E-Myth by Michael E. Gerber: Book Report

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Imagining a leader with an exceptional level of dominance or autocracy there is no way this harmonious vision will be realized. This is in fact a serious flaw to the overall book. There must be the appropriate management and leadership styles anchored in emotional intelligence for this entire framework proposed by the author to work.

Scalability of Business Models

Another criticism of the book is the assumption that processes created for the business at start-up can scale over time to be franchised, replicated across multiple locations. This is debatable; consider the role of service and system integrators in the computer industry that have exceptional knowledge of ERP system development and integration yet are competing on price to win deals. The salaries of employees need to scale this enterprise can be easily over $150,000 a year, in fact the best SAP system architects can easily make this. How does this model scale? It certainly can yet the highly specific nature of this skill set and the costs of acquiring it in remote regions do not scale well. Rather, start-ups and small businesses in this arena concentrate on getting their most senior experts to potential clients and customers no matter where they are. Businesses that require an exceptional level of expertise, as the programming and integration of ERP systems does, do not easily and neatly fit into the concepts of the book. Instead the author argues that virtually any business can scale into a franchise structure. True, with unlimited capital yet the skill set to manage ERP integration is exceptionally expensive and cannot scale unless there is an abundance of business first. To win business in enterprise software greater headcount is needed.

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So the highly focused service businesses do not in fact scale to the level the author discusses. In fact there is an assumption the scalability of process is essential, yet if a company is highly differentiated in their performance the processes will have an order of complexity to them. This is an irony when the model the author discusses is again held up to more advanced examples.

A Critique of Business Development

The framework for business development is comparable to a strategic plan. It has the same components yet fails to discuss how critical the coordination and synchronization of processes are in the detail necessary to create a scalable network. Second, the business development model is predicated on a favorite quote from Deming the author relies on to draw attention to process being the most critical element in organization, not necessarily organizational structures. This works initially yet Deming has passionate about continual improvement through Six Sigma and his quote over time loses its impact. The concept of hard systems, soft systems and information systems are relevant and useful. They however are not addressed from an agility standpoint as organizations glory. The bottom line is that this is an inspirational book that chastises technical professionals in the first third and then recommends a strategy to build businesses into franchises. Again, a successful entrepreneur will see no reason to change, and this is a fundamental flaw in this book. Second, technicians who aspire to start scalable, franchisable businesses have a passion for detail and their area of core competency, not for marketing. Again these people can change, yet that is exactly what most people struggle the most….....

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