E-Myth Part 4: 7 Components of Management

If you haven’t already read part 1-3 of the series, I suggest taking a step back and reading these to understand how we get to the fourth and final section. Understanding the E-Myth as a whole will allow you to uncover more about your business and how to effectively implement changes.

Part 1: A New Way Of Thinking

Part 2: The Entrepreneur, The Manager and The Technician

Part 3: The Business Development System

Now that you understand the E-Myth, let’s take a look at the systems in a business. When setting up systems in a business, often the most challenging aspect is not knowing where to start. Understandably, as this is something that you were probably never taught. 

When beginning your system development, you must force your brain to see things differently. Understand that the Technician, the Manager and the Entrepreneurial personalities operate differently, and whilst all 3 play a part in the Business Development Systems, only one can do the development work effectively. The Manager.

The E-Myth breaks a business down into seven easily digestible components of Management.

7 Components of Management

7 Components of Management

1. Your Primary Aim

The vision necessary to bring your business to life. It provides you with purpose and energy and moves you beyond your comfort zone.

Ask yourself

  • “What kind of life do I want to lead?”

2. Your Strategic Objective

A very clear statement of what your business has to do for you to achieve your Primary Aim. It’s a way to communicate the direction of your business, how it intends to get there, and the specific benchmarks it will need to hit in order for the Strategy to work. 

Ask yourself

  • “What revenues and profits do I want to achieve over the next 2, 5, and 10 years?”
  • “What kind of experience do I want to give my customers?”
  • “How am I going to deliver the goods/services to achieve my goals?”
  • “Do I have the right people, and systems in place to retain them?”

3. Your Organizational Strategy

It’s about organizing your company and creating the framework for growing toward your strategic objective. It provides each person in an organization with a sense of commitment and accountability. 

Ask yourself

  • “Do I have job descriptions and contracts for all roles?”
  • “Do I have an organisational chart?”
  • “Do I have written procedures and processes for each role?”

4. Your Management Strategy

Management isn’t about doing things, it’s about getting things done. When you reach that point where your business gets things done the way you want them done, consistently and predictably without you having to do them, then you can be free of it. 

Ask yourself

  • “Do my customers have what they need?”
  • “Do I have a system to capture customer information?”
  • “Do I have checklists in place for staff to make sure they are following procedures?”

5. Your People Strategy

Create an environment in which ‘doing it’ is more important to your people than not doing it. And ‘doing it’ well becomes a way of life. It’s about having an effective process for recruiting, hiring and training staff. 

Ask Yourself

  • “What systems do I have in place for recruiting great people?” (See: Topgrading)
  • “What systems do I have in place to retain great people?”
  • “Before hiring, do I take the time to explain the role in great detail?”
  • “Do I communicate the vision, mission and purpose clearly to team members?

6. Your Marketing Strategy

Create a Marketing Strategy that starts, ends, lives, and dies with your customer. Understand your customer, the demographics, the psychographics etc. Make a promise that your customer wants to hear, and deliver on that promise better than anybody else can. 

Ask yourself

  • “What is it that my customers really want and need?”
  • “Do I communicate clearly and deliver on my brand promise?”

7. Your Systems Strategy

Identifying, developing and implementing the key systems your business needs to succeed. The systems run the business – the people run the system. Your business is a fully integrated system. It’s about Soft Systems (living things, eg ideas and people), Hard Systems (offices, white boards, PCs, telephones) and Information Systems (cash flow forecasts, accounting and reporting systems.)

“If you can’t describe what you are doing as a process, you don’t know what you’re doing”  W. Edwards Deming

 

A Call to Learning

The E-Myth is not simply a prescription for success; it’s a call to arms. But this call to arms is not a call to battle, it’s a call to learning. How to feel, think, and act differently and more productively.

There is an old Chinese proverb that says: When you hear something, you will forget it. When you see something, you will remember it. But not until you do something, will you understand it. 

The E-Myth works because it requires the full engagement of the people working it. It can’t be done half-heartedly. It can’t be done frenetically. It can only be done intelligently, reasonably, intentionally, systematically, and compassionately. 

The very process of Business Development creates instantaneous change in the people who engage in it. And that is the key to its success. It’s now time for you to take action, because until then, it’s just another good idea, just another creative thought. 

 

Taking the First Step 

Business Management

So where do you begin? Now that the fire is burning, get started and turn your business into a “money machine”, a turn-key operation. Step back from your business and look at it through your new EMyth eyes. 

  1. Analyze your business as it is today
  2. Decide what it must look like when you’ve finally got it just like you want it
  3. Determine the gap between where you are and where you need to be in order to make your dream a reality. 

The gap will tell you exactly what needs to be done to create the business of your dreams. And what you’ll discover when you look at your business through your E-Myth eyes is that the gap is always created by the absence of systems, the absence of a proprietary way of doing business that successfully differentiates your business from everyone’s else’s.

As an E-Myth Advisor, I have helped guide numerous business owners through the E-Myth Process to discover where their business is, where they want it to be, and how to get there. 

 

TED BONEL – STRATEGY & EXECUTION ADVISORS

Need assistance to help your team achieve your objectives to grow your business? Contact me at tedb@strategyandexecution.com.au to schedule a free 30-minute discovery meeting.

ABOUT STRATEGY & EXECUTION

We have been providing organisations and their leaders with facilitation support and executive education focused on strategy development and strategy execution for more than 20 years. Using business models such as Scaling Up, Exponential Organizations, E-Myth Mastery, Outthinker etc, we support organisations seeking to create or refine excellent strategies and execute them quickly and effectively.

Our expertise is based on a mixture of wide business experience, effective tools as well as a great deal of consulting and executive education. Our approach to working with clients is as unique as our specialist focus. We always seek to challenge our clients’ thinking – but equally are unafraid to roll up our sleeves and help execute the ideas we help generate. Learn more about us here or view our upcoming workshops and events.

If you are preparing for strategy development and/or a strategy implementation challenge and are committed to creating value for your organisation, we look forward to hearing from you. Contact us now