Nelson Barss 25:39

No, it’s good. It sounds like you're getting some good coaching. I want to read- so there's a section here where he talks about Ray Kroc’s McDonald's. And just how detailed… he talks about how the french fries, this is on page 93, “The french fries are left in the warming bin for no more than seven minutes. Hamburgers were moved from the hot trays no more than 10 minutes so that they retain the proper moisture.” He talks about how “the pickles are placed by hand and the right pattern on the burgers and the-


Liz Sears 26:07

Which is so true. If you open up your hamburger to add something you're like, “yup, there's the pickles.”


Nelson Barss 26:12

Usually.


Liz Sears 26:12

Usually. Usually.


Nelson Barss 26:13

If they're following the plan, right? “Food was served within 60 seconds, discipline, standardization and order were the watchwords.” I guess sometimes I bristle when I think about trying to run my business this way. Because I don't know, as an employee, if I would want that. Like, the micromanagement that that he's talking about here. I mean, McDonald’s is famous for it, right? It's so systematic. What do you say to that? To that fear of mine? Am I just worrying too much about these employees and should focus more on the job at hand?


Liz Sears 26:45

I think what it really boils down to is the presentation, honestly, because what I have found, even in my own personal life, is that there are certain things that if I do them in the exact same order every single time, such as morning routine, that it frees up my mind to think about other stuff. But if I don't, then I almost pay more attention to the different things that I'm doing, or the way that I open my email and scrub it or the way that I make a hamburger, you know, is that if I if I have a very clean system that is identical every time I do it, then it actually frees up more time because it's done quicker and accurate. You're not wasting time going back and fixing something. And so I think a lot of what happens in our day is dependent on what else is happening, you know, we get thrown curveballs and wild things all the time, but on everything that can be systematic, can actually bring peace and just structure and calm to the day, because at least those pieces always happen the same.


Nelson Barss 27:49

And I think certain people would love it, and certain people would hate it. Right? I think it just depends. Yeah, I was thinking about, we just finished interviewing Eric Barlow. His is the opposite philosophy. It's like high trust, good people that have been with him for eight to ten years, and he doesn't micromanage them and they like that.


Liz Sears 28:07

But he did train them, he said in the very beginning, very thoroughly, and then…


Nelson Barss 28:11

And then they earn in that trust. So no skipping steps, is what you're saying?


Liz Sears 28:19

Probably. That would serve well


Nelson Barss 28:21

What else stood out to you in the book?


Liz Sears 28:23

I really like this, just on page 96, where it ended it, it says, “how do you create your franchise prototype? How do you”, like Ray Kroc, “build a business that works predictably, effortlessly and profitably each and every day.” And I think that that's an area that, as entrepreneurs, if we spend the time necessary to build and refine and continue with that, that we will be able to have the ultimate goal, which is profitably.


Nelson Barss 28:54

“Predictably, effortlessly and profitably.” That sounds like a pretty good business.


Liz Sears 28:59

I would like that. That would be fun.


Nelson Barss 29:02

And, is this where the phrase came from, “working on your business, not in it”?


Liz Sears 29:05

I think so.


Nelson Barss 29:05

I hear it all the time and he must have been the coiner of the phrase.


Liz Sears 29:10

I’ve been hearing it for years. So now I'm curious, when was this? ’95. Yep.


Nelson Barss 29:15

This is a second edition, though. This is The E Myth revisited.


Liz Sears 29:18

Oh, that’s true. Yeah, cause he said he started in the 70s. Yeah, okay. We're gonna credit Michael Gerber is who said “working on your business, not in it”. So, for those who have never heard the term before, working in your business as being the technician, it's doing the job, it's fulfilling the orders, providing customer service. Working ON your business is the entrepreneur, it's the vision, it's the “what's next”, what's the next piece to build out?


Nelson Barss 29:40

It’s creating systems, documenting, everything. So he goes through and talks about creating a model, a model for your business to follow. I've just plugged into someone else's model, for the most part, right, found a coach, and follow their model to the best of our ability, but the idea is that it gives consistent value to your customers. You go get a burger at McDonald's. It's what you want. Whether you're in California or in New York, you're gonna have the same experience.


Liz Sears 30:11

Yep. Pickles might be placed differently, but for the most part...


Nelson Barss 30:17

So, he goes through, he talks about building a model, but I'm wondering if we could maybe just get to the part where he's talking about these different processes, the business development process.

Innovation. And then he talks about…


Liz Sears 30:33

Tracking it. What was the word he used for that?


Nelson Barss 30:36

Quantification.


Liz Sears 30:37

Quantification. Yep. So not just tracking the numbers, but finding the story.


Nelson Barss 30:40

And then, my favorite word that has been sticking out in my mind is Orchestration.


Liz Sears 30:44

Yes. So, Part Three, building a small business that works. So the first step, the innovation, like you were talking about, it's often thought of as creativity. But it's also getting things done.


Nelson Barss 31:00

And he talks about really small innovations, right? So some examples he gives us, like, instead of saying, “Hi, may I help you?” try saying, “Hi, have you been in here before?” Which a lot of people use that, I hear at restaurants all the time, right? “Have you ever been here before?” But it's a very nerdy way of measuring the results of that little innovation.


Liz Sears 31:21

So here's something that we do for innovation that might be kind of fun, is when we send out our newsletters, we’ll usually send out ten percent with a particular subject line. And then we track the open rate. And then we'll send out ten percent more with a different subject line. And so by the third group, we kind of know which one's going to get the most opens, and then we send out the bulk of the rest. And so the more that we've been trying different approaches and then collecting the data, then it's helped us be able to make more…


Nelson Barss 31:50

Yeah, it's data driven. It's this quantification part, right?


Liz Sears 31:54

And so coming up with those ideas, being innovative about different ways to gather-


Nelson Barss 31:58

Another example, is asking a sales person for three weeks to wear a brown suit. And then three weeks later, you go to navy blue, and you measure the results.


Liz Sears 32:10

That’s hilarious. There was this one, I don't know how it applies here, but I'll tell the story anyways, because it popped in my head, is they were talking about trying to figure out what would help employees be more productive. And so they tried having the lights at full brightness. And then they moved the lights to slightly dimmer, and they were talking to the employees, we want to see what works is that they tried two or three different things. And then they did it with a different group of people, but they didn't tell them what they were doing. They just changed the lights. And changing lights without telling them did nothing but changing lights with telling them that we're just trying to see what would help actually caused them to be more productive. So sometimes it's also communicating it.


Nelson Barss 32:51

I think the thing to learn from this whole idea of innovation, quantification, orchestration, is nobody's gonna just get it right the first moment, like, I'm gonna divine, the right business plan on day one, and we're going to run it that way, because I'm so smart,


Liz Sears 33:05

It's like parenting, you can get a perfect manual made after your first kid and it doesn't work at all with your second. So even if somebody has a process that works, that might not work for you. So gathering your own data-


Nelson Barss 33:17

The idea of just trying new things, you having no clue. I've studied a lot of direct mail stuff, and a lot of guys talk about how they've arrived at what works. And they just try things that they don't think will work, they do A/B tests, and they stick with the one that worked. And then the next week, they try to tweak it a little bit, A/B tests, stick with the one that works. Over the years, you develop a pretty effective mailpiece that you can use through this innovation quantification process.


Liz Sears 33:43

So the quantification then is just taking all of that data, analyzing it, and deciding and determining what is working and what isn't.


Nelson Barss 33:50

Which is really hard work.


Liz Sears 33:51

Oh, my goodness.


Nelson Barss 33:52

Getting the data is really hard. He talks about quantifying everything. He says, “I mean everything. How many customers do you see in person each day? How many in the morning? How many the afternoon? How many people call? How many asked about price?”


Liz Sears 34:08

How many minutes did they stay in the store? How many minutes on the phone?


Nelson Barss 34:11

And then, here I am, once again, picturing, you know running a business this way? And it can be so tedious that I don't know if I want to ask my people to do it. Just honestly, it's like we've tried to implement some of this stuff from four disciplines of execution, which is another book that dives really into quantification. And it's like, really, you want me to micro track every single thing I do every moment? And we found ways to automatically track things, like if you can get a good CRM, a good phone system that integrate with each other, there's a lot of data that you can auto track how many calls, how long they last, who has better conversion rate on leads and things like that could be done…


Liz Sears 34:53

Because we're already tracking if we convert the lead into an appointment now, so…


Nelson Barss 34:57

So there's a lot of technology that can automate some of the tracking, but some of it is just as simple as a checklist, or a tracker that gets turned in every night by your team so that you can start gathering data and deciding what works.


Liz Sears 35:11

Yep. And then I love that once you've done your innovation, and you've tried a bunch of things, and then once you quantified it, that's when you do the orchestration. And that's- the orchestration is eliminating all of the other pieces that don't work. So you just kind of boil it down to the pieces that work for you.


Nelson Barss 35:26

He says, “the elimination of discretion, or choice at the operating level of your business.” You know, think about an orchestra, right? How much discretion or choice to the players in an orchestra have? None, right? They follow the script, they're following the director and the written music.


Liz Sears 35:47

The score and the director, that is about it. Their vibrato, that's their discretion.


Nelson Barss 35:53

And I think this also speaks to, like, how long are you going to stick with this new policy? Right? The orchestration is expecting it to continue week after week, month after month and not forget about it in favor of the next new idea. And keeping- you gotta say it, somebody once said, the CEO is the chief reminding officer, just has to say the same thing over and over again to their team.


Liz Sears 36:17

Chief reminding officer, I love that.


Nelson Barss 36:21

So, I want to read this, “the need for orchestration is based on the absolutely quantifiable certainty that people will do only one thing predictably. And that is to be unpredictable. But for your business to be predictable your people must be.” And he says, “to give your customer what he wants every single time. Why? Because unless your customer gets everything he wants, every single time, he will go someplace else to get it.”


Liz Sears 36:43

Yep, that’s exactly true.


Nelson Barss 36:47

Very good. What else, Liz, what else stood out to you from this book?


Liz Sears 36:52

You know, one of the pieces that I really liked, where it said, Your Business Development Program in section, or chapter 11, he breaks it down into seven categories. And so, your primary aim getting super clear on what exactly it is that you want to do.


Nelson Barss 37:06

And that’s more about a life thing. It's not so much about your business, it's like, “how do I want my life to look?”


Liz Sears 37:11

Exactly, because as the business owner, it has to be the full picture of everything. And then your strategic objective, which is more dialing it into the business, and then you go into your organizational strategy, basically making your org chart how it's going to work with each other, you know, all the different roles, and then your management strategy. So, you know, Eric, with Norm’s Plumbing, was a really good example of how his management strategy is very different than a lot of other ones. And then your people strategy, you know, hiring, working with them, keeping them happy, your marketing strategy, how do you get the word out, so that people know to come in, buy from you, and then your system strategy. So, one of the business people that I particularly admire, said that his goal was every single week to systematize something. So he was constantly being aware of what are the things that he does? And what can he systematize? And I'm like, “Oh, my gosh, I can't even imagine how different my life would be a year from now, if I systematized fifty-two things that I do.” That'd be amazing, wouldn't it?


Nelson Barss 38:15

Yeah, that'd be awesome. So for me, like this organization chart, philosophy, and a lot of this work gets done before you ever sell a product, right? Before you ever do anything. And he goes to that example, but I, I remember, when I started my company, that's how I organized my file folders. I had a marketing manager, and I had a loan officer, and I had a processor. And then he had CEO, and I had accountant. And every time I did work under one of those hats, because I was just doing all of it myself, everything was saved in that folder, because I knew someday, I would be bringing on a marketing manager. And I would be able to kind of sit down with them and give them a folder with everything that they need to know and do.


Liz Sears 38:57

Brilliant.


Nelson Barss 38:59

So, that's kind of the mentality of, of the E Myth, right? You're documenting from the bottom up all the processes that you expect to be done, and only then are you ready to actually bring someone in and train them. And you just keep moving yourself up one level at a time in your organization. Yeah.


Liz Sears 39:18

You know, there were a couple of things in chapter 12 that super stood out to me. Stephen Covey, I think was the first time I'd ever heard this concept of writing your own obituary. And in here he talks about, you know, finding yourself in a room and there's a box and there's a body in it, and it's yours, and they're start starting to read or play a video of you telling your story. I was like, “Maybe I will do that. Tell my own one right now and they play my video.” And you're telling them the story of your life. And then he says, “How would you like that story to go?” And then turn the page he says, “All you need to do is begin living your life as if it were important. All you need to do is take your life seriously. To create intentionally. To actively make your life into the life you wish it to be. Simple? Yes. Easy? No.”


Nelson Barss 40:07

I don't know if this is- Oh, on the next page, he says, “I believe it's true that the difference between great people and everyone else is that great people create their lives actively, while everyone else is created in their lives passively waiting to see where life takes them next.”


Liz Sears 40:23

You know, I had a very powerful coaching session with one of my coaches last week that is exactly this. And so, I'm going to tell the little story here really quick. In fact, I'll try the activity on you see how it goes. Okay.


Nelson Barss 40:39

Oh boy. We didn't preapprove this first.


Liz Sears 40:41

We didn't, so this is gonna be even more fun. All right. If everything in your job and everything that you do were functioning perfectly, like clockwork, exactly how you'd like, what emotions would you be experiencing?


Nelson Barss 40:55

Exhilaration.


Liz Sears 40:57

Okay, what else?


Nelson Barss 41:01

Peace.


Liz Sears 41:01

Exhilaration, peace,


Nelson Barss 41:01

Those are like two opposites. I’d be really happy and thrilled, but I would also be at peace, comfortable.


Liz Sears 41:08

Good thing they can't see this because I don't know if I spelled these right. I spelled peace right. Okay. Give me like five more sure that emotion too.


Nelson Barss 41:16

Satisfied. Confident. Hmm… Optimistic. Probably energized. Ready for the next thing. Is that enough, can I stop?


Liz Sears 41:34

Sure. But if you have another one pop in your head, tell me, okay? All right. So what-


Nelson Barss 41:39

Hungry.


Liz Sears 41:39

Yes, that’s a good one. So, if I had you list all the different pieces of your business, every single little part that you do that you're involved in, we could probably come up with thirty-forty-fifty things at least. So I want you to think of one of those that's not running exactly the way you want right now. Like, if you ranked it as not working.


Nelson Barss 42:04

You want me to say it out loud?


Liz Sears 42:06

If you want to.


Nelson Barss 42:08

Probably the sales side, that’s struggling right now.


Liz Sears 42:10

Okay, sales side. Alright. So… I’m gonna put my book, just because this is how it works for me. So, these are the emotions, alright, that you want to feel if your life was going exactly like you'd enjoy. Exhilaration, peace, confident, satisfied, optimistic, energized. This is your sales. Not quite working the way you want. Okay. How would you- or what would you do, like an action item, if you were experiencing this, you are creating this experience in your life, in your sales area of your business, but nothing here had changed the circumstances were all identical. As they are right now. But you're feeling and experiencing satisfaction, confidence, exhilaration.


Nelson Barss 43:01

So if I already felt that way, what would I do differently?


Liz Sears 43:01

If you felt this way, what would you do? Yeah, like what would something you do today?


Nelson Barss 43:07

Probably make a lot more sales calls.


Liz Sears 43:09

Okay, what's something else you might do? You're feeling confident, you're feeling excited, you’re feeling energized.


Nelson Barss 43:16

Recruit more. And probably get out there in the community and meet more business partners like real estate agents and CPAs, financial planners.


Liz Sears 43:27

Yeah. What are some things you might do with some of your staff? If this is what you're feeling? In regards to sales.


Nelson Barss 43:32

Probably motivate them, probably encourage them, probably inspire more.


Liz Sears 43:36

Yeah. So, at the end of this coaching session, what she said to me is, she's like, “Liz, your emotions, and how you show up and how you live your life, what you create, has nothing to do with what's going on. You can literally experience all of these even in a section of your business that's not working how you want.” And so I started thinking about that. And one of the things that, obviously, I mentioned isn't quite working right now is the fact that we lost some pretty key employees. And so, I had- she said, “What's something you would do if this is what you're experiencing?” And I said, “Well, I'd probably call our Director of Operations and tell her I'm super proud of what she's done so far, and that I'm super excited to see that twenty percent, because that was her next piece, and see if she needed anything.” And she's like, “Okay, do it.” Okay, so I called her and I just told her, because it was true, I am proud of what she's done. My overwhelming emotion was that there's not enough done. My overwhelming thought when I wasn't experiencing this, I was just experiencing the situation as abdicating my experience to the circumstances. The circumstances said feel stressed, feel overwhelmed, feel crappy feel all these things. The circumstances said to feel that so I was like, “Okay, I feel down, I feel bad,” but I chose to show up like this. I called her and told her that and she is like, “oh my gosh, you have no idea how much that means to me, because now, I just thought that I wasn't doing a good enough job.” And then she showed up way better for the next several hours, like just energized herself. Crazy.


Nelson Barss 45:11

So, I think, the takeaway for me is emotions; they are not at the mercy of the circumstance, right? They actually create the circumstance, the emotions come way before. The results that you think are causing the emotions.


Liz Sears 45:30

Yeah. And sometimes you'll be feeling like this, and circumstances will shift. And a lot of people instead of acting intentionally, like he talks about in here, they just let the circumstances tell them how to feel. And they're like, Okay, fine. They don't choose, they fail to choose.


Nelson Barss 45:44

Intentionally creating their life and their business with careful thought and planning.


Liz Sears 45:49

And not just- yeah. So, how they experience life. So, there you go.


Nelson Barss 45:55

Well, as we wrap this up, are there any other outstanding thoughts that you want to share, I have one quote I want to close with, but I want to give you a minute to bring up anything else. That really stands out to you.


Liz Sears 46:08

I loved that org chart, how they wrote the description, I just flipped past that page, so that's why I brought it up again, and how they signed the contract for each one of those.


Nelson Barss 46:18

I gotta get back and redo our org chart. I've handed it out many times, and whenever we make a change, whenever we hire somebody, I used to always update it and pass it out. And it went a long way just in helping people understand their job and everyone else's jobs, because I think it's all straight in my head. But how are they supposed to know unless I paint the picture and put it on paper for them?


Liz Sears 46:38

Yeah, because you're the chief reminder, officer.


Nelson Barss 46:40

Chief reminding officer, over and over again, saying the same things.


Liz Sears 46:46

You know what, I am not seeing my final note on here. So maybe I did already pass it.


Nelson Barss 46:52

Well, let me share this. This is, I think, a really good way to sum up the point of this book, right, or visualize where you're trying to get to, in your business. He says- this is on chapter eleven, we spend lot of times chapter eleven. And- so it's on page 134. He says, “Imagine yourself taking a potential buyer through your business, explaining each component, and how it works with every other component, how you've innovated systems and solutions to people problems, how you've quantified the results of those innovations, how you've orchestrated the innovations, so they produce the same results every single time. Imagine yourself introducing the potential buyer of your business to your people, and standing by while they probably explain their accomplishments accountabilities to a fascinated stranger. Imagine how impressed the potential buyer of your business would be upon being presented with such order, such predictability and such irreproachable control.” I think this is a really good summary of the way to build a business, right? It's order. It’s systems, it's planning. And it’s-


Liz Sears 48:04

Intention.


Nelson Barss 48:06

I think, you know, we always talk about our people, our greatest assets, and I think there's so much value in that, but I think everyone needs structure and guidance and guidelines and all of the infrastructure that's going to help them to be successful and to grow in a business.


Liz Sears 48:25

Absolutely. I mean, a business in a sense is almost like a city. If you don't have streets and lines drawn on the streets and freeways with lines and all of those things, then people don't- Can you imagine if all the street lines disappeared one day? That'd be chaos.


Nelson Barss 48:41

We would all drive on the right side of the street for a while, right? It would stick with us for a while and then eventually… bedlam.


Liz Sears 48:47

Yep. All right, perfect. So I love this book, recommend this book. Glad to have read it


Nelson Barss 48:51

I’ve given it to a lot of people. It's a good gift for someone who's struggling, starting their business and you know, living that solopreneur frazzled life that we are trying to help people get out of. So if that's you, if you have not read this book, please pick it up. Take a look at it. And we'll see you guys on the next episode of business greater than you.


Liz Sears 49:11

All right. Thanks for listening.


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