TheE-MythRevisited

WhyMostSmallBusinessesDon’tWorkandWhattoDoAboutIt

MICHAELE.GERBER

ToMyFather,Iwishhewerehere.

CONTENTS

AcknowledgmentsForewordIntroduction

PartI:TheE-MythandAmericanSmallBusiness

Chapter1.TheEntrepreneurialMythChapter2.TheEntrepreneurtheManager,andtheTechnicianChapter3.Infancy:TheTechnician’sPhaseChapter4.Adolescence:GettingSomeHelpChapter5.BeyondtheComfortZoneChapter6.MaturityandtheEntrepreneurialPerspective

PartII:TheTurn-KeyRevolution:ANewViewofBusiness

Chapter7.TheTurn-KeyRevolutionChapter8.TheFranchisePrototypeChapter9.WorkingOnYourBusiness,NotInIt

PartIII:BuildingaSmallBusinessThatWorks!

Chapter10.TheBusinessDevelopmentProcessChapter11.YourBusinessDevelopmentProgramChapter12.YourPrimaryAimChapter13.YourStrategicObjectiveChapter14.YourOrganizationalStrategy

Chapter15.YourManagementStrategyChapter16.YourPeopleStrategyChapter17.YourMarketingStrategyChapter18.YourSystemsStrategyChapter19.ALettertoSarah

Epilogue:BringingtheDreamBacktoAmericanSmallBusinessAfterword:TakingtheFirstStepAbouttheAuthorOtherBooksbyMichaelE.GerberCopyrightAboutthePublisher

ACKNOWLEDGMENTS

Iwould like to expressmy deepest gratitude to themany peoplewithwhomI’veworkedtoproducetheideasthatarepresentedinthisbook,aswellasforthesupportneededtocompleteit.

To Ilene Gerber, my wife, partner, and editor, without whose intensity ofpurpose,dedicationtothetruth,andloveforthework,bothinourbusinessandintherestofthelifewesharetogether,neitherthisbook,ourbusiness,norourmarriagewouldhavebeenpossible.

ToShana,Kim,Hillary,Sam,andAlexOlivia,mychildren,whohavegiventomemorethantheyhavereceived,inwaysonlyafathercantrulyknow.

To all my associates at E-Myth Worldwide, present and past, whosecommitment to the ideas in thisbook,aswellas toeachotherandourclients,havegivenmeaningtothewordsbylivingthem,evenwhenitwasimpossibleandwhenthereseemedtobenogoodreasonfordoingso.

Toallourthousandsofclientsovertheyearswhohaveputtheirtrustinourintegrity,and,intheprocess,caughtusatleastasmuchaswetaughtthemaboutwhatitmeanstotranscendscarcitywithexcellence.

To Nancy and Bob Dreyfus, my sister-in-law and brother-in-law, whosewisdom,love,andgenerousspiritshavetouchedmemorethantheycanpossiblyknow.

To Virginia Smith at HarperBusiness, whose caring, intelligent friendshiphas seenme through themostdismalmomentsofwritingwithagentle,open,andwillingnaturethatenabledmetobemyselfinthemomentsIleastwantedtobe,withoutapologyorexplanation.

And, finally, to all my readers who continue to support my work soenthusiastically.

Thankyouall.

FOREWORD

It has been fifteen years since The E-Myth was first published. In my case,fifteen full years. A lot has happened in the interim—with my family, mybusiness, my life. Many wonderful things, many good things, many painfulthings.And, if it’s truewhatDonJuansaid inTalesofPower, that “Thebasicdifference between an ordinary man and a warrior is that a warrior takeseverything as a challenge while an ordinaryman takes everything either as ablessingoracurse,” then I amasguiltyofbeinganordinarymanas thenextguy,and,onoccasion,haveascended to thewarriorstatewhenGodsawfit toprovidemewiththepower.

Inthesefifteenyears,Ihaveexperiencednearfinancialandbusinessdisasteraswell as incredible victories; havebuilt a 16-yearmarriage into an exquisitepartnershipwithmywife, Ilene; have become the father of two extraordinarychildren,SamandAlexOlivia (the total isnowfive,agesnineyears to thirty-eight years); have entered the anointed state of grandfatherhood thanks tomydaughterKimandmyson-in-lawJohn,whohaveblesseduswithSarah,Elijah,Noah, Hannah, and Isaiah; have traveled throughout the world speaking tohundreds of thousands of small business owners in Australia, Canada, Spain,NewZealand,Japan,PuertoRico,Mexico,Indonesia,and,ofcourse,inalmosteverymajorcityintheUnitedStates.And,throughitall,Ihavebeenthegratefulrecipientofunrestrained support andcaring frommanyof thosewhose lives IhaveinsomewaymanagedtotouchandwhosepathsIhavecrossed.

In short, the years have been exhilarating, challenging, frustrating,exhausting, debilitating, boring, enlightening, rewarding, and, after all is saidanddone,ahandfulforanyone,especiallyforaguymyagewithapenchantforgoingtothewallwithoutconcernforthedamageIdototheleadingpartsofmybody.

Thisbook,then,isaproductofthelastfifteenyears,aswellasaproductofthefifteenyearsthatprecededthem.ItwasalmostexactlyeightyearsbeforeTheE-Mythwaspublished that I foundedourcompany,E-MythWorldwide,whichhasprovided the fuel and experience for thepoint of view I have sharedwiththoseofyouwhohavereadTheE-Myth,andwiththoseofyouwhoareabouttoreadthisbook.

IntheyearssinceTheE-Mythwaspublished,manyofmyreaders—aswellasmanyofoursmallbusinessclients—haveaskedmetoclarifyspecificaspectsofTheE-Myth point of view so they could better apply it to their businesses.Thisbookanswersmanyquestions thatTheE-Myth has raisedover theyears,offering both new and previous readers the opportunity to approach theirbusinesseswith renewed vigor and a sharpenedmindset through an expandedexperienceofTheE-Mythprinciples.

Towardthatend,IhaveattemptedtoanswerthemostimportantquestionsIhave been asked about the principles covered in each chapter by means of arunningdialoguewithawonderfulwomannamedSarah(notherrealname)withwhom I’ve spent quite a bit of time over the past year. Sarah’s experience inbusiness,herpatience, intelligence,andpassionhavehelpedme toaddress thechallenging issues of our small business clients in the reorganization of theirmindsaswellastheirbusinesses.ItisinresponsetoSarah’sfrustrations,andherverypersonalinquiry,thatIhaveendeavoredtoclarifyforthereadertheE-MythPointofView.IhopethatSarahandherquestionsareasengagingtoyouastheyhavebeentome.

But, before I introduce you to Sarah, I’d like to share with you somethoughtsaboutsmallbusinessesandthepeoplewhoownthem.

The question has often been asked of me, “What do the owners ofextraordinarybusinessesknowthattherestdon’t?”

Contrarytopopularbelief,myexperiencehasshownmethatthepeoplewhoare exceptionally good in business aren’t so because of what they know butbecauseoftheirinsatiableneedtoknowmore.

TheproblemwithmostfailingbusinessesI’veencounteredisnotthattheirowners don’t know enough about finance, marketing, management, andoperations—theydon’t,butthosethingsareeasyenoughtolearn—butthattheyspendtheirtimeandenergydefendingwhattheythinktheyknow.ThegreatestbusinesspeopleI’vemetaredeterminedtogetitrightnomatterwhatthecost.

Andbygettingitright,I’mnotjusttalkingaboutthebusiness.Imean that there is something uplifting, some vision, some higher end in

sightthat“gettingitright”wouldserve.Anethicalcertainty,amoralprinciple,auniversaltruth.

WhichisnottosaythatthoseI’minclinedtothinkofasextraordinarywouldnecessarily communicate it that way. Many can’t. Even if they had theinclination, they simply don’t have thewords for it. But it’s still there all thesame.Youcanseeit intheireyes,feel itradiatingfromtheirbodies,hearit inthetimbreoftheirvoices.

On theotherhand,notwithstanding the search for “somethinghigher,” thebest of the best I have known are extraordinarily grounded people; they arecompulsive about detail, pragmatic, down-to-earth, in touch with the seamyreality of ordinary life. They know that a business doesn’t miss the mark byfailing to achievegreatness in some lofty, principledway, but in the stuff thatgoeson ineverynookandcrannyof thebusiness—on the telephone,betweenthecustomerandasalesperson,ontheshippingdock,atthecashregister.

And so the great ones I have known seem to possess an intuitiveunderstanding that the only way to reach something higher is to focus theirattention on themultitude of seemingly insignificant, unimportant, and boringthings that make up every business. (And that make up every life, for thatmatter!)

Thosemundaneandtediouslittlethingsthat,whendoneexactlyright,withthe right kind of attention and intention, form in their aggregate a distinctiveessence, an evanescent quality that distinguishes every great business you’veeverdonebusinesswithfromitsmoremediocrecounterpartswhoseownersaresatisfiedtosimplygetthroughtheday.

Yes,thesimpletruthaboutthegreatestbusinesspeopleIhaveknownisthattheyhaveagenuinefascinationforthetrulyastonishingimpactlittlethingsdoneexactlyrightcanhaveontheworld.

Itistothatfascinationthatthisbookisdedicated.Thisbookisaguideforthosewhoseethedevelopmentofanextraordinary

business as a never-ending inquiry, an ongoing investigation, an activeengagement with a world of forces, within us and without, that continuallyamazeandconfoundthetrueseekersamonguswithawesomevariety,unendingsurprises,anduntoldcomplexity.

While it may seem obvious, this fascination with the development of anextraordinarybusinessisnotthesameasafascinationwithsuccess.

Certainly not the success we normally think of. Some end point which,having reached it, enables one to say, “1 did it!” Becausemy experience hastaughtmeonlytoowellthatendpointsinthedevelopmentofanextraordinarybusinessareinstantlyreplacedbybeginningpoints.

So, this book isnot about endings, but aboutbeginnings, about thenever-endinggame,thedelightfulandexhilaratingprocess,thecontinuousevolutionof

oursenses,ofourconsciousness—ofourhumanness—whichonlycomes frombeingpresentinthemoment,frombeingattentivetowhat’sgoingon.

Ibelievethatourbusinesscanprovideuswithamirrortoseeourselvesaswe are, to seewhatwe truly know andwhatwedon’t know, to see ourselveshonestly,directly,andimmediately.

Ibelievethatourbusinesscanbecomeanexcitingmetaphorfor“TheWay.”Awise person once said, “Know thyself.”To that honorable dictum I can

only add for the businessperson on the path of discovery, good traveling andgoodluck.

Imightalsoadda few instructivewords fromanotherwiseman,AnthonyGreenbank,whosaid inTheBookofSurvival, “To live through an impossiblesituation,youdon’tneed the reflexesof aGrandPrixdriver, themusclesof aHercules,themindofanEinstein.Yousimplyneedtoknowwhattodo.”

Goodreading.

MichaelE.GerberSantaRosa,California

June,2001

INTRODUCTION

I think that maybe inside any business, there is someone slowly goingcrazy.

JosephHeller

SomethingHappened

Ifyouownasmallbusiness,orifyouwanttoownasmallbusiness,thisbookwaswrittenforyou.

It represents many thousands of hours of work we have done at E-MythWorldwideoverthepasttwenty-fouryears.

Itillustratesabelief,createdandsupportedbytheexperienceswehavehadwiththethousandsofsmallbusinessownerswithwhomwe’veworked.

It is abelief that says smallbusinesses in theUnitedStates simplydonotwork;thepeoplewhoownthemdo.

And what we have also discovered is that the people who own smallbusinessesinthiscountryworkfaxmorethantheyshouldforthereturnthey’regetting.

Indeed,theproblemisnotthattheownersofsmallbusinessesinthiscountrydon’twork;theproblemisthatthey’redoingthewrongwork.

As a result, most of their businesses end up in chaos—unmanageable,unpredictable,andunrewarding.

Justlookatthenumbers.Businesses start and fail in theUnitedStates at an increasingly staggering

rate.Everyyear,overamillionpeople in thiscountrystartabusinessofsomesort.Statisticstellusthatbytheendofthefirstyearatleast40percentofthem

willbeoutofbusiness.1Within five years, more than 80 percent of them—800,000—will have

failed.And the rest of the bad news is, if you own a small business that has

managedtosurviveforfiveyearsormore,don’tbreatheasighofrelief.Becausemorethan80percentofthesmallbusinessesthatsurvivethefirstfiveyearsfailinthesecondfive.

Whyisthis?Whydosomanypeoplegointobusiness,onlytofail?Whatlessonaren’ttheylearning?Why is it that with all the information available today on how to be

successfulinsmallbusiness,sofewpeoplereallyare?Thisbookanswersthosequestions.It’s about four profound ideas,which, if you understand and take them to

heart, will give you the power to create an extraordinarily exciting, andpersonallyrewarding,smallbusiness.

Ignore them,andyouwill likely join thehundredsof thousandsofpeopleevery yearwho pour their energy and capital—and life—into starting a smallbusinessandfail,orthemanyotherswhostrugglealongforyearssimplytryingtosurvive.

IDEA#1Thereisamythinthiscountry—IcallittheE-Myth—whichsaysthat small businesses are started by entrepreneurs risking capital to make aprofit.Thisissimplynotso.Therealreasonspeoplestartbusinesseshavelittletodowithentrepreneurship.Infact,thisbeliefintheEntrepreneurialMythisthemost important factor in the devastating rate of small business failure today.UnderstandingtheE-Myth,andapplyingthatunderstandingtothecreationanddevelopmentofasmallbusiness,canbethesecrettoanybusiness’ssuccess.

IDEA#2There’sarevolutiongoingontodayinAmericansmallbusiness.IcallittheTurn-KeyRevolution.Notonlyisitchangingthewaywedobusinessin this country and throughout the world but it is changing who goes intobusiness,howtheydoit,andthelikelihoodoftheirsurvival.

IDEA#3AttheheartoftheTurn-KeyRevolutionisadynamicprocessweat E-Myth Worldwide call the Business Development Process. When it issystematized and applied purposely by a small business owner, the BusinessDevelopment Process has the power to transform any small business into anincrediblyeffectiveorganization.Ourexperiencehasshownusthatwhenasmallbusinessincorporatesthisprocessintoitseveryactivityandusesittocontrolitsdestiny, that companystaysyoungand thrives.Whena smallbusiness ignoresthis process—as most unfortunately do—it commits itself to Management byLuck,stagnation,and,ultimately,failure.Theconsequencesareinevitable.

IDEA#4TheBusinessDevelopmentProcesscanbesystematicallyappliedby any small business owner in a step-by-step method that incorporates thelessons of the Turn-Key Devolution into the operation of that business. Thisprocess then becomes a predictableway to produce results and vitality in anysmallbusinesswhoseowneriswillingtogiveitthetimeandattentionitrequirestoflourish.

Since the founding of E-MythWorldwide in 1977,we have assisted over25,000 small business owners with the implementation of our BusinessDevelopment Process through their enrollment in our uniqueE-MythMasteryProgramTM,andIhaveseenitsucceedthousandsoftimes.

IwouldventuretoguessthatnoorganizationhashadmoredirectexperienceapplyingthelessonsoftheTurn-KeyRevolutionandtheBusinessDevelopmentProcess to the development of a small business than we have had at E-MythWorldwide.And,while theprocess isno“magicbullet”anddoes requirehardwork,itisalwaysgratifyingworkandtheonlyworkIknowthatwillgiveyouthe level of control youneed to getwhat youwant fromyour small business.Indeed,itwillchangeyourbusinessanditwillchangeyourlife.

This book, then, is about producing results—not simply “how to do it.”Becausebothofusknowthatbookslikethatdon’twork.Peopledo.

Andwhatmakes peoplework is an ideaworthworking for, alongwith aclearunderstandingofwhatneedstobedone.

It is onlywhen such an idea becomes firmly integrated into theway youthinkandoperateyourbusinessthat“howtodoit”becomesmeaningful.

Thisbookisaboutsuchanidea—anideathatsaysyourbusinessisnothingmorethanadistinctreflectionofwhoyouare.

Ifyourthinkingissloppy,yourbusinesswillbesloppy.Ifyouaredisorganized,yourbusinesswillbedisorganized.

Ifyouaregreedy,youremployeeswillbegreedy,givingyoulessandlessofthemselvesandalwaysaskingformore.

Ifyourinformationaboutwhatneedstobedoneinyourbusinessislimited,yourbusinesswillreflectthatlimitation.

So if your business is to change—as it must continuously to thrive—youmust change first. If you areunwilling to change, yourbusinesswill never becapableofgivingyouwhatyouwant.

Thefirstchangethatneedstotakeplacehastodowithyourideaofwhatabusinessreallyisandwhatittakestomakeonework.

Onceyoufullyunderstandtherelationshipeveryownermusthavewithhisorherbusinessifitistowork,Icanassureyouthatyourbusinessandyourlifewilltakeonnewvitalityandnewmeaning.

You’llknowwhysomanypeoplefailtogetwhattheywantfromabusinessoftheirown.

You’llseethealmostmagicalopportunitiesavailabletoanyonewhostartsasmall business in the rightway,with a true understanding,with the necessarytools.

I’veseenithappenthousandsoftimes,ineverykindofbusinessimaginable,withpeoplewhoknewnothingaboutbusinesswhentheystarted.

Mywishisthatbythetimeyouarethroughreadingthisbook,itwillhavestartedtohappentoyou.

1

PARTI

TheE-MythandAmericanSmallBusiness

THEENTREPRENEURIALMYTH

They intoxicate themselveswithwork so theywon’t see how they reallyare.

AldousHuxley

TheE-Myth is themythof theentrepreneur. It runsdeep in thiscountryandringsoftheheroic.

PicturethetypicalentrepreneurandHerculeanpicturescometomind:amanor woman standing alone, wind-blown against the elements, bravely defyinginsurmountableodds,climbingsheerfacesoftreacherousrock—alltorealizethedreamofcreatingabusinessofone’sown.

The legend reeksofnobility,of lofty, extra-humanefforts,of aprodigiouscommitmenttolarger-than-lifeideals.

Well,whiletherearesuchpeople,myexperiencetellsmetheyarerare.OfthethousandsofbusinesspeopleIhavehadtheopportunitytoknowand

workwithover thepast twodecades, fewwerereal entrepreneurswhen Imetthem.

Thevisionwasallbutgoneinmost.Thezestfortheclimbhadturnedintoaterrorofheights.Thefaceoftherockhadbecomesomethingtoclingtoratherthantoscale.Exhaustionwascommon,exhilarationrare.Buthadn’tallof themoncebeenentrepreneurs?Afterall, theyhadstarted

theirownbusiness.Theremusthavebeensomedreamthatdrovethemtotakesucharisk.

But,ifso,wherewasthedreamnow?Whyhaditfaded?

Wherewastheentrepreneurwhohadstartedthebusiness?Theanswerissimple:theentrepreneurhadonlyexistedforamoment.Afleetingsecondintime.Andthenitwasgone.Inmostcases,forever.Iftheentrepreneursurvivedatall,itwasonlyasamyththatgrewoutofa

misunderstandingaboutwhogoesintobusinessandwhy.Amisunderstanding thathascostusdearly in this country—more thanwe

canpossiblyimagine—inlostresources,lostopportunities,andwastedlives.That myth, that misunderstanding, I call the E-Myth, the myth of the

entrepreneur.And it finds its roots in this country in a romantic belief that small

businessesarestartedbyentrepreneurs,when,infact,mostarenot.ThenwhodoesstartsmallbusinessesinAmerica?Andwhy?

TheEntrepreneurialSeizure

TounderstandtheE-Mythandthemisunderstandingatitscore,let’stakeacloserlookatthepersonwhogoesintobusiness.Notafterhegoesintobusiness,butbefore.

For thatmatter,wherewereyoubeforeyoustartedyourbusiness?And, ifyou’rethinkingaboutgoingintobusiness,whereareyounow?

Well, if you’re likemostof thepeople I’veknown,youwereworking forsomebodyelse.

Whatwereyoudoing?Probablytechnicalwork,likealmosteverybodywhogoesintobusiness.Youwereacarpenter,amechanic,oramachinist.Youwereabookkeeperorapoodleclipper;adrafts-personorahairdresser;

a barber or a computer programmer; a doctor or a technicalwriter; a graphicartistoranaccountant;aninteriordesigneroraplumberorasalesperson.

Butwhateveryouwere,youweredoingtechnicalwork.Andyouwereprobablydamngoodatit.Butyouweredoingitforsomebodyelse.Then,oneday, fornoapparent reason, somethinghappened. Itmighthave

been the weather, a birthday, or your child’s graduation from high school. ItmighthavebeenthepaycheckyoureceivedonaFridayafternoon,orasidewaysglancefromthebossthat justdidn’tsitright.Itmighthavebeenafeelingthat

your boss didn’t really appreciate your contribution to the success of hisbusiness.

It could have been anything; it doesn’t matter what. But one day, forapparently no reason, you were suddenly stricken with an EntrepreneurialSeizure.Andfromthatdayonyourlifewasnevertobethesame.

Insideyourminditsoundedsomethinglikethis:“WhatamIdoingthisfor?WhyamIworkingforthisguy?Hell,Iknowasmuchaboutthisbusinessashedoes.If itweren’tforme,hewouldn’thaveabusiness.Anydummycanrunabusiness.I’mworkingforone.”

Andthemomentyoupaidattentiontowhatyouweresayingandreallytookittoheart,yourfatewassealed.

Theexcitementofcuttingthecordbecameyourconstantcompanion.Thethoughtofindependencefollowedyoueverywhere.Theideaofbeingyourownboss,doingyourownthing,singingyourown

song,becameobsessivelyirresistible.OnceyouwerestrickenwithanEntrepreneurialSeizure,therewasnorelief.Youcouldn’tgetridofit.Youhadtostartyourownbusiness.

TheFatalAssumption

In the throes of your Entrepreneurial Seizure, you fell victim to themostdisastrousassumptionanyonecanmakeaboutgoingintobusiness.

It is an assumption made by all technicians who go into business forthemselves, one that charts the course of a business—fromGrandOpening toLiquidation—themomentitismade.

That Fatal Assumption is: if you understand the technical work of abusiness,youunderstandabusinessthatdoesthattechnicalwork.

Andthereasonit’sfatalisthatitjustisn’ttrue.Infact,it’stherootcauseofmostsmallbusinessfailures!The technical work of a business and a business that does that technical

workaretwototallydifferentthings!Butthetechnicianwhostartsabusinessfailstoseethis.TothetechniciansufferingfromanEntrepreneurialSeizure,abusinessisnot

abusinessbutaplacetogotowork.Sothecarpenter,ortheelectrician,ortheplumberbecomesacontractor.Thebarberopensupabarbershop.

Thetechnicalwriterstartsatechnicalwritingbusiness.Thehairdresserstartsabeautysalon.Theengineergoesintothesemiconductorbusiness.Themusicianopensupamusicstore.All of them believing that by understanding the technical work of the

business they are immediately and eminently qualified to run a business thatdoesthatkindofwork.

Andit’ssimplynottrue!In fact, rather thanbeing their greatest single asset, knowing the technical

workoftheirbusinessbecomestheirgreatestsingleliability.For if the technician didn’t know how to do the technical work of the

business,hewouldhavetolearnhowtogetitdone.Hewouldbeforcedtolearnhowtomakethebusinesswork,ratherthanto

dotheworkhimself.The real tragedy is that when the technician falls prey to the Fatal

Assumption,thebusinessthatwassupposedtofreehimfromthelimitationsofworkingforsomebodyelseactuallyenslaveshim.

Suddenlythejobheknewhowtodosowellbecomesonejobheknowshowtodoplusadozenothershedoesn’tknowhowtodoatall.

Because although the Entrepreneurial Seizure started the business, it’s thetechnicianwhogoestowork.

Andsuddenly,anentrepreneurialdreamturnsintoatechnician’snightmare.

SeetheyoungWomanBankingPies.SeetheYoungWomanStartaBusinessBakingPies.SeetheYoungWomanBecomeanOldWoman.

I met Sarah after she had been in business for three years. She told me,“Theyhavebeenthelongestthreeyearsofmylife.”

Sarah’sbusinesswasnamedAllAboutPies(notitsrealname).But,intruth,Sarah’sbusinesswasn’treallyallaboutpies—itwasreallyall

aboutwork.TheworkSarahdid.TheworkSarahusedtolovetodomorethananythingelse.PlustheworkSarahhadneverdoneinherlife.

“Infact,”Sarahsaidtome,“notonlydoIhatetodoallthis[shespreadherarms,takinginthesmallshopinwhichwestood]butIhate[sheemphasizedtheword almost fiercely]—Ihate baking pies. I can’t stand the thought of pies. Ican’tstandthesmellofpies.Ican’tstandthesightofpies.”Andthenshestartedcrying.

Thesweetfresharomaofpiesfilledtheair.Itwas7A.M.andAllAboutPieswastoopeninthirtyminutes.ButSarah’s

mindwassomeplaceelse.“It’s seven o’clock,” she said, wiping her eyes with her apron, as though

reading my mind. “Do you realize I’ve been here since three o’clock thismorning?AndthatIwasupattwotogetready?AndthatbythetimeIgetthepiesready,openforbusiness,takecareofmycustomers,cleanup,closeup,dotheshopping,reconcilethecashregister,gotothebank,havedinner,andgetthepiesreadyfortomorrow’sbake,it’llbenine-thirtyorteno’clocktonight,andbythetimeIdoallthat,bythetimeanynormalperson,forGod’ssake,wouldsaythatthedaywasdone,IwillthenalsoneedtositdownandbegintofigureouthowI’mgoingtopaytherentnextmonth?

“And all this [she spread her armswearily again, as though to accentuateeverythingshehadjustsaid]becausemyverybestfriendstoldmeIwascrazynottoopenapieshopbecauseIwassodamngoodatit?And,what’sworse,Ibelievedthem!IsawawayoutofthehorriblejobIusedtohave.Isawawaytogetfree,doingworkIlovedtodo,anddoingitallforme.”

ShewasonatearthatIdidn’twanttointerrupt.Iwaitedquietlytohearwhatshewouldsaynext.

Instead,shekickedthehugeblackoveninfrontofherwithherrightfoot.“Damn!”sheexploded.“Damn,Damn,Damn!”Foremphasis,shekickedtheovenagain.Andthenslumped,sigheddeeply,

andhuggedherself,almostdesperately.“WhatdoIdonow?”shesaid,almostinawhisper.Notreallyaskingme,I

knew,butaskingherself.Sarahleanedagainstthewallandremainedtherequietlyforalongmoment,

staringatherfeet.Thelargeclockonthewalltickedloudlyintheemptyshop.Icouldhearthecarsdrivingbyonthebusystreetinfrontoftheshopasthecitycameawake.Thesunshoneharshlythroughthespotlesswindows,sweepingthegleamingoakfloorinfrontofthecounter.

I could see the dust in the stream of light, hanging suspended as thoughwaitingforSarahtospeak.

Shewasdeepindebt.Shehadspenteverythingshehad,andmore,tocreatethislovelylittleshop.Thefloorswerethebestoak.Theovenswerethebestovens.Thedisplayswerecharming,theverybestmoneycouldbuy.Shehadputherheart into thisplace, justasshehadputherheart intoher

pies,fallinginlovewithbakingasayounggirl,mentoredbyherauntwhohadlivedwithherfamilywhileSarahwasgrowingup.

Her aunt had filled her family’s kitchen, Sarah’s childhood, with thedelicious,sweetaromaoffreshlybakedpies.Heraunthadintroducedhertothemagicof theprocess: thekneadingof thedough, thecleaningof theoven, thesprinkling of the flour, the preparation of the trays, the careful cutting of theapples,thecherries,therhubarb,thepeaches.Itwasalaboroflove.

Heraunthadcorrectedherwhen,inherhaste,Sarahhadhurriedtheprocess.Heraunthadtoldher,timeandtimeagain,“Sarah,dear,wehaveallthetime

intheworld.Bakingpiesisnotaboutgettingdone.It’saboutbakingpies.”AndSarahthoughtsheunderstoodher.ButnowSarahknewthatbakingpieswasabout“gettingdone.”Bakingpies

wasruinedforher.Atleastshethoughtitwas.Theclockcontinueditsemphaticticking.IwatchedasSarahseemedtoshrinkevenclosertoherself.Iknewhowoppressiveitmustbeforhertofindherselfsodeeplyindebt,to

feelsohelpless in the faceof it.Wherewasherauntnow?Whowasgoing toteachherwhattodonext?

“Sarah,”IsaidascarefullyasIcould.“It’stimetolearnallaboutpiesalloveragain.”

ThetechniciansufferingfromanEntrepreneurialSeizuretakestheworkhelovesto do and turns it into a job. Thework that was born out of love becomes achore,amongawelterofotherlessfamiliarandlesspleasantchores.Ratherthanmaintainingitsspecialness,representingtheuniqueskillthetechnicianpossessesanduponwhichhestartedthebusiness,theworkbecomestrivialized,somethingtogetthroughinordertomakeroomforeverythingelsethatmustbedone.

ItoldSarahthateverytechniciansufferingfromanEntrepreneurialSeizureexperiencesexactlythesamething.

First,exhilaration;second, terror; third,exhaustion;and, finally,despair.Aterriblesenseofloss—notonlythelossofwhatwasclosesttothem,theirspecialrelationshipwiththeirwork,butthelossofpurpose,thelossofself.

Sarah looked atmewith a sense of relief, as though she felt seen but notjudged.

“You’vegotmynumber,”shesaid.“ButwhatdoIdonow?”“Youtakethisonestepatatime,”Ianswered.“Thetechnicianisn’ttheonlyproblemyou’vegottodealwithhere.”

THEENTREPRENEUR,THEMANAGER,ANDTHETECHNICIAN

Thus, in thecourseofhis life,onemanacquiresmanypersonalqualities,many personages, many ‘I’s’ (because each, speaking for itselfindependentlyoftheotherssays‘I,’‘me,’whenitappears).

JeanVaysse

TowardAwakening

No,TheTechnicianisn’ttheonlyproblem.Theproblemismorecomplicatedthanthat.The problem is that everybody who goes into business is actually three-

people-in-one:TheEntrepreneur,TheManager,andTheTechnician.And the problem is compounded by the fact that while each of these

personalitieswantstobetheboss,noneofthemwantstohaveaboss.So they start a business together in order to get rid of the boss. And the

conflictbegins.Toshowyouhowtheproblemmanifestsitselfinallofus,let’sexaminethe

way our various internal personalities interact. Let’s take a look at twopersonalitieswe’reallfamiliarwith:TheFatGuyandTheSkinnyGuy.

Haveyoueverdecidedtogoonadiet?You’resittinginfrontofthetelevisionsetoneSaturdayafternoon,watching

anathleticcompetition,awedbytheathletes’staminaanddexterity.You’re eating a sandwich, your second since you sat down to watch the

eventtwohoursbefore.You’re feeling sluggish in the face of all the action on the screen when,

suddenly,somebodywakesup inyouandsays,“Whatareyoudoing?Lookatyourself,You’reFat!You’reoutofshape!Dosomethingaboutit!”

It has happened to us all. Somebody wakes up inside us with a totallydifferentpictureofwhoweshouldbeandwhatweshouldbedoing.Inthiscase,let’scallhimTheSkinnyGuy.

Who’s The Skinny Guy? He’s the one who uses words like discipline,exercise,organization.TheSkinnyGuyisintolerant,self-righteous,asticklerfordetail,acompulsivetyrant.

TheSkinnyGuyabhorsfatpeople.Can’tstandsittingaround.Needstobeonthemove.Livesforaction.

TheSkinnyGuyhasjusttakenover.Watchout—thingsareabouttochange.Before you know it, you’re cleaning all the fattening foods out of the

refrigerator.You’re buying a new pair of running shoes, barbells, and sweats.Thingsaregoingtobedifferentaroundhere.Youhaveanewleaseonlife.Youplanyournewphysicalregimen:upatfive,runthreemiles,coldshoweratsix,abreakfast of wheat toast, black coffee, and half a grapefruit; then, ride yourbicycle to work, home by seven, run another two miles, to bed at ten—theworld’salreadyadifferentplace!

Andyouactuallypullitoff!ByMondaynight,you’velosttwopounds.YougotosleepdreamingofwinningtheBostonMarathon.Whynot?Thewaythingsaregoing,it’sonlyamatteroftime.

Tuesdaynightyougetonthescale.Anotherpoundgone!You’reincredible.Gorgeous.Aleanmachine.

OnWednesday, you really pour it on. Youwork out an extra hour in themorning,anextrahalf-houratnight.

You can’t wait to get on the scale. You strip down to your bare skin,shiveringinthebathroom,filledwithexpectationofwhatyourscaleisgoingtotellyou.Yousteplightlyontoitandlookdown.Whatyouseeis…nothing.Youhaven’tlostanounce.You’reexactlythesameasyouwereonTuesday.

Dejectioncreepsin.Youbegintofeelaslighttwingeofresentment.“Afterallthatwork?Afterallthatsweatandeffort?Andthen—nothing?Itisn’tfair.”Butyoushrugitoff.Afterall,tomorrow’sanotherday.Yougotobed,vowingtoworkharderonThursday.Butsomehowsomethinghaschanged.

Youdon’tknowwhat’schangeduntilThursdaymorning.It’sraining.Theroomiscold.Somethingfeelsdifferent.Whatisit?Foraminuteortwoyoucan’tquiteputyourfingeronit.

Andthenyougetit:somebodyelseisinyourbody.It’sTheFatGuy!He’sback!Andhedoesn’twanttorun.Asamatteroffact,hedoesn’tevenwanttogetoutofbed.It’scoldoutside.

“Run?Areyoukiddingme?”TheFatGuydoesn’twantanythingtodowithit.Theonlyexercisehemightbeinterestediniseating!

Andallofasuddenyoufindyourselfinfrontoftherefrigerator—insidetherefrigerator—alloverthekitchen!

Foodisnowyourmajorinterest.TheMarathonisgone;theleanmachineisgone;thesweatsandbarbellsand

runningshoesaregone.TheFatGuyisback.He’srunningtheshowagain.It happens to all of us, time and time again.Becausewe’ve been deluded

intothinkingwe’rereallyoneperson.AndsowhenTheSkinnyGuydecidestochangethingsweactuallybelieve

thatit’sIwho’smakingthatdecision.AndwhenTheFatGuywakesupandchangesitallbackagain,wethinkit’s

Iwho’smakingthatdecisiontoo.Butitisn’tI.It’swe.The Skinny Guy and The Fat Guy are two totally different personalities,

withdifferentneeds,differentinterests,anddifferentlifestyles.That’s why they don’t like each other. They each want totally different

things.Theproblemisthatwhenyou’reTheSkinnyGuy,you’retotallyconsumed

byhisneeds,hisinterests,hislifestyle.Andthensomethinghappens—thescaledisappointsyou, theweatherturns

cold,somebodyoffersyouahamsandwich.Atthatmoment,TheFatGuy,who’sbeenwaitinginthewingsallthistime,

grabsyourattention.Grabscontrol.You’rehimagain.In other words, when you’re The Skinny Guy you’re always making

promisesforTheFatGuytokeep.And when you’re The Fat Guy, you’re always making promises for The

SkinnyGuytokeep.Is it anywonderwe have such a tough time keeping our commitments to

ourselves?It’snotthatwe’reindecisiveorunreliable;it’sthateachandeveryoneofus

isawholesetofdifferentpersonalities,eachwithhisowninterestsandwayof

doingthings.Askinganyoneofthemtodefertoanyoftheothersisinvitingabattleorevenafull-scalewar.

Anyonewho has ever experienced the conflict between The Fat Guy andTheSkinnyGuy(andhaven’tweall?)knowswhatImean.Youcan’tbeboth;oneofthemhastolose.Andtheybothknowit.

Well, that’s the kind of war going on inside the owner of every smallbusiness.

Butit’sathree-waybattlebetweenTheEntrepreneur,TheManager,andTheTechnician.

Unfortunately,it’sabattlenoonecanwin.Understandingthedifferencesbetweenthemwillquicklyexplainwhy.

TheEntrepreneur

The entrepreneurial personality turns the most trivial condition into anexceptionalopportunity.TheEntrepreneur is thevisionary inus.Thedreamer.Theenergybehindeveryhumanactivity.Theimaginationthatsparksthefireofthefuture.Thecatalystforchange.

TheEntrepreneurlivesinthefuture,neverinthepast,rarelyinthepresent.He’shappiestwhenleftfreetoconstructimagesof“what-if”and“if-when.”

In science, the entrepreneurial personality works in themost abstract andleast pragmatic areas of particle physics, pure mathematics, and theoreticalastronomy.Inart,itthrivesintherarefiedarenaoftheavant-garde.Inbusiness,The Entrepreneur is the innovator, the grand strategist, the creator of newmethodsforpenetratingorcreatingnewmarkets,theworld-bendinggiant—likeSearsRoebuck,HenryFord,TomWatsonofIBM,andRayKrocofMcDonald’s.

TheEntrepreneurisourcreativepersonality—alwaysatitsbestdealingwiththe unknown, prodding the future, creating probabilities out of possibilities,engineeringchaosintoharmony.

Every strong entrepreneurial personality has an extraordinary need forcontrol.Livingashedoesinthevisionaryworldofthefuture,heneedscontrolofpeopleandeventsinthepresentsothathecanconcentrateonhisdreams.

Givenhisneedforchange,TheEntrepreneurcreatesagreatdealofhavocaroundhim,whichispredictablyunsettlingforthoseheenlistsinhisprojects.

Asaresult,heoftenfindshimselfrapidlyoutdistancingtheothers.The farther ahead he is, the greater the effort required to pull his cohorts

along.

Thisthenbecomestheentrepreneurialworldview:aworldmadeupofbothanoverabundanceofopportunitiesanddraggingfeet.

Theproblemis,howcanhepursuetheopportunitieswithoutgettingmireddownbythefeet?

The way he usually chooses is to bully, harass, excoriate, flatter, cajole,scream, and finally,whenall else fails, promisewhateverhemust tokeep theprojectmoving.

ToTheEntrepreneur,mostpeople areproblems thatget in thewayof thedream.

TheManager

Themanagerialpersonalityispragmatic.WithoutTheManagertherewouldbenoplanning,noorder,nopredictability.

TheManager is thepartofus thatgoes toSearsandbuysstackingplasticboxes, takes themback to thegarage, and systematically stores all thevarioussized nuts, bolts, and screws in their own carefully identified drawer.He thenhangsallofthetoolsinimpeccableorderonthewalls—lawntoolsononewall,carpentry tools on another—and, to be absolutely certain that order is notdisturbed,paintsapictureofeachtoolonthewallwhereithangs!

IfTheEntrepreneurlivesinthefuture,TheManagerlivesinthepast.WhereTheEntrepreneurcravescontrol,TheManagercravesorder.Where The Entrepreneur thrives on change, The Manager compulsively

clingstothestatusquo.Where The Entrepreneur invariably sees the opportunity in events, The

Managerinvariablyseestheproblems.TheManagerbuildsahouseandthenlivesinit,forever.TheEntrepreneurbuildsahouseandtheinstantit’sdonebeginsplanningthe

nextone.TheManagercreatesneat,orderlyrowsofthings.TheEntrepreneurcreates

thethingsTheManagerputsinrows.TheManager is the onewho runs after The Entrepreneur to clean up the

mess.WithoutTheEntrepreneurtherewouldbenomesstocleanup.WithoutTheManager,therecouldbenobusiness,nosociety.WithoutThe

Entrepreneur,therewouldbenoinnovation.It is the tension between The Entrepreneur’s vision and The Manager’s

pragmatismthatcreatesthesynthesisfromwhichallgreatworksareborn.

TheTechnician

TheTechnicianisthedoer.“Ifyouwantitdoneright,doityourself”isTheTechnician’scredo.TheTechnician loves to tinker. Things are to be taken apart and put back

togetheragain.Thingsaren’tsupposedtobedreamedabout,they’resupposedtobedone.

IfTheEntrepreneur lives in the future andTheManager lives in thepast,TheTechnicianlivesinthepresent.Helovesthefeelofthingsandthefactthatthingscangetdone.

AslongasTheTechnicianisworking,heishappy,butonlyononethingatatime.Heknowsthattwothingscan’tgetdonesimultaneously;onlyafoolwouldtry.Soheworkssteadilyandishappiestwhenheisincontroloftheworkflow.

Asa result,TheTechnicianmistrusts thoseheworks for,because theyarealwaystryingtogetmoreworkdonethaniseitherpossibleornecessary.

ToTheTechnician, thinking is unproductive unless it’s thinking about theworkthatneedstobedone.

Asaresult,heissuspiciousofloftyideasorabstractions.Thinkingisn’twork;itgetsinthewayofwork.TheTechnicianisn’tinterestedinideas;he’sinterestedin“howtodoit.”ToTheTechnician,allideasneedtobereducedtomethodologyiftheyare

tobeofanyvalue.Andwithgoodreason.TheTechnicianknowsthatifitweren’tforhim,theworldwouldbeinmore

troublethanitalreadyis.Nothingwouldgetdone,butlotsofpeoplewouldbethinkingaboutit.

Put anotherway,while TheEntrepreneur dreams, TheManager frets, andTheTechnicianruminates.

The Technician is a resolute individualist, standing his ground, producingtoday’s bread to eat at tonight’s dinner. He is the backbone of every culturaltradition, but most importantly, of ours. If The Technician didn’t do it, itwouldn’tgetdone.

EveryonegetsinTheTechnician’sway.TheEntrepreneurisalwaysthrowingamonkeywrenchintohisdaywiththe

creationofyetanother“greatnewidea.”Ontheotherhand,TheEntrepreneurisalwayscreatingnewandinteresting

work for The Technician to do, thus establishing a potentially symbiotic

relationship.Unfortunately,itrarelyworksoutthatway.Since most entrepreneurial ideas don’t work in the real world, The

Technician’s usual experience is one of frustration and annoyance at beinginterruptedinthecourseofdoingwhatneeds tobedoneto trysomethingnewthatprobablydoesn’tneedtobedoneatall.

TheManagerisalsoaproblemtoTheTechnicianbecauseheisdeterminedto impose order on The Technician’s work, to reduce him to a part of “thesystem.”

But being a rugged individualist,TheTechnician can’t standbeing treatedthatway.

To The Technician, “the system” is dehumanizing, cold, antiseptic, andimpersonal.Itviolateshisindividuality.

Workiswhatapersondoes.Andtothedegreethatit’snot,workbecomessomethingforeign.

To The Manager, however, work is a system of results in which TheTechnicianisbutacomponentpart.

ToTheManager, then,TheTechnicianbecomesaproblemtobemanaged.ToTheTechnician,TheManagerbecomesameddlertobeavoided.

Tobothofthem,TheEntrepreneuristheonewhogotthemintotroubleinthefirstplace!

The fact of the matter is that we all have an Entrepreneur, Manager, andTechnicianinsideus.Andiftheywereequallybalanced,we’dbedescribinganincrediblycompetentindividual.

TheEntrepreneurwould be free to forge ahead into new areas of interest;TheManagerwouldbesolidifying thebaseofoperations;andTheTechnicianwouldbedoingthetechnicalwork.

Each would derive satisfaction from the work he does best, serving thewholeinthemostproductiveway.

Unfortunately, our experience shows us that few people who go intobusiness are blessed with such a balance. Instead, the typical small businessowner is only 10 percent Entrepreneur, 20 percent Manager, and 70 percentTechnician.

TheEntrepreneurwakesupwithavision.TheManagerscreams“Oh,no!”And while the two of them are battling it out, The Technician seizes the

opportunitytogointobusinessforhimself.Not to pursue the entrepreneurial dream, however, but to finally wrest

controlofhisworkfromtheothertwo.ToTheTechnicianit’sadreamcometrue.TheBossisdead.Buttothebusinessit’sadisaster,becausethewrongpersonisatthehelm.TheTechnicianisincharge!

Sarahlookedalittleoverwhelmed.

“Idon’tunderstand,”shesaid.“HowcouldIhavedonethisdifferently?TheonlyreasonIwentintothisbusinesswasbecauseIlovedbakingpies.Ifithadn’tbeen for that, what would have been the point?” She watched my facesuspiciously, as though Iwere trying tomakeher already impossible situationevenmoreimpossible.

“Well,let’sthinkaboutittogether,”Ianswered.“If it’s true that within each businessperson there are three personalities,

rather than just one, can you imaginewhat amess thatmakes? If one of youwantsthis,andanotherofyouwantsthat,andathirdwantssomethingentirelydifferent, canyou imagine theconfusion that causes inour lives?And it’snotonlythepersonalitiesinsideeachoneofusthatconfuseusbutalltheotherswecome into contact with as well: in our customers, in our employees, in ourchildren, in our partners, in our parents, in our friends, in our spouses, in ourlovers.Ifthisistrue,andallyouneedtodotodiscoverwhetheritisornotistotakealookatyourselffromdaytoday,asthoughfromabove,asthoughfromoutside of your skin, as though you were watching someone else—that is, toobserveyourselfasyougothroughtheday—youwouldseethedifferentpartscomeout.Youwouldsee themplaying their respectivegames.Youwouldseehow they fight for their own space—and the space of all the others—andsabotageeachotherasbesttheycan.

“In your business, youwould see how one part of you craves a sense oforder,while another part of you dreams about the future.Youwould see howanotherpartofyoucan’tstandbeingidle,andjumpsintobake,andtocleanup,and to wait on customers, the part of you who feels guilty if she isn’t doingsomethingallthetime.

“Inshort,youwouldseehowTheEntrepreneurinyoudreamsandschemes,TheManagerinyouisconstantlyattemptingtokeepthingsastheyare,andTheTechnician in you drives the other two crazy. Youwould see that it not onlymattersthatyourpersonalitiesarenotinabalancedrelationshipwitheachother

butthatyourlifedependsongainingthatbalance.Thatuntilyoudo,it’sawar!Andit’sawarnoonecanwin.

“Youwould also see that one of your personalities is the strongest of thethree(orfour,orfive,orsix),andthatshealwaysmanagestocontroltheothers.In fact, if youwatch longenough,you’llbegin tounderstandhowdevastatingthe tyranny of your strongest personality is to your life. And you’ll see thatwithout balance, without all three of these personalities being given theopportunity,thefreedom,thenourishmenttheyeachneedtogrow,yourbusinesscannothelpbutmirroryourownlopsidedness.

“Soitisthatanentrepreneurialbusiness,withoutaManagertogiveitorderandwithout a Technician to put it towork, is doomed to suffer an early, andprobablyverydramatic,death.AndthataManager-drivenbusiness,withoutanEntrepreneur or a Technician to play their absolutely critical roles, will putthings into little gray boxes over and over again, only to realize too late thatthere’snoreasonforthethingsortheboxessheputtheminto!Suchabusinesswilldieveryneatly.

“AndthatinaTechnician-drivenbusiness,withoutTheEntrepreneurtoleadherandTheManagertosuperviseher,TheTechnicianwillworkuntilshedrops,onlytowakeupthenextmorningtogotoworkevenharder,andthenext,andthenext.Only todiscover, longafter it’s too late, thatwhile shewasworkingsomeonemovedafreewaythroughthestore!”

Sarahlookedatmewithuncertainty.“But,I’mnotanEntrepreneur,”shesaid.“AllIdoisbakepies.AllIeverwantedtodowastobakepies,justlikeThe

Technicianyoudescribed.Whenentrepreneurialpersonalitieswerepassedout,IthinkIgotpassedover.WhatdoIdoifthereisnoEntrepreneurinme?”

Icouldn’thelpbutsmile.Thiswasgoingtobefun.BecauseIknewwhenSarahfinallygotit—andIknewshewould—shewasgoingtodiscoversomeoneinherselfsheneverknewwasthere.

“Beforewereachthatconclusion,Sarah,let’slookmorecloselyatwhatanEntrepreneurdoes,”Iresponded.

“AnEntrepreneur does theworkof envisioning thebusiness as somethingapartfromyou,theowner.Theworkofaskingalltherightquestionsaboutwhythisbusiness,asopposedtothatbusiness?Whyapiebakingbusinessratherthanabodyshop?Ifyouareabakerofpies,it’seasyforyoutodecidetoopenupapie-bakingbusiness.Butthat’sjustthepoint.Ifyouareabakerofpiesandaredetermined to do entrepreneurial work, you would leave your pie-bakingexperience behind you and engage in the internal dialogue with which everytrulyentrepreneurialpersonalityiswonderfullyfamiliar.

“Youwouldbegintosaytoyourself,‘It’stimeformetocreateanewlife.It’stimeformetochallengemyimaginationandtobegintheprocessofshapinganentirelynewlife.And thebestway todo thatanywhere in thiswholewideopportunity-filledworldistocreateanexcitingnewbusiness.OnethatcangivemeeverythingthatIwant,onethatdoesn’trequiremetobethereall thetime,onethathasthepotentialtobestunninglyunique,onethatpeoplewilltalkaboutlong after having shopped in it the very first time, and, as a result of thatdelightfulexperience,willcomebacktoshopthereagainbecauseithassuchaspecialflavortoit.Iwonderwhatthatbusinesswouldbe?’

“I wonder what that business would be?” I said to Sarah, “is the trulyentrepreneurialquestion.Thedreamingquestion,Icallit.It’sthequestionthatisattheheartoftheworkofanEntrepreneur.Iwonder.Iwonder.Iwonder.

“SotheworkofanEntrepreneuristowonder,”Icontinued.“Toimagineandtodream.Toseewithasmuchofherselfasshecanmusterthepossibilitiesthatwaftaboutinmidairsomeplacethereaboveherheadandwithinherheart.Notinthepastbutinthefuture.That’stheworktheentrepreneurialpersonalitydoesattheoutsetofherbusinessandateachandeverystagealongtheway.Iwonder.Iwonder.Iwonder.Justaseveryinventormust.Justaseverycomposermust.Justaseveryartist,oreverycraftsperson,oreveryphysicistmust.Justaseverybakerof pies must. I call it Future Work. ‘I wonder’ is the true work of theentrepreneurialpersonality.”

She tried to repress it, but I saw a small smile begin to form on Sarah’smouth.

“How could I do this differently,” she finally asked me with growingconfidence.“IfIwere togive the trueentrepreneur inmyself life,howcouldItotallychangemyexperienceofthisbusiness?”

“Nowyou’vegotit!”Isaid.“That’sjusttherightquestion.Andtogettotheanswer,let’slookatwhereyourbusinessexiststodayinthesmallbusinesslifecycle.”

INFANCY:THETECHNICIAN’SPHASE

…myUncleSolhadaskunkfarmbuttheskunkscaughtcoldanddiedandsomyUncleSolimitatedtheskunksinasubtlemanner…

e.e.cummings

CollectedPoems

It is self-evident that businesses, likepeople, are supposed togrow; andwithgrowth,comeschange.

Unfortunately, most businesses are not run according to this principle.Instead most businesses are operated according to what the owner wants asopposedtowhatthebusinessneeds.

Andwhat The Technician who runs the companywants is not growth orchangebutexactlytheopposite.Hewantsaplacetogotowork,freetodowhathewants,whenhewants,freefromtheconstraintsofworkingforTheBoss.

Unfortunately,whatTheTechnicianwantsdoomshisbusinessbeforeitevenbegins.

To understand why, let’s take a look at the three phases of a business’sgrowth:Infancy,Adolescence,andMaturity.

Understandingeachphase,andwhatgoesoninthebusinessowner’smindduringeachofthem,iscriticaltodiscoveringwhymostsmallbusinessesdon’tthriveandensuringthatyoursdoes.

TheBossisdead,andyou,TheTechnician,arefreeatlast.Finally,youcandoyourown thing inyourownbusiness.Hope runshigh.Theair iselectricwith

possibility. It’s like being let out of school for the summer. Your newfoundfreedomisintoxicating.

In the beginning nothing is too much for your business to ask. As TheTechnician,you’reaccustomedto“payingyourdues.”Sothehoursdevoted tothebusinessduringInfancyarenotspentgrudginglybutoptimistically.There’sworktobedone,andthat’swhatyou’reallabout.Afterall,yourmiddlenameisWork.“Besides,”youthink,“thisworkisforme.”

And so youwork. Ten, twelve, fourteen hours a day. Seven days aweek.Evenwhenyou’reathome,you’reatwork.Allyourthoughts,allyourfeelings,revolve around your new business.You can’t get it out of yourmind.You’reconsumedbyit;totallyinvestedindoingwhateverisnecessarytokeepitalive.

Butnowyou’redoingnotonlytheworkyouknowhowtodobuttheworkyoudon’tknowhow todoaswell.You’renotonlymaking it butyou’re alsobuying it, selling it, and shipping it.During Infancy, you’re aMaster Juggler,keepingalltheballsintheair.

It’seasytospotabusinessinInfancy—theownerandthebusinessareoneandthesamething.

If you removed the owner from an Infancy business, there would be nobusinessleft.Itwoulddisappear!

InInfancy,youarethebusiness.It’s even named after you—“JOE’S PLACE,” “TOMMY’S JOINT,”

“MARY’SFINEFOODS”—sothecustomerwon’tforgetyou’reTheBoss.Andsoon—ifyou’relucky—allofthesweat,worry,andworkbegintopay

off.You’regood.Youworkhard.Thecustomersdon’t forget.They’recomingback. They’re sending in friends. Their friends have friends. And they’re alltalkingaboutJoe,Tommy,andMary.They’realltalkingaboutyou.

If you can believe what your customers are saying, there’s never beenanyone like Joe, Tommy, andMary. Joe, Tommy, andMary are just like oldfriends.Theyworkhardfortheirmoney.Andtheydogoodwork.Joeisthebestbarber I everwent to.Tommy is thebest printer I everused.Marymakes thebestcornedbeefsandwichIeverate.Yourcustomersarecrazyaboutyou.Theykeepcoming,indroves.

Andyouloveit!Butthenitchanges.Subtlyatfirst,butgraduallyitbecomesobvious.You’re

falling behind. There’smorework to do than you can possibly get done. Thecustomersarerelentless.Theywantyou;theyneedyou.You’vespoiledthemforanyoneelse.You’reworkingatbreakneckspeed.

And then the inevitable happens. You, the Master Juggler, begin to dropsomeoftheballs!

Itcan’tbehelped.Nomatterhowhardyoutry,yousimplycan’tcatchthemall. Your enthusiasm for working with the customers wanes. Deliveries, onceearly,arenowlate.Theproductbeginstoshowthewearandtear.Nothingseemstoworkthewayitdidatfirst.

Joe’shaircutsdon’tlookthewaytheyusedto.“Isaidshortintheback,noton the sides.” “My name’s not Fred; that’s my brother—and I never had acrewcut!”

GlitchesstartshowingupinTommy’sprinting: typos, inksmudges,wrongcolors,wrong paper. “I didn’t order business cards; I ordered catalog covers.”“Pink?Isaidbrown!”

Mary’s best-tasting-biggest-stack-of-corned-beef-in-the-world suddenlylooks like pastrami. It is pastrami. “Didn’t you ask for pastrami?” Anotherirritatedvoicecallsout:“Where’smypastramisandwich?Thisiscornedbeef!”Andyetanother:“Whatarethesegarbanzobeansdoinginmymeatloaf?”

Whatdoyoudo?Youstretch.Youworkharder.Youputinmoretime,moreenergy.

Ifyouputintwelvehoursbefore,younowputinfourteen.Ifyouputinfourteenhoursbefore,younowputinsixteen.Ifyouputinsixteenhoursbefore,younowputintwenty.Buttheballskeep

dropping!All of a sudden, Joe, Tommy, andMarywish their namesweren’t on the

sign.Allofasudden,theywanttohide.Allofasudden,youfindyourselfattheendofanunbelievablyhecticweek,

lateonaSaturdaynight,poringoverthebooks,tryingtomakesomesenseoutofthemess,thinkingaboutalloftheworkyoudidn’tgetdonethisweek,andalloftheworkwaiting for you nextweek.And you suddenly realize it simply isn’tgoingtogetdone.There’ssimplynowayintheworldyoucandoallthatworkyourself!

Inaflash,yourealizethatyourbusinesshasbecomeTheBossyouthoughtyouleftbehind.There’snogettingridoftheBoss!

Infancyendswhen theowner realizes that thebusinesscannotcontinue to runthewayithasbeen;that,inorderforittosurvive,itwillhavetochange.

When that happens—when the reality sinks in—most business failuresoccur.

When thathappens,mostofTheTechnicians lock theirdoorsbehind them

andwalkaway.TherestgoontoAdolescence.

Sarahwasbeginningtolookdefeatedagain.Ihadseenthatlookbeforeonthefacesofcountlessclients.WhenaTechnician-turned-business-ownerissuddenlyconfrontedwith the realityofher situation,a senseofhopelessnesscanset in.Thechallengecanseemoverwhelming.But,IsensedthatSarahwouldstrugglewiththeidea—andherself—untilshegotit.

“I guess I still don’t get it,” she said. “What’s wrong with being aTechnician? I used to love thework I do.And if I didn’t have to do all theseotherthings,Iwouldstillloveit!”

“Ofcourseyouwould,”Ianswered.“Andthat’sexactlythepoint!“There’s nothing wrong with being a Technician. There’s only something

wrong with being a Technician who also owns a business! Because as aTechnician-turned-business-owner,yourfocusisupsidedown.Youseetheworldfrom the bottom up rather than from the top down. You have a tactical viewratherthanastrategicview.Youseetheworkthathastogetdone,andbecauseof thewayyou’re built, you immediately jump in todo it!Youbelieve that abusinessisnothingmorethananaggregateofthevarioustypesofworkdoneinit,wheninfactitismuchmorethanthat.

“Ifyouwant toworkinabusiness,geta jobinsomebodyelse’sbusiness!Butdon’tgotoworkinyourown.Becausewhileyou’reworking,whileyou’reanswering the telephone, while you’re baking pies, while you’re cleaning thewindows and the floors, while you’re doing it, doing it, doing it, there’ssomethingmuchmoreimportantthatisn’tgettingdone.Andit’stheworkyou’renot doing, the strategic work, the entrepreneurial work, that will lead yourbusinessforward,thatwillgiveyouthelifeyou’venotyetknown.

“No,”Isaid,trulyenjoyingthis,“there’snothingwrongwithtechnicalwork;itis,itcanbe,purejoy.

“It’s only a problem when The Technician consumes all the otherpersonalities. When The Technician fills your day with work. When TheTechnicianavoidsthechallengeoflearninghowtogrowabusiness.WhenTheTechnician shrinks from the entrepreneurial role so necessary to the lifeblood,themomentum,ofatrulyextraordinarysmallbusiness,andfromthemanagerialrolesocriticaltotheoperationalbalanceorgroundingofasmallbusinessonaday-to-daybasis.

“To be a great Technician is simply insufficient to the task of building a

great small business.Being consumedby the tacticalwork of the business, aseveryTechniciansufferingfromanEntrepreneurialSeizureis,leadstoonlyonething:acomplicated,frustrating,and,eventually,demeaningjob!

“Iknowyouknowwhat thatfeels like,Sarah.Canyousee thatas longasyouviewyourbusinessfromTheTechnician’sperspective,youaredoomedtocontinuehavingthisexperience?”IaskedherasgentlyasIcould.

I saw thatSarahwas still strugglingwith the ideaofdoingwhat shedoesdifferently. I waited for the question I knewwas brewing, and it wasn’t longbeforeitcame.

“ButIcan’tevenimaginewhatmybusinesswouldbelikewithoutmedoingthework,” she said. “It has always depended onme. If itweren’t forme,mycustomers would go someplace else. I’m not sure I understand what’s reallywrongwiththat.”

“Well, thinkabout it,” I said. “Inabusiness thatdependsonyou,onyourstyle,onyourpersonality,onyourpresence,onyourtalentandwillingnesstodothework,ifyou’renottherewhyofcourseyourcustomerswouldgosomeplaceelse.Wouldn’tyou?

“Becauseinabusinesslikethatwhatyourcustomersarebuyingisnotyourbusiness’sabilitytogivethemwhattheywantbutyourabilitytogivethemwhattheywant.Andthat’swhat’swrongwithit!

“What if you don’twant to be there?What if you’d like to be someplaceelse?Onavacation?Orathome?Readingabook?Workinginthegarden?Oron a sabbatical, forGod’s sake? Isn’t there any place youwould rather be attimesthaninyourbusiness,fillingtheneedsofyourcustomerswhoneedyousobadlybecauseyou’retheonlyonewhocandoit?

“Whatifyou’resick,orfeellikebeingsick?Orwhatifyoujustfeellazy?“Don’tyousee?Ifyourbusinessdependsonyou,youdon’townabusiness

—youhaveajob.Andit’stheworstjobintheworldbecauseyou’reworkingforalunatic!

“And,besides,that’snotthepurposeofgoingintobusiness.“Thepurposeofgoingintobusinessistogetfreeofajobsoyoucancreate

jobsforotherpeople.“The purpose of going into business is to expand beyond your existing

horizons.Soyoucan inventsomething that satisfiesaneed in themarketplacethathasneverbeen satisfiedbefore.Soyoucan live an expanded, stimulatingnewlife.”

Sarahsaid,“Ihatetobeatadeadhorse,butwhatifIwanttodothetechnicalworkinmybusiness?WhatifIdon’twanttodoanythingelsebutthat?”

“Then forGod’s sake,” I said as emphatically as I dared, “get rid of your

business!Andgetridofitasquicklyasyoucan.Becauseyoucan’thaveitbothways.You can’t ‘have your pie and eat it too.’You can’t ignore the financialaccountabilities, the marketing accountabilities, the sales and administrativeaccountabilities. You can’t ignore your future employees’ need for leadership,for purpose, for responsible management, for effective communication, forsomethingmore than just a job inwhich their sole purpose is to support youdoingyourjob.Letalonewhatyourbusinessneedsfromyouifit’stothrive:thatyouunderstandthewayabusinessworks,thatyouunderstandthedynamicsofabusiness—cash flow, growth, customer sensitivity, competitive sensitivity, andsoforth.

“Thepoint is,” I said toher,watchingher face sink and thenbegin to liftwithanunexpressedquestion,“ifallyouwantfromabusinessofyourownisthe opportunity to dowhat you did before you started your business, get paidmore for it, andhavemore freedomtocomeandgo,yourgreed—Iknow thatsounds harsh, but that’s what it is—your self-indulgence will eventuallyconsumebothyouandyourbusiness.”

I paused and then continued because I could see that Sarah was not yettotallyconvinced.

“You just can’t get there from here! You just can’t play the role of TheTechnicianand ignore the rolesofTheEntrepreneur andTheManager simplybecauseyou’reunpreparedtoplaythem.

“Because, the moment you chose to start a small business, Sarah, youunwittingly chose to play a significantly larger game than any game you hadeverplayedbefore.

“Andtoplaythisnewgame,calledbuildingasmallbusinessthatactuallyworks,yourEntrepreneurneedstobecoaxedout,nourished,andgiventheroomsheneedstoexpand,andyourManagerneedstobesupportedaswellsoshecandevelopherskillatcreatingorderandtranslatingtheentrepreneurialvisionintoactionsthatcanbeefficientlymanifestedintherealworld.

“Anything less than thatwill eventually push you to the brink of disasterand,finally,overtheedge.Becauseasmallbusinesssimplydemandsthatwedoitorthebusinesswillshrivelonthevine.

“Sowhetherwelikeitornot,wehavetolearnhow.Theexcitingthingis,thatonceyoubegin to,onceyourTechnicianbegins to letgo,onceyoumakeroomfortherestofyoutoflourish,thegamebecomesmorerewardingthanyoucanpossiblyimagineatthispointinyourbusiness’slife.”

“Tellmemoreaboutthat,”Sarahsaid.“Ireallywanttoknow.”“Iwill,”Ianswered.“AlthoughIsensethatyoualreadyunderstandquitea

bitmorethanyouthink.Butfirst,let’sgoontoAdolescence,thesecondstagein

asmallbusiness’sgrowth.”

ADOLESCENCE:GETTINGSOMEHELP

Asgovernments,westumblefromcrisistocrashprogram,lurchingintothefuturewithoutplan,withouthope,withoutvision.

AlvinToffler

TheThirdWave

Adolescencebeginsatthepointinthelifeofyourbusinesswhenyoudecidetogetsomehelp.

There’s no telling how soon this will happen. But it always happens,precipitatedbyacrisisintheInfancystage.

EverybusinessthatlastsmustgrowintotheAdolescentphase.Everysmallbusinessownerwhosurvivesseekshelp.

Whatkindofhelpdoyou,theoverloadedTechnician,goouttoget?Theanswerisaseasyasitisinevitable:technicalhelp.Someonewithexperience.Someonewithexperienceinyourkindofbusiness.Someonewhoknowshowtodothetechnicalworkthatisn’tgettingdone—

usuallytheworkyoudon’tliketodo.Thesales-orientedownergoesouttofindaproductionperson.Theproduction-orientedownerlooksforasalesperson.Andjustabouteverybodytriestofindsomeonetodothebooks!Becauseif

there’sanythingmostsmallbusinessownershatetodo—andthereforeignore—it’sthebooks.

Andsoitisthatyoubringinyourfirstemployee—Harry,asixty-eight-year-oldbookkeeperwho’sbeendoingthebookssincehewastwelveyearsold,inthe

OldCountry.Harryknowsthebooks.Heknowshowtodothebooksineightdifferentlanguages.But most important, Harry has twenty-two years of experience doing the

booksinacompanyjustlikeyours.ThereisnothingHarrydoesn’tknowaboutyourkindofbusiness.Andnowhe’syours.Theworldsuddenlylooksbrighteragain.Amajorballisabouttobecaught—andbysomebodyelseforachange!It’sMondaymorning.Harryarrives.Yougreethimwarmly,and,let’sfaceit,

feverishly.You’vespentallweekendgettingreadyforthismoment.Youclearedoutagenerousspaceforhim.Youarrangedthebooksandthestackofunopenedlettersonhisdesk.Youboughtacoffeecupwith“Harry”printedonit.Youwereeventhoughtfulenoughtofindacushionforhischair(he’llbesittingforalongtime).

There’sacriticalmoment ineverybusinesswhen theownerhireshisveryfirst employee to do thework he doesn’t knowhow to do himself, or doesn’twanttodo.Inyourbusiness,Harryisthatperson.AndthisMondaymorningisthatcriticaltime.

Thinkaboutit.You’ve taken a big step. The books are on Harry’s desk now rather than

yours.Andwhat’smore, Harry is about to become the only other person in the

wholeworldwhoknowstherealstoryaboutyouandyourbusiness.Harryisgoingtotakeonelookatthebooksandknowthetruth.Harry,yourvery first andmost importantemployee, is about to findouta

secretyou’vebeenhidingfromeveryoneelseinyourlife: thatyoudon’tknowwhatyou’redoing!

Thequestionis,what’shegoingtodoaboutit?Willhelaugh?Willhecry?Willheleave?Orwillhegotowork?AndifHarrywon’tdothebooks,whowill?But suddenly you hear the quiet, systematic clattering of the calculator’s

keysfromHarry’sdesk.He’sworking!Harry’sgoingtostay!Youcan’tbelieveyourluck.

You’renotgoingtohavetodothebooksanymore.And in a single stroke, you suddenly understand what it means to be in

businessinawayyouneverunderstoodbefore.“Idon’thavetodothatanymore!”At last you’re free. The Manager in you wakes up and The Technician

temporarilygoes to sleep.Yourworries areover.Someoneelse isgoing todothatnow.

But at the same time—unaccustomed as you are to beingTheManager—yournewfoundfreedomtakesonanalltoocommonform.

It’scalledManagementbyAbdicationratherthanbyDelegation.Inshort,likeeverysmallbusinessownerhasdonebeforeyou,youhandthe

booksovertoHarry…andrun.Andforawhileyouarefree.Atleastrelativelyso.Afterall,youstillhave

alltheotherworktodo.ButnowthatyouhaveHarry,thingsarebeginningtochange.BecausewhenHarry’snottotallyimmersedinthebooks,youcangethimto

answerthephone.And when he’s not answering the phone, you can get him to do a little

shippingandreceiving.Andwhenhe’snotdoingtheshippingandreceiving,hemightaswellhandle

afewofyourcustomers.Andwhenhe’snothandlingafewofyourcustomers,well,whoknowswhat

youcouldthinkofnext?Lifebecomeseasier.Lifebecomesadream.Youbegintotakealittlelongerlunch:thirtyminutesinsteadoffifteen.Youleavealittleearlierattheendoftheday:eighto’clockinsteadofnine.Harrycomestoyouoccasionallytotellyouwhatheneeds,andyou,busyas

usual, simply tell him to handle it. How doesn’tmatter as long as he doesn’tbotheryouwiththedetails.You’vegototherfishtofry.

Harryneedsmorepeople.Thebusinessisbeginningtogrow.Busyasusual,youtellhimtohirethem.Hedoes.Harry’sawonder.It’sgreattohaveaguylikeHarry.Youdon’thavetothinkaboutwhathe’sdoing;youdon’thavetoworryabout how he’s getting along. He never complains. He just works. And he’sdoingalltheworkyouhatetodo.It’sthebestofallpossibleworlds.YougettobeTheBoss,doingtheworkyoulovetodo,andHarrytakescareofeverythingelse.Ah,thelifeofanEntrepreneur!

Andthenitunexpectedlyhappens.Acustomercallstocomplainabouttheshabbytreatmentshereceivedfrom

one of your people. “Who was it?” you ask, privately steaming. She doesn’t

know, but if you’re going to hire people like that she’ll take her businesselsewhere.

Youpromisetolookintoit.Yourbankercallstotellyouthatyou’reoverdrawn.“Howdidthathappen?”

you ask him, your heart dropping to your knees.He doesn’t know, but if youdon’twatchitmorecloselyhe’llhaveto“takesteps.”

Youpromisetolookintoit.Your oldest supplier calls to tell you that the order you placed the week

beforewasplacedwrong,sotheshipmentwillbetenweekslate.What’smore,you’regoingtohavetoeat theoverage.“Howdidthathappen?”youaskhim,reachingforaRolaid.Hedoesn’tknow,butifyoucan’tmanageyourorderingbetterthanthat,he’llhavetolookatotheroptions.

Youpromisetolookintoit.Outontheshippingdock,youwalkuptoakidHarryhired.He’swrappinga

package. You look at the package and explode. “Who taught you to wrap apackagelikethis?”youaskthesurprisedkid.“Didn’tanyoneshowyouhowtodothisright?Here,giveittome.I’lldoitmyself.”

Andyoudo.Thatveryafternoon,youhappentobewalkingbytheproductionline.You

almostdropinyourtracks.“Whotaughtyoutodoitthatway?”youstammertotheshockedproductionperson.“Didn’tanybodyshowyouhowtodo it right?Here,giveittome.I’lldoitmyself.”

Andyoudo.Theverynextmorning,you’retalkingtothenewsalesperson,alsohiredby

Harry.“What’shappeningtocustomerA?”youaskher.Heranswersendsyouinto

arage.“WhenI tookcareofhimweneverhadproblems like that!”youwail.“Here,giveittome.I’lltakecareofitmyself.”

Andyoudo.Andtheyoungshippingclerklooksattheproductionperson,andtheyboth

lookat thenewsalesperson, and theyall lookat theirActingBossHarry, andask:“Whothehellwasthat?!”Harryjustshrugsandsays(asonlyamanwho’sworked for other people for fifty-plus years can say): “Oh, that was just TheBoss.”

But,hearthis:whatHarryknowsissomethingyou’reabouttolearn.That it’s only the beginning of a process that occurs in everyAdolescent

businessoncetheowner’sManagementbyAbdicationbeginstotakeitstoll.It’sonlythebeginningofaprocessofdeteriorationinwhichthenumberofballsintheairnotonlyexceedsyourabilitytojugglethemeffectivelybutyourpeople’s

abilityaswell.What Harry knows, and what you’re about to learn, is that it’s only the

beginning of a process inwhich the balls begin to fall faster andwith greaterfrequencythantheyeverdidwhenyouweredoingeverythingyourself.

Andasthethudofthelandingballsbecomesdeafening,youbegintorealizethatyounevershouldhavetrustedHarry.

Younevershouldhavetrustedanyone.Youshouldhaveknownbetter.As theballscontinue to fall at anoverwhelming rate,youbegin to realize

thatnoonecaresaboutyourbusinessthewayyoudo.Thatnooneiswillingtoworkashardasyouwork.That no one has your judgment, or your ability, or your desire, or your

interest.Thatifit’sgoingtogetdoneright,you’retheonewho’sgoingtohavetodo

it.SoyourunbackintoyourbusinesstobecometheMasterJuggleragain.It’s

the sameold story.Walk into anyAdolescent business anywhere in theworldandyou’llfindtheownerofthebusinessdoingit,doingit,doingit,busy,busy,busy—doing everything that has to get done in his business—despite the factthat he nowhas peoplewho are supposed to be doing it for him. People he’spayingtodoit!

Andwhat’sworseisthatthemorehedoes,thelesstheydo.Andthelesstheydo,themoreheknowsthatifit’sgoingtogetdone,he’s

goingtohavetodoithimself.Soheinterfereswithwhattheyhavetodoevenmore.

ButHarryknewthiswhenhestarted.He could have told you—his newBoss—that ultimatelyTheBoss always

interferes.Harrycouldhave toldyou that theworkwillneverbedone toTheBoss’s

satisfaction.AndthereasonisthatTheBossalwayschangeshismindaboutwhatneeds

tobedone,andhow.WhatHarrydoesn’tknow,however,iswhy—whyyou’resuchamadman.Thatit’snotyourpeoplewhoaredrivingyoucrazy.Thatit’snotthecomplainingcustomerwho’sdrivingyoumad.That it’snot thebanker,or thevendor,or the incorrectlywrappedpackage

that’sdrivingyouupthewall.Thatit’snotthat“nobodycares,”orthat“nothinggetsdoneontime”that’s

drivingyouinsane.

No,it’snottheworldthat’stheproblem.It’sthatyousimplydon’tknowhowtodoitanyotherway.You’re hopelessly, helplessly at a loss. For you to behave differently you

wouldneedtoawakenthepersonalitieswhohavebeenasleepwithinyouforalongtime—TheEntrepreneurandTheManager—andthenhelpthemtodeveloptheskillsonlytheycanaddtoyourbusiness.

ButTheTechnicianinyouwon’tstoplongenoughforthattohappen.TheTechnicianinyouhasgottogotowork!TheTechnicianinyouhasgottocatchtheballs!TheTechnicianinyouhasgottokeepbusy.TheTechnicianinyouhasjust

reachedthelimitsofhisComfortZone.

IlookedoveratSarahandcouldtellIhadhitanerve.

Sarah had discovered something in the course of our conversation—somethingaboutherComfortZonethatwasverymeaningfulforher.

And,intuitively,Iknewwehadjusttakenasnapshotofit.

BEYONDTHECOMFORTZONE

Drasticchangecreatesanestrangementfromtheself,andgeneratesaneedforanewbirthofanewidentity.Anditperhapsdependsonthewaythisneedissatisfiedwhethertheprocessofchangerunssmoothlyorisattendedwithconvulsionsandexplosions.

EricHoffer

TheTemperofOurTime

EveryAdolescentbusinessreachesapointwhereitpushesbeyonditsowner’sComfort Zone—the boundary within which he feels secure in his ability tocontrolhisenvironment,andoutsideofwhichhebeginstolosethatcontrol.

TheTechnician’sboundaryisdeterminedbyhowmuchhecandohimself.The Manager’s is defined by how many technicians he can supervise

effectivelyorhowmanysubordinatemanagershecanorganizeintoaproductiveeffort.

TheEntrepreneur’s boundary is a function of howmanymanagers he canengageinpursuitofhisvision.

Asabusinessgrows,itinvariablyexceedsitsowner’sabilitytocontrolit—totouch,feel,andseetheworkthatneedstobedone,andtoinspectitsprogresspersonallyaseverytechnicianneedstodo.

Outofdesperation,hedoeswhatheknowshowtodorather thanwhathedoesn’t, thereby abdicating his role asmanager and passing his accountabilitydowntosomeoneelse—a“Harry.”

At that point, his desperation turns into hope. He hopes that Harry willhandleitsothathewon’thavetoworryaboutitanymore.

ButHarryhasneedsofhisown.Harry’salsoa technician.HeneedsmoredirectionthanTheTechniciancangivehim.Heneedstoknowwhyhe’sdoingwhat he’s doing. He needs to know the result he’s accountable for and thestandards against which his work is being evaluated. He also needs to knowwhere the business is going and where his accountabilities fit into its overallstrategy.

To produce effectively, Harry needs something The Technician-turned-business-owner isn’t capable of giving him—amanager!And the lack of onecausesthebusinesstogointoatailspin.

And as the business grows beyond the owner’s Comfort Zone—as thetailspin accelerates—there are only three courses of action to be taken, onlythreewaysthebusinesscanturn.ItcanreturntoInfancy.Itcangoforbroke.Oritcanhangonfordearlife.

Let’stakealookateach.

GettingSmallAgain

One of the most consistent and predictable reactions of The Technician-turned-business-ownertoAdolescentchaosisthedecisionto“getsmall”again.Ifyoucan’tcontrolthechaos,getridofit.

Goback to theway itused tobewhenyoudideverythingyourself,whenyou didn’t have people to worry about, or too many customers, or too manyunpayablepayablesandunreceivablereceivables,ortoomuchinventory.

Inshort,gobacktothetimewhenbusinesswassimple,backtoInfancy.And thousandsupon thousandsof techniciansdo just that.Theyget ridof

theirpeople,getridoftheirinventory,wrapuptheirpayablesinalargebag,renta smaller facility, put the machine in the middle, put the telephone by themachine,andgobacktodoingitallbythemselvesagain.

They go back to being the owner, sole proprietor, chief cook and bottlewasher—doingeverythingthatneedstobedone,allalone,butcomfortablewiththefeelingofregainedcontrol.

“What can go wrong?” they think to themselves, forgetting at once thatthey’vebeentherebefore.Predictably,thistootakesitstoll.

Onemorning—itcouldbesixweeksorsixyearsfollowingthedayyou“gotsmall”again—theinevitablehappens.

Youwakeupinbed,andyourspouseturnstoyouandsays:“What’swrong?You’renotlookingtoogood.”

“I’mnotfeelingtoogood,”youanswer.“Doyouwanttotalkaboutit?”heorsheasks.“It’ssimple,”yousay,“Idon’twanttogointhereanymore!”Then your spouse asks you the obvious question: “But if you don’t, who

will?”Andallofasuddenyouarestruckwiththerealityofyourcondition.Yourealizesomethingyou’veavoidedalltheseyears.Youcomefacetofacewiththeunavoidabletruth:Youdon’townabusiness—youownajob!What’smore,it’stheworstjobintheworld!You can’t close it when youwant to, because if it’s closed you don’t get

paid.Youcan’tleaveitwhenyouwantto,becausewhenyouleavethere’snobody

theretodothework.Youcan’tsellitwhenyouwantto,becausewhowantstobuyajob?At that point you feel the despair and the cynicism almost every small

businessownergetstofeel.Iftherewaseveradream,howeversmall,it’sgone.Andwithit,anydesire

tokeepbusy,busy,busy.Youdon’twashthewindowsanymore.Youdon’tsweepthefloors.The customers become a problem rather than an opportunity. Because if

somebodybuyssomething,you’regoingtohavetodothework.Yourstandardsofdressbegintodeteriorate.Thesignonthefrontdoorfadesandpeels.Andyoudon’tcare.Forwhenthedreamisgone,theonlythingleftiswork.Thetyrannyofroutine.Theday-to-daygrindofpurposelessactivity.Finally,youclosethedoors.There’snothingtokeepyouthereanymore.According to the Small BusinessAdministration,more than 400,000 such

businessesclosetheirdoorsintheUnitedStateseveryyear.Andit’sunderstandable.Yourbusiness,oncetheshiningpromiseofyourlife,andnownopromiseat

all,hasgraduallybecomeamortuaryfordeaddreams.

GoingforBroke

TheAdolescentbusinesshasanotheralternativethatiscertainlylesspainfuland decidedly more dramatic than “getting small.” It can just keep growingfasterandfasteruntilitself-destructsofitsownmomentum.

The roll call is endless: Itel, Osbourne Computer, Coleco, and countlessmore. All such “going-for-broke” companies were started with anEntrepreneurialSeizurebyaTechnicianwho focusedon thewrongendof thebusiness,thecommoditythebusinessmade,ratherthanthebusinessitself.

“Going-for-broke”businessesareasignofourtime.Theyareahigh-techphenomenon.Withtheexplosionofnewtechnologyandthenumbersofthosewhocreate

it,awholenewbreedoftechnicianshasflockedtothebusinessarena.Alongwiththesewizardsandtheirseeminglyunlimitedtechnicalvirtuosity,

anavalancheofnewproductshasthunderedthroughthewide-opendoorsofanenthralledandreceptivemarketplace.

Unfortunately,mostofthesecompaniesbarelygetthroughthedoorsbeforethe uncontrollablemomentum that got them there forces them to stumble andthenfall.

All theexcessesofAdolescence,frustratingandbewilderingas theymightbe in a normally expanding company, are disastrous in a “going-for-broke”business.Asquicklyasitgrows,chaosgrowsevenfaster.Fortiedtothetailofatechnological breakthrough, The Technician and his people rarely break freelongenoughtogainsomeperspectiveabouttheircondition.Thedemandforthecommodity of which they are so proud quickly exceeds their chronicallyAdolescentabilitytoproduceit.

The result is almost always catastrophic. The business explodes, leavingbehind it people who most often justify the explosion as an inevitableconsequence of doing business on a “fast track” where luck and speed and abrilliantbitoftechnologicaldaring-doarethenecessarycomponentsformakingitbig.

Therealityisotherwise.Luckand speedandbrilliant technologyhaveneverbeenenough,because

somebodyisalways luckier, faster,andtechnologicallybrighter.Unfortunately,once on a fast track, there’s precious little time to listen. The race iswon byreflex,astrokeofgenius,orastrokeofluck.

“Going for broke” is the high-tech equivalent of Russian Roulette,oftentimesplayedbypeoplewhodon’tevenknowthegunisloaded!

AdolescentSurvival

The most tragic possibility of all for an Adolescent business is that itactuallysurvives!

You’re an incredibly strong-willed, stubborn, single-minded individualwho’sdeterminednottobebeaten.

You go into your business every morning with a vengeance, absolutelyconvincedthat it’sa jungleout there,andfullycommitted todoingwhatever’snecessarytosurvive.

And you do survive. Kicking and scratching, beating up your people andyour customers, ranting and raving at your family and friends—because, afterall,you’vegottokeepthebusinessgoing.Andyouknowthere’sonlyonewaytodoit:you’vegottobethere—allthetime.

InAdolescentSurvivalyou’reconsumedbythebusinessandthepossibilityoflosingit.

Andsoyouputeverythingyouhaveintoit.And,forwhateverreason,youmanagetokeepitgoing.Dayafterday,fightingthesamebattles,inexactlythesamewayyoudidthe

daybefore.Youneverchange.Nightafternight,yougohometounwind,only towindupeven tighter in

anticipationoftomorrow.Finally,yourbusinessdoesn’texplode—youdo!You’re like a twelve-cylinder engine working on one cylinder, pumping

away, tryingwith everything you’ve got to produce twelve cylindersworth ofresults.

Butfinally,andinevitably,there’snothingleft.There’s simply nothing more you can do, except face the fact that one

cylindercan’tproducetheresultsoftwelve,nomatterhowhardittries.Somethinghastogive,andthatsomethingisyou.Doesthissoundfamiliar?Well,ifyou’vebeeninbusinessforawhile,itshould.Andifyouhaven’tbeeninbusinessforlong,itprobablywillsoundfamiliar

oneday.Because the tragedy is that the condition of Infancy and Adolescence

dominatesAmericansmallbusiness.ItistheconditioninmostofthesmallbusinessesweatE-MythWorldwide

havevisitedover thepast twenty-fouryears, aconditionof rampantconfusion

andwastedspirits.Itdidn’tneedtohappen.Thereisabetterway.

The nerve I had touched earlier in Sarah had diminished enough for her tocollectherthoughts.

“How did you know?” she asked me quietly. “Have you been talking tosomeoneaboutme?”shesaid,inpartwantingtobelieveIknewmoreaboutherstorythanIhadleton,andinpartknowingshewasjustlikeeveryoneelse.

Sheknewtheanswer.BeforeIcouldconfirmit,shesaid,“Igotsmallagain.AndIstilldon’tunderstandwhathappened.”

ShelookedaroundthesmallshopasthoughseeingsomeoneorsomethingIcouldn’t.

“MyHarrywasElizabeth,”shesighed.“Ihiredherwhenthebusinesswasonlysixmonthsold.Shedideverything

forme,Elizabethdid.Shewasabsolutelyincredible.Idon’tknowwhatIwouldhavedonewithouther.Shedidthebooks.Shehelpedmebake.Shecleanedupinthemorningandafterweclosed.Shehiredmyfirst threeemployees, taughtthemhow todo thevarious jobs thatneeded tobedone.ShewasalwaysherewhenIneededher.And,asthebusinessgrewoverthenexttwoyears,Elizabethtookonmoreandmoreoftheresponsibilityforthebusiness.SheworkedashardasIdid.Andsheseemedtoloveithere.Andme.Sheseemedtolovemetoo.Goodnessknows,Ilovedher.

“Andthen,oneday—itwasaWednesday,June10th,Ibelieve,atseveninthemorning—shecalledmeandtoldmeshewouldn’tbecominginanylonger.Thatshehadtakenanotherjob.Thatshecouldn’taffordtoworkforwhatIwaspayingher.Justlikethat!Icouldn’tbelievemyears.Icouldn’tbelievethatshemeant it. I thought it was a joke. I laughed, and said, ‘C’mon Elizabeth,’ orsomethinglikethat.AndElizabethsaidshewassorry.Andthenhungup!Hungup.Justhungup.

“Well,Istoodthereandwept.AndthenIfeltfear,afearIhadn’teverfeltbefore. I felt cold inside.How could this be? I thought tomyself.How couldsomeone I thought Iknewsowell, someone I trusted somuch,have suddenlybecomeastranger?Whatintheworlddidthissayaboutme?Aboutmylackofjudgment?AbouttheconversationsIshouldhavehadwithElizabethbutdidn’t?

“Butthepiesneededtoberemovedfromtheoven,andthefloorsneededtobe cleaned, and the shopprepared for opening, and so, despite the pain Iwasfeeling, the sickness in my stomach, I went to work. And I haven’t stopped

since.Thepeopleshehiredleftsoonafterward.Tobehonestwithyou,Ineverreallyhadaconnectionwiththem.TheywereElizabeth’speople.

“WhenI thinkbacknow,Iseehoweasy itwasforme todo.Howeasy itwasformetobecomeabsorbedbytheworkratherthanthepeople.AndIguesstheyknewthat.BecauseafterElizabeth left theyallseemed to regardmewithsuspicion.LikeIhadlethergowithouttellingthemorsomething.IfElizabethcouldleave,awomanlikethat,whatdiditsayaboutthemforstaying?Atleastthat’swhat Ibelieved theywere thinking.Whoknew? Iwas toodevastated toask. Since then I haven’t had the heart to hire anyone to replace them. Thethoughtof it is terrifyingtome.ThethoughtofbringingstrangersintomylifelikethatagainfeelslikeariskIdon’twanttotake.AndsoIdoitallmyself.AndIknowIcan’tdoitmuchlonger.Besideswhich,what’sthepoint?”

Sarahsigheddeeplyandlookedacrossatme.“So,there’smyComfortZone,”shesaid.“WhatdoIdoaboutthat?”“Startalloveragain—butdifferentlythistime,”Ianswered.“It’stheonlywayoutofthetrap.”

Mostofushavehadtheexperienceofbeingdisappointedbysomeoneinwhomwe have put our trust as a direct result of our indifference or lack ofunderstandingorlackofskillorlackofattention.

And most of us learn eventually, if for no other reason than because werealizethatwecan’tbeeverywhereatonce,totrustagain.

Buttrustcanonlytakeussofar.Trustalonecansetusuptorepeatthosesamedisappointingexperiences.Becausetruetrustcomesfromknowing,notfromblindfaith.Andtoknow,onemustunderstand.Andtounderstand,onemusthaveanintimateawarenessofwhatconditions

are trulypresent.Whatpeopleknowandwhat theydon’t.Whatpeopledoandwhat theydon’t.Whatpeoplewantandwhat theydon’t.Howpeopledowhattheydoandhowpeopledon’t.Whopeopleareandwhotheyaren’t.

Inshort,SarahtrustedElizabethblindly.SarahsimplywantedtobelieveinElizabeth.Itwaseasierthatway.BecauseifSarahtrustedblindly,ifshesimplyleftitalluptochance,shewouldn’tbeforcedtodotheworkshedidn’twanttodo.TheworkofcomingtoagreementaboutwhatherrelationshipwithElizabethwasabout.Whatroleeachofthemwastheretoplay.WhatitmeantforSarahtobeanownerandElizabeth tobeheremployee.What itmeant forSarah tosetouttherulesofthegamethatshewasexpectingElizabethtoplay.

Because Sarah didn’t feel comfortable in this new role, this role of theowner, this role of The Entrepreneur, this role of a businessperson, she lefteverythinguptochance.Sheabdicatedheraccountabilityasanownerandtookon the role of just another employee. She avoided fully participating in herrelationship with Elizabeth, and, in the process, created a dynamic betweenherself andher employeebuilt on aweak structure.Anomission that foretoldElizabeth’sinevitabledepartureandSarah’sinevitablepain.

Icertainlydidn’tneedtotellSarahthatshehadnoonetoblamebutherself.Ijustneededtofindtherightwaytoshowherhowshecoulddoitdifferentlythenexttime.

“Thenexttime,”Isaid,“you’llknowthatyourbusinessisdestinedtogrow,and that once it does your job is going to be significantly different. For now,that’sallyouneed.

“Small,smaller,smallest.Howbigissmall?Oneperson?Tenpeople?Sixtypeople?Onehundredfiftypeople?ToaFortune500company,aFortune1,000company is small. To a Fortune 1,000 company, a Fortune 3,000 company issmall.Toaten-personcompany,atwo-personcompanyissmall.

“Thetruequestionisnothowsmallabusinessshouldbebuthowbig.Howbig can your business naturally become, with the operative word beingnaturally?

“Because,whatever that size is, any limitation you place on its growth isunnatural,shapednotbythemarketorbyyourlackofcapital(eventhoughthatmay play a part) but by your own personal limitations. Your lack of skill,knowledge, and experience, and, most of all, passion, for growing a healthy,functionallydynamic,extraordinarybusiness.

“Inthisregard,‘gettingsmall’is,ratherthananintentionalact,areactiontothe pain and fear induced by uncontrolled and uncontrollable growth, both ofwhich could have been anticipated provided the owner had been prepared tofacilitatethegrowthinabalanced,healthy,proactiveway.

“But to do that requires intention at the outset of the business,entrepreneurial intention,aswell asawillingness—no,a truepassion—for thepersonal transformationsuchaprocesswill call for:accessingnewskills,newunderstanding,newknowledge,newemotionaldepth,newwisdom.

“YoumightsaythatthechaosthattakesplaceineveryAdolescentbusinesscanproduceoneof twooutcomes for the small business ownerwho suddenlyfinds himself in the middle of it. For the truly passionate owner, Don Juan’s‘warrior,’itcanprovidehimwithanopportunitytotransmutehispersonal‘lead’into ‘gold.’ Or the fires can become so fearsome that he shrinks back to the‘safety’ofthesmallerlifehecamefromnottoolongbefore—the‘lead’I’vegot

isbetterthanthe‘gold’Ihaven’tgot.Bettersafethansorry.“So,inthiscontext,abusinessthat‘getssmallagain’isabusinessreduced

tothelevelofitsowner’spersonalresistancetochange,toitsowner’sComfortZone, in which the owner waits and works, works and waits, hoping forsomethingpositivetohappen.

“This condition reminds me of a line from Samuel Beckett’sWaiting forGodot inwhichEstragon, havingwaited around for days hoping themythicalGodot will arrive and relieve him of his misery, turns to his companion,Vladimir,andsays,‘Ican’tgoonlikethis.’TowhichVladimirreplies,‘That’swhatyouthink.’

“So,ifthenaturaldispositionofeverybusinessistoeithergroworcontract—and it is; there is no denying that—then ‘getting small again’ is the naturalinclination of The Technician-turned-owner to shrink from the unknown, toshrinkfromthebusinessshehascreated,toconstrainthebusinessfromcreatingdemands on her to which she feels hopelessly inadequate to respondappropriately.

“Inshort,businessesthat‘getsmallagain’die.Theyliterallyimplodeuponthemselves.

“Notrightaway,necessarily.Butovertimetheydie.Atrophyanddie.Theycan’tdoanythingelse.

“And the result of that is enormous disappointment, lost investment,shatteredlives,notonlytheowner’sbutthoseoftheemployees,thefamiliesofboththeownerandtheemployees,thecustomers,thesuppliers,thelenders,allofthosepeoplewhoseliveshavesomehowbeenintertwinedwiththelifeofthissmallbusiness,andnowwithitsdeath.

“Thetragedyisthatallthiscouldhavebeenpreventedhadthebusinessbeenstarteddifferently,hadTheTechniciansufferingfromanEntrepreneurialSeizureapproachedthebusinessinabroader,moreentrepreneurialway.

“Ofcourse,youcouldn’thaveanticipatedeverything thathashappened toyou so far in your business,” I said toSarah, “but you could have anticipatedmuchofit.

“YoucouldhaveanticipatedwhathappenedtoElizabethandthepeopleshehired.

“Youcouldhaveanticipated thatpeoplewould loveyourpiesand that thebusinesswouldthereforehavetogrow.

“You could have anticipated that growth would bring additionalresponsibilities,additionalskillsrequired,additionalcapitalneededtorespondtotheaddeddemandthatgrowthalwaysplacesonabusinessandonpeople.

“In short,while you couldn’t have known everything, you could certainly

haveknownmorethanyoudo.“Andthat’syour job,Sarah!The jobof theowner.Andifyoudon’tdo it,

nobodywill.“Simplyput,yourjobistoprepareyourselfandyourbusinessforgrowth.“To educate yourself sufficiently so that, as your business grows, the

business’sfoundationandstructurecancarrytheadditionalweight.“And as awesome a responsibility as thatmay seem to you, you have no

otherchoice—ifyourbusinessistothrive,thatis.“It’suptoyoutodictateyourbusiness’srateofgrowthasbestyoucanby

understanding thekeyprocesses that need tobeperformed, thekeyobjectivesthatneedtobeachieved,thekeypositionyouareaimingyourbusinesstoholdinthemarketplace.

“Byaskingtherightquestions,suchas:WheredoIwishtobe?WhendoIwish to be there?Howmuch capitalwill that take?Howmany people, doingwhatwork,andhow?Whattechnologywillberequired?Howlargeaspacewillbeneeded,atBenchmarkOne,atBenchmarkTwo,atBenchmarkThree?

“Will you bewrong at times?Will youmakemistakes?Will you changeyourmind?Ofcourseyouwill!Moreoftenthannot.But,doneright,youwillalsohavecontingencyplansinplace.Bestcase,worstcase.Andsometimesyouwillsimplyflybytheseatofyourpants;youwillgowiththeflow,followyourintuition.

“Butallthewhile,evenwhileyou’reguessing,thekeyistoplan,envision,and articulate what you see in the future both for yourself and for youremployees.Becauseifyoudon’tarticulateit—Imean,writeitdown,clearly,soothers can understand it—you don’t own it!And do you know that in all theyearsI’vebeendoingthisworkwithsmallbusinessowners,outofthethousandsuponthousandswe’vemet,therehaveonlybeenafewwhohadanyplanatall!Nothingwritten,nothingcommittedtopaper,nothingconcreteatall.

“Remember,Sarah,anyplanisbetterthannoplan.“Becauseintheprocessofdefiningthefuture,theplanbeginstoshapeitself

toreality,boththerealityoftheworldoutthereandtherealityyouareabletocreateinhere.

“And as those two realities merge, they form a new reality—call it yourreality, call it the unique invention that is uniquely yours, the reality of yourmind and your heart unitingwith all the elements of your business, and yourbusinesswith theworld, shaping, designing, collaborating, to form somethingthatneverexistedbeforeinexactlythatway.

“And that is the sign of aMature company.AMature company is starteddifferently than all the rest. A Mature company is founded on a broader

perspective, an entrepreneurial perspective, a more intelligent point of view.Aboutbuildingabusinessthatworksnotbecauseofyoubutwithoutyou.

“Andbecauseitstartsthatway,it ismorelikelytocontinuethatway.Andtherein resides the true difference between an Adolescent company, whereeverythingis leftuptochance,andaMaturecompany,where there isavisionagainstwhichthepresentisshaped.

“ButI’mgettingaheadofmyself,”Isaid.“Theimportantthingisthatyourexperience could have been completely different. That there is an entirelydifferentwaytostartabusinessthanthewayyouandmostTechnicians-turned-business-ownersstarttheirs.Andthatanyonecandoit!”

IlookedatSarahandcaughttheglowinhereyes.“I’minspiredbytheideaofit,”shesaidsoftly.“Allofasuddeneverything

thathaslookedsodarkfeelslightagain.”But, no soonerhad shebegun to let herself thrill to the ideaofbuilding a

business that works that some other thought—a dark thought—captured herattention.

“ButwhatdoIdoaboutElizabeth?”shesaid.

“What do I do aboutElizabeth?”Thequestion everyTechnician-turned-ownerwantsanswered.

Asthough,byansweringthatquestion,everythingelsewillbeanswered.As if the answer to all of the frustrations most small business owners

experienceissomehowtiedtoparticularpeople.As ifwithin thecomplexityofSarah’s relationshipwithElizabeth—within

all relationships for that matter—there exists some key which, once turned,couldmakeeverythingrightagain.

Well,I’mnogenius,butIknowthatthereisnosuchkey.There’s just us, you andme, fumbling about in our often inadequateway,

constantlybeingsurprisedbyourownandotherpeople’sbehavior,howbadlywe’ve done it, how out of touch with our own and others’ feelings we’vediscoveredourselvestobe.

IlookedSarahintheeye,gotveryquiet,andsaid,“Sarah,therealquestionisnotwhattodoaboutElizabethbutwhatdoyoudoaboutalltheElizabethsinyourfuture?

“Youdidthebestyoucould.AndsodidElizabeth.It’stimetogetonwithyourlife.Tobuildyourbusinessinanenliveningway.Areyouready?”

Sarahsmiledatme,hereyespositivelygleaming.

“I’mreadyifyouare,”shesaid.“Thenlet’stalkaboutMaturityforaminute,”Isaid.“Becausethat’swhereyourfuturelies.”

MATURITYANDTHEENTREPRENEURIALPERSPECTIVE

Theyseethepattern,understandtheorder,experiencethevision.

PeterDrucker

TheNewSociety

Maturity, the third phase of a company’s growth, is exemplified by the bestbusinesses in theworld.BusinessessuchasMcDonald’s,FederalExpress,andDisney.

AMaturebusinessknowshowitgottobewhereitis,andwhatitmustdotogetwhereitwantstogo.

Therefore,Maturityisnotaninevitableresultofthefirsttwophases.Itisnottheendproductofaserialprocess,beginningwithInfancyandmovingthroughAdolescence.

No,companieslikeMcDonald’s,FederalExpress,andDisneydidn’tendupasMaturecompanies.Theystartedout thatway!Thepeoplewhostarted themhadatotallydifferentperspectiveaboutwhatabusinessisandwhyitworks.

Thepersonwho launcheshisbusiness as aMature companymust alsogothroughInfancyandAdolescence.Hesimplygoes through theminanentirelydifferentway.

It’shisperspectivethatmakesthedifference.HisEntrepreneurialPerspective.

TheEntrepreneurialPerspective

IonceheardastoryaboutTomWatson,thefounderofIBM.Askedtowhat

heattributedthephenomenalsuccessofIBM,heissaidtohaveanswered:

IBMiswhatitistodayforthreespecialreasons.Thefirstreasonisthat,attheverybeginning,Ihadaveryclearpictureofwhatthecompanywouldlooklikewhenitwasfinallydone.YoumightsayIhadamodelinmymindofwhatitwouldlooklikewhenthedream—myvision—wasinplace.

ThesecondreasonwasthatonceIhadthatpicture,Ithenaskedmyselfhowacompanywhichlookedlikethatwouldhavetoact.IthencreatedapictureofhowIBMwouldactwhenitwasfinallydone.

The third reason IBM has been so successful was that once I had apictureofhowIBMwouldlookwhenthedreamwasinplaceandhowsuchacompanywouldhavetoact,I thenrealizedthat,unlesswebegantoactthatwayfromtheverybeginning,wewouldnevergetthere.

Inotherwords, I realized that for IBM tobecomeagreat company itwouldhavetoactlikeagreatcompanylongbeforeiteverbecameone.

From the very outset, IBM was fashioned after the template of myvision.Andeachandeverydayweattempted tomodel thecompanyafterthattemplate.Attheendofeachday,weaskedourselveshowwellwedid,discovered the disparity between where we were and where we hadcommittedourselvestobe,and,atthestartofthefollowingday,setouttomakeupforthedifference.

EverydayatIBMwasadaydevotedtobusinessdevelopment,notdoingbusiness.

Wedidn’tdobusinessatIBM,webuiltone

Now,it’sbeenmorethanthirtyyearssinceTomWatsonSr.spokeaboutthereasons for IBM’s success and I recognize what people might say about this$88.4billioncompany.Thatit’sabusinessintrouble.Thatit’slostitsway.Thatit’s hardly an exemplar for any business owner to follow.But ifWatsonwerealivetoday,I’mcertainitwouldbedifferent.I’mcertainthattheentrepreneurialgeniusthatgaverisetoIBMwould,ifitwerepresenttoday—andIdon’tknowthat it isn’t, but all the signs are there—be engaged in the reinvention of thecompanyassurelyasithadbeenreinventedtimeandtimeagain,tore-createitsfutureasthefuturedemanded.

Inshort,mystorytellermaynothavehadWatson’swordsexactlyverbatim,

butwhatthestorytellsusisveryimportant.Itrevealsanunderstandingofwhatmakesagreatbusinessgreat.It also tells us what makes all other businesses survivable at their best;

intolerableattheirworst.It tells us that the very best businesses are fashioned after a model of a

businessthatworks.It tells us that it is the Entrepreneurial Perspective that says it’s not the

commodityortheworkitselfthatisimportant.What’simportantisthebusiness:howitlooks,howitacts,howitdoeswhatitisintendedtodo.

ItsaysthatTomWatsonSr.hadapassionfortheenterpriseitself.Andthat,unfortunately,mostpeoplewhogointobusinessdon’t.Thatmostpeoplewhogointobusinessdon’thaveamodelofabusinessthat

works, but of work itself, a Technician’s Perspective, which differs from theEntrepreneurialPerspectiveinthefollowingways:

The Entrepreneurial Perspective asks the question: “How must thebusinesswork?”TheTechnician’sPerspective asks: “Whatworkhastobedone?”The Entrepreneurial Perspective sees the business as a system forproducingoutsideresults—forthecustomer—resultinginprofits.TheTechnician’sPerspectiveseesthebusinessasaplaceinwhichpeoplework to produce inside results—for The Technician—producingincome.TheEntrepreneurialPerspectivestartswithapictureofawell-definedfuture, and then comes back to the present with the intention ofchanging it to match the vision. The Technician’s Perspective startswiththepresent,andthenlooksforwardtoanuncertainfuturewiththehopeofkeepingitmuchlikethepresent.TheEntrepreneurialPerspectiveenvisions thebusiness in itsentirety,fromwhichisderiveditsparts.TheTechnician’sPerspectiveenvisionsthebusinessinparts,fromwhichisconstructedthewhole.TheEntrepreneurialPerspective is an integratedvision of theworld.TheTechnician’sPerspectiveisafragmentedvisionoftheworld.To The Entrepreneur, the present-day world is modeled after hisvision.ToTheTechnician,thefutureismodeledafterthepresent-dayworld.

IsitanywonderthattheEntrepreneurialPerspectiveisabsolutelynecessaryfor the creationof a great business,whileTheTechnician’s produces its exactopposite?

The Entrepreneurial Perspective adopts a wider, more expansive scale. Itviews the business as a network of seamlessly integrated components, eachcontributing to some larger pattern that comes together in such a way as toproduceaspecificallyplannedresult,asystematicwayofdoingbusiness.

Each step in the development of such a business is measurable, if notquantitatively,atleast,qualitatively.There’sastandardforthebusiness,aform,awayofbeingthatcanbetranslatedintothingstodotodaythatbestexemplifyit.Thebusiness operates according to articulated rules andprinciples. It has aclear,recognizableform.

With The Technician’s Perspective, however, the scale is narrower, moreinhibited,confinedprincipallytotheworkbeingdone.

Asaresult,TheTechnician’sbusinessbecomesincreasinglyoppressive,lessexhilarating,closedofffromthelargerworldoutside.

Hisbusinessisreducedtostepsthatfailtotakehimanywhereotherthantothenextstep,itselfnothingmorethanareplicaoftheonebeforeit.

Routinebecomestheorderoftheday.Work is done for work’s sake alone, forsaking any higher purpose, any

meaningforwhatneedstobedoneotherthantheneedtojustdoit.TheTechnicianseesnoconnectionbetweenwherehisbusinessisgoingand

whereitisnow.Lacking the grander scale and visionary guidance manifest in the

EntrepreneurialModel,TheTechnicianislefttoconstructamodeleachstepoftheway.

But the only model from which to construct it is the model of pastexperience, the model of work. Exactly the opposite of what he needs if thebusinessistofreehimoftheworkhe’sgrownaccustomedtodoing.

TheEntrepreneurialModel

What does The Entrepreneur see off in the distance that The Technicianfindssodifficulttosee?WhatexactlyistheEntrepreneurialModel?

It’s a model of a business that fulfills the perceived needs of a specific

segmentofcustomersinaninnovativeway.TheEntrepreneurialModellooksatabusinessasifitwereaproduct,sitting

ona shelf andcompeting for thecustomer’sattentionagainst awhole shelfofcompetingproducts(orbusinesses).

Saidanotherway,theEntrepreneurialModelhaslesstodowithwhat’sdonein abusiness andmore todowithhow it’s done.The commodity isn’twhat’simportant—thewayit’sdeliveredis.

WhenTheEntrepreneurcreates themodel,he surveys theworldandasks:“Where is the opportunity?” Having identified it, he then goes back to thedrawing board and constructs a solution to the frustrations he finds among acertaingroupofcustomers.Asolutionintheformofabusinessthatlooksandacts inaveryspecificway, theway thecustomerneeds it to lookandact,notTheEntrepreneur.

“Howwillmybusinesslooktothecustomer?”TheEntrepreneurasks.“Howwillmybusinessstandoutfromalltherest?”

Thus,theEntrepreneurialModeldoesnotstartwithapictureofthebusinesstobecreatedbutofthecustomerforwhomthebusinessistobecreated.

Itunderstandsthatwithoutaclearpictureofthatcustomer,nobusinesscansucceed.

TheTechnician,ontheotherhand,looksinwardly, todefinehisskills,andonlylooksoutwardlyafterwardtoask,“HowcanIsellthem?”

Theresultingbusinessalmost inevitablyfocuseson the thing itsells ratherthanthewaythebusinessgoesaboutitorthecustomertowhomit’stobesold.

SuchabusinessisdesignedtosatisfyTheTechnicianwhocreatedit,notthecustomer.

ToTheEntrepreneur,thebusinessistheproduct.ToTheTechnician,theproductiswhathedeliverstothecustomer.ToTheTechnician,thecustomerisalwaysaproblem.Becausethecustomer

neverseemstowantwhatTheTechnicianhas toofferat thepriceatwhichheoffersit.

To The Entrepreneur, however, the customer is always an opportunity.BecauseTheEntrepreneurknowsthatwithinthecustomerisacontinuingparadeofchangingwantsbeggingtobesatisfied.AllTheEntrepreneurhastodoisfindoutwhatthosewantsareandwhattheywillbeinthefuture.

As a result, the world is a continuing surprise, a treasure hunt to TheEntrepreneur.

ToTheTechnician,however,theworldisaplacethatneverseemstolethimdowhathewants todo; it rarely applaudshis efforts; it rarely appreciateshiswork; it rarely, if ever, appreciates him. ToTheTechnician, theworld always

wantssomethinghedoesn’tknowhowtogiveit.Thequestionthenbecomes,howcanweintroducetheentrepreneurialmodel

toTheTechnicianinsuchawaythathecanunderstanditandutilizeit?Theansweris,unfortunately,wecan’t.TheTechnicianisn’tinterested.TheTechnicianhasotherthingstodo.Ifweare tobe successfulat this,whatwemustdo, instead, is togive the

undeveloped Entrepreneur in each of us the information he needs to growbeyondthelimitationsofTheTechnician’sComfortZonesoastoexperienceavisionofabusinessthatworks.

Whatwemustdo,instead,istoprovideourinnerentrepreneurwithamodelof a business that works, a model that is so exciting that it stimulates ourentrepreneurial personality—our innovative side—to break free of TheTechnician’sbondsonceandforall.

What we must do, instead, is discover a model that sparks theentrepreneurialimaginationineachofuswithsucharesoundingshockthatbythetimeTheTechnicianwakesuptothefactitwillbetoolate,TheEntrepreneurwillbewellonhisway.

But,atthesametime,ifthemodelistowork,ifthemodelistoawakenTheEntrepreneur within each of us to begin to rebuild our businesses around theEntrepreneurialPerspective they sodesperatelyneed to flourish,TheManagerandTheTechnicianneedtheirownmodels.

Because ifTheEntrepreneurdrives thebusiness,TheManagermustmakecertainithasthenecessaryfuelforsustenance,andthattheengineandchassisareinagoodstateofrepair.

IfTheTechnicianistobesatisfied,ontheotherhand,theremustbeamodelthat provides himwithwork that satisfies his need for direct interactionwitheverynutandbolt.

In short, for thisbusinessmodelofours towork, itmustbebalancedandinclusive so thatTheEntrepreneur,TheManager, andTheTechnician all findtheirnaturalplacewithinit,sothattheyallfindtherightworktodo.

Tofindsuchamodel, letusexaminearevolutionarydevelopmentthathastransformedAmericansmallbusinessinanastonishingway.

IcallittheTurn-KeyRevolution.

ItwastimeforSarahtoopenherstore.Andwestillhadalotofworktodo.

“I’ll come back tonight,” I said. “Can I answer any questions before I

leave?”“Yes,”Sarahsmiled.“Howsooncanwegetstarted?”

Formoreinformation,visitusatwww.e-myth.com

PARTII

TheTurn-KeyRevolution:ANewViewofBusiness

THETURN-KEYREVOLUTION

Systems theory looks at the world in terms of the interrelatedness of allphenomena, and in this framework an integratedwholewhose propertiescannotbereducedtothoseofitspartsiscalledasystem.

FritjofCapra

TheTurningPoint

The Industrial Revolution, the Technological Revolution, the InformationExplosionareallfamiliarphenomenaintoday’sworld.Thereisnoquestionoftheimpacteachhashadonourlives.

IfaskedtodescribetheTurn-KeyRevolution,however,mostpeoplewouldsimplyrespondwithablankstare.

YettheimpactoftheTurn-KeyRevolutiononAmericansmallbusiness,andtheinferenceswecandrawaboutthatimpactforthefuture,areasprofoundasanyofthephenomenacitedabove.

ForattheheartoftheTurn-KeyRevolutionisawayofdoingbusinessthathas the power to dramatically transform any small business—indeed, anybusiness, nomatterwhat its size—from a condition of chaos and disease to acondition of order, excitement, and continuous growth. It is the Turn-KeyRevolution that provides us with that illusive key to the development of anextraordinarybusiness:theultimatelybalancedmodelofabusinessthatworks.

TheFranchisePhenomenon

It all started in 1952 when a fifty-two-year-old salesman walked into ahamburger stand in San Bernardino, California, to sell the two brothers whoowneditamilkshakemachine.

Whathesawtherewasamiracle.Atleastthat’showRayKroc,themilkshakemachinesalesman,mighthave

described it. For he had never seen anything like that very firstMacDonald’s(latertobecomeMcDonald’s)hamburgerstand.

ItworkedlikeaSwisswatch!Hamburgers were produced in a way he’d never seen before—quickly,

efficiently,inexpensively,andidentically.Bestofall,anyonecoulddoit.Hewatchedhighschoolkidsworkingwithprecisionunderthesupervision

of theowners,happily responding to the long linesofcustomersqueuedup infrontofthestand.

It became apparent to Ray Kroc that what the MacDonald brothers hadcreatedwasnotjustanotherhamburgerstandbutamoneymachine!

Soonafterthatfirstvisit,andpossessedbyapassionhehadneverfeltquitelike that before, Ray Kroc convinced Mac and Jim MacDonald to let himfranchisetheirmethod.

Twelveyearsandseveralmillionhamburgerslater,heboughtthemoutandwent on to create the largest retail prepared food distribution system in theworld.

“TheMostSuccessfulSmallBusinessintheWorld”

That’swhatMcDonald’scallsitselftoday.Andforgoodreason.BecausethesuccessofMcDonald’sistrulystaggering.Thinkaboutit.Inlessthanfortyyears,RayKroc’sMcDonald’shasbecome

a$40-billion-a-yearbusiness,with28,707restaurantsworldwide—andgrowinginnumbereveryminute—servingfoodtomorethan43millionpeopleeverydayin 120 countries, representing more than 10 percent of the gross restaurantreceiptsinAmerica!

TheaverageMcDonald’srestaurantproducesmorethan$2millioninannualsales,andismoreprofitablethanalmostanyotherretailbusinessintheworld,withanaverage17percentpretaxnetprofit.

But Ray Kroc created much more than just a fantastically successful

business.Hecreatedthemodeluponwhichanentiregenerationofentrepreneurshave since built their fortunes—amodel thatwas the genesis of the franchisephenomenon.

It started as a tricklewhen a few entrepreneurs began to experimentwithKroc’s formula for success. But it wasn’t long before the trickle turned intoNiagaraFalls!

In 2000, there were 320,000 franchised businesses in 75 industries.Franchises produce $1-trillion in sales each year—almost 50 percent of everyretaildollarspentinthenation—andhadmorethan8millionfull-andpart-timepeople,thelargestemployerofhighschoolyouthinthecountry’seconomy.

ButthegeniusofMcDonald’sisn’tfranchisingitself.Thefranchisehasbeenaround for more than a hundred years. Many companies—Coca-Cola andGeneralMotorsamongthem—haveutilizedfranchisingasaneffectivemethodof distribution to reach broadly expanding markets inexpensively. The truegeniusofRayKroc’sMcDonald’sistheBusinessFormatFranchise.

It is the Business Format Franchise that has revolutionized Americanbusiness.

It is the Business Format Franchise, with one new franchise opening itsdoors every eight minutes of every single business day, that has spawned somuchofthesuccessofthefranchisephenomenonoverthepastfortyyears.

And, according to studies conducted by the U.S. Commerce Departmentfrom1971to1987,lessthan5percentoffranchiseshavebeenterminatedonanannualbasis,or25percentinfiveyears.

Compare that statistic to the more than 80-percent failure rate ofindependentlyownedbusinesses,andyoucanimmediatelyunderstandthepowerof the Turn-Key Revolution in our economy, and the contribution that theBusiness Format Franchise has made to it and the future success of yourbusiness.

TurningtheKey:TheBusinessFormatFranchise

Theearlyfranchisebusinesses,manyofwhichstillexist,werecalled“tradename”franchises.

Under this system, the franchisor licenses the right to small companies tomarketitsnationallyknownproductslocally.

But the Business Format Franchise moves a step beyond the trade namefranchise.

The Business Format Franchise not only lends its name to the smallerenterprise but it also provides the franchisee with an entire system of doingbusiness.

AndinthatdifferenceliesthetruesignificanceoftheTurn-KeyRevolutionanditsphenomenalsuccess.

TheTurn-KeyRevolutionandtheBusinessFormatFranchisewerebornofabeliefthatrunscountertowhatmostbusinessfoundersinthiscountrybelieve.

Mostbusinessfoundersbelievethatthesuccessofabusinessresidesinthesuccessoftheproductitsells.

Tothetradenamefranchisor,thevalueofthefranchiseliesinthevalueofthebrandnamethatitislicensing:Cadillac,Mercedes,Coca-Cola.

Therewasatimewhenthatbeliefwastrue,butitisn’tanymore.Inaworldwhere brand names proliferate like snowflakes in a Minnesota blizzard, itbecomesmoreandmoredifficult—andinfinitelymoreexpensive—toestablishasecurepositionwithabrandnameandexpecttokeepit.

Asaresult,tradenamefranchiseshavebeendecliningoverthesameperiodthatfranchisingingeneralhasbeenexplodingatanunprecedentedrate.

ItistheBusinessFormatFranchisethathasaccountedforthatgrowth.Because theBusiness Format Franchise is built on the belief that the true

productofabusinessisnotwhatitsellsbuthowitsellsit.Thetrueproductofabusinessisthebusinessitself.WhatRayKrocunderstoodatMcDonald’swas that thehamburgerwasn’t

hisproduct.McDonald’swas.Andhebelievedthatforamostimportantreason.

SellingtheBusinessInsteadoftheProduct

RayKrocwas theconsummateentrepreneur.And likemost entrepreneurs,hesufferedfromonemajorliability.Hehadahugedreamandverylittlemoney.

Enterthefranchisee.ThefranchiseebecamethevehicleforRayKroctorealizehisdream.Atthatpoint,RayKrocbegantolookathisbusinessastheproduct,andat

thefranchiseeashisfirst,last,andmostimportantcustomer.For the franchisee wasn’t interested in hamburgers or french fries or

milkshakes;hewasinterestedinthebusiness.Drivenbyhisdesiretobuyabusiness,thefranchiseeonlywantedtoknow

onething:“Doesitwork?”

RayKroc’smost important concern then became how tomake certain hisbusinesswouldworkbetterthananyother.

IfMcDonald’swas to fulfill thedreamhehad for it, the franchiseewouldhavetobewillingtobuyit.

AndtheonlywayRayKroccouldassurehimselfofthatwastomakecertainthatMcDonald’sworkedbetterthananyoftheotherbusinessproductsaround.

At the outset, Ray Kroc wasn’t just competing with other hamburgerbusinesses—hewascompetingwitheveryotherbusinessopportunityaround!

But there was a second reason that Ray Kroc had for making certainMcDonald’swouldwork.

Given the failure rate of most small businesses, he must have realized acrucialfact:forMcDonald’stobeapredictablesuccess,thebusinesswouldhaveto work, because the franchisee, if left to his own devices, most assuredlywouldn’t!

Onceheunderstoodthis,RayKroc’sproblembecamehisopportunity.Forcedtocreateabusinessthatworkedinordertosellit,healsocreateda

businessthatwouldworkonceitwassold,nomatterwhoboughtit.Armedwith that realization, he set about the task of creating a foolproof,

predictablebusiness.Asystems-dependentbusiness,notapeople-dependentbusiness.Abusinessthatcouldworkwithouthim.Unlikemostsmallbusinessownersbeforehim—andsince—RayKrocwent

toworkonhisbusiness,notinit.He began to think about his business like an engineer working on a pre-

productionprototypeofamass-produceableproduct.He began to reengineer McDonald’s decades before the word and the

processcameintofashion.HebegantothinkaboutMcDonald’sjustlikeHenryFordmusthavethought

abouttheModelT.Howcouldthecomponentsoftheprototypebeconstructedsothatitcould

beassembledataverylowcostwithtotallyinterchangeableparts?How could the components be constructed so that the resulting business

system could be replicated over and over again, each business working—justliketheModelT—asreliablyasthethousandsthatprecededit?

What Ray Kroc did was to apply the thinking behind the IndustrialRevolution to the process of Business Development, and to a degree neverbeforeexperiencedinabusinessenterprise.

Thebusiness-as-a-productwouldonlysellifitworked.Andtheonlywaytomakecertainitwouldworkinthehandsofafranchiseeanywhereintheworld

wouldbetobuilditoutofperfectlypredictablecomponentsthatcouldbetestedinaprototypelongbeforeevergoingintomassproduction.

Therein lies thesecretbehind thestunningsuccessof theBusinessFormatFranchise,thelaunchingpadfortheTurn-KeyRevolution.

ThatsecretistheFranchisePrototype.It is in the Franchise Prototype that every successful franchisor builds his

future.ItisintheFranchisePrototypethateveryextraordinaryfranchisorplantsthe

seedsofhisfortune.AnditisintheFranchisePrototypethatyoucanfindthemodelyouneedto

makeyourbusinesswork.

SarahandIcouldn’thavepickedabettertimetohavethisconversation.

IfshehadeverfelttheweightofbeingaTechnician-turned-business-owner,caughtupinthedoingofherbusinessandtheinordinatepriceshewaspayingforit,itwasrightnow.

Itwasteno’clockatnight.Asusual,shehadhadatumultuousday.Herfacewasflushwiththeexertionofmoppingthefloors,bundlingandtossingoutthetrash,preparingtheovensforthenextday,cleaningthecounterstotheiroriginalhigh luster—inaddition to a full dayofwaitingoncustomers; servinguppie,coffee,andtea;washing,drying,andstackingplates,cups,saucers;andshiningthesilver.

Andyet,withall thathadgoneon in theshop thatday,youcouldn’thaveknownit;for,asalways,theshopwasimpeccable.And,despitethecosttoherofkeepingitthatway,Icouldn’thelpbutnoticethedeepsatisfactionSarahfeltasshesurveyedherdomain.Butshewasobviouslytired.

We pulled two chairs up to a table and quietly sipped the tea she hadpreparedforus.Thelargeclocktickedemphaticallyonthewall,punctuatingoursilence. An occasional car drove by the shop. People walked by the shop’swindows,occasionallylookingintotheshopastheycontinuedontheirjourneyintothenight.

IwaitedforasignfromSarahthatshewasready.Finally,shebeganthoughtfullyandquietly.“YoutalkaboutMcDonald’sas

anexampletobemodeled.I’mnotsureIagreewithyouabout that.Iknowifmyauntwereheretoday,shewouldthinkofMcDonald’sasexactlytheoppositeofwhatyou’vesuggesteditis.Talktomeaboutthat,”shesaid.“I’minterestedinhowyouwouldrespondtomyaunt,aboutwhatyouwouldsaytoher.”

“Youknow,Sarah,”Ibegan,“Icansensethatsomethinghasshiftedinyoutoday.Somethingimportant.Icansensealsofromthetoneofyourquestionthatyou’re truly interested in pursuing this question about McDonald’s, and I’minspiredtoengageinthequestionwithyouatthedeepestlevel.Iwanttothankyouforthat.

“It’strue,manysmallbusinessownersatfirstmisunderstandmypointaboutMcDonald’s.Theyassociatefastfoodwithlowquality.Theyinfer,then,thatbysettingMcDonald’supasanexample,I’msuggestingthatonecanbeincrediblysuccessful in business despite the seemingly low quality of the productdelivered.When exactly the opposite is true.But, letmeget back to that in amoment.

“Asforyouraunt,eventhoughIhavenevermether,fromthewayyouhavedescribedherIfeelIknowher.AndthisiswhatIwouldsaytoherifshewerehereaskingmethequestionherself:

“Iwould say that RayKrocwas amanwith a purpose. His purposewasclear,undiluted,andsure.Helivedinanordinaryworld,likewealldo,aworldin which most things didn’t work the way they were supposed to. AtMcDonald’s, he saw something that did work, exactly as it was supposed to,timeaftertimeaftertime.ToRayKroc,thatwasaninspiration.Infact,hewasawedbyit.Hewasasimpleman.AndhefellinlovewiththesheerenormityofthethinghecalledMcDonald’s.

“As certainly as you loved baking pies, Ray Kroc loved makingMcDonald’s.Ascertainlyasyoulovedproducinganexceptionalpie,RayKroclovedproducinganexceptionalresult,thesameway,withthesameimpact,timeaftertime.Ascertainlyasyoulovedthearoma,thesmells,thesight,thetaste,ofyour kitchen, Ray Kroc loved the aroma, the smells, the sight, the taste ofMcDonald’s.Hewasamaninlove.

“Now, from the outside in, I can understandwhyyoumight be critical ofMcDonald’s.Youmightsaythatpeopleshouldn’teatmeat.Youmightsaythatthe hamburgers could be fatter, or less fatty, or this or that. But what youcouldn’t say—what you couldnever say—is thatMcDonald’s doesn’t keep itspromise. Because it does. Better than just about any business in the world,McDonald’s,theloveofRayKroc’slife,stillkeepsitspromise,longafterRayKrochasgone.Itdeliversexactlywhatwehavecometoexpectofiteverysingletime.

“Sothat’swhyIlookuponMcDonald’sasamodelforeverysmallbusiness.“Becauseitcandoinitsmorethan28,000storeswhatmostofuscan’tdoin

one!“Andtome,that’swhatintegrityisallabout.It’saboutdoingwhatyousay

youwilldo,and,ifyoucan’t,learninghow.“If that is themeasureofan incrediblebusiness—andIbelieve it is—then

there is no more incredible business thanMcDonald’s.Who among us smallbusinessownerscansaywedothingsaswell?

“ButMcDonald’sisevenmoreimportantthanthat.“McDonald’shasnotonlycreatedanextraordinarybusiness, ithascreated

for all of us small business owners an extraordinary way to create anextraordinarybusiness.Ithascreatedamodelwecanemulate.

“And theprofound impact that thathashadonoureconomyover thepastfourdecadesisbeyondourcomprehension.

“So,Sarah’saunt,IhonestlybelieveifyouhadknownRayKroc,youwouldhavediscoveredinhimakindredspirit.

“Youwouldhave invitedhimintoyourkitchenandhewouldhave invitedyouintohis.

“Youwouldhavediscussedwithhimwithgreatpassiontheartofcreatingafine pie crust and he would have discussed with you—with just as great apassion—theartofcreatingafinefrenchfry.

“Youwouldhavesharedwithhimyoursecretforpreparingthefruit,justashe would share with you his secret for preparing the hamburger buns he solovinglydevotedhimselfto.

“Youaretwopeasinapodwithonebigexception.“You,Sarah’saunt,hadbutonekitchen inwhichyou loved towork,your

kitchen,makingyourpies,alone,orwithSarahbyyourside.“RayKrochadthousandsofkitchens,inwhichhelovedtowork,perfecting

allthetimehisabilitytotouchmillionsofpeoplewiththesamelovingattentionyou’velavishedonafew.

“YouareaTechnician,acraftsperson,wholoveswhatyoudo.“HewasanEntrepreneur,albeitstillacraftsperson,wholovedwhathedid.“Theonlydifferencebetweenthetwoofyouisanorderofmagnitude.“Soletmetellyouhowhecraftedsomethingthatsize.”

THEFRANCHISEPROTOTYPE

Precision instruments are designed to achieve an idea, dimensionalprecision,whereperfectionisimpossible.Thereisnoperfectlyshapedpartofthemotorcycleandneverwillbe,butwhenyoucomeascloseastheseinstruments takeyou, remarkable thingshappen,andyougoflyingacrossthecountrysideunderapowerthatwouldbecalledmagicifitwerenotsocompletelyrationalineveryway.

RobertM.Pirsig

ZenandtheArtofMotorcycleMaintenance

The success of the Business Format Franchise is without question the mostimportantnewsinbusiness.

Over the course of one year, Business Format Franchises have reported asuccessrateof95percent incontrast tothe50-plus-percentfailurerateofnewindependentlyownedbusinesses.Where80percentofallbusinessesfail inthefirstfiveyears,75percentofallBusinessFormatFranchisessucceed!

ThereasonforthatsuccessistheFranchisePrototype.Tothefranchisor,thePrototypebecomestheworkingmodelofthedream;it

isthedreaminmicrocosm.ThePrototypebecomestheincubatorandthenurseryforallcreativethought,thestationwherecreativityisnursedbypragmatismtogrowintoaninnovationthatworks.

TheFranchisePrototype isalso theplacewhereallassumptionsareput tothetesttoseehowwelltheyworkbeforebecomingoperationalinthebusiness.

Without it the franchise would be an impossible dream, as chaotic andundisciplinedasanybusiness.

ThePrototypeactsasabufferbetweenhypothesisandaction.Puttingideastothetestintherealworldratherthantheworldofcompetingideas.Theonlycriterionofvaluebecomestheanswertotheultimatequestion:“Doesitwork?”

Once having completed his Prototype, the franchisor then turns to thefranchiseeandsays,“Letmeshowyouhowitworks.”

Andworkitdoes.Thesystemrunsthebusiness.Thepeoplerunthesystem.IntheFranchisePrototype,thesystembecomesthesolutiontotheproblems

that have beset all businesses and all human organizations since timeimmemorial.

Thesystemintegratesalltheelementsrequiredtomakeabusinesswork.Ittransformsabusinessintoamachine,ormoreaccurately,becauseitissoalive,into an organism, driven by the integrity of its parts, all working in concerttoward a realizedobjective.And,with itsPrototype as its progenitor, itworkslikenothingelsebeforeit.

AtRayKroc’sMcDonald’s,everypossibledetailofthebusinesssystemwasfirsttestedinthePrototype,andthencontrolledtoadegreeneverbeforepossibleinapeople-intensivebusiness.

Thefrenchfrieswereleftinthewarmingbinfornomorethansevenminutestopreventsogginess.AsoggyfrenchfryisnotaMcDonald’sfrenchfry.

Hamburgerswereremovedfromthehottraysinnomorethantenminutestoretainthepropermoisture.

Thefrozenmeatpatties,preciselyidenticalinsizeandweight,wereturnedatexactlythesametimeonthegriddle.

Pickleswereplacedbyhandinasetpatternthatpreventedthemfromslidingoutandlandinginthecustomer’slap.

Foodwasservedtothecustomerinsixtysecondsorless.Discipline,standardization,andorderwerethewatchwords.Cleanlinesswas enforcedwithmeticulous attention to themost seemingly

trivialdetail.RayKrocwasdetermined that the customerwouldnot equate inexpensive

withinattentiveorcheap.Nowherehadabusinesseverpaidsomuchattentionto the little things, to the system that guaranteed the customer that herexpectationswouldbefulfilledinexactlythesamewayeverytime.

Unlike the trade name franchise before it, Ray Kroc’s system left thefranchiseewithaslittleoperatingdiscretionaspossible.

Thiswasaccomplishedbysendinghimthrougharigoroustrainingprogrambeforeeverbeingallowedtooperatethefranchise.

At McDonald’s, they called it the University of Hamburgerology, orHamburgerU.

There, thefranchisee learnednothowtomakehamburgersbuthowtorunthesystemthatmakeshamburgers—thesystembywhichMcDonald’ssatisfiedits customers every single time. The system that was to be the foundation ofMcDonald’suncommonsuccess.

Is it anywonder thatMcDonald’s calls itself “TheMost Successful SmallBusinessInTheWorld!”

Itis!Every single extraordinary detail Ray Kroc invented four decades ago is

evenmoreextraordinarytoday.WhetheritisHamburgerU,ortheplacementofpickles,ortheexactingway

inwhichthebunsarewarmedbeforeserving,orthethicknessofthepatty—allofit,today,longafterRayKrochasgone,isstillknownbythefranchiseeasthesystemattheheartofMcDonald’s.

Andjustasitwasthen,itisnow.Oncethefranchiseelearnsthesystem,heisgiventhekeytohisownbusiness.

Thus,thename:Turn-KeyOperation.Thefranchiseeis licensedtheright tousethesystem,learnshowtorunit,

andthen“turnsthekey.”Thebusinessdoestherest.Andthefranchiseesloveit!Becauseifthefranchisorhasdesignedthebusinesswell,everyproblemhas

been thought through. All that’s left for the franchisee to do is learn how tomanagethesystem.

That’swhattheFranchisePrototypeisallabout.It’s a place to conceive and perfect the system. To find out what works

becauseyou’veworkedit.The system isn’t something you bring to the business. It’s something you

derivefromtheprocessofbuildingthebusiness.TheFranchisePrototypeistheanswertotheperpetualquestion:“HowdoI

givemycustomerwhathewantswhilemaintainingcontrolofthebusinessthat’sgivingittohim?”

ToTheEntrepreneur,theFranchisePrototypeisthemediumthroughwhichhisvisiontakesformintherealworld.

To The Manager, the Franchise Prototype provides the order, thepredictability,thesystemsoimportanttohislife.

ToTheTechnician, the Prototype is a place inwhich he is free to do thethingshelovestodo—technicalwork.

And to the small business owner, the Franchise Prototype provides themeans throughwhich he can finally feed his three personalities in a balancedwaywhilecreatingabusinessthatworks.

So, now you have it: the Franchise Prototype is the model you’ve beenlookingfor.TheFranchisePrototypeisthemodelofabusinessthatworks.Thebalanced model that will satisfy The Entrepreneur, The Manager, and TheTechnicianallatonce.

Andit’sbeenthereallthetime!It’s been there at McDonald’s. And at Federal Express. And at Disney

World.AndatMrs.Field’sCookies.It’s been there at Subway Sandwiches andDomino’s Pizza andKentucky

FriedChickenandPizzaHut.It’sbeenthereatTacoBellandUPSandUniversalStudios.It’sbeenthere,waitingforyoutodiscoverit,allthistime!It’sbeenthereintheformofaProprietaryOperatingSystemattheheartof

everyextraordinarybusinessaroundyou,franchisedornot.Because,afterall,that’sallthatanyBusinessFormatFranchisereallyis.Itisaproprietarywayofdoingbusinessthatsuccessfullyandpreferentially

differentiateseveryextraordinarybusinessfromeveryoneofitscompetitors. Inthislight,everygreatbusinessintheworldisafranchise.

Thequestionis:Howdoyoubuildyours?Howdoyouputthispowerfullyliberatingideatoworkforyou?

HowdoyoucreateyourFranchisePrototype?How do you, like Ray Kroc, build a business that works predictably,

effortlessly,andprofitablyeachandeveryday?Howdoyoubuildabusinessthatworkswithoutyou?Howdoyougetfreeofyourbusinesstoliveafullerlife?Doyougetit?Doyouseewhythisissoimportant?Becauseuntilyoudoit,yourbusinesswillcontrolyourlife!Butonceyoubegin toput this idea toworkforyou,you’reon theway to

beingfree!

IcouldseethatSarahgotit.

Icouldseethattheflushonhercheeksnowhadnothingtodowiththeworkshe’dbeendoingallday.

Icouldseethatherdark,intelligent,creativeeyeswererivetedonmine,andthat the questions were bubbling within her. She was feeling excitementcontemplatingthecreationofanentrepreneurialbusiness.

Andsheknewshehadonealready.ShecoulddoinherbusinesswhatRayKrochaddoneinhis.Allsheneeded

todowaslearnhow!

WORKINGONYOURBUSINESS,NOTINIT

…formisonlyabeginning.Itisthecombinationoffeelingsandafunction;shapesandthingsthatcometooneinconnectionwiththediscoveriesmadeasonegoesintothewoodthatpullittogetherandgivemeaningtoform.

JamesKrenov

ACabinetmaker’sNotebook

It is critical that you understand the point I’m about tomake. For if you do,neitheryourbusinessnoryourlifewilleverbethesame.

Thepointis:yourbusinessisnotyourlife.Yourbusinessandyourlifearetwototallyseparatethings.Atitsbest,yourbusinessissomethingapartfromyou,ratherthanapartof

you,withitsownrulesanditsownpurposes.Anorganism,youmightsay,thatwill liveordieaccordingtohowwell itperformsitssolefunction:tofindandkeepcustomers.

Once you recognize that the purpose of your life is not to serve yourbusiness,butthattheprimarypurposeofyourbusinessistoserveyourlife,youcanthengotoworkonyourbusiness,ratherthaninit,withafullunderstandingofwhyitisabsolutelynecessaryforyoutodoso.

ThisiswhereyoucanputthemodeloftheFranchisePrototypetoworkforyou.

Whereworkingonyourbusiness rather than inyourbusinesswillbecomethecentralthemeofyourdailyactivity,theprimecatalystforeverythingyoudofromthismomentforward.

Pretend that the business you own—orwant to own—is the prototype, orwillbetheprototype,for5,000morejustlikeit.

Thatyourbusinessisgoingtoserveasthemodelfor5,000morejustlikeit.Notalmostlikeit,butjustlikeit.Perfectreplicates.Clones.Inotherwords,pretendthatyouaregoingtofranchiseyourbusiness.(Note:

Isaidpretend.I’mnotsayingthatyoushould.Thatisn’tthepointhere—unless,ofcourse,youwantittobe.)

Further, now that you know what the game is—the franchise game—understandthattherearerulestofollowifyouaretowin:

1.Themodelwillprovideconsistentvalue toyourcustomers,employees,suppliers,andlenders,beyondwhattheyexpect.2.Themodelwillbeoperatedbypeoplewiththelowestpossiblelevelofskill.3.Themodelwillstandoutasaplaceofimpeccableorder.4.AllworkinthemodelwillbedocumentedinOperationsManuals.5.Themodelwillprovideauniformlypredictableservicetothecustomer.6.Themodelwillutilizeauniformcolor,dress,andfacilitiescode.

Let’stakealookateachoftheserulesinturn.1.TheModelWillProvideConsistentValuetoYourCustomers,Employees,Suppliers,andLenders,BeyondWhatTheyExpect

Whatisvalue?How do we understand it? I would suggest that value is what people

perceiveittobe,andnothingmore.So what could your Prototype do that would not only provide consistent

valuetoyourcustomers,employees,suppliers,andlendersbutwouldprovideitbeyondtheirwildestexpectations?

ThatisthequestioneveryEntrepreneurmustask.Becauseitistheraisond’êtreofhisbusiness!It is in the understanding of value, as it impacts every personwithwhom

yourbusinesscomesintocontact,thateveryextraordinarybusinesslives.Valuecanbeawordsaidatthedoorofthebusinessasacustomerleaves.Valuecanbeanunexpectedgiftfromthebusinessarrivinginthemail.Valuecanbeawordofrecognitiontoanewrecruitforajobwelldone,or,

forthatmatter,toaseasonedsalespersonwho’sbeensuccessfulforyears.Value can be the reasonable price of your products, or the dedication you

showintheprocessofexplainingthemtoacustomerwhoneedsmorehelpthanusual.

Value can be a simple word of thanks to your banker for hisconscientiousness.

Valueisessentialtoyourbusinessandtothesatisfactionyougetfromitasitgrows.2.TheModelWillBeOperatedbyPeoplewiththeLowestPossibleLevelofSkill

Yes,Isaidlowestpossiblelevelofskill.Becauseifyourmodeldependsonhighlyskilledpeople,it’sgoingtobeimpossibletoreplicate.Suchpeopleareatapremiuminthemarketplace.They’realsoexpensive,thusraisingthepriceyouwillhavetochargeforyourproductorservice.

BylowestpossiblelevelofskillImeanthelowestpossiblelevelnecessarytofulfillthefunctionsforwhicheachisintended.Obviously,ifyoursisalegalfirm, you must have attorneys. If yours is a medical firm, you must havephysicians.Butyoudon’tneedtohirebrilliantattorneysorbrilliantphysicians.Youneedtocreatetheverybestsystemthroughwhichgoodattorneysandgoodphysicianscanbeleveragedtoproduceexquisiteresults.

The question you need to keep asking yourself is: How can I give mycustomertheresultshewantssystematicallyratherthanpersonally?Putanotherway:How can I create a businesswhose results are systems-dependent ratherthanpeople-dependent?Systems-dependentratherthanexpert-dependent.

HowcanIcreateanexpertsystemratherthanhireone?Thatisnottosaythatpeopleareunimportant.Onthecontrary,peoplebring

systemstolife.Peoplemakeitpossibleforthingsthataredesignedtoworktoproducethe

intended results.And, in theprocess, peoplewhoare systemsoriented—as allyourpeoplemustbe—learnhowtomoreeffectivelymakethingsworkforyourcustomersandforyourbusinessbylearninghowtoimprovethesystems.

It’sbeensaid,andIbelieveittobetrue,thatgreatbusinessesarenotbuiltbyextraordinarypeoplebutbyordinarypeopledoingextraordinarythings.

But for ordinary people to do extraordinary things, a system—“a way ofdoing things”—is absolutely essential in order to compensate for the disparitybetweentheskillsyourpeoplehaveandtheskillsyourbusinessneedsifitistoproduceconsistentresults.

In this context, the system becomes the tools your people use to increasetheirproductivity,togetthejobdoneinthewayitneedstogetdoneinorderforyourbusinesstosuccessfullydifferentiateitselffromyourcompetition.

It’syour job—moreaccurately, the jobofyourbusiness—todevelop thosetoolsandtoteachyourpeoplehowtousethem.

It’syourpeople’sjobtousethetoolsyou’vedevelopedandtorecommendimprovementsbasedontheirexperiencewiththem.

There’sanotherreasonforthisrule—whatIcalltheRuleofOrdinaryPeople—that says the blessing of ordinary people is that they make your jobmoredifficult.

Thetypicalownerofasmallbusinessprefershighlyskilledpeoplebecausehebelievestheymakehisjobeasier—hecansimplyleavetheworktothem.

Thatis,thetypicalsmallbusinessownerprefersManagementbyAbdicationtoManagementbyDelegation.

Unfortunately, the inevitable result of this kind of thinking is that thebusinessalsogrowstodependonthewhimsandmoodsofitspeople.

Ifthey’reinthemood,thejobgetsdone.Ifthey’renot,itdoesn’t.In this kind of business, a business that relies on discretion, “How do I

motivatemypeople?”becomestheconstantquestion.“HowdoIkeeptheminthemood?”

It is literally impossible to produce a consistent result in a business thatdepends on extraordinary people. No business can do it for long. And noextraordinarybusinesstriesto!

Because every extraordinary business knows that when you intentionallybuildyourbusinessaround theskillsofordinarypeople,youwillbe forced toask the difficult questions about how to produce a result without theextraordinaryones.

Youwillbe forced to findasystemthat leveragesyourordinarypeople tothepointwheretheycanproduceextraordinaryresultsoverandoveragain.

You will be forced to invent innovative system solutions to the peopleproblemsthathaveplaguedsmallbusinesses(andbigbusinessesaswell!)sincethebeginningoftime.

Youwillbeforcedtobuildabusinessthatworks.You will be forced to do the work of Business Development not as a

replacementforpeopledevelopmentbutasitsnecessarycorrelate.3.TheModelWillStandOutasaPlaceofImpeccableOrder

AtthecoreofRule#3istheirrepressiblefactthatinaworldofchaos,mostpeoplecraveorder.Anditdoesn’ttakeageniustoseethattheworldtodayisina stateofmassive chaos.Wars, famine, crime, violence, inflation, recession, ashifting of traditional forms of social interaction, the threat of nuclearproliferation, HIV, holocaust in all its horrific forms are all communicatedinstantlyandcontinuouslytothefixatedconsumer,toallofuswatchingTV.

AsAlvinTofflerwroteinhisrevolutionarybook,TheThirdWave,“…mostpeople surveying the world around them today see only chaos. They suffer asense of personal powerlessness and pointlessness.” He went on to say that,“Individualsneedlifestructure.Alifelackingincomprehensivestructureisanaimlesswreck.The absenceof structurebreedsbreakdown.Structureprovidestherelativelyfixedpointsofreferenceweneed.”1

It is these “relatively fixed points of reference” that an orderly businessprovidesitscustomeranditsemployeesinanotherwisedisorderlyworld.

Abusinessthatlooksorderlysaystoyourcustomerthatyourpeopleknowwhatthey’redoing.

Abusinessthatlooksorderlysaystoyourpeoplethatyouknowwhatyou’redoing.

Abusinessthatlooksorderlysaysthatwhiletheworldmaynotwork,somethingscan.

Abusinessthatlooksorderlysaystoyourcustomerthathecantrustintheresultdeliveredandassuresyourpeople that theycan trust in their futurewithyou.

Abusinessthatlooksorderlysaysthatthestructureisinplace.4.AllWorkintheModelWillBeDocumentedinOperationsManuals

Documentationsays,“Thisishowwedoithere.”Withoutdocumentation,allroutinizedworkturnsintoexceptions.Documentationprovidesyourpeoplewiththestructuretheyneedandwitha

writtenaccountofhowto“getthejobdone”inthemostefficientandeffectiveway.Itcommunicatestothenewemployees,aswellastotheold,thatthereisalogictotheworldinwhichtheyhavechosentowork,thatthereisatechnologybywhichresultsareproduced.Documentationisanaffirmationoforder.

Again fromToffler: “…formany people, a job is crucial psychologically,over and above the paycheck. By making clear demands on their time andenergy, itprovidesanelementof structurearoundwhich the restof their livescanbeorganized.”2

Theoperativewordhereisclear.Documentationprovidestheclaritystructureneedsifitistobemeaningful

toyourpeople.Throughdocumentation, structure is reduced to specificmeans rather than

generalized ends, to a literal and simplified taskTheTechnician in eachof usneedstounderstandtodothejobathand.

TheOperationsManual—therepositoryofthedocumentation—isthereforebestdescribedasacompany’sHow-to-Do-ItGuide.

Itdesignatesthepurposeofthework,specifiesthestepsneededtobetakenwhiledoing thatwork, and summarizes the standards associatedwithboth theprocessandtheresult.

YourPrototypewouldnotbeamodelwithoutone.5.TheModelWillProvideaUniformlyPredictableServicetotheCustomer

Whilethebusinessmustlookorderly,itisnotsufficient;thebusinessmustalsoactorderly.Itmustdothingsinapredictable,uniformway.

AnexperienceIhadnottoolongagoillustratesthepoint.Iwenttoabarberwho,inourfirstmeeting,gavemeoneofthebesthaircuts

I had ever had.Hewas amasterwith the scissors and used them exclusively,neverresortingtoelectricshearsassomanyothersdo.Beforecuttingmyhair,he insisted on washing it, explaining that the washing made cutting easier.Duringthehaircut,oneofhisassistantskeptmycupofcoffeefresh.Inall,theexperiencewasdelightful,soImadeanappointmenttoreturn.

When I returned, however, everything had changed. Instead of using thescissorsexclusively,heusedtheshearsabout50percentofthetime.Henotonlydidn’twashmyhairbutneverevenmentionedit.Theassistantdidbringmeacupofcoffee,butonlyonce,nevertoreturn.Nonetheless,thehaircutwasagainexcellent.

Severalweekslater,Ireturnedforathirdappointment.Thistime,thebarberdidwashmyhair,butaftercutting it,preliminary toa final trim.This timeheagainusedthescissorsexclusively,but,unlikethefirsttwotimes,nocoffeewasserved,althoughhedidaskifIwouldlikeaglassofwine.AtfirstIthoughtitmightbetheassistant’sdayoff,butshesoonappeared,busilyworkingwiththeinventorynearthefrontoftheshop.

As I left, something inme decided not to go back. It certainlywasn’t thehaircut—hedidanexcellentjob.Itwasn’tthebarber.Hewaspleasant,affable,seemedtoknowhisbusiness.Itwassomethingmoreessentialthanthat.

Therewasabsolutelynoconsistencytotheexperience.The expectations created at the first meeting were violated at each

subsequentvisit.Iwasn’tsurewhattoexpect.Andsomethinginmewantedtobesure.IwantedanexperienceIcouldrepeatbymakingthechoicetoreturn.

The unpredictability said nothing about the barber, other than that hewasconstantly—andarbitrarily—changingmyexperienceforme.Hewasincontrolofmyexperience,notI.Andhedemonstratedlittlesensitivitytotheimpactofhisbehavioronme.Hewas running thebusiness forhim,not forme.Andbydoing so, he was depriving me of the experience of making a decision topatronizehisbusinessformyownreasons,whatevertheymighthavebeen.

Itdidn’tmatterwhatIwanted.It didn’t matter that I enjoyed the sound of the scissors and somehow

equatedthemwithaprofessionalhaircut.Itdidn’tmatterthatIenjoyedbeingwaitedonbyhisassistant.It didn’t matter that I enjoyed the experience of having my hair washed

beforehesettoworkandthatIactuallybelieveditwouldimprovethequalityofthehaircut.

Iwouldhavebeenembarrassedtoaskforthesethings,letalonetogivemyreasonsforwantingthem.Theywereallsototallyemotional,soillogical.HowcouldIhaveexplainedthem,orjustifiedthem,withoutappearingtobeaboob?

Whatthebarberdidwastogivemeadelightfulexperienceandthentakeitaway.

It reminded me of my first psychology course in college. I recall theprofessor talking about the “Burnt Child” Syndrome. This iswhere a child isalternatelypunishedandrewardedfor thesamekindofbehavior.This formofbehavior in a parent can be disastrous to the child; he never knows what toexpectorhowtoact.Itcanalsobedisastroustothecustomer.

The“BurntChild,”ofcourse,hasnochoicebuttostaywiththeparent.Butthe“BurntCustomer”cangosomeplaceelse.Andhewill.

Whatyoudoinyourmodelisnotnearlyasimportantasdoingwhatyoudothesameway,eachandeverytime.6.TheModelWillUtilizeaUniformColor,Dress,andFacilitiesCode

Marketingstudiestellusthatallconsumersaremovedtoactbythecolorsandshapestheyfindinthemarketplace.

Differentconsumergroupssimplyresponddifferentlytospecificcolorsandshapes.

Believe it or not, the colors and shapes of yourmodel canmakeor breakyourbusiness!

Louis Cheskin, founder of the Color Research Institute, wrote about thepowerofcolorsandshapesinhisbook,WhyPeopleBuy.

Littlethingsthataremeaninglessfromapracticalpointofviewmayhavegreatemotionalmeaning through their symbolism. Imagesand colors areoftengreatmotivatingforces.

Sometimeagoweconductedastudyofwomenshoppinginanapparelshop.Ayoungwomanwantedtobuyablousethatwasavailableinseveralcolors.Sheheldtheblueblouseuptoherfaceandlookedintothemirror.Shewasablondeandsheknewshelookedgoodinblue.Shefingeredtheredone lovingly.She loved thecolor, she thought,butshesaid itwas toostrongandloud.Thesalesgirlremindedherthatyellowwasthefashionablecolor.Shecouldnotmakeuphermindbetween thecolor that she lookedbest in, the color she liked best, and the color in current fashion, so shesettledonagrayblouse.Itwasreportedtomeacoupleofweekslaterthatshedidn’t like thegrayblouse.“Itwasdead,” she said.Shewore itonlytwice.

Some of the other purchasers of blouses permitted one of the innerdrivestowin.Someboughtblousesbecausethecolorflatteredthem;otherschosethecolorthatwasinfashionandsometookthecolortheyliked.Eachchoseacolorthatsatisfiedthestrongesturgeorfulfilledthegreatestwish.Justthink!Allthisdeeppsychologyinthemereprocessofbuyingablouse.3

YourbusinessisthesameastheblouseinCheskin’sstory.Therearecolorsthatwork and colors that don’t. The colors you show your customermust bescientifically determined and then used throughout yourmodel—on thewalls,the floors, the ceiling, the vehicles, the invoices, your people’s clothes, thedisplays,thesigns.

Themodelmustbethoughtofasapackageforyouroneandonlyproduct—yourbusiness.

Justaswithcolors,thereareshapesthatworkandshapesthatdon’t,onyourbusinesscard,yoursigns,yourlogo,yourmerchandisedisplays.

Inonetest,Cheskinshowedthatatriangleproducedfarfewersalesthanacircle,andacrestoutproducedbothbyasignificantmargin!

Imagine, sales increasedor lost by the choice of a seeminglymeaningless

shape!Theshapeofyoursign,yourlogo,thetypestyleusedonyourbusinesscards

willhaveasignificantimpactonsaleswhetheryoucaretothinkaboutitornot!YourPrototypemustbepackagedascarefullyasanyboxofcereal.Beforewegoon,let’ssummarizewhatwe’vecoveredsofar.Gotoworkonyourbusinessratherthaninit.Gotoworkonyourbusinessasifitwerethepre-productionprototypeofa

mass-produceableproduct.Thinkofyourbusinessassomethingapart fromyourself,asaworldof its

own,asaproductofyourefforts,asamachinedesignedtofulfillaveryspecificneed,asamechanismforgivingyoumore life,asasystemof interconnectingparts,asapackageofcereal,asacanofbeans,assomethingcreatedtosatisfyyour consumers’ deeply held perceived needs, as a place that acts distinctlydifferentfromallotherplaces,asasolutiontosomebodyelse’sproblem.

Thinkofyourbusinessasanythingbutajob!Gotoworkonyourbusinessratherthaninit,andaskyourselfthefollowing

questions:

HowcanIgetmybusinesstowork,butwithoutme?How can I get my people to work, but without my constantinterference?How can I systematize my business in such a way that it could bereplicated5,000 times, so the5,000thunitwould runas smoothlyasthefirst?HowcanIownmybusiness,andstillbefreeofit?HowcanIspendmytimedoingtheworkIlovetodoratherthantheworkIhavetodo?

Ifyouaskyourselfthesequestions,you’lleventuallycomeface-to-facewiththerealproblem:thatyoudon’tknowtheanswers!

Andthat’sbeentheproblemallalong!Butnowitshouldbedifferent.Becausenowyouknowthatyoudon’tknow.

Nowyouarereadytolooktheproblemsquarelyintheface.Theproblemisn’tyourbusiness;itneverhasbeen.Theproblemisyou!

Ithasalwaysbeenyouandwillalwaysbeyou.Untilyouchange,thatis.Until you change your perspective aboutwhat a business is and how one

works.Untilyoubegintothinkaboutyourbusinessinatotallynewway.Until you accept the undeniable fact that business, even a very small

businesslikeyours,isbothanartandascience.And, like art and science, to successfully develop a serious business you

needspecificinformation.Most importantly, to successfully develop a serious business you need a

process, a practice, bywhich to obtain that information and, once obtained, amethodwithwhichtoputthatinformationtouseinyourbusinessproductively.

Whatfollowsisjustsuchamethod.A programmed approach to learningwhat needs to be learned about your

businessinordertoclimbtheproverbialladder.A proven way to the top that has been successfully implemented by

thousandsofsmallbusinessesjustlikeyours.WecallittheE-MythMasteryProgram.Andit’saprocessthatcanchangeyourlife!

Sarahlookedatmethoughtfullyforamoment,andthensaid,“Letmedescribein my own words what I heard you just say.” She folded her hands tightlytogetherbeforeheronthetable,and,asifforemphasis,leanedtowardme.

“Whatyou’resayingisthatI’mtooidentifiedwithmybusiness.ThatIneedtoseparatemyselffromit:firstinthewayIthinkaboutit,secondinthewayIfeelaboutit,andthirdinthewayIworkinit.

“AndwhatIhearyousayingisthatitisthisidentificationwithmybusiness,myTechnician’sneedtoseethebusinessasnothingmoreorlessthanme,thatiscausingmeallthepainI’mfeeling,allthefrustrationIexperiencegoingtoworkeveryday.Mybeliefthat,ifI’mgood,thebusinesswillbe.ThatifIworkhardenough, the businesswill succeed. That if I am in touchwith everything thatgoesoninthebusiness,nothingcanpossiblygowrong.

“And what I hear you saying is that in order for me to be free of myfrustration, in order to exercise true control over my business, I need todisidentifywithmybusiness. Ineed toconceiveofmybusiness in a radicallydifferentlywaythanI’maccustomedto.Ineedtoconceiveofmybusinessasaproduct.Justlikemypiesareaproduct,Ineedtothinkofmybusinesslikethat.AndifIweretothinkthatway,Iwouldsuddenlyhavetoaskthequestion:How

mustmy business-as-a-productwork in order for it to successfully attract notonlycustomersbutalsoemployeeswhowanttoworkthere?

“AndtheminuteIaskthatquestion,I’malreadydoingbusinessinatotallynewway!”

Sarahpausedforamoment,asiftoletthatlastthoughttrulysinkin.“Youknow,”shesaidquietly,“Icantrulysaythatuntilthisverymoment,I

hadneverthoughtaboutmybusinessasanideabefore.Isimplythoughtofitasajob.Aplacetogotowork.Ineverevenconsideredtherewasanotherwaytothinkaboutit.Butnow!Nowit’sgettingexciting.Anentirelynewopportunity.Thinking like this remindsme ofmy first literature class in high school.MyteacherwasMr.Roethkeandhehadanincredibleabilitytobringthesubjectofliteraturealive.BythetimeIreadthefirstassignment—itwasHuckleberryFinn—Icouldn’tputthebookdown.Thesewererealpeopleinthebook,livingouttheir lives, in real places, overcoming obstacles, terror, love, feelings.HuckleberryFinncamealivetomeinthatfirstclasslikenobookhadbeforeit.

That’swhat this feels like tome, likewe’re opening the covers of a newbook, not knowing what’s inside, but knowing, given the wonderful, richanticipationthataccompanieseverynewadventure,thatnothingwilleverbethesameagain.That’showthisallfeelstome.Thatmybusinesswillneverbethesamefromthismomenton.AndneitherwillI!”

Shepressedherhandstogether,andthenleanedbackagainstherchairasiftocatchabreath.

“And,ifIunderstandyoucorrectly,that’swhatyou’recallingtheFranchisePrototype. The Franchise Prototype is the name formy business-as-a-product.It’s awayof thinkingaboutmybusiness asonecomplete thing, awhole,youmightsay,thatlooks,acts,andfeelsinaclearlydefinableway,apartfromme.Independent of me. That if I did all this correctly, All About Pies could bedesigned, engineered, and manufactured just like any product is: to operatepredictably in such a way that causes everyone to want to buy from it, andbecause it is so predictably responsive to their needs, they would keep oncomingbackformore.Andit’smyjobtodesign,engineer,andmanufactureAllAboutPiesuntilitworksperfectlywithoutmehavingtobethereallthetime.

“And,whileImustadmit,I’moverwhelmedbytheideaofit,it’sthemostchallengingandexcitingthoughtI’vehadinyears!

“Andthegreatthingis,I’vealreadygotthebusiness.AllIhavetodonowistolearnhow!”

“Sarah,”Isaid,“Icouldn’thavesaiditanybetter.So,let’sgoontothenextstep, the Business Development Process. Because what you have to learn isgoingtobeeasierthanyouthink.”

Formoreinformation,visitusatwww.e-myth.com123

PARTIII

BuildingaSmallBusinessThatWorks!

10

THEBUSINESSDEVELOPMENTPROCESS

Toleranceforfailureisaveryspecificpartoftheexcellentcompanyculture—and that lesson comes directly from the top. Champions have tomakelotsoftriesandconsequentlysuffersomefailuresortheorganizationwon’tlearn.

ThomasJ.PetersandRobertH.WatermanJr.

InSearchofExcellence

Building the Prototype of your business is a continuous process, a BusinessDevelopmentProcess. Its foundation is threedistinctyet thoroughly integratedactivitiesthroughwhichyourbusinesscanpursueitsnaturalevolution.TheyareInnovation,Quantification,andOrchestration.

Innovation

Innovation is often thought of as creativity. But as Harvard ProfessorTheodoreLevittpointsout, thedifferencebetweencreativityandInnovation isthe difference between thinking about getting things done in the world andgetting things done. Says Professor Levitt, “Creativity thinks up new things.Innovationdoesnewthings.”1

TheFranchiseRevolutionhasbroughtwith it anapplicationof InnovationthathasbeenalmostuniversallyignoredbyAmericanbusiness.Byrecognizing

thatitisnotthecommoditythatdemandsInnovationbuttheprocessbywhichitis sold, the franchisor aims his innovative energies at the way in which hisbusinessdoesbusiness.

Tothefranchisor,theentireprocessbywhichthebusinessdoesbusinessisamarketingtool,amechanismforfindingandkeepingcustomers.Eachandeverycomponentofthebusinesssystemisameansthroughwhichthefranchisorcandifferentiatehisbusinessfromallotherbusinessesinthemindofhisconsumer.

Where the business is the product, how the business interacts with theconsumerismoreimportantthanwhatitsells.

Andthehowdoesn’thavetobeexpensivetobeeffective.Infact,someofthemostpowerfulInnovationshaverequiredlittlemorethanthechangeofafewwords,agesture,thecolorofclothing.

Forexample,whatdoesthesalespersoninaretailstoreinvariablysaytotheincomingcustomer?Hesays,“MayIhelpyou?”Haveyoueverheardthatonebefore?

Andhowdoes thecustomer invariably respond?Hesays,“No thanks, justlooking.”Haveyoueversaidthatonebefore?

Ofcourseyouhave!Infact,it’sauniversalphenomenon.Nowwhydoyousupposethesalespersonasksthatquestionwhenheknows

thatthecustomerwillrespondthewayhedoes?Becausethecustomerrespondsthewayhedoes,that’swhy!Ifthecustomerisjustlooking,thesalespersondoesn’thavetogotowork!Canyouimaginewhatthosefewwordsarecostingretailersinthiscountry

in lost sales? Here’s a perfect opportunity to try a simple and inexpensiveInnovation.

THEINNOVATIONInsteadofasking,“Hi,mayIhelpyou?”try“Hi,haveyoubeen inherebefore?”The customerwill respondwith either a “yes”or a“no.”Ineithercase,youarethenfreetopursuetheconversation.

If the answer is yes, you can say, “Great. We’ve created a special newprogramforpeoplewhohaveshoppedherebefore.Letmetakejustaminutetotellyouaboutit.”

If the answer is no, you can say, “Great, we’ve created a special newprogramforpeoplewhohaven’tshoppedherebefore.Letmetakejustaminutetotellyouaboutit.”

Ofcourse,you’llhavetohavecreatedaspecialnewprogramtotalkaboutin

eithercase.Butthat’stheeasypart.Justthink.Afewsimplewords.Nothingfancy.Buttheresultisguaranteed

toputmoneyinyourpocket.Howmuch?Thatdependsonhowenthusiasticallyyoudoit.Theexperienceofourretailclientstellsusthatbydoingthisonethingalone,saleswillincreasebetween10and16percentalmostimmediately!

Canyoubelieve it?Afewsimplewordsandsales instantlygoup.Notbyjustalittlebit,mindyou,butbyaconsiderableamount!Whatwouldyoudofora10-to16-percentincreaseinsales?

THEINNOVATIONAgain, for salespeople, a six-week test.For the firstthreeweeks,wear a brown suit towork, a starched tan shirt, a brown tie (formen),andwell-polishedbrownshoes.Makecertainthatalltheelementsofyoursuitarecleanandwell-pressed.Forthefollowingthreeweekswearanavybluesuit,agood,starchedwhiteshirt,atiewithredinit(apinorascarfwithredinitforwomen),andhighlypolishedblackshoes.

The resultwillbedramatic: saleswillgoupduring thesecond three-weekperiod!Why?Because, as our clients have consistently discovered, blue suitsoutsellbrownsuits!Anditdoesn’tmatterwho’sinthem.

Is it any wonder that McDonald’s, Federal Express, Disney, Mrs. Field’sCookies, and many more extraordinary companies spend so much time andmoney on determining how they look? It pays!And it pays consistently, overandoverandoveragain.

THEINNOVATIONThe next timeyouwant somebody to do somethingforyou,touchhimsoftlyonthearmasyouaskhimtodoit.Youwillbeamazedtofindthatmorepeoplewillrespondpositivelywhenyoutouchthemthanwhenyoudon’t.

Again,toapplythistoyourbusiness,youoryoursalespeopleshouldmakeapointoftouchingeachcustomerontheelbow,arm,orbacksometimeduringthesales process. You will find, as our clients have found, that there will be ameasurableincreaseinsales.

Innovation is the heart of every exceptional business. Innovation continuallyposesthequestion:Whatisstandinginthewayofmycustomergettingwhathe

wantsfrommybusiness?FortheInnovationtobemeaningfulitmustalwaystakethecustomer’spoint

of view. At the same time, Innovation simplifies your business to its criticalessentials.Itshouldmakethingseasierforyouandyourpeopleintheoperationofyourbusiness;otherwiseit’snotInnovationbutcomplication.

Innovation, then, is themechanism throughwhichyourbusiness identifiesitself in the mind of your customer and establishes its individuality. It is theresult of a scientifically generated and quantifiably verified profile of yourcustomer’sperceivedneedsandunconsciousexpectations.

It is the skill developed within your business and your people that isconstantly asking, “What is the best way to do this?” knowing, even as thequestionisasked,thatwewillneverdiscoverthebestway,butbyaskingwewillassuredlydiscoverawaythat’sbetterthantheoneweknownow.

In that regard, I thinkof Innovationas the“BestWay”skill. Itproducesahigh level of energy in every company within which it’s nurtured, fed, andstimulated, energy that in turn feeds everyone the company touches—itsemployees, customers, suppliers, and lenders. In an innovative companyeveryonegrows.

There’snodoubtaboutit:Innovationisthesignatureofabold,imaginativehand.

Quantification

But on its own, Innovation leads nowhere. To be at all effective, allInnovationsneedtobequantified.WithoutQuantification,howwouldyouknowwhethertheInnovationworked?

ByQuantification, I’m talking about the numbers related to the impact anInnovationmakes.

For example, ask any group of small business owners how many sellingopportunities they had the day before (as we have at E-MythWorldwide dayafterday)andIpromiseyou99percentofthemwon’tknowtheanswer.

ThesadfactisthatQuantificationisnotbeingdoneinmostbusinesses.Andit’scostingthemafortune!

Forexample,howwouldyouknowthatbychangingthewordsyouusetogreetanincomingcustomeryouproduceda16-percentincreaseinsalesunlessyouquantifieditby(1)determininghowmanypeoplecameinthedoorbeforethe Innovation was put into effect; (2) determining howmany people bought

productsandwhat thedollarvalueof thoseproductswerebeforeyouchangedthewordsandwhatyousaidtoproducethosesales;(3)countingthenumberofpeople who came in the door after you changed the words; (4) counting thenumber of peoplewho purchased something; (5) determining the average unitvalue of a sale; and (6) determiningwhat the improvementwas as a result ofyour Innovation?Thesenumbers enableyou todetermine theprecisevalueofyourInnovation.

How would you know that wearing a blue suit had a specific monetaryimpact on your business unless you quantified that impact and had a specificcontrolagainstwhichtomeasureit?Theanswerisobvious;youwouldn’t.

AndasI’vesaid,fewsmallbusinessownersdoquantifythesethings,eventhosewhobelieveinQuantification.

Because few small business owners believe that such apparentlyinsignificantInnovationsarereallythatimportant!

Butaskyourself,ifyoucouldincreasesales10percentbydoingsomethingassimpleaswearingabluesuit,wouldyoudoit?Wouldyoumakeitimportant?Theanswerisasobviousasthequestionisridiculous.Ofcourseyouwould!

AnditistheobviousthatmustbeaddressedbyQuantificationattheoutsetoftheBusinessDevelopmentProcess.

Beginbyquantifyingeverythingrelatedtohowyoudobusiness.Imeaneverything.Howmanycustomersdoyouseeinpersoneachday?Howmanyinthemorning?Intheafternoon?Howmanypeoplecallyourbusinesseachday?Howmanycalltoaskforaprice?Howmanywanttopurchasesomething?HowmanyofproductXaresoldeachday?Atwhattimeofthedayaretheysold?Howmanyaresoldeachweek?Whichdaysarebusiest?Howbusy?Andsoforth.Youcan’tasktoomanyquestionsaboutthenumbers.Eventually,youandyourpeoplewillthinkofyourentirebusinessinterms

ofthenumbers.You’llquantifyeverything.You’ll be able to read your business’s health chart by the flow of the

numbers.You’llknowwhichnumbersarecriticalandwhicharenot.

You’ll become as familiarwith your business’s numbers as your doctor iswithyourbloodpressureandpulserates.

Becausewithout the numbers you can’t possibly knowwhere you are, letalonewhereyou’regoing.Withthenumbers,yourbusinesswilltakeonatotallynewmeaning.

Itwillcomealivewithpossibilities.

Orchestration

Onceyouinnovateaprocessandquantifyitsimpactonyourbusiness,onceyoufindsomething thatworksbetter thanwhatprecededit,onceyoudiscoverhow to increase the “yeses” from your customers, your employees, yoursuppliers, and your lenders—at that point, it’s time to orchestrate the wholething.

Orchestration is the elimination of discretion, or choice, at the operatinglevelofyourbusiness.

WithoutOrchestration,nothingcouldbeplanned,andnothinganticipated—byyouoryourcustomer.Ifyou’redoingeverythingdifferentlyeachtimeyoudoit, if everyone in your company is doing it by their owndiscretion, their ownchoice,ratherthancreatingorder,you’recreatingchaos.

As Theodore Levitt says in his stunning book, Marketing for BusinessGrowth,“Discretionistheenemyoforder,standardization,andquality.”2

“If a blue suit works, wear it every single time you’re in front of acustomer,”isthedictumofthedisciplesofOrchestration.

“If ‘Hi, have you been in here before?’ works better than anything elseyou’vetried,sayiteverysingletimeyougreetacustomer,”istheruleofthedayfromthedisciplesofOrchestration.

By every disciple of Orchestration I’m referring to anyone who has everseriously decided to produce a consistent, predictable result in the world ofbusiness,nomatterwhatbusinesstheyarein.

Whether thatbeFredSmithatFederalExpress,TomWatsonat IBM,RayKrocatMcDonald’s,WaltDisneyatDisney,DebbieandRandyFieldsatMrs.Fields’Cookies,orwhomever,throughoutthecourseoftime.

BecauseeveryfounderofeverygreatBusinessFormatFranchisecompany,whether it is franchised or not, knows one thing to be true: if you haven’torchestratedit,youdon’townit!

Andifyoudon’townit,youcan’tdependonit.

Andifyoucan’tdependonit,youhaven’tgotafranchise.Andwithoutafranchisenobusinesscanhopetosucceed.If,byafranchise,youunderstandthatI’mtalkingaboutaproprietarywayof

doingbusinessthatdifferentiatesyourbusinessfromeveryoneelse’s.In short, the definition of a franchise is simply your uniqueway of doing

business.Andunlessyouruniquewayofdoingbusinesscanbereplicatedeverysingle

time,youdon’townit.Youhavelostit.Andonceyou’velostit,you’reoutofbusiness!

TheneedforOrchestrationisbasedontheabsolutelyquantifiablecertaintythatpeoplewilldoonlyonethingpredictably—beunpredictable.

Butforyourbusinesstobepredictable,yourpeoplemustbe.Thenwhat?Thenthesystemmustprovidethevehicletofacilitatepredictability.Todowhat?Togiveyourcustomerwhathewantseverysingletime.Why?Becauseunlessyour customergets everythinghewants every single time,

he’llgosomeplaceelsetogetit!Orchestrationisthegluethatholdsyoufasttoyourcustomers’perceptions.Orchestration is the certainty that is absent from every other human

experience.Itistheorderandthelogicbehindthehumancravingforreason.Orchestration is as simple as doing what you do, saying what you say,

lookinglikeyoulook—beinghowandwhoyouare—foraslongasitworks.Foraslongasitproducestheresultsyouwant.

Andwhenitdoesn’tworkanylonger,changeit!TheBusinessDevelopmentProcessisnotstatic.It’snotsomethingyoudoandthenaredonewith.It’ssomethingyoudoallthetime.In other words, once you’ve innovated, quantified, and orchestrated

something in your business, you must continue to innovate, quantify, andorchestrateit.

TheBusinessDevelopmentProcess isdynamic, simplybecause theworld,movingasitdoes,willnottolerateastationaryobject.

The world will collide with whatever you’ve created, and sooner or laterdestroyit.

TheBusinessDevelopmentProcessisthatwhichenablesyoutopreempttheworld’s changes. It hopefully precedes them, anticipates them, and, if not, atleastisinfinitelyflexibleinrelationshiptothem.

Inshort, Innovation,Quantification,andOrchestrationare thebackboneofeveryextraordinarybusiness.

TheyaretheessenceofyourBusinessDevelopmentProcess.

“Ineedyou tohelpmewithsomething,”Sarahsaid,a lookofconcernonherface. “Ineedhelpcoming togripswith thiswhole subjectofOrchestration. Itsoundssomechanical,sodeadening!WhenIthinkofit,Ipictureashopfullofpeople working dispassionately, each of them doing things in identically thesameway,likerobots.Certainlyyoucan’tbesayingthat.ButIdon’tknowhowelsetothinkaboutit.”

Shepausedwithuncertainty,butthen,asthoughdecidingshehadmadeherpoint,grewquietandwaitedformyanswer.

“Sarah,” I began softly, “if the Business Development Process were onlyabout Orchestration, I would agree with you—it would be deadly. Absent ahigher purpose, all habits are. Because that’s all that Orchestration really is,Sarah:ahabit.Awayofdoingsomethinghabitually.

“The problem is you can’t understand the value of an entire process byseparating it from its parts, or its parts from the process. Because once youseparatethepartsofaprocess,onceyoutakeaprocessapart,thereisnoprocess.Thereisnomovementwhatsoever.Thereisonlythisthingorthat.Thereisnobeginning,nomiddle,noend.Thereisnostory;there’sonlyanevent,frozenintime.Youmightsaythatapartfromitsprocess,thepartofaprocessisdead.Sowhen you think ofOrchestration absent Innovation andQuantification, you’redescribinganactionstrippedofitspurpose,itsmeaning,itsvitality.

“No,tofullyunderstandtheroleanyaction—oranypieceofwork—playsinthebusinessasawhole,youhavetoseeitasapartofthewhole,notasathinginitself.LetmeshowyouwhatImean.

“Thinkbacktoyouraunt’skitchen.Thinkabouttheprocessofbakingapie.Certainly when you remember the entire process you and your aunt wentthrough,youremembermuchmorethananysinglepartofit,isn’tthattrue?”

Sarahsmiledwarmly,relivingtheexperienceinheraunt’skitchen.“Yes,ofcoursethat’strue,”sheresponded.

“It all melts together into a sensation, you might say. Into a picture, andsmells,andmovements,andthings,fusedtogetherwithmyaunt’sremarksandher laughter and her hands doing the things they did on the cutting board.ExactlytheoppositeofwhatIimagineOrchestrationtobe,”shesaidfirmly.“Infact,that’swhatwassospecialtomeaboutthekitchen.Thecreativityofitall.

Thecontinuousstreamofsurprises.”“But think about it, Sarah. Is that really true?Wasn’t there a specificway

youraunttaughtyoutocutthefruit?Aspecificwaytoholdit?Aspecificwaytoprepareit?Wasn’tthereaspecificwaytodoeverythingyouraunttaughtyoutodo?Andwasn’t the creativity, the continuous streamof surprises, a result notjustofthespecificworkyouweredoingbutofyourcontinuousandexhilaratingexperience of improving as you learned how to do those very specific tasksbetterandbetter,untilyoucoulddothemalmostaswellasyouraunt?

“Wasn’tthatwherethejoycamefrom?Thatifyouwereresignedtodoingone thing, oneway, forever,without ever improving, therewouldbeno joy—therewouldonlybethesamedeadeningroutine?Andisn’tthatwhatyouraunttaughtyouasshetaughtyoutobakepies—themysterythatchangecanbring?

“So,ofcourse, thereneedstobeOrchestration,Sarah.Thereneedstobeawaywedosomething.Thereneedstobeasetroutine.Becausewithoutit,therewouldbenothing to improveupon.Andwithout improvement, therewouldbenoreasontobe.Wewouldbemachines.Or,asyoucalledthem,‘robots.’Therewouldbethetyrannyofroutine.Therewouldbethemonotonyandtheboredomyousoeloquentlydescribe.

“But with the process, with the continuous Innovation and Quantificationthat precedes the Orchestration and that follows it, with this continuousinvestigation into the way of work, the work itself becomes key to our ownpersonaltransformation.Theworkitselfbecomessomethingotherthanahabit;it becomes an exploration into who we are and howwe express ourselves inrelationship to something much larger. First, the position we fill. Then thefunctionitfills.Thenthebusinesswithinwhich thefunctionfulfillsboth itselfandthebusiness,withoutwhichitwouldn’texist.Thentheworldwithinwhichthebusinessfulfillsitspurposeaswellasthepurposeofthepeoplewithwhom,andforwhom,itcomesintocontact.Andsoon,andsoforth.

“What I’ve just described is the thrill of apprenticeship, the learning andgrowingthatyouexperiencedinthekitchenunderyouraunt’stutelage.

“That’sonelevelofexperience.Buttherearemore.“Asecondkindofexperienceiswhenyoubegintodevelopacertainlevelof

mastery of the orchestrated skills your aunt introduced you to, mastery thatcomesfromyourpractice.That’sthemasteryofthecraftsperson.

“The craftsperson develops a knowingness about the work she does thatbearsitsownfruit,thefruitofbeingpresent,orattentive.Thecraftspersonlearnsthatwithintheworkshedoesthereisajewelhidingbelowthesurface.Thatthethrill of the craft is to discover the jewel. And that there is only one way todiscover it: topractice the craftmindlessly.Tobecomeonewith thework.To

polishandpolish,asthoughwithone’sheart.Thatthereisnowaytoknowwhenthejewelwillshowitself,buttotrustwithallone’sheartthatoneday,whenitisleastexpected,thejewelwillbethere!Itwillappear.

“And so the craftsperson is one who has reached that stage of herdevelopmentwhere she is contentwith thework, andonly thework,knowingthat it is only through being there with one’s work that the jewel will revealitself, and that it is the work, and only the work, raised to the level of nearperfection thatconnects thecraftspersonwithherself,withherownheart.Andsoshepractices,day inanddayout,content todoso,without the thrillof theapprenticetokeephergoing,butknowingdeepinsidethatthereisnoplacetogobuthere.

“Unliketheapprentice’sstage,thecraftsperson’sstageislongandrelativelyserene until that day when the jewel does appear, and with it a stunningexplosionoflightenrapturesthecraftspersonandbringswithitmastery.

“You’veseenmasterybefore,Sarah.You’veseen it inyouraunt’s face, inhereyes,inthewayshespoketoyou.Forthemaster,thereisonlyonewayandthat is toteachanother.Themaster isconnectedtotheapprenticeasthoughtoher past.Asyou are to your childhood.Themaster knows that theprocess ofgrowing,ofchange,oftransformation,isalwaysmoving,neverstill.Itisinthefaceof theapprentice that themasterseesherselfanew.It is in thefaceof thecraftspersonthatthemasterrenewsherpilgrimageandfindsthebeautyofgivingherselfuptowork.It isinthefaceoftheworkthatthemasterdiscoversanewwhysheissoenrapturedand,insodoing,bringsherrapturetotheapprenticetostartalloveragain.

“Inmuch thesameway,Orchestrationbuildsupon thatwhichpreceded it,and becomes the foundation for that which is about to follow, and, in theprocess,honorsthepast,thepresent,andthefuture.

“Tome,Sarah,thatiswhattheBusinessDevelopmentProcessisallabout;itisasearch,withinwhichtheveryordinarythingswemustdofromday-to-dayaretheessentialhubofthewheelaroundwhichthesearchmoves.

“Onamorepracticallevel,whatwe’veexperiencedinourworkwithsmallbusinessesisthat,astheBusinessDevelopmentProcessbecomesanintegralpartofthebusiness,italsobecomesanintegralpartofthecommunicationbetweentheparticipants.Itbecomesnotonlyawayofthinkingandawayofdoingbutawayofbeingaswell.Youmightsaythat,whilegoingtoworkonthebusiness,peoplebegintorealizethatitisapowerfulmetaphorforgoingtoworkontheirlives.

“And that, I believe, is the heart of the process: not efficiency, noteffectiveness,notmoremoney,notto‘downsize’or‘getlean,’buttosimplyand

finallycreatemorelifeforeveryonewhocomesintocontactwiththebusiness,butmostofall,foryou,thepersonwhoownsit.

“So,Iobviouslyfeelpassionatelyaboutthesubject.Whatyoucallitdoesn’treallymatter; call it theBusinessDevelopmentProcess,Reengineering,TQM,Excellence, or Kaizen—the entire subject becomes a desultory process if itdoesn’taddresstheheartsandmindsandsoulsofpeople.

“Quality is just a word, and an empty word at that, if it doesn’t includeharmony,balance,passion,intention,attention.

“Continuousimprovementforitsownsakeisawasteoftime.“Lifeiswhatabusinessisabout,andlifeiswhatthisworkisabout.Coming

togripswithoneself,inthefaceofanincrediblycomplexworldthatcanteachusifwe’reopentolearn.

“In this way, the Business Development Process can be thought of as ametaphorforpersonaltransformation,forcomingtogripswithreallife.

“Fordevelopingrealskillswithinastructureofyourowndesign.“Forunderstandingthedynamicsofchange,ofvalue,ofcommunication,of

thought.“It’sanidea.AnideathatweatE-MythWorldwidehavelearnedtomanifest

in thepracticalworld. It isaphilosophy. It isacosmology. It iswhateveryouwishittobe.

“Butwhatitis,intheend,isanopportunitytofulfillwhateverisfulfillablein the place you find yourself now, and in any future place you could occupywithenoughimaginationandenoughofawish.”

IsuddenlybecameawarethatIhadbeengoingonwithoutcheckinginwithSarah.I’vebeenknowntodothatattimes.

“I’msorry,Sarah.Igotcarriedawaywiththeideaandthesoundofmyownvoice.Doyouhaveanyquestions?CanIbemorespecific?”

Sarah touched my hands on the table, and said, “My head is full ofquestions,butsomehowIthinkyou’regoingtoanswerthem.Ijustwanttothankyou for doingwhat you just did. If you don’tmind, couldwe go on and talkabouthowallthisworks?”

Itookasipoftea,andwenton.12

11

YOURBUSINESSDEVELOPMENTPROGRAM

AndIsaytoyeall,goodfriends,thatasyegrowingolf,yecometoseethethingsyelearnthereineveryotherplace.Thegracethatcomesfromsuchadiscipline, the extra feel in the hands, the extra strength and knowin’, allthosespecialpowersye’vefeltfromtimetotime,begintoenterourlives.

MichaelMurphy

GolfintheKingdom

Nowyouunderstandthetaskahead:tothinkofyourbusinessasthoughitweretheprototypefor5,000morejustlikeit.

Toimaginethatsomeonewillwalkthroughyourdoorwiththeintentionofbuyingyourbusiness—butonlyifitworks.

Andonlyifitworkswithoutalotofworkandwithoutyoutoworkit.Imagineyourselfatthatmoment.Imagineyoursmileinsideasyousay,“Let

meshowyouhowitworks,”knowingthatnotonlywillitworkbutitwillworkbetterthananybusinesshe’severseen.

Imagine yourself taking the potential buyer through your business,explainingeachcomponentandhowitworkswitheveryothercomponent.

Howyou’ve innovated systems solutions to people problems, how you’vequantified the results of those innovations, and how you’ve orchestrated theinnovationssothattheyproducethesameresultseverysingletime.

Imagine yourself introducing the potential buyer of your business to yourpeople,andstandingbywhiletheyproudlyexplaintheiraccountabilitiestothefascinatedstranger.

Imaginehowimpressedthepotentialbuyerofyourbusinesswouldbeuponbeingpresentedwithsuchorder,suchpredictability,suchirreproachablecontrol.

ImaginetheresultsofyourBusinessDevelopmentProgram.Your Business Development Program is the step-by-step process through

whichyouconvertyourexistingbusiness—ortheoneyou’reabouttocreate—intoaperfectlyorganizedmodelforthousandsmorejustlikeit.

YourBusinessDevelopmentProgramisthevehiclethroughwhichyoucancreateyourFranchisePrototype.

TheProgramiscomposedofsevendistinctsteps:

1.YourPrimaryAim2.YourStrategicObjective3.YourOrganizationalStrategy4.YourManagementStrategy5.YourPeopleStrategy6.YourMarketingStrategy7.YourSystemsStrategy

Let’sgetstarted.

12

YOURPRIMARYAIM

Thechiefcharacteristicofthevolitionalactistheexistenceofapurposetobeachieved;theclearvisionofanaim.

RobertAssagioliTheActofWill

I doubt that by now you’d be surprised to find out that I don’t believe yourbusinesstobethefirstorderofbusinessonouragenda.

Youare.NorwillyoubesurprisedtohearthatIdon’tbelieveyourbusinessisyour

life,thoughitdoesandcanplayasignificantlyimportantroleinyourlife.Butbeforeyoucandeterminewhatthatrolewillbe,youmustaskyourself

thesequestions:WhatdoIvaluemost?WhatkindoflifedoIwant?WhatdoIwantmylifetolooklike,tofeellike?WhodoIwishtobe?

YourPrimaryAimistheanswertoallthesequestions.Consideritfromanotherperspective.I’d like you to imagine that you are about to attend one of the most

importantoccasionsofyourlife.Itwillbeheld ina roomsufficiently large toseatallofyour friends,your

family, your business associates—anyone and everyone to whom you areimportantandwhoisimportanttoyou.

Canyouseeit?Thewallsaredrapedwithdeepgolden tapestries.The lighting is subdued,

soft,castingawarmglowonthefacesofyourexpectantguests.Theirchairsarehandsomely upholstered in a golden fabric that matches the tapestries. The

goldencarpetingisdeeplypiled.At the front of the room is a dais, and on the dais a large, beautifully

decoratedtable,withcandlesburningateitherend.On the table, in the center, is the object of everyone’s attention. A large,

shining,ornatebox.Andintheboxis…you!Stiffastheproverbialboard.Doyouseeyourselflyinginthebox,notadryeyeintheroom?Now,listen.Fromthefourcornersoftheroomcomesataperecordingofyourvoice.Can

youhearit?You’readdressingyourguests.You’retellingthemthestoryofyourlife.

Howwouldyoulikethatstorytogo?That’syourPrimaryAim.Whatwouldyouliketobeabletosayaboutyourlifeafterit’stoolatetodo

anythingaboutit?That’syourPrimaryAim.Ifyouwere towrite a script for the tape tobeplayed for themourners at

yourfuneral,howwouldyoulikeittoread?That’syourPrimaryAim.Andonceyou’vecreatedthescript,allyouneedtodoismakeitcometrue.Allyouneedtodoisbeginlivingyourlifeasifitwereimportant.Allyouneedtodoistakeyourlifeseriously.Tocreateitintentionally.Toactivelymakeyourlifeintothelifeyouwishittobe.Simple?Yes.Easy?No.But absolutely essential if your business is to have any meaning beyond

work.Becauseifyourbusinessisgoingtobecomeanintegralpartofthattape,if

yourbusiness is going tomake amajor contribution to the realizationof yourdream, if your business is going to become a significant component of yourPrimaryAim,youhavetoletyourbusinessknowwhatthatAimis!

Andhowcanyouexpecttodothat,ifyoudon’tknowwhatitis?Doyou seewhyyourPrimaryAim is so important to the successofyour

business?Withnoclearpictureofhowyouwishyourlifetobe,howonearthcanyou

begintoliveit?Howwouldyouknowwhatfirststeptotake?Howwouldyoumeasureyourprogress?Howwouldyouknowwhereyouwere?

Howwouldyouknowhowfaryouhadgone?Howwouldyouknowhowmuchfartheryouhadyettogo?WithoutyourPrimaryAim,youwouldn’t.Indeed,youcouldn’t.Itwouldbe

virtuallyimpossible.AswithMature companies, I believe great people to be thosewho know

how they got where they are, andwhat they need to do to get where they’regoing.

Greatpeoplehaveavisionof their lives that theypractice emulatingeachandeveryday.

Theygotoworkontheirlives,notjustintheirlives.Their lives are spent livingout thevision theyhaveof their future, in the

present.Theycomparewhat they’vedonewithwhat they intended todo.Andwherethere’sadisparitybetweenthetwo,theydon’twaitverylongtomakeupthedifference.

Theygotoworkontheirlives,notjustintheirlives.Ibelieveit’struethatthedifferencebetweengreatpeopleandeveryoneelse

isthatgreatpeoplecreatetheirlivesactively,whileeveryoneelseiscreatedbytheirlives,passivelywaitingtoseewherelifetakesthemnext.

The difference between the two is the difference between living fully andjustexisting.

Thedifferencebetweenthetwoislivingintentionallyandlivingbyaccident.LetmerepeatoncemorethatgreatquotebyDonJuaninCarlosCastaneda’s

ASeparatePeace: “The difference between awarrior and an ordinaryman isthat a warrior sees everything as a challenge, while an ordinary man seeseverythingaseitherablessingoracurse.”

Sobeforeyoustartyourbusiness,orbeforeyoureturnto it tomorrow,askyourselfthefollowingquestions:

WhatdoIwishmylifetolooklike?HowdoIwishmylifetobeonaday-to-daybasis?WhatwouldIliketobeabletosayItrulyknowinmylife,aboutmylife?HowwouldIliketobewithotherpeopleinmylife—myfamily,myfriends, my business associates, my customers, my employees, mycommunity?HowwouldIlikepeopletothinkaboutme?Whatwould I like tobedoing twoyears fromnow?Tenyears from

now?Twentyyearsfromnow?Whenmylifecomestoaclose?What specifically would I like to learn during my life—spiritually,physically,financially,technically,intellectually?Aboutrelationships?HowmuchmoneywillIneedtodothethingsIwishtodo?BywhenwillIneedit?

ThesearejustafewofthequestionsyoumightaskyourselfinthecreationofyourPrimaryAim.

Theanswersbecomethestandardsagainstwhichyoucanbegintomeasureyour life’s progress. In the absence of such standards, your life will driftaimlessly,withoutpurpose,withoutmeaning.

In that regard, your Primary Aim is the vision necessary to bring yourbusinesstolifeandyourlifetoyourbusiness.

Itprovidesyouwithapurpose.Itprovidesyouwithenergy.Itprovidesyouwiththegristforyourday-to-daymill.

“That’swhat’sbeenmissinginmybusiness,”Sarahallbutshouted.“Me!HowcouldIhavebeensooblivioustosomethingsoobvious?”

“Don’tbesohardonyourself,”Isaid.“Wearealloblivious.Jointheclub.Letmetellyouastory.

“There was once a young man who had recently turned forty whose lifeseemedtobegoingnowhere.Somehowhehadnevergrabbedholdofacareer.His lifehadnopurpose.Collegehadsomehoweludedhim. Inhis firstyearatUCLA,hecouldn’t findanything toholdhisattentionandhequit.Hestudiedmusic—manysaidbrilliantly—asaboy,butinhisearlyadultyearsfailedtofindtheconvictionheneededtopursueit.

“Many different things attracted him—music, religion, mysticism, writingpoetry,drugs,writingpulpfiction,money—noneofthempermanently.Hetookwhateverjobscamealong,and,becauseofhisnaturalandvariedtalents,hedidwhateverhedidwell,buteventhennoneofthejobsturnedintoanythingwithafuture,atleastnotafuturethatattractedhim.Afterleavingcollegeatmidterm,hedrove toNewYorkCity tostudyart,quicklychangedhismind,and joinedtheArmy,whichsenthimtoKorea.Hisfatherdiedsuddenly,bringinghimhometocareforhismotherandtwoyoungersiblings.

“Sometimeafter,hemetanexcitingwoman,tookofftoEuropewheretheytraveled from country to country on a motor scooter, and where he playedsaxophoneanddrewreligiousfiguresonthestreetsinfrontofcathedralstoearnenoughmoney to eat. Finally out ofmoney and tiredof the game, he andhiswoman friend were repatriated by the U.S. government and returned to NewYorkCitywheretheycontractedtodriveaNewYorkCityyellowcabtoL.A.todeliverittoitsnewowner.

“Whenhewas twenty-five, theymarried, had twochildren,moved toSanFrancisco, where the young man sold encyclopedias for a living, playedsaxophone on occasion, and became over time less young. Their life was arunningbattle.Eventually, after one toomany rages about hiswife’s abuse ofalcohol,her infidelity,andhis lackofpurpose, thewhole thingcame tumblingdownintodivorce.

“He immediatelymetamuchyoungerwoman,whoseeyes shined likehisex-wife’sdidn’t,whoreadhispoetryandwastouchedbyit,wholistenedtohismusic and was awed by it, was satisfied just to sit by his side, no questionsasked.Andthoughhecontinuedtosellencyclopedias,andthoughhisheartfeltneedforconnectingwithsomethingthatsmackedofpurposecontinuedtopainhimprivatelythroughoutallofthis,hislifetookamorepositiveturnwiththisnewyoungwomanwhoeventuallybecamehissecondwife.

“Hewent back to college, left the book business, studied contracting andconstructionsohecouldworkwithhishandsratherthanhismouth,movedwithhis new, willing wife to southern California, and maneuvered himself intoframing jobs fromwhich hewas fired time after timeuntil he learnedhow topullitoff.

“By this time, hewas aman inhis late thirties beginning todowork thatkids twenty years younger than him did. They regarded him on the job assomethingof a freak.His beardbynowwasdown to his chest, his hair hungdownoverhisshoulders;hewrotepoetryatnight,playedjazzontheweekend,ate burritoswith theMexicans on the job, smoked dope in the evenings, anddreamedcrazilyaboutthefuturewhenheandhisyoungwifewouldbuytwentyacresinMendocinoCounty,buildtheirownhousewiththeirownhands,raiseafamily,andhavehistwogirlsfromhisfirstmarriagemoveinwiththemwheneverythingwasready.

“Theyhadatinyone-bedroomhouseinSantaAna,California,drovea’52Chevy pickup, and alongwith theirGreatDane namedDan and a little blackpoodle namedMurray, they lived in a sense-steaming daze that seemed at thetimeclosetowhattheperfectlifemustbelike.

“But,aswithallgoodthings,thistoocametoanend,whenouryoungman,

turning older, pursued by the demons of some indefinable muse, decided tomove back north, now that they had their act together, saved up enough fromliving the right life,handscrustedandgnarly from‘honest’work,bodybrownandbeautifulfromputtinghismusclesontheline,brainfilledwiththepoetryhehadwritten, themusichehadrenewed,andthedopehehadsmoked,knowingthat itwas timetobecomethecontractorhehadsetout tobecomethreeyearsbefore, and that all it would take was one sizable kick to get them movingtoward what he knewwould be the fine resolution of his up-to-now raggedysearch.

“HeandhiswifeandhisGreatDane,Dan,andhispoodlenamedMurray,pluswhateverelsetheyhadaccumulatedinthefewyearshespentworkingwithhishandsratherthanhismouthinsouthernCalifornia,pileditallupinthe’52ChevypickupandmovedbacktotheSanFranciscotheyhadcomefromnotthatlongbefore.

“Itwas then that the big shift took place and the unpredictable happened.Ournowthirty-eighty-year-oldheroandhisyoungwife,alongwiththedogsandthepickup,wereinvitedtomoveintemporarilywithhissisterandherhusbandwhile negotiating the purchase of their ‘MendocinoAcres.’His brother-in-lawhadtheideathatourherowoulddowellconsulting—intheareainwhichhewasa tested expert, sales—with his advertising agency’s hi-tech small businessclients, until such time, of course, that our hero settled downwith his youngbrideontheir‘MendocinoAcres’tofollowhistruecalling.

“Understand,everyoneknewthatthatwasgoingtohappen.Nobodydoubtedit. Full of the robust idealism that had marked his youthful passing, he was,withoutanydoubtwhatsoever,goingtorealizehisvision;thetwentyacreswereall but his—it simply required the doing. Of course, there was also thecontractor’s license and themoney, but noone thought that anyof thatwouldproveinsurmountable.

“After all, herewas amanwho had lived a life that baffled good reason.Whateverhechose todo,hedid.Whateverhedid,hewasgoodat.Nomatterthatoncehedidit,hegrewtiredofit.Hechosetodothat,too.Tohisfriendsandhisfamilyhewas,ifnotunexplainable,certainlysomeonetobenoticed,attimesinamazement,andattimeswithpity;but,neverwithoutawe,becausewhoknewwhatthismanwasgoingtodonext?Andsomehow,theyall,intheirownprivateway,enviedhim!Canyoubelievethat?Theyenviedhimbecauseheseemedsofree! Despite the perpetual trouble he found himself in. Despite his lack ofdirection.Despitehiswhimsicalandsometimesdangerousphilosophy,therewasno denying it, this man, although getting older, sometimes precipitously, wasliving a romantic adventure they write movies about, or, if not that, a pitiful

tragedy.“Byanyone’sstandards,hewaslivingprettyclosetotheedge.Here’saguy

on the cusp ofmiddle agewith a long beard, a youngwife, two dogs, and apickup,withoutahomeoftheirown,livingwithfamily,searchingforpropertythey couldn’t possibly afford,with hardly a thought in his head that anythingwas wrong at all with this picture, about to step on those moving stairs tosomewherethathewastotallyunpreparedfor.

“And take the step he did. And it was a stunner! He was, thanks to hisbrother-in-law’sgoodintentions,suddenlysetadrift inaworld thatcouldhavebeenanotherplanet for all he knew. InSiliconValley.Callingon techieswhoowned businesses whose names he couldn’t even pronounce at first attempt,making stuff he didn’t even know existed. He was dumbfounded by themagnitudeofhisignorance.Andyet,somethingcalledhimtostay.Theyaskedhim, ‘How can you helpme?’He answered, ‘I don’t know.’ They asked him,‘Whatdoyouknowaboutmybusiness?’Heanswered,‘Nothing.’Theylookedathimfora long time.Hesatand lookedback,and just thought.Theysaid tohim,‘Whydon’tyoucomebackafteryou’vehadsometimetothinkaboutit.’Hesaidhewould.Andhedid.Becauseheknewsomethingwasthere.

“Understand,here’saguywhohadbeensellingencyclopediastopeopleatnight,infrontoftheirtelevisionsets,oronthediningroomtable.Watchingtheirfaces suspiciously regardhimas someonewhocameoutof thenight,untilhespreadout theencyclopediaand thevividlycoloredpanels that showedall thebooks graphically alive: the maps, the transparencies of the human body, theendlesslistoftopics,ofwonderstheworldwithheldfromthemintheirordinarylives,thepromisetotheirchildren,eventheirchildrentocome,ofeducation,ofknowledge,ofinformation,longbeforetheInformationAgehadarrived.

“Heretheireyeswouldawakenandlightenuptoallthesecolorfulpicturesofwhatwaspossible,andnow,almostwithintheirreach,pendingadecision.Hehad done that late at night, grinding away in front of Frank andMarge untilfinally Frank, with his last breath, would say sort of covertly, ‘Well, Marge,whad’ya think? Think we should do it?’ And he would sit there, our thirty-something hero, waiting without a movement, without a whisper ofencouragementtoMarge, letalonetoFrank,waitingfor the inevitable ‘yes’or‘no,’eitherofwhichwouldturnhimbackoutintothenightto,ifhewaslucky,go another round, at Ben andMary’s, with all the little kids hanging on thepicturesandmakingmessesonhislaminatedplates.

“Tothisguy,thisworld,thisSiliconValley,wasamiracle!‘AndIgettodothisduringtheday?!’Andso,visitthemhewould.Allthewhilefeelingstupid,knowingnothingabout theirworld,or theirbusiness,or the littleweird things

they made there, the little black boxes with their arcane significance so farbeyondhis experienceof coffee tables andpoetry andmusic and framing andpitchingandclosing,thisintricatelittleworldoftheirsthatlivedinsomecubicleinsideof their foreign, tight, screwy littlebrains.Andyet, intuitively,heknewthat he knew something that they needed.He knew that therewas somethingwaiting there for him, something his peculiar life had—in some strange,inexplicableway—preparedhimfor,somethingonlysomeonewhohadlivedinsuch an unconscious, cataclysmic, totally disorganized, yet always passionatestate,doingthisandthat,couldfullyappreciate.

“Anditwasthenthatthecurtainlifted.Thecurtainbetweentheworldthatwas theirs and theworld that was his. Butmost of all, the curtain that stoodbetweenhimselfandhimself,thecurtainthatseparatedhimfromhislife.

“Itwas then that he realizedwith a suddenness thatmadehimgiddy that,while he didn’t understand their business, neither did they! And in that oneshudderinginstantoftruthourherowasreborn.Hediscoveredanentirelynewlife.

“Andwiththediscoveryofhisnewlife,therecamefortheveryfirsttimeinhis life thebeginningofsomepurpose: tonever let thecurtaindownagain, toneverallowthecurtaintocoverwhatwashidingtherebehindit.Thattheworldwas nothing like he had believed it to be. That no one knew what he hadbelieved they knew. That everything was just like he had thought it was, amystery,but thathewasn’t theonlyonewhodidn’tknowwhatwasgoingon.WhathelearnedinSiliconValleyisthatnooneknewwhatwasgoingon!Itwascompletelyopento interpretation.Andhisguesswasasgoodasanyone’s.MyGod,probablyevenbetter.

“After all, he hadmetFrank andMarge face-to-face.Hehad survived theworst of the worst confrontations. He had even been attacked by a Germanshepherddogwhilehewasattemptingtomakehisfinalclose.Rightacrossthekitchentable!WhoinSiliconValleycouldsaythat?Andlivetotellaboutit.Yo,andhehadevenmadethesale!Walkedoutwitha torncontract inhandandacheck. Who said little black boxes were dangerous? Who said there wasanythingtofear,anythinghecouldn’tunderstand?”

I stopped longenough to feelhowmuch this storyhad touchedSarahandhowmuchshewantedtoasktheobviousquestion,butIhadtofinish,soIwenton.

“Andsothatchapterofourhero’slifewasclosedandanewchapteropened.Hemovedintohisearlyfortiesandtheendofhissecondmarriage,whichalso,bythistime,hadproducedachild—histhirddaughter—anotherloveofhislifewho could not, as no child can ever do, repair a brokenmarriage.During the

yearsthatfollowed,hebecameaboutthebestanyonecouldbeinhisnowchosenprofession.Helearnedthesecretshethoughtwerehidden.Hemarriedawomanfar bigger than the others, had two more children, fought battles with hisignorance at times titanic in scope,moved through one obstacle after another,wrotebooks,spokethroughouttheworld,builtagreatbusiness,onlytowatchitalmostfail,persistedinbuildingitupagain,lanced,jabbed,wrestled,grappled,laughed, sang, loved, and roared, and through it all, remembered one simplethingthatmeantmoretohimthananythingelsehehadeverthought:thecurtain,thecurtain.Keepthecurtainupatallcost.

“Because it is thecurtain thatkepthimshrouded indarkness.And it’s thedarknessthatholdsoutthelight.Itisthelight,theopenness,theclearingofalltheobstacles toknowing that hadbecomehis truepurpose: tobeopen.Tobeawake,tobeavailabletowhat’sreallygoingon,togiveupfalsebeliefs.

“Andforonlyonereason:hislifewasatstake!“Andthat’sthepoint,Sarah.“It’snotyourbusinessyouhavetofearlosing.It’ssomethingmuchbigger

thanthat.It’syourSelf.“Andthat’swhatthiswholethingisabout.“What truths are your curtain hiding from you? What misunderstanding

keeps you where you are, in the past, in the dark, shrouded in your limitedbeliefs,shrinkingfromtheworld,fromthelightontheothersideofthecurtain?

“Until you lift the curtain, Sarah, until you dare to pull themask off theworld’sface,untilyoumovebeyondyourComfortZone,youwillneverknowwhatitisyouweremissingoutthere.

“It’syou,Sarah.It’syouthat’swaitingoutthereforyoutofindontheothersideofthecurtain.

“Iknow,Sarah,becausethemanI’vebeentellingyouaboutisme.Whenthecurtainlifted,Ilearnedsomething.

“Thatthere’snooneelseouttherebutyou!”

13

YOURSTRATEGICOBJECTIVE

‘Yourarrowsdonotcarry,’observedtheMaster,‘becausetheydonotreachfarenoughspiritually.’

EugenHerrigel

ZenandtheArtofArchery

Onceyouhaveapictureofhowyouwantyourlifetobe,andyoucometotherealization that it’s more than just things to have and things to do, once yourealize thatwhat you and I reallywant is to have the room, the openness, toexpand,togrow,tobemoreofourselves,whateverthatmeans,andtofindoutwhatthatmeansiswhat’smostimportanttous,onceyouseethat,youcanthenturntothebusinessthat’sgoingtohelpyougetthere;youcanthenturntothedevelopmentofyourStrategicObjective.

YourStrategicObjectiveisaveryclearstatementofwhatyourbusinesshastoultimatelydoforyoutoachieveyourPrimaryAim.

Itisthevisionofthefinishedproductthatisandwillbeyourbusiness.In this context, your business is ameans rather than an end, a vehicle to

enrichyourliferatherthanonethatdrainsthelifeyouhave.YourStrategicObjectiveisnotabusinessplan.ItisaproductofyourLife

Plan, aswell as yourBusiness Strategy andPlan.YourLife Plan shapes yourlife,andthebusinessthatistoserveit.YourBusinessStrategyandPlanprovidethe structure within which your business is intended to operate over time tofulfill your Life Plan. Your Business Strategy and Plan are a way ofcommunicatingtoanyoneyoumustcommunicatetothedirectionyourbusinessisgoing,howitintendstogetthere,andthespecificbenchmarksitwillneedto

hitinorderfortheStrategyandPlantowork.YourBusinessStrategyandPlanarealsousefulformarketingyourbusiness

to those who are important to you: your banker, your investors, and yourstrategicalliancesinthebusinesscommunity.

ButunlessyourBusinessStrategyandPlancanbereducedtoasetofsimpleandclearlystatedstandards,itwilldomoretoconfuseyouthantohelp.

YourStrategicObjectiveisjustsuchalistofstandards.Itisatoolformeasuringyourprogresstowardaspecificend.Itisdesignedforimplementation,notforrationalization.Itisatemplateforyourbusiness,tomakecertainthatthetimeyouinvestin

itproducesexactlywhatyouwantfromit.Let’stakeacloserlookatsomeofthestandardsthatneedtobeincludedin

yourStrategicObjective.

TheFirstStandard:Money

The first standard of your Strategic Objective is money. Gross revenues.Howbigisyourvision?Howbigwillyourcompanybewhenit’sfinallydone?Will it be a $300,000 company? A million-dollar company? A $500-millioncompany?

If you don’t know the answer, how can you possibly knowwhether yourbusinesscanhelpyourealizeyourPrimaryAim?

Butgrossrevenuesalonearenotenough.Youalsohavetoknowwhatyourgrossprofitsaregoingtobe,yourpretaxprofits,yourafter-taxprofits.

At thispointyoucomeface-to-facewith the firstdilemmaencounteredbyeveryone going into business. How can you possibly know now what yourbusinessisgoingtoproduceinsalesthatfarinthefuture?

The answer is, you can’t! But it doesn’tmatter.At the beginning of yourbusiness,anystandardsarebetterthannostandards.Creatingmoneystandardsisnotjuststrategicallynecessaryforyourbusiness;itisstrategicallynecessaryforyourlife,fortherealizationofyourPrimaryAim.

Indeed, thefirstquestionyoumustalwaysaskwhencreatingstandardsforyourStrategicObjectiveis:WhatwillservemyPrimaryAim?

Thefirstquestionaboutmoneythenbecomes:HowmuchmoneydoIneedtolivethewayIwish?Notinincomebutinassets.Inotherwords,howmuchmoneydoyouneedinordertobeindependentofwork,tobefree?

Infact,thereisultimatelyonlyonereasontocreateabusinessofyourown,

andthatistosellit!Todoit,tofinishit,andthentogetpaidforit!JustlikeRayKrocdid,tocreateyourFranchisePrototype,toturn-keyyour

business,tocreateabusinessthatreallyworks,andthensellit.Howmuchdoyouwantforit?Tentimesearnings?Twentytimesearnings?Whendoyouwantit?Threeyearsfromnow?Fiveyears?Whywouldanyonebuyit?Becauseitworks!Anditworksbecauseyoubuiltitthatway.Youbuiltitsothatitwouldwork

better than anyone else’s business. You invented a turn-key solution to yourspecific kind of business’s problems. A little money machine. An absolutelypredictablelittlebusinessthatdoeswhatitpromisestodoeverysingletime.

Abusinessthatcangiveyoueverythingyouwant.And because it can give you everything you want, it can give your

prospectivebuyereverythinghewants.At this point another set of standards are immediately brought into the

picture.Becauseonceyou’vecreateda setof financial standards foryour life,onceyouknowwhatitisyourbusinessneedstoprovideyouwithasareturnonyour investment, it becomes obvious that the business must have a realisticchance of achieving those standards, of producing that return on yourinvestment.

Howcanyouknowwhetherornotitdoes?BydeterminingwhetheryourbusinessisanOpportunityWorthPursuing.

TheSecondStandard:AnOpportunityWorthPursuing

AnOpportunityWorth Pursuing is a business that can fulfill the financialstandardsyou’vecreatedforyourPrimaryAimandyourStrategicObjective.

Ifitisreasonabletoassumethatitcan,thebusinessisworthpursuing.If it is unreasonable to assume that it can, then no matter how exciting,

interesting, or appealing the business is, forget it.Walk away from it. It willconsume toomuchof yourprecious time andprevent you from finding a trueOpportunityWorthPursuing.

HowdoyouknowwhetheryouhaveanOpportunityWorthPursuing?Lookaround.Ask yourself:Does the business I have inmind alleviate a frustrationexperiencedbyalargeenoughgroupofconsumerstomakeitworthmywhile?

ThisstandardfulfillstwoprimaryrequirementsofyourStrategicObjective.

It tells you what kind of business you’re creating while it defines who yourcustomerwillbe.Ittellsyouwhatyouneedtosellandtowhom.

WhatKindofBusinessAmIIn?

Ask anyone what kind of business they’re in and they’ll instinctivelyrespond with the name of the commodity they sell. “We’re in the computerbusiness.”Or,“We’reinthehottubbusiness.”Alwaysthecommodity,nevertheproduct.

What’sthedifference?The commodity is the thing your customer actuallywalks outwith in his

hand.Theproductiswhatyourcustomerfeelsashewalksoutofyourbusiness.Whathefeelsaboutyourbusiness,notwhathefeelsaboutthecommodity.Understanding the difference between the two is what creating a great

businessisallabout.Charles Revson, the founder of Revlon and an extraordinarily successful

entrepreneur,oncesaidabouthiscompany:“InthefactoryRevlonmanufacturescosmetics,butinthestoreRevlonsellshope.”

Thecommodityiscosmetics;theproduct,hope.InaChaneltelevisioncommercialinthe1980s,anincrediblyhandsomeman

andastrikinglybeautifulwomanarealonewhilemusicplayshypnoticallyinthebackground.

Thesceneshiftsquicklyandfrequently toothershots, suchasa tall,erectbuilding.

So far there hasn’t been a sound except for the music that supports thissuggestivevisualballet.

Theblackshadowofanairplanemovesverticallyupthebuilding.Sheapproacheshim.Themusiccontinues.He says, “Can I ask you a question?” in a voice filledwith intimacy and

invitation.Wedon’thearheranswer.We just see her tilt her head back, close her eyes, and open her mouth

slightly.Suddenly,themessage:“SharetheFantasy.Chanel.”Notawordaboutperfume.That’sthecommodity.Thecommercialisselling

theproduct—fantasy.

Thecommercialissaying,“BuyChanelandthisfantasycanbeyours.”What’s your product?What feeling will your customer walk away with?

Peaceofmind?Order?Power?Love?What ishe reallybuyingwhenhebuysfromyou?

Thetruthis,nobody’sinterestedinthecommodity.Peoplebuyfeelings.And as theworld becomesmore andmore complex, and the commodities

more varied, the feelings we want become more urgent, less rational, moreunconscious.

How your business anticipates those feelings and satisfies them is yourproduct.

And the demographics and psychographics associatedwith your customerwillpredeterminehowyoudothat.

WhoIsMyCustomer?

EverybusinesshasaCentralDemographicModel.Thatis,amostprobablecustomer.And that customer has awhole set of characteristics throughwhichyoucandefinehim—age,sex,income,familystatus,education,profession,andsoforth.

Demographics is the science ofmarketplace reality. It tells youwho yourcustomeris.

YourCentralDemographicModelcustomerbuysforveryparticularreasons,noneofwhicharerationalorevenexplicable!Yethebuys,ordoesn’t.

Themotivations thatpropelhim in eitherdirection constituteyourCentralPsychographicModel.

Psychographics is the scienceofperceivedmarketplace reality. It tellsyouwhyyourcustomerbuys.

So when you ask, “Is this business an OpportunityWorth Pursuing?” theonlywaytotellistodeterminehowmanysellingopportunitiesyouhave(yourcustomers’demographics)andhowsuccessfullyyoucansatisfytheemotionalorperceivedneedslurkingthere(yourcustomers’psychographics).

StandardsThreeThrough?

ThereisnospecificnumberofstandardsinyourStrategicObjective.Thereareonlyspecificquestionsthatneedtobeanswered.

WhenisyourPrototypegoingtobecompleted?Intwoyears?Three?Ten?Where are you going to be in business? Locally? Regionally?Nationally?Internationally?How are you going to be in business? Retail? Wholesale? Acombinationofthetwo?What standards are you going to insist upon regarding reporting,cleanliness, clothing, management, hiring, firing, training, and soforth?

You can begin to see that the standards you create for your businesswillshapebothyourbusinessandtheexperienceyouhaveofyourbusiness.

In fact, the standards of your Strategic Objective create the tension thatdraws the futuremodelofyourbusinessand theway itactuallyappears todayclosertooneanother.

Aswesawearlier,standardscreatetheenergybywhichthebestcompanies,andthemosteffectivepeople,produceresults.

It was eleven o’clockMondaymorning, oneweek followingmy lastmeetingwithSarah.ItwastheonedayoftheweekAllAboutPieswasclosed.

Wedecidedtospendthedaytogethertotalkaboutherbusiness.As shewalked up to the table in the restaurant wherewe had decided to

meet, Icouldseeherexcitement.ShewasamuchdifferentSarah thanwhenIhadseenheraweekearlier.Hereyeswereclear,herbodyexuberant.Shelookedmuchyounger.Shealsolookedlikeshehadalottotalkabout.

Therestaurantwasownedbyafriendofmine.Wehaddonealotofworktogetherinhisstart-upyearsandsoitwasaplacewhereIcouldtakeatableandspendasmuchtimeasIneededwithoutbeingrushedoutthedoor.Infact,itwasa wonderful place to provide a new client with some clarity about what abusinesscoulddowhendonewell.

Sarahsatdownandimmediatelybegantotalk.Ipouredhersomecoffee.

“It seems for the first time in my life, I truly have come to someunderstandingaboutwhatIwant.ItisimportantformetotellyouhowmuchIappreciatewhatyou’vegivenme.But,havingsaidthat,Irealized,fromalmostthe moment you left last week, that I would never allow myself again to beconsumedbytheworkofmybusiness.Itbecameobvioustome,withaclaritythat’s almost impossible to describe, how big a price I have been paying forbeingsoobsessedwithmywork.And,onceIrealizedit, Iswear, itwas likeIwassuddenlyandforeverfreeofit.Somethingtrulyfreeinghappenedtomethatnight.

“Andit’snotasthoughIhaven’tbeenworkingforthepastsixdays.Ihave.Businesshastogoon,afterall.Butthispastweekwasnotthewayitwasbefore.Whileonepartofmewasdoingthework—Iguessthat’sthepartyouwouldcallTheTechnician—partofmestayedremovedfromit.Partofmewasn’ttakenatallbytheworkIwasdoing.And,rememberhowItoldyouthatIdidn’tthinkIwasentrepreneurial?Well, Isuddenlyrealized that Iam!ThatI’vealwayshadan entrepreneurial part in me. That what you call The Entrepreneur, I havealwaysthoughtofasmyspirit.

“‘Myspirit’ iswhatmyauntcalled it.Sheused tosay tome, ‘Sarah, feedyourspirit. It isyourspiritwhichgivesyou life.’ I rememberasa littlegirl, itwasmyspiritthatalwaysgotmeintotrouble.Itwasmyspiritthatmyteacherscomplained about somuch.Theyused to say tomyparents, ‘If itweren’t forSarah’sspirit,shewouldbedoingmuchbetter inschoolthanshedoes.’Itwasmy spirit that would dream when I was in the classroom, rather than payattentiontowhatwasgoingonaroundme.

“Iusedtofantasizeaboutthingsallthetime—myheadwenttothestrangestplaces.Anythingcouldsetmeoff.Andwhilethatpartofmewouldreallyseemto tickmy teachers andmy parents off,my aunt always seemed to nurture it.‘Youneed tobeverygentlewithyourspirit,Sarah,’sheused tosay tome. ‘Itneedstobefree,butitalsoneedsyoutodirect itsattention.Toomuchofone,andnotenoughoftheother,andyourspiritwilltakeofflikeawildhorse.That’showyouneedtothinkofyourspirit,Sarah,likeawildhorse.Partofitisthereto serve you, and another part to serve itself. The thing you need to learn iswhichpartiswhich.Ifyouputitbehindafence,youwillkillit.Butifyouleaveittocomeandgoasitpleases,youwillneverunderstandit.’

“AndIseethat’swhatI’vebeendoingthesepastthreeyears,”Sarahsaidtome. “I’ve put a fence around my spirit, around my entrepreneurial nature,withoutevenrealizingit.ButwhatIreallycametounderstandthispastweekisthatI’vebeendoingthat,puttingafencearoundmyspirit,foralong,longtime.Myparents taughtmehowtodo it;my teachers taughtmehowtodo it.And,

likeagoodlittlegirl,Ilearnedthelessonwell.Butnowthewildhorseisfree!NowI’mbackinthekitchenwithmyauntagain.NowIreallyunderstandwhatmy aunt was doing with me in the kitchen all those years ago. She wasn’tteachingmehowtobakepies;shewasbakingme!Shewasteachingmeaboutthewildhorse,aboutmyspirit.Aboutcreativity.

“AndwhenyoutalkedaboutTheEntrepreneur,itallcamebacktomewitharush.Myaunt, thekitchen, thepies, thedreaming in the classroom, the secretplaces Iused togohidewhen Iwasa littlegirl.AndhowI stoppedhiding inthoseplacesalongtimeago,andhowmuchImissit!

“WhatI’vecometorealizeisthatI’veconfusedbakinggoodpieswithwhatmyauntwasreallytalkingtomeabout.Ithoughtthatbakinggoodpieswasit,whenitwasn’t.Itneverhasbeen.Anditneverwillbeagain.

“So,backtomybusiness,”shecontinued.“It’scleartomenowthatwhatIwishtodoistodevelopit,growit,andbefreeofit todowhateverelseit isIwishtodo,eventhough,rightnow,atthisverymoment,Icouldn’tforthelifeofmetellyouwhatthatis.”

“Try,”Isaid.“Trytotellmeasbestyoucan.”Shesmiled.“You’rejustlikemyaunt;sheneverletmeoffthehookeither.“Okay,I’lltry.Whynot—whatelsedowehavetodo?”Sheclosedhereyes foramomentandseemed togatherherself.And then

shebegantospeaksoftly,asthoughtoherself.“I’malittlegirlagain.WhenIstillhadmyhidingplaces.BeforeIlostmy

spirit. It’ssummer,andI’mlyinginbedlookingupat theceilinginmyroom,feeling the cool summer breeze floating through the open window. There’snothing I have to do; there’s no place I have to be. It’s the most wonderfulfeelingofmylife,lyingherelikethis,openingmyeyes,closingthem,dreaming,smelling thewonderfulsummersmells, thesmellofcutgrass, thesmellof thewatersprinklingonthelawn,thefullnessofit.

“And then I begin to dream, first in colors, nothing specific, just colors,floating above my head, like crystals and flowers and blossoms of light inglowingcolors.Andthenthecolorstakeform—theyareme,andtheyarealsosomethingelse.I’mwalkingbythestreamthatrunsacrossourland,about500feetfromthehouse,downwherethefouroaksstand.Wehavethesefouroaks—huge,gnarledtreesthatstandlikeaminiatureforestatthecornerofourproperty.Myaunt and I called them ‘FourOaks,’ as though theywere another country.AndIusedtogothereasalittlegirlandimagineIwasinanothercountry.

“I’min‘FourOaks’now,inmymind,asIliethereinmybed,asIusedtodo time after time. And it’s therewheremywild horsewaited forme. He isstandinginthecenterofthe‘FourOaks,’hisbodyglisteningintheshade,black

asblackcanbe.Iwalkuptohimandtouchhisface,andheshuddersandpullsaway fromme.Foramomentwewatcheachotherwithoutmoving,and then,he’sgone!Hewhirlsaroundandspeedsoff,hismaneandtailstreaming,outofthe trees, through thestream,over thehillon theothersideof thestream,andoutofsight.I’msuddenlyawareofthesweetsummerbreezeagain,asitsoftlytouchesmyface,andI’minbed,huggingmyselfunderthecovers,thrilledtobealiveonsuchawonderfulsummermorningwhenthere’snothingatallIhavetodobutthis.”

TearswerestreamingdownSarah’scheeks.Tearsofsomethingpreciouslostandthenfound.Therewasaradiantsmileonherface.Thetearsalsowelledupin my eyes, watching her, understanding what this meant to her, andunderstandingatthesametimewhatthismeanttome.

Weatelunchalmostwithouttalkingandthensettleddownintoanafternoonofconversation.Thewaiterbroughtusapotoftea.Sarahpouredherselfandmeacup,andthenIbegan.

“Tellme,”Isaid,“nowthatyouhaveabetterfeelingforwhatyourbusinesscandoforyou,whydon’tyoutrytodescribeittome.Whydon’tyoubegintodescribeyourStrategicObjective?”

“Okay,” she began. “I’ve given some thought to this,” she smiled, almostbashfully.

Iwas thinking tomyself, as she finished collectingher thoughts, that I’veseen that smile dozens, if not hundreds, of times before when owners of abusiness begin to imagine their company as something bigger than they everdared to imagine before, and as they tell it tome or to someone else. It’s asthough theyare embarrassed tobe seen imagining somethingbigger than theyare;as though theyareoverreaching,beingpresumptuous. I suspect theymusthave experienced something similar when they were children, telling theirparents or their teachers about a fanciful idea they had, and feeling thedisappointment and shame that comes from being told that you’re beingunrealistic, that you’re dreaming, hearing them say, “You can’t do that.”Andfindingthemselvesaloneaschildrenwiththeirdreamsthattheydarednotshareagain. How, without even realizing it, our parents and our teachers take our“spirit”away.

But, like I knew shewould, Sarah continuedwithout embarrassment now,fully takenby thepicturesshewasdescribing.Thiswasherbusiness, thiswasheridea,andshecouldseeitasclearlyasanything.

“Iseemybusinessaboutsevenyearsfromnow,”shesaid.“Therearefourlocations:theoneIhavenowandthreemore.”Shenamedthethreecommunitiesadjoininghers.

“Thenameofthebusinessisthesame.There’snoneedtochangethat.Thebusinessisallaboutpies,allabouttheexperienceofpiesmyauntgavetome.It’sthatexperienceIwishtogivetootherpeople.Notonlymycustomersbutthepeople I hire. I want everyone to know, somehow, that All About Pies is ametaphorforsomethingmuchfiner.

“I see the shops producing annual sales of $450,000 each, for a total of$1,800,000 a year. I’m not totally certainwhat the net profitwill be, but I’vedecidedthatitshouldbeabout15percent,or$67,500foreachshop,foratotalof$270,000forthefour.Ifeelthatthat’sareasonableprofittoshootfor,eventhoughtodayI’monlyproducingabout11percent,aftermyincome,Imean.

“That means if I sell the business in seven years, given a realisticprice/earnings ratio, I think it’scalled, I shouldbeable tosell thebusiness formorethan$1million.Onemilliondollarsinsevenyears—that’smydream,”shesaid to me, smiling, as though she could already see the money in the bank.“Because,first,Iwon’teverneedanymoremoneythanthattodoeverythingIhaveeverwanted,andsecond,becauseit’sreallyagreatroundnumbertoshootfor.ItsortofmakeseverythingIneedtodoreallyconcrete.

“Before I can open my second shop, I realize I’ve got to get this oneoperatingwithoutme.Andso,oneofthefirstthingsI’mgoingtodo—andI’vealreadybeguntodothissincewemetlastweek—istodocumentallofthethingsI reallyknowhow todo today.For example, Iknowhow tobakeagreatpie.AndIknowthatIcandocumenthowIdothat,sothat’soneofthefirstplacesI’mgoingtobegin.ButI’mgettingaheadofmyself.Letmetellyouwhatmybusinesswilllooklikewhenit’sdone,soyoucanreallygetafeelforit.

“Myauntusedtosaythatoneoftheproblemswehaveinourlivesisthatwedon’texpressourcaringdeeplyoroftenenough.Sheusedtosaythatwhenwewereinthekitchencuttingtheapples,orsomethinglikethat.She’dsay,‘Whenwe cut apples, we’re doing something important. And God is giving ussomething important, not only the apple, which is important enough, but thekitchen,and theknife, and thecompanywe’regivingeachother.Sowhenwecuttheapples,weneedtorememberthat,andholdthemjustright,andsliceintothemwithjusttheappropriateforce,nottoomuch,nottoolittle.’Shewouldsay,‘HoldmyhandwhileIcuttheapple.DoyoufeelwhatImean?Nottoomuch,andnottoolittle.Toomuchandyouaretakenawaybythetask.Toolittleandtheappledoesn’tgetcut.’

“Anyway,inmybusinessIwanttoexpress‘nottoomuchandnottoolittle.’

Iwantthebusinesstobeanexpressionof‘ourcaringdeeplyandoftenenough.’Iwantthebusiness,AllAboutPies,tobeallaboutcaring,notaboutpies.

“And if the business is all about caring, then everything we do in thebusiness, everything the business ‘looks, acts, and feels like,’” she said tomewithasmile, remembering thestory IhadsharedwithheraboutTomWatson,“theneverythingthebusinessiswillbeareflectionofthat,areflectionofcaring.Caringwillbethetrueproductofmybusiness,notpies.

“SoI seeAllAboutPiesasamodel foreveryonewhocomes intocontactwithit.Andwhat’ssoexcitingaboutthatisIknowIcandoit!Myaunttaughtmehow.Iknowwhatitmeanstocareenoughaboutthekitchentoscrubitdownuntilitgleams.Iknowwhatitmeanstocareenoughabouttheknivestosharpenthemuntilthey’rerazor-keen.Iknowwhatitmeanstoselectthefinestfruit,tospendtimesmellingit,holdingit,lookingatit,toknowexactlywhenit’sready.Tomake absolutely certain of that,my aunt planted her owngarden, her owntrees.Andwewouldseethatonlythebestoforganicfertilizerswereused,andso Iknow thatAllAboutPiesneeds togrow itsown fruit in itsowngardens.Andthat’ssomethingIjustrealizedthisweek!

“SoInowfeelcertainthat,inorderforAllAboutPiestobecomewhatIcanimagineittobecome,itwon’tbeenoughformyemployeestojustworkintheshop—theyneedtolearneverythingjustasIdidwhenIwasagirlworkingwithmyaunt.AllAboutPieswillbetothemwhatmyauntwastome!

“AndIknowIcandothat!”shesaidtome,againpassionately.“It’sasrealtomenowasmyauntwastomethen.

“So each shopwill produce pieswith fruit from a central organic garden.Whichmeans I’mgoing to have to find one to buy, or land that I’mgoing tohavetoplant,centrallylocatedbetweentheshopssothateachhastheaccessitneeds.

“Whatitalsomeansisthattheshopsareonlygoingtobakepiesfromfruitthat’s in seasonhere,when it’s inseason.That’sallmyaunteverdid. I’mnotgoingtousefruitfromanyplaceotherthanmyowngardens,andthatisgoingtobesomethinguniqueaboutAllAboutPiesthatdifferentiatesitfromeveryotherbakeryorsmallpieshop.Trulyhomegrown.Withhomegrowngentlecare.

“Butwhat’salsoexcitingtome,”Sarahcontinued,“isthatIrealizethatI’vealreadydonealotofwhatI’mdescribinginmycurrentshop!

“Thefloorsarethebestoak.Theovensarethebestyoucanbuy.Thedisplaycasesareabsolutelygorgeous.

“Myauntwouldhavelovedmyplace.“Andthat’swhatIalsorealizedwhileIwasthinkingaboutallthis.Thatif

I’mever inquestionaboutwhether I’mdoing it rightornot, all Ihave toask

myselfis,‘Whatwouldmyauntthink?’andI’llknowtheanswer.“Canyouseeit?”sheaskedmehonestly.“Am I giving you a taste ofwhatmy StrategicObjective is?Am I being

clearenough?”“Sarah,”Ismiled,“youleavemespeechless.”“Then,what’snext?”sheasked,asshepouredeachofusafreshcupoftea.

14

YOURORGANIZATIONALSTRATEGY

All organizations arehierarchical.At each levelpeople serveunder thoseabovethem.Anorganizationisthereforeastructuredinstitution.Ifitisnotstructured,itisamob.Mobsdonotgetthingsdone,theydestroythings.

TheodoreLevitt

ManagementforBusinessGrowth

Everyonewants to “get organized.”Butwhen you suggest that they start bycreatinganOrganizationChart,allyougetisdoubtful—andsometimeshostile—stares.

“Don’tberidiculous,”aclientonceretorted.“We’rejustasmallcompany.Wedon’tneedanOrganizationChart.Weneedbetterpeople!”

Despitehisprotestations,Ipersisted.BecauseIknewsomethinghedidn’t.I knew that the organizational development reflected in the Organization

Chart can have a more profound impact on a small company than any othersingleBusinessDevelopmentstep.

OrganizingAroundPersonalities

Mostcompaniesorganizearoundpersonalitiesratherthanaroundfunctions.Thatis,aroundpeopleratherthanaccountabilitiesorresponsibilities.Theresultisalmostalwayschaos.Tobest showyouwhat Imean, let’s takea lookatWidgetMakers,anew

companyformedbyJackandMurrayHopeful,brothersandnowpartners,inanenterprisethattheyaresurewillmakethemrich.

JackandMurraystarttheirpartnershipasmostdo,bysharingthework.WhenJack’snotmakingthewidget,Murrayis.WhenJack’snothelpingthecustomer,Murrayis.WhenMurray’snotdoingthebooks,Jackis.Inthebeginning,thebusinesshumslikeawell-oiledmachine.Theshopisspotless.Thewindowsgleam.Thefloorsaremeticulous.Thecustomerssmile.AndJackandMurrayhustle.Takingturns,alwaystakingturns.OnMonday,Murrayopensup.OnTuesday, Jack.OnWednesday,Murray.

OnThursday,Jack.Afterall,they’repartnersaren’tthey?Iftheydon’tdoit,whowill?It’sonlyfairthattheysharethework.Andtheygoonthatway.Andthebusinessbeginstogrow.Allofasudden, there’smoreworkthaneitherMurrayorJackcanhandle.

Theyhavetogethelp.SotheyhireJerry.Agreatguy.Andanephewtoboot.Aslongastheyhavetopaysomeone,mightaswellkeepitinthefamily.Nowit’sJack,Murray,andJerry,takingturns,takingturns.WhenJack’snotdoingthebooks,Murrayis.AndwhenMurrayandJackaren’t,Jerryis.NowwhenMurrayisn’tworkingwithacustomer,eitherJackorJerryis.OrwhenJackisn’topeningup,Murrayis,orJerry.Thingsaremoving.Thebusinessisjumping.JackandMurrayandJerryare

asbusyasthreepeoplecanbe.It isn’t longbeforeHerb joins them. Jack’swife’s brother.Agoodguy.A

hardworker.Willingandeager.Nowit’sJack,Murray,Jerry,andHerb,takingturns,takingturns.WhenJack’snotdoingthebooks,Herbis,orMurray,orJerry.WhenMurray’snotworkingwithacustomer,it’sJackorJerryorHerb.WhenJerry’snotmakingwidgets,it’sMurrayorJackorHerb.Everybody’sopeningup,answeringthetelephone,goingoutforsandwiches,

makingdeposits—takingturns,takingturns,takingturns.But suddenly the widgets begin to come back. They don’t seem to be

workingliketheyusedto.

“Wenever had this trouble before,” says Jack toMurray.Murray looks atHerb.HerblooksatJerry.

Allofasudden,thebooksbegintolookfunny.“Weneverhadthistroublebefore,”saysMurraytoJack.JacklooksatJerry.

JerrylooksatHerb.Andthat’snotall.Theshopisbeginningtofallapart.Toolsaremissing.Dustisgettinginthewidgets.Corrugatedcardboardisstrewnabouttheworktable.Nailsareinthescrewboxesandscrewsinthenailboxes.JackandMurrayandJerryandHerbarebeginningtobumpintoeachother

ontheirwayinandout.They’reelbowingforroomintheworkspace.Windowsaren’tgettingcleaned.Floorsaren’tgettingswept.Tempersbegintomount.Butwho’stosaysomething?Andwhat?Andtowhom?Ifeverybody’sdoingeverything,thenwho’saccountableforanything?IfJackandMurrayarepartners,who’sincharge?If both, then what happens when Jack tells Jerry to do something that

Murraywon’tallowhimtodo?WhenHerbwantstogoforlunch,whodoeshetell—Jack?Murray?Jerry?Who’saccountableformakingcertainthatthestoreismanned?Whenthewidgetsgobad,who’saccountableforcorrectingthecondition?Whenthebooksareunbalanced,who’saccountableforbalancingthem?Whenthefloorsneedcleaning,whenthewindowsneedwashing,whenthe

shop needs opening or closing, when the customers need tending—who’saccountableforproducingtheresults?

What Jack and Murray don’t understand is that without an OrganizationChart,everythinghingeson luckandgoodfeelings,on thepersonalitiesof thepeopleandthegoodwilltheyshare.

Unfortunately, personalities, good feelings, goodwill, and luck aren’t theonlyingredientsofasuccessfulorganization;alone,theyaretherecipeforchaosanddisaster.

Organizationneedssomethingmore.

OrganizingYourCompany

Let’sstartWidgetMakersalloveragain.JackandMurrayHopefularesittingintheirkitchen.TheyhavedecidedtoformWidgetMakers.They are excited about its prospects but know that if it’s to succeed they

havetoapproachitdifferentlyfromthewaymostpeoplestartanewbusiness.The first thing they decide to do is to think about the business as a

corporation,ratherthanasapartnership.Ratherthanthinkingofthemselvesaspartners,theynowthinkofthemselves

asshareholders.Having both worked in partnerships with other people—and failed—Jack

andMurrayknow that there’snothingmoredisastrous thanapartnershipgonebad,assomanydo.

Unlessit’safamilybusiness,thatis.JackandMurrayalreadyknowthat familybusinessesareevenworse than

partnerships.Butapartnershipthat’salsoafamilybusiness?No.JackandMurraydecidetodoitadifferentway.Sittingthereatthekitchentable,JackandMurrayeachtakeablankpieceof

paperandprinttheirnamesatthetopofthepage.Undereachnametheyprint“PrimaryAim.”Forthenexthourorso,JackandMurrayeachvisualizeshowhewouldlike

hislifetolookandwriteshisconclusionsonthepageinfrontofhim.Thentheyspendanotherhourorsotalkingaboutwhattheywrote,sharing

their personal dreamswith each other, perhaps discovering in that hourmoreabouteachotherthantheyhadknowninalltheiryearsasbrothers.

ThenextstepJackandMurraytakeistodrawalineacrossablankpieceofpaperaboutathirdofthewaydown.AbovethelinetheywriteinboldlettersthewordSHAREHOLDERS.Theyhaveagreedwitheachotherthatistobetheirroleoutsideofthebusiness.

Inside of the business, they have agreed, theywill from this time forwardthinkofthemselvesasEMPLOYEES.

Theyrealizethiswillsavethemalotoftroublelateron.Thenextstepwillrequiresometime:thecreationoftheStrategicObjective

forWidgetMakers,Inc.JackandMurraygoatitenthusiastically.Murrayagreesto do the necessary research concerning theCentralDemographicModel theyhavetentativelychosen.Howmanypotentialbuyersarethereintheterritoryinwhich they’vedecided todobusiness? Is thepopulationgrowing?What is the

competition?Howarewidgetspricedandhowaretheyselling?Isthereafutureforwidgetsintheterritory?Whatistheanticipatedgrowthoftheterritory?Anyzoningchangesexpected?

MurrayalsoagreestocreateaquestionnaireandmailittoasampleoftheirCentralDemographicModelconsumerstofindouthowtheyfeelthey’retreatedbyotherwidgetcompanies.Atthesametime,Murrayistopersonallycall150ofthoseconsumers.He’llconductaNeedsAnalysis togetabetterunderstandingofhowtheythinkandfeelaboutwidgets.Whatdowidgetsmeantothem?Howhavewidgetschangedtheir lives?If theycouldhaveanykindofwidgetatall,whatwoulditlooklike?Howwoulditfeeltouseit?Whatdotheywantagoodwidgettodoforthem?

Murrayagreestodotheresearchbyacertaindate.Meanwhile, Jack agrees to pull together the preliminary financial data

neededtosecurealoanfromthebank—anoperatingproformaandacashflowprojectionforthefirstyearofoperation.

Oncetheinformationabouttheconsumer,thecompetition,andthepricingiscollected, Jack and Murray will meet again and complete their StrategicObjectiveandpluginthefinalnumbersneededfortheloan.

Luck is with them. The information Murray collects about their CentralDemographicModel,thecompetition,andthepricingismorethanencouraging.

They complete their Strategic Objective and then begin the task oforganizationaldevelopment—thecreationoftheirOrganizationChart.

SincetheirStrategicObjectivehasindicatedhowtheywillbedoingbusiness(onelocation,assemblingandsellingwidgetsandwidget-relatedaccessoriestoaspecificconsumerwithintheterritorydescribedasNorthMarineWest),JackandMurrayagreethattheirOrganizationChartwillrequirethefollowingpositions:

President and Chief Operating Officer (COO), accountable for theoverall achievement of the Strategic Objective and reporting to theSHAREHOLDERSwhoinclude,onanequalbasis,JackandMurray.Vice-President/Marketing, accountable for finding customers andfinding new ways to provide customers with the satisfactions theyderivefromwidgets,atlowercost,andwithgreaterease,andreportingtotheCOO.Vice-President/Operations, accountable for keeping customers bydeliveringtothemwhatispromisedbyMarketing,andfordiscoveringnew ways of assembling widgets, at lower cost, and with greater

efficiencysoastoprovidethecustomerwithbetterservice,reportingtotheCOO.Vice-President/Finance, accountable for supporting both MarketingandOperationsinthefulfillmentoftheiraccountabilitiesbyachievingthe company’s profitability standards, and by securing capitalwheneverit’sneeded,andatthebestrates,alsoreportingtotheCOO.Reporting to the Vice-President/Marketing are two positions: SalesManagerandAdvertising/ResearchManager.Reporting to the Vice-President/Operations are three positions:ProductionManager,ServiceManager,andFacilitiesManager.Reporting to theVice-President/Finance are two positions:AccountsReceivableManagerandAccountsPayableManager.

JackandMurraysitbackand lookat thecompletedOrganizationChartofWidget Makers, Inc., and smile. It sure looks like a big company. The onlyproblemisthatJackandMurray’snameswillhavetofillalltheboxes!They’retheonlytwoemployees.

Butwhattheyhaveeffectivelydoneisdescribealltheworkthat’sgoingtobedoneinWidgetMakers,Inc.,whenitsfullpotentialisrealized.

More importantly, they have described thework that has to be done rightaway!

Jack and Murray realize that there’s no difference between the WidgetMakersoftodayandtheWidgetMakersoftomorrow;theworkisthesame;onlythefaceswillchange.

ThenextjobjackandMurraytakeoniswritingaPositionContractforeachpositionontheirOrganizationChart.

APositionContract(aswecallitatE-MythWorldwide)isasummaryoftheresultstobeachievedbyeachpositioninthecompany,theworktheoccupantofthatpositionisaccountablefor,alistofstandardsbywhichtheresultsaretobeevaluated,anda linefor thesignatureof thepersonwhoagrees tofulfill thoseaccountabilities.

JackandMurrayknowthataPositionContractisnotajobdescription.It isacontract,rather thanjustadescription,betweenthecompanyandan

employee,asummaryoftherulesofthecompany’sgame.Itprovideseachpersoninanorganizationwithasenseofcommitmentand

accountability.Accountabilityliterallymeans“standupandbecounted.”

Therefore, the Position Contract is the document that identifies who’s tostandupandwhatthey’rebeingcountedontoproduce.

WidgetMakers,Inc.OrganizationChart

HavingcompletedthePositionContractsforthepositionswithintheirnewcompany,JackandMurray,asshareholders,proceedtothemostcriticaltaskoftheirnewassociation:namingthepeopletoputintheboxes.

Andsincethereareonlytwoofthem,itbecomesevenmorecriticalthattheyapproach this taskwisely and carefully, if they’re to avoid the errors of theirpast.

Once they have that settled, they go below the horizontal line and in themiddle of the piece of paper they draw a box in which theywrite the lettersCOO,forChiefOperatingOfficer,orPresident,oftheirnewcorporation.

The nextmost difficult step, of course, is to decidewhich one of them isgoingtofillthatposition,understandingthatitcanbeonlyoneofthem.Therecan’t be two Chief Operating Officers of a company. Someone’s got to beaccountable.Someone’sgottobeincharge.

WillitbeJack?WillitbeMurray?Theyponderthequestionseriously.This is the person fulfilling the role thatwill ultimately be accountable to

JackandMurrayfortherealizationoftheirdream.Aftercarefulthought,MurraydecidesonhisownthatJackshoulddoit.AlthoughMurray is the older brother, he knows in his heart that Jackhas

alwaystakenhisaccountabilitiesmoreseriously.JackhasalwaysbeenmorethoroughthanMurray.WhileMurrayhasalways

beenthemorecreativeofthetwo,creativityisnotnecessarilywhat’scalledforhere—organizationis.

Afterall,theirlifesavingsareatstake.If thebusiness is togive thembothwhat theywant, someonewillhave to

takeitveryseriouslyindeed.MurrayconferswithJackabouthisdecision.Theybothunderstandwhat’satstakehere.Acommitmentof trust,bothto

eachotherandtotheStrategicObjectivetheyhavefashionedtogetherwithgreatcare.

They both understand this is more than just a job: it’s a heartfeltcommitment.

After a long discussion, they agree on Jack for COO, and Jack solemnlyaccepts the position, aswell as the authority that goeswith it, by signing thePositionContractforCOO,orPresident.

NextcomethethreeVice-Presidentialpositions:Marketing,Operations,andFinance.

JackasksMurrayifhewouldagreetobeVice-President/Marketing,sincehedid such an exceptional job on themarketing research project at the outset oftheirventure.

Murray agrees enthusiastically—this is the work he had hoped to do allalong—and gladly signs the Vice-President/Marketing Position Contract. Jackthen signs Murray’s Position Contract as the President (the Vice-President/Marketing’smanager)onbehalfofthecompany.

Next comes Vice-President/Operations. Jack agrees to take this positionbecauseitwillbedifficult,hereasonswithMurray,forMurraytobothsellthewidgets and make them at the same time. This time Jack signs the PositionContractbothasVice-President/OperationsandasPresident.

Finally, Jack takes on the accountability of Vice-President/Finance, andsigns thePositionContract for thatposition.There’snoquestionbetweenJackandMurraywho’sbestsuitedforthatjob.

Murray now assumes the positions of Sales Manager and

Advertising/ResearchManager,andsignsthosePositionContracts.Jack takes the positions of Production Manager, Service Manager, and

FacilitiesManager,aswellasthoseofAccountsPayableManagerandAccountsReceivableManager,andsignsthosePositionContracts.

With allPositionContracts signed, Jack andMurray sit back for a secondtimetosurveywhatthey’vedone.Whentheyseeit, they’reshocked!JackhasbeengiveneightjobstoMurray’sthree!Something’sgottobechanged.

Aftersomethought,theyagreetohaveMurraytakeontheaccountabilitiesof Accounts Receivable and Accounts Payable as well as that of ServiceManager.

Thatmakesitsixjobseach.Anyoneshouldbeable todosix jobsonanaverageday,JackandMurray

thinktothemselvesambitiously.And,finally,theorganizationisdone!Notabitofworkhadbeenperformedonthe job,andyet the twoof them

were able to conceive of the company, the work that needs to be done, thestandards by which they would hold each position accountable, and whichpositionisaccountabletowhichpositionandspecificallyforwhat.

And upon completing this one preparatory act, a sense of order sweptthroughJackandMurray.Asenseofelation.

Fordespitetheobvioussizeofthejobahead,somehowitlookeddoable.SomehowJackandMurrayknewtheyweregoingtogetitalldone.Theywereorganized.Theyhadsomesemblanceofaplan.IncreatingtheirOrganizationChart,JackandMurrayhadalsogeneratedthe

blueprintfortheirFranchisePrototype.

PrototypingthePosition:ReplacingYourselfwithaSystem

Having created a picture of the business as it will look when it’s finallydone,JackandMurraystarttheprototypingprocess.

Butatthebottomoftheorganization,notatthetop.Theystartworkingonthebusinesswheretheystartworkinginthebusiness.In the position of Salesperson and Production Person and Accounts

ReceivableClerk.Not as the owners or partners or shareholders. Not as the COO or the

VP/Marketing.

But as employees, at the very bottom of the organization. Doing TacticalWork,notStrategicWork.

TacticalWorkistheworkalltechniciansdo.StrategicWorkistheworktheirmanagersdo.If Jack andMurray’s business is going to thrive, they have to find other

peopletodotheTacticalWorksoastofreeJackandMurraytodotheStrategicWork.

TheOrganizationChart is themeans throughwhich that critical transitioncanbemade.

Let’swatch as Jack andMurraygo through the samegrowthprocess theyexperiencedatthebeginningofthischapter,butthistimeavoidingtheirearlierdisasterbyprototypingthepositionsintheirOrganizationChart.

Jack andMurraygo towork in their business.But nowwith a difference.Theyarenolongerinterestedinworkingintheirbusiness.Theyarenowfocusedondevelopingabusinessthatworks.Todothattheybegintoworkinanentirelydifferentway.

AsMurraygoestoworkinthepositionofSalesperson,healsogoestoworkonthepositionofSalespersonasVice-President/Marketing.

AsJackgoestoworkin thepositionofProductionPerson,healsogoestoworkonthepositionofProductionPersonasVice-President/Operations.

Inotherwords,MurrayandJackstartbuildingtheirbusinessbylookingateachpositioninthebusinessasthoughitwereaFranchisePrototypeofitsown.

AsMurraygoestoworkinthepositionofSalespersonasaSalesperson,healsogoestoworkonthepositionofSalespersonbyimplementingtheBusinessDevelopmentProcessofInnovation,Quantification,andOrchestration.

Likewise,whenJackgoestoworkinthepositionofProductionPersonasaProduction Person, he goes to work on the position of Production Person byimplementingtheBusinessDevelopmentProcessofInnovation,Quantification,andOrchestration.

Eachofthemasks,“Whatwouldbestserveourcustomerhere?HowcouldImosteasilygivethecustomerwhathewantswhilealsomaximizingprofitsforthecompany?Andatthesametime,howcouldIgivethepersonresponsibleforthatworkthebestpossibleexperience?”

Murray begins to test the clothing hewears as a Salesperson to seewhatcolorsandstylesproducethegreatestpositiveimpactonthecustomers.

Hestartstestingdifferentwords.He begins to think about how Widget Makers, Inc., interacts with its

customers, and how each component of this interaction could be modified toincreaseitseffectiveness.

And as he quantifies the impact of his innovations on sales, he takes themost productive of them and writes them down in theWidget Makers SalesOperationsManual.

Before long, the Sales Operations Manual contains the exact scripts forhandling incomingcalls,outgoingcalls,meeting thecustomerat thedoor.Theexact responses to customer inquiries, complaints, concerns. The system bywhichanorderisentered,returnsaretransacted,newproductrequestsareactedupon,inventoryissecured.

OnlywhentheSalesOperationsManualiscompletedoesMurrayrunanadforasalesperson.

Butnotforsomeonewithsalesexperience.NotaMasterTechnician.Butanovice.Abeginner.AnApprentice.Someoneeagertolearnhowtodoitright.Someonewillingto learnwhatMurrayhasspentsomuchtimeandenergy

discovering.Someoneforwhomquestionshaven’tbecomeanswers.Someone who is open to the possibility of learning skills he hasn’t

developedyet,skillshewantstolearn.And the ad is placed under Sales in the Classified Section of the Sunday

paper. It reads: COME AND SEE OUR TURN-KEY OPERATION. COMEANDSEEOURMONEYMACHINE.NOEXPERIENCENECESSARY.JUSTANOPENMINDANDAWILLINGNESSTOLEARN.

And as Murray interviews the candidates, he shows them the SalesOperationsManualandWidgetMakers’StrategicObjective,andexplainshowtheywerecreatedandwhy.

HetellsthemthestoryofWidgetMakers,thedreamheandJackconceived,toenablethemtomakeapersonaldifferenceinthemarketinwhichtheyhavechosentobecomeleaders.

HeshowsthemtheOrganizationChart,wherethepositionofSalespersonis,towhichpositionitreports,andwhoinWidgetMakersiscurrentlyaccountableforthatposition.

HetalkstothemabouttheirPrimaryAimtodeterminewhoamongthemhasavisionthatcoincideswithWidgetMakers’viewoftheworld.

Andwhenhefindstherightperson,Murrayhireshim,handshimtheSalesOperationsManual,hashimmemorizethewordsinit,dresstocode,learnthesystems, and finally, go to work.Using the Sales System, Murray innovated,quantified,andorchestrated.

At thatmoment, at that exact instant,Murraymoves up to the positionofSalesManagerandbeginstheprocessofBusinessDevelopmentalloveragain.

Becauseatthatmoment,Murrayhastakenthemostimportantstepinfreeinghimself from the TacticalWork of his business.Murray has replaced himselfwithasystemthatworksinthehandsofapersonwhowantstoworkit.

AndnowMurray’sjobbecomesmanagingthesystemratherthandoingthework.

MurrayisnowengagedinStrategicWork.AndwhileMurray did that, Jack did the very same thing for each of the

TacticalWorkpositionshewasresponsiblefor!Bothofthemworkingonthebusinesswhileworkinginit,andallaccording

toplan.NowJackandMurrayhave learned,byexperience,an important lesson in

developing their business, a lesson every Technician suffering from anEntrepreneurial Seizuremust learn if his business and his life are to work inharmony.

That your Organization Chart flows down from your Strategic Objective,whichinturnflowsdownfromyourPrimaryAim.

Thateach is thecauseof theonepreceding it,andeach, therefore,playsapartinthefulfillmentoftheonebeforeit.

Alogicisestablished,anintegratedwhole.Inthisexample,WidgetMakers,Inc.,becameanorderlysystemforcreating

andre-creatingJackandMurray’slives.WithouttheOrganizationChart,confusion,discord,andconflictbecomethe

orderoftheday.Butwith it, the direction, purpose, and style of the business are balanced,

interacting purposefully and progressingwith intention and integrity toward acohesiveandsensiblewhole.

Finally,goodpeoplecouldcometogetherandgetsomethingdone!

Sarahexhaledloudlyandstretched,botharmsextendingfullytowardtheceilingasthoughshewaslettinggoofafeelingshewashavingdifficultyhandling.

“Boy,”shesaid,“yousuredon’tmake iteasy.Theminute I thinkI’vegotthisentrepreneurialthinghandled,yougivemesomemoreworktodo.

“I’dliketogobackoverthisagainbecauseI’mnotsureI’vegotit.“Whatyou’re saying is that Ineed tocreateanOrganizationChart forAll

AboutPiesasitwilllookwhenit’sdone,sevenyearsfromnow,ratherthanthewayitisnow?”

“Yes,”Iresponded.

“AndthatonceI’vecreatedthatOrganizationChart,IneedtoputmynameinallthepositionsIcurrentlyfill?”

“Rightagain,”Ianswered.“And that I need to create very detailed descriptions of each one of those

positions, and then sign the Position Contracts for each, as though I were anemployee taking responsibility for each job?Do youmean I actually need tosigneachPositionContract,exactlyasthoughIwerethatemployee?”

“Yes,” I said,“exactlyas thoughyouwere thatemployee.Because ifyourbusiness is going to work, you are each one of those employees! Until youreplaceyourselfwithsomeoneelse,thatis.”

She continued to press forward, her eyes shining like diamonds, intense,awake,engaged.

“And the reason for that is,”Sarah said, “that unless I act as I expectmyemployeestoact,unlessIworkinmybusinessexactlyasIwishthemto,IwillneverbeabletocreateasystemfordoingitexactlythewayIexpectthemtodoit.

“In other words, unless I act in exactly the same way as I expect myemployees to act, the system I createwill indulgemypreferences, rather thanwhatthebusinessreallyneedstomakeitpossibleforeveryoneotherthanmetobeasproductiveandhappyaspossible.

“AndifIonlyindulgemypreferences,Iwillneverbeabletoreplacemyselfwithanyoneotherthananotherowner,someonejustlikeme,someonewiththesameinterestsasanowner,someonewiththesamegoalsasmine.”

Shepausedforamomentasthoughtocatchherbreath,andthenadded,“Isthatwhatyouaresaying?”

“Exactly!” I answered. “Because it’s critical if you are to begin yourbusinessalloveragainthatyou’reable toseparateyourselffromtherolesyouneedtoplay.Tobecomeindependentofthem,ratherthantheserolesbecomingdependentonyou.

“Remember we talked earlier about the crazy-making nature of all yourdifferent personalities, and that the only way to eliminate that craziness is toorganize yourself and theworld around you as clearly as possible so you canfunctionasclearlyaspossible?

“Well, it’s the dysfunctional nature of these unconscious personalities wehavetocombat.

“It’sourautomaticnaturewe’vegottoorganizeintoanintentionalnature.“Andtheonlywaywecandothatisintentionally,notautomatically.“And so one part of us, the part a man named Gurdjieff once called the

‘driver,’mustorderalltherest.

“Thedrivermusttakechargeofthehorseandcarriage,Gurdjieffoncesaid.“And,as theownerofyourbusiness,as thedriverofyourbusiness, that’s

yourprimaryjob:totakechargeofthehorseandcarriage.“And, to do so, you must be able to differentiate among all the roles, to

discriminate between what’s most important and what’s least important, toorganizeitinsuchawaythatyourbestintelligencetellsyouyourbusinessmustwork.

“And,onceyouhavedonethat,onceyou’veorganizedyourbusinessinthemostintelligentwayyoucan,yournextmostimportantjobistofollowtherulesofthegameyouhavecreatedwithintegrity.

“Becauseifyouwon’tfollowtherules,whyshouldanyoneelse?“Iftherulesdon’tapplytoyou,theleader,whyshouldyouexpectanyoneto

followyou?“Ifyoudon’tobeytherules,honorthem,extolthem,whyshouldyouexpect

anyoneelsetotakeyourgameseriously?“Theansweris,youcan’texpectthemto,becausetheywon’t!“And that’swhat thiswhole process of organizational development is. It’s

theprocessthroughwhichyouthinkthroughyourbusinessasbestasyou’reableand then structure the way it is to work. Your Organization Chart is thatstructure.Itisyoutalkingtoyourpeopleandtheworld,tellingthemexactlyhowyouseeyourbusinessworkingwhenit’sdone.Whenthedreamisinplace.It’syousharingyourmindwiththeworld.Andthen,oncehavingsharedit,it’syoutellingyourpeopleandtheworldthatyoubelieveenoughinthevisiontoliveityourself!

“Anythinglessthanthatissheerarrogance,”Itoldher.“But,whenyou livebyyourown rules,whenyou ‘walkyour talk,’when

youliveasyouthink,thenyourbusinesswillbecomeathingtobehold.”“Gotit!”shesaid.“Ididn’thaveadoubtintheworldbutyouwould,”Iresponded.“So,let’sgoontoManagementDevelopment,”IsaidtoSarah,asIpoured

herafreshcupoftea,“andthentoPeopleDevelopment.“Becausewheremanagement, people, and systemscome together, sodoes

yourPrototype.”

15

YOURMANAGEMENTSTRATEGY

TheSystemistheSolution.

AT&T

Youmaythinkthatthesuccessfulimplementationofamanagementstrategyisdependentonfindingamazinglycompetentmanagers—peoplewithfinelyhoned“people skills,” with degrees from management schools, with highlysophisticatedtechniquesfordealingwithanddevelopingtheirpeople.

Itisn’t.Youdon’tneedsuchpeople.Norcanyouaffordthem.Infact,theywillbethebaneofyourexistence.Whatyouneed,instead,isaManagementSystem.The System will become your management strategy, the means through

whichyourFranchisePrototypeproducestheresultsyouwant.The System will become your solution to the problems that beset you

becauseoftheunpredictabilityofyourpeople.The System will transform your people problems into an opportunity by

orchestrating the process by which management decisions are made whileeliminatingtheneedforsuchdecisionswhereverandwheneverpossible.

WhatIsaManagementSystem?

ItisaSystemdesignedintoyourPrototypetoproduceamarketingresult.And themoreautomatic thatSystem is, themoreeffectiveyourFranchise

Prototypewillbe.Management Development—the process through which you create your

ManagementSystem,andteachyourup-and-comingmanagerstouseit—isn’tamanagementtoolasmanypeoplebelieve.It’samarketingtool.

ItspurposeisnotjusttocreateanefficientPrototypebutaneffectiveone.AndaneffectivePrototype is abusiness that finds andkeeps customers—

profitably—betterthananyother.Let’slookathowsuchasystemwasputintopracticebyaresorthotelI’ve

patronizedoverthepastseventeenyears.AMatch,aMint,aCupofCoffee,andaNewspaper

Thefirsttimeitwasanaccident;thatis,anaccidentforme.Ihadn’tplannedtogothere.

I’dbeendrivingforsevenhours,and,tiredoftheroad,decidedtostopforthenightbeforegoingontoSanFrancisco.

ThehotelwaslocatedinaredwoodgroveoverlookingthePacific.BythetimeIwalkedintothelobby,thesunwassettingandthegrovehad

turneddarkaspitch.Instantly something toldme that I was in a special place. The lobbywas

warmlylighted.Redwoodpanelingreflectedtheredglowofthelightontobeigeoverstuffedcouchesthathuggedthethreewallssurroundingthereceptiondesk.Along,darkwoodtablefacedthefrontdoorthroughwhichIhadjustentered.On the table rested a hugewoven Indian basket overflowingwith fresh fruit.Beside the basket stood a massive bronze lamp, its deep burnished lightbouncingoffthefruit,addingafestivelooktotheroom.Runningthefulllengthofthetableandfallingdownoneitherendalmosttothefloorwasanintricatelycrocheted linen cloth, its bright, exotic pattern accentuating the colors of thefruit,thebronzeofthelamp,andthedeepredochreofthewalls.

At the far side of the table, against the far wall, in a massive fieldstonefireplace, a roaring fire filled the room with the cheerful crackling of itsfuriouslyburningoaklogs.

EvenifIhadn’tbeensotired,thecontrastbetweentheheatoftheflamesonmyfaceandthecoldofthenightatmybackwouldhavebeenenoughtoattractmetotheroom.Asitwas,Ipracticallymeltedwithdelight.

Behind thereceptiondeskawomanappeareddressed ina freshlystarchedred,green,andwhiteginghamblouseandadeepredochreskirt.Apinwiththelogoof thehotel atopa redochre ribbondecoratedherblouse likeabadgeofhonor.Amatchingribbonheldherhairbackfromaglowingface.

“WelcometoVenetia,”shesmiledwarmly.Ittooknomorethanthreeminutesfromthemomentshespokethatgreeting

tothetimethebellboyusheredmeintomyroom,despitethefactthatIhadnoreservation.Icouldn’tbelievetheeasewithwhichitallhappened.

And the room!Theoverall impressionwasoneofunderstatedopulence—thick, muted pastel wall-to-wall carpeting; a four-poster, king-size white pinebedcoveredbyamagnificent, impeccablyclean,white-on-whitequilt;originalgraphicsdepictingscenesandbirdsofthePacificNorthwestgracingtherough-hewneleganceofthenaturalcedarwalls;astonefireplacewithoaklogsalreadypreparedandwaitingonthegrateforthefiresomeoneknewIwouldappreciate,paper rolled ceremoniously beneath the grate, and an elegant oversizedmatchlyingdiagonallyacrossthehearth,waitingtobestruck.

Delighted withmy good fortune, I changed for dinner; the woman at thedeskhadmademyreservationwhenshecheckedme in! Iwalkedout into thenight to find the restaurant.A sign by a path outside ofmy roompointedmedownanotherwell-litpaththroughthedarkredwoodgrove.

Thenightairwasstillandclear.InthedistanceIcouldhearthehushed,rhythmicpatterofthePacificOcean

surf. Or was it my imagination? It scarcely mattered; an aura of magicsurroundedtheplace.

Therestaurantstoodonaknolloverlookingthehotelandtheocean.UntilIwentinside,Ihadn’tseenanotherperson,buttherestaurantwascrowded.

I gave themaitre d’my name and he immediately showedme to a table,despite the fact that other people were waiting. Evidently, reservations meantsomethinginthisrestaurant!

Themealwas as delightful as everything I had experienced before it, thefoodattractivelyprepared,theserviceattentiveyetunobtrusive.Ilingeredoveraglass of brandywhile enjoying a classical guitarist who played a selection ofBachfuguesforthedinnerguests.

Isignedthecheckandreturnedtomyroom,notingonthewaythatthelightshad been turned up on the path apparently to compensate for the growingdarkness.

BythetimeIarrivedatmyroom,thenighthadbecomechilly.Iwaslookingforwardtoafireandpossiblyanotherbrandybeforegoingtobed.

Somebodyhadbeatenmetoit!Abriskfirewasburninginthefireplace.Thequiltwasturneddownonthe

bed.Thepillowswereplumpedup,amintrestingoneachone.Ononeofthenighttablesbesidethebedstoodaglassofbrandyandacard.

Ipickedupthecardandread:

WelcometoyourfirststayatVenetia.Ihopeithasbeenenjoyable.IfthereisanythingIcandoforyou,dayornight,pleasedon’thesitatetocall.

Kathi

AsIdriftedtosleepthatevening,Ifeltverywelltakencareof.

ThefollowingmorningIawoketoastrangebubblingsoundinthebathroom.Iarosetoinvestigate.

Apotofcoffee,turnedonbyanautomatictimer,wasmerrilyperkingawayonthesinkcounter.Acardrestingagainstthepotsaid:

Yourbrandofcoffee.Enjoy!K.

Anditwasmybrandofcoffee!Howintheworldcouldtheyhaveknownthat?And then I remembered.At the restaurant thenightbefore theyhadasked

mewhatbrandofcoffeeIpreferred.Andhereitwas!Justas Icaughton towhat theyhaddone, therewasapoliteknockat the

door.I went to the door and opened it. Nobody. But there on the mat was a

newspaper.Mynewspaper,theNewYorkTimes.Howintheworlddidtheyknowthat?AndthenIremembered.WhenIcheckedinthenightbeforethereceptionist

had asked me what newspaper I preferred. I hadn’t given it another thought.Untilnow.Andthereitwas!

And exactly the same scenario has occurred each and every time I’vereturned.

ButafterthatfirsttimeIwasneveraskedmypreferencesagain.Ihadbecomeapartofthehotel’sManagementSystem.Andneveroncehasitletmedown.ThesystemknowswhatIlikeandmakescertainthatIgetit,inexactlythe

sameway,atexactlythesametime.

What exactlyhad theSystemprovided?Amatch, amint, a cupof coffee,andanewspaper!

But itwasn’t thematch, themint, thecupofcoffee,or thenewspaper thatdidit.Itwasthatsomebodyhadheardme.

Andtheyheardmeeverysingletime!ThemomentIwalkedintotheroomandfelt thefire,Iknewthatsomeone

hadthoughtaboutme.HadthoughtaboutwhatIwanted.Ihadn’tsaidaword,andyettheyhadheardme.ThemomentIsawthemintsonthepillows,theturned-downquilt,andthe

brandyon the table, I knew that someonehad thought aboutme.Had thoughtaboutwhatIwanted.

Ihadn’tsaidawordandyettheyhadheardme.ThemomentIheardthecoffeepotperkinginthebathroomandsawthecard

that identified it as my brand, I remembered that someone had asked for mypreference.

Andtheyhadheardmyanswer.The instant I saw the newspaper and recognized it as my newspaper, I

rememberedthatsomeonehadasked.Andtheyhadheardmyanswer.Anditwastotallyautomatic!Every single element was an orchestrated solution designed to produce a

marketingresult,anintegratedcomponentofthehotel’sManagementSystem.Aftermythirdvisittothehotel,IaskedtospeakwiththeManager.Iwantedtofindouthowhewasabletoproducetheidenticalresultsforme

everysingletime.Howcouldhemakecertainthatsomeonewouldasktherightquestionssoas

toensurethecorrectresultsforeachandeveryguest?Wasitbecausehehiredextremelycompetentpeople?Weretheemployeesowners?Wasitsomekindofspecialincentivesystem?

TheManagerwasayoungmanoftwenty-nine.Heinvitedmeintohisofficetotalk. It waswell-lit,modest in size, and overlooked the redwood grove I hadwalkedthroughtogettotherestaurant.Hisdeskwascleanandneatlyorganized,notaloosepaperinsight.

“Thisisaveryorderlyyoungman,”Ithoughttomyself.“Perhapshe’sthereasonthehotelworkssowell.”

The young Manager obviously enjoyed his job, because he warmedimmediately to the conversation about hiswork and the task of producing theresultsforwhichhewasheldaccountablebythehotel’sowner.

“You know,” he said, smiling self-consciously, “it’s funny sitting heretalkingtoyouaboutwhatwedohereatthehotel.Becauseuntilfivemonthsago,theonlyexperienceIhadinthehotelbusinesswasasaguestfortwonightsataHolidayInninFresnothreeyearsago.

“Infact,”hecontinued,“beforethisjobIwasworkingasashort-ordercookatarestaurantnearby.TheownerandIgottoknoweachother.HeaskedifI’dliketolearnthehotelbusiness,and,beforeIknewit,hehiredme.EverythingIknowaboutthehotelbusinessI’velearnedhere.

“Here,letmeshowyou.”Hereachedbehindhisdeskforaredbinder.Printedonthespinewere the

initialsOMandthelogoofthehotel.“Whatwedohereissimple.Anyonecandoit.”Heopenedthebindertothetableofcontents.“ThisisourOperationsManual.Asyoucansee,it’snothingbutaseriesof

checklists.Thisoneisachecklistforsettinguparoom.”Heopenedthebooktoayellowpage.

“This group of pages is yellow.Everything in theManual is color coded.Yellow has to do with Room Setup. Blue, with Guest Support Services. Forinstance,whenwelightyourfireatnight,putthemintsonyourpillow,andsoon.

“EachchecklistitemizesthespecificstepseachRoomSupportPersonmusttaketodohisorherjob.ThereareeightpackagesofchecklistsforeachRoomSupport Person waiting in their mailbox when they come in every day. Eachpackage of checklists is used for one of the eight rooms the Room SupportPersonisaccountablefor.

“AsaRoomSupportPersongoesabouttheprocessoftakingcareofhisorhereightrooms,achecklistiscompletedtoconfirmthateachaccountabilitywasperformedaccordingtothestandards.Asyoucansee,hereatthebottomofthechecklist is a place for the RSP to sign, indicating that he or she did theprescribedwork.

“Tosignandnottohavedonetheworkisgroundsforinstantdismissal.“Butthere’sanotherpartofthesystemthatreallymakesitwork.“On the back of each checklist is a drawing of the specific room that

identifieseach task tobecompleted,and theorder inwhich ithas tobedone.ThedrawingtakestheRSPthroughtheroutine,and,astheycompleteeachtask,theycheckoffthecorrespondingpartofthedrawingtoshowthatitwasdone.

“Withthisdrawingwecantrainnewpeoplealmostinstantlyandhavethemproducingaresultidenticaltothatofapersonwho’sbeenwithusforquitesometime.

“As added insurance, my RSP Supervisors run spot checks every day tomakecertainthatanyerrorsarecaughtintime.”

Hepausedandsmiled.“But thereare rarelyanyerrors.Thesystemworkslikeacharm.

“There’sanequallyeffectivesystemforeverythingwedohere.Thefactis,theownerworkeditalloutinadvance.Thelighting,thesauna,andthepoolaretimed electronically and synchronizedwith the seasons, so that they deliver apredictable result to the guests. For example, you might have noticed that atnight the outdoor lights increase in intensity as it gets darker. That’s doneautomatically.Noonehastothinkaboutit.

“Icouldgiveyoulotsofotherexamples,butIthinkyougetthepoint.Thewholethingwasputtogetherinawaytheownerbelievedwouldmakeapositiveimpressiononourguests.You’dbeamazedathowmanypeoplecomeuptomeafterstayingherejusttothankmeforhowwelltheyweretreated.

“Butit’snotthebigthingstheytalkabout;it’salwaysthelittlethings.”Icouldunderstandandbelieveallhehadsaid,butstillIasked,“Howdoyou

getyourRSPs touse thechecklists?Howdoyouget themtouse thesystem?Don’ttheygettiredoftheroutine?Doesn’titgetboringforthem?”

“Ah,”saidmywillinghost.“That’swherewereallyshine.”

16

YOURPEOPLESTRATEGY

Lifegamesreflectlifeaims.

RobertS.DeRoppTheMasterGame

HowdoIgetmypeople todowhat Iwant?”This is theonequestionIhearmostoftenfromsmallbusinessowners.

And the answer I invariably give them is, “You can’t!You can’t get yourpeopletodoanything.

“If you want it done,” I tell them, “you’re going to have to create anenvironmentinwhich‘doingit’ismoreimportanttoyourpeoplethannotdoingit.Where‘doingit’wellbecomesawayoflifeforthem.”

Sincethat is thequestionmostoftenaskedofme,IwasintriguedwiththehotelManager’s answer tomy question, “How do you get your people to dowhatyouwant?”

HisresponsewasrefreshingbecauseitissorarethatIhearsomethinglikeit.“ThefirstthingthatsurprisedmewhenIcametoworkhere,”theManager

said,“wasthattheownertookmeseriously.“Imean,thinkaboutit.HereIwas,akid,withabsolutelynoexperiencein

thisbusiness.Buthenevertreatedmethatway.HetreatedmeasthoughIwereaserious adult. Somebodyworth talking to aboutwhat he obviously consideredimportant.

“And that was the second thing that surprised me when I came to workhere,” theManager continued. “How seriously theBoss took the operation ofthishotel.

“Imean,itwasn’tjustthathetookitseriously—everyoneI’veeverworkedforwasseriousabouthisbusiness—itwasthekindofseriousnesshehad.

“Itwasasthoughthehotelwasmorethanjustahoteltohim.“Itwaslikethehotelwasanexpressionofwhohewas,asymbolofwhathe

believedin.“SoifIhadn’ttakenthehotelseriously,itwouldhavelookedlikeIwasn’t

takinghimseriously,asamanwhosevaluesIrespected.“I guess that’s why he took me seriously. It established a level of

communication between us that made it possible for me to listen to what hebelievedinandhowthehotelexpressedthosebeliefsonaday-to-daybasis.

“I’ll never forgetmy firstdayhere,”hewenton. “Itwas like Iwasbeinginitiatedintoafraternityorsomething.

“Itwasrightherethatithappened.”Hewavedhisarminacircleindicatingtheofficeinwhichweweresitting.“Thisusedtobehisoffice.

“I was sitting where you’re sitting,” he said. “And the Boss was sittinghere.”Hepointedatthechairinwhichhewassitting.

“Itwas aMondaymorningand theyhad justhadabigweekend, so therewas a ton of stuff to do. Usually when I start a new job, the first thing thathappens is that the personwho hiresme takes aminute to describewhat I’msupposedtodoandthenthrowsmeouttheretodoit.SoIwassurprisedwhenthe Boss asked me if I wanted a cup of coffee. He seemed so unhurried, sounbusinesslike,youmightsay.

“Nothatwasn’tit,”theManagercorrectedhimself.“HewasprobablythemostbusinesslikepersonIhadevermet.“Butitwashowhewasabouthisbusinessthatstruckme.“Heseemedtobesayingthatwhatweweregoingtotalkaboutwasthemost

important thing on his agenda that day, that discussing my job was moreimportanttohimthandoingtheworkthatwasgoingonatthetime.

“Hewasn’thiringmetowork;hewashiringmetodosomethingmuchmoreimportantthanthat.”

TheManagersmiled.“Youknow,I’veneversaidthistoanyonebefore.It’sreally strange, butwhile I’m telling you all of this, it’s becoming clear tomewhyIhavesomuchrespectforthisplace.It’sbecauseIhavesomuchrespectfor theBoss. Tome, the place is him. If I didn’t respect him, I don’t think IwouldbeasgoodatwhatIdohereasIam.Somehowtheideaofwhatwedohereishisidea.Andthat’swhathetooksolongtocommunicatetomeonthatfirstday—hisideaofthisplace.Andwhatthatmeanttohim.

“Whathetoldmewassomethingnobodyhaseversaidtomebeforeinanyjob.

“Hesaid,‘Theworkwedoisareflectionofwhoweare.Ifwe’resloppyatit, it’s becausewe’re sloppy inside. If we’re late at it, it’s becausewe’re lateinside.Ifwe’reboredbyit,it’sbecausewe’reboredinside,withourselves,notwith thework.Themostmenialwork can be a piece of artwhen done by anartist.Sothe jobhere isnotoutsideofourselves,but insideofourselves.Howwedoourworkbecomesamirrorofhowweareinside.’”

TheManagercontinued,asiftheownerweretalkingthroughhim.“Workispassivewithoutyou.Itcan’tdoanything.Workisonlyanideabeforeapersondoes it.But themomentapersondoes it, the impactof theworkon theworldbecomes a reflection of that idea—the idea behind the work—as well as thepersondoingit.

“In theprocess, theworkyoudobecomesyou.Andyoubecometheforcethatbreatheslifeintotheideabehindthework.

“Youbecomethecreatoroftheimpactontheworldoftheworkyoudo.“Thereisnosuchthingasundesirablework,”hecontinued.“Thereareonly

people who see certain kinds of work as undesirable. People who use everyexcuseintheworldtojustifywhytheyhavetodoworktheyhatetodo.Peoplewho look upon their work as a punishment for who they are andwhere theystandintheworld,ratherthanasanopportunitytoseethemselvesastheyreallyare.

“WhattheBosssaidisthatpeoplelikethatdon’tbringlifetotheideaoftheworktheydo;theybringdeathtoit.

“The result of that is always what we experience as the sloppy,inconsiderate, inconsistent, and inhuman transactions that take place betweenmost businesses and the people who buy from them. Exactly the opposite ofwhatwehavehere.

“Andthereasonit’sdifferenthereisbecausewegiveeveryonewhocomestoworkatthehotelanopportunitytomakeachoice.Notafterthey’vedonethework,butbefore.

“Andwedothatbymakingsuretheyunderstandtheideabehindtheworkthey’rebeingaskedtodo.

“I guess that’s what excited me most about taking this job,” said theManager. “It’s thevery first place I’ve evergone toworkwhere therewasanideabehindtheworkthatwasmoreimportantthantheworkitself.

“TheideatheBossexpressedtomewasbrokendownintothreeparts:“Thefirstsaysthatthecustomerisnotalwaysright,butwhetherheisornot,

itisourjobtomakehimfeelthatway.“Thesecondsaysthateveryonewhoworkshereisexpectedtoworktoward

beingthebesthecanpossiblybeatthetaskshe’saccountablefor.Whenhecan’t

dothat,heshouldactlikeheisuntilhegetsaroundtoit.Andifhe’sunwillingtoactlikeit,heshouldleave.

“Thethirdsaysthatthebusinessisaplacewhereeverythingweknowhowtodoistestedbywhatwedon’tknowhowtodo,andthattheconflictbetweenthetwoiswhatcreatesgrowth,whatcreatesmeaning.

“The idea the Boss has about the business comes down to one essentialnotion.Thatabusinessislikeamartialartspracticehall,adojo,aplaceyougoto practice being the best you can be. But the true combat in a dojo is notbetweenonepersonandanotherasmostpeoplebelieveittobe.Thetruecombatinamartialartspracticehallisbetweenthepeoplewithinourselves.

“That’swhattheBossandItalkedaboutinourfirstmeeting.Hisphilosophyaboutworkandaboutbusiness.Icametounderstandthatthehotelwastheleastimportant thing in our relationship.What was important was how seriously Itooktoplayingthegamehehadcreatedhere.

“Hewasn’t lookingforemployeessomuchas forplayers inhisgame.Hewaslookingforpeoplewhowantedsomethingmorethanjustajob.”

WhattheManagerwastellingme,andwhattheBosshadtoldhim,wasthatpeople—your people—do not simply want to work for exciting people. Theywanttoworkforpeoplewhohavecreatedaclearlydefinedstructureforactingintheworld.Astructurethroughwhichtheycantestthemselvesandbetested.Suchastructureiscalledagame.

Andthereisnothingmoreexcitingthanawell-conceivedgame.That is what the very best businesses represent to the people who create

them:agametobeplayedinwhichtherulessymbolizetheideayou,theowner,haveabouttheworld.

Ifyourideaisapositiveone,yourbusinesswillreflectthatoptimism.Ifyourideaisanegativeone,yourbusinesswillreflectthataswell.Inthiscontext,thedegreetowhichyourpeople“dowhatyouwant”isthe

degreetowhichtheybuyintoyourgame.Andthedegreetowhichtheybuyintoyourgamedoesn’tdependonthem

but on how well you communicate the game to them—at the outset of yourrelationship,notafterit’sbegun.

YourPeopleStrategyisthewayyoucommunicatethisidea.ItstartswithyourPrimaryAimandyourStrategicObjective,andcontinues

throughyourOrganizationalStrategy(yourOrganizationChartandthePositionContractsforallof thepositions in it)andtheOperationsManuals thatdefinetheworkyourpeopledo.

It is communicated through the beliefs you have and theway you expectyourPrototype to exemplify them; through the standards you establish for the

performanceofaccountabilitiesatalllevelsandinallsectorsofyourPrototype;throughthewordsyouusetodescribewhatyourbusinessneedstobecome—foryourcustomer,foryourpeople,foryourself—ifitistobemorethanjustaplacewherepeoplegotowork.

Butthegameyourbusinesswillplaycan’tsimplybecapturedonthewrittenpage.Itmustbeseenifitistowork.Itmustbeexperienced.

Itis—first,last,andalways—abouthowyouact.Thewordswillbecomehollowifthegameisacontrivedone.Thegamecan’tbecreatedasadevicetoenrollyourpeople.Itcan’tbecome

cynicalifit’stoprovideyourpeoplewithwhattheyneedinordertocomealivewhileplayingit.

Thegamehastobereal.Youhavetomeanit.Thegameisameasureofyou.Howyouactinthegameestablisheshowyouwillberegardedbytheother

players.

TheRulesoftheGame

Asinanygame,the“peoplegame”hasrulesthatmustbehonoredifyouaretobecomeanygoodatit.

I’veincludedafewheretogiveyouatasteforthem.Asfortherestofthem,you’llhavetodiscoverthemforyourselfbyplayingagameofyourown.You’lllearntherulesintheprocess.

1. 1.Never figureoutwhat youwant yourpeople todoand then try tocreateagameoutofit.Ifit’stobeseenasserious,thegamehastocomefirst;whatyourpeopledo,second.

2. 2. Never create a game for your people you’re unwilling to playyourself.They’llfindyououtandneverletyouforgetit.

3. 3.Make sure there are specific ways of winning the game withoutendingit.Thegamecanneverendbecausetheendwilltaketheliferightout of your business. But unless there are victories in the process, yourpeoplewillgrowweary.Hence,thevalueofvictoriesnowandthen.Theykeeppeopleinthegameandmakethegameappealing,evenwhenit’snot.

4. 4.Change the game from time to time—the tactics, not the strategy.Thestrategyisitsethic,themoralunderpinningofyourgame’slogic.This

must remain sacrosanct, for it is the foundationofyouandyourpeople’scommitment to each other. But change is necessary. For any game canbecomeordinary,nomatterhowexhilaratingitmaybeatthebeginning.Toknowwhenchange is called for,watchyourpeople.Their resultswilltell you when the game’s all but over. The trick is to anticipate the endbeforeanyoneelsedoesandtochangeitbyexecutiveaction.You’llknowifyou’vepulled itoffbywatchinghoweveryoneresponds to thechange.Notat first,however.Youcanexpectsomeresistanceat first.Butpersist.Yourpersistencewillmovethemthroughtheirresistanceintoyournewandmoreenliveninggame.

5. 5. Never expect the game to be self-sustaining. People need to beremindedofitconstantly.Atleastonceaweek,createaspecialmeetingabout the game. At least once a day, make some kind of issue about anexception to the way the game has been played—and make certain thateveryoneknowsaboutit.Remember,inandofitselfthegamedoesn’texist.Itisalivetothedegreethat people make it so. But people have the unerring ability to forgeteverything they start and to bedistractedby trivia.Most great games arelost thatway.Tomakecertainyours isn’t,don’texpectyourpeople tobesomething they’renot.Remind them, timeafter time,of thegame they’replayingwithyou.Youcan’tremindthemtoooften.

6. 6.Thegamehastomakesense.Anillogicalgamewillabortbeforeitevergets going. The best games are built on universally verifiable truths.Everyoneshouldbeabletoseethemifthey’retobesufficientlyattractive.A gamewithmuddy beginningswill get you nowhere.Know the groundyoustandonandthenassembleyourarmament.Soonerorlateryou’llneedit.Foragamethatisn’ttestedisn’tagameatall.But remember,youcanhave thebest reasons in theworld foryourgameand still end up with a loser if the logic is not supported by a strongemotionalcommitment.All thelogicdoesisgiveyourpeopletherationalarmament to support their emotional commitment. If their commitmentwanes,itmeansthatthey—andmostlikely,you—haveforgottenthelogic.Sowheel out the logic often.Make sure everyone remembers the game’sraisond’être.

7. 7.Thegameneeds tobe fun from time to time.Note that I said, fromtimetotime.Nogameneedstobefunallthetime.Infact,agameisoftennofunatall.That’spartofthethrillofplayingagamewell:learninghowtodealwiththe“nofun”partsoastoretainyourdignitywhilefallingonyourface.

Atthesametime,funneedstobeplannedintoyourgame.Butmakecertainthatthefunyouplanisfun.Funneedstobedefinedbyyourpeople.Ifit’sfuntothem,itwillwork.Butnottoooften,maybeonceeverysixmonths.Somethingtolookforwardto,andsomethingtoforget.

8. 8.If you can’t think of a good game, steal one.Anyone’s ideas are asgood as your own.But onceyou steal somebody else’s game, learn it byheart.There’snothingworsethanpretendingtoplayagame.

TheLogicoftheGame

TothehotelManager,theBoss’sgamewasagoodone,sohelearnedhowtoplayit.Itwasasimplegame,buteffective.Itwasbuiltonthefollowinglogic:

Mostpeopletodayarenotgettingwhattheywant.Notfromtheirjobs,notfromtheirfamilies,notfromtheirreligion,notfromtheirgovernment,and,mostimportant,notfromthemselves.

Somethingismissinginmostofourlives.Part of what’s missing is purpose. Values. Worthwhile standards against

which our lives can be measured. Part of what’s missing is a Game WorthPlaying.

What’salsomissingisasenseofrelationship.Peoplesufferinisolationfromoneanother.In a world without purpose, withoutmeaningful values, what have we to

sharebutouremptiness,theneedyfragmentsofoursuperficialselves?Asaresult,mostofusscrambleabouthungrilyseekingdistraction,inmusic,

intelevision,inpeople,indrugs.Andmostofallweseekthings.Thingstowearandthingstodo.Thingstofilltheemptiness.Thingstoshoreupourerodingsenseofself.Thingstowhichwecanattachmeaning,significance,life.We’vefastbecomeaworldofthings.Andmostpeoplearebeingburiedin

theprofusion.What most people need, then, is a place of community that has purpose,

order,andmeaning.A place in which being human is a prerequisite, but acting human is

essential.Aplacewherethegenerallydisorganizedthinkingthatpervadesourculture

becomesorganizedandclearlyfocusedonaspecificworthwhileresult.A place where discipline and will become prized for what they are: the

backboneofenterpriseandaction,ofbeingwhatyouareintentionallyinsteadofaccidentally.

Aplacethatreplacesthehomemostofushavelost.That’swhatabusinesscando;itcancreateaGameWorthPlaying.Itcanbecomethatplaceofcommunity.It can become that place where words such as integrity, intention,

commitment,vision,andexcellencecanbeusedasactionstepsintheprocessofproducingaworthwhileresult.

Whatkindofresult?Givingyourcustomerasensethatyourbusiness isaspecialplace,created

byspecialpeople,doingwhattheydointhebestpossibleway.Andallbeingdoneforthesimplest,mosthumanreasonpossible—because

they’realive!Whatotherreasondoyouneed?Human beings are capable of performing extraordinary acts. Capable of

going to the moon. Capable of creating the computer. Capable of building abombthatcandestroyusall.

Theleastweshouldbeabletodoisrunasmallbusinessthatworks.Forifwecan’tdothat,thenwhat’sthevalueofourgrandideas?What purpose do they serve but to alienate us from ourselves, from each

other,fromwhoweare?

PlayingtheGame

Thinkingthewaythehotelownerdid,youcanbegintoconstructamentalmap of the game he created. His hotel became a world in which the sensoryexperiences of his customer were greeted by a profound dedication tocleanliness,beauty,andorder.

Butthisdedicationdidn’trestonapurelycommercialjustification(thoughtherewasthattoo;nobusinesscouldbesuccessfulwithoutit)butamoralone.OntheBoss’sphilosophy,hisviewoftheworld,hisidea.

The idea was then communicated to his people, both in word and deed,throughawell-plannedprocess.

Theimportanceofthiscannotbeoverstated.TheBosscommunicatedhisideathroughdocumentedsystemsandthrough

hiswarm,moving,andpositivemanner.He knew that he could communicate the orderly yet human process of

pleasing customers to his people only if it were communicated to them in anorderlyandhumanway.

Inshort, themediumofcommunicationbecameas importantas the idea itwasdesignedtocommunicate.

And thehotel’shiringprocessbecame thefirstandmostessentialmediumforcommunicatingtheBoss’sidea.

As theManager explained it to me, the hiring process was comprised ofseveraldistinctcomponents:

1. 1. A scripted presentation communicating the Boss’s idea in a groupmeeting to all of the applicants at the same time. This presentationdescribednotonlytheideabutalsothebusiness’shistoryandexperienceinsuccessfully implementing that idea, and the attributes required of thesuccessfulcandidateforthepositioninquestion.

2. 2.Meetingwitheachapplicantindividuallytodiscusshisreactionstoandfeelingsabout the idea,aswellashisbackgroundandexperience.At thismeeting, each applicant was also asked why he felt he was superblyappropriatefortherolethepositionwastoplayinimplementingtheBoss’sidea.

3. 3.Notificationof thesuccessfulcandidateby telephone.Again,ascriptedpresentation.

4. 4.Notificationoftheunsuccessfulapplicants,thankingeachforhisinterest.Astandardletter,signedbytheinterviewer.

5. 5.FirstdayoftrainingtoincludethefollowingactivitiesforboththeBossandthenewemployee:

ReviewingtheBoss’sideaSummarizingthesystemthroughwhichtheentirebusinessbringsthe

ideatorealityTaking the new employee on a tour of the facilities, highlightingpeople at work and systems at work to demonstrate theinterdependenceofthesystemsonpeopleandthepeopleonsystemsAnsweringclearlyandfullyalltheemployee’squestionsIssuingtheemployeehisuniformandhisOperationsManualReviewingtheOperationsManual, including theStrategicObjective,the Organizational Strategy, and the Position Contract of theemployee’spositionCompletingtheemploymentpapers

Andthehiringprocessisjustthebeginning!Justthink.Allofthissimplytostartarelationship!Areyoubeginningtounderstandthatsystematizingyourbusinessneednot

beadehumanizingexperience,butquitetheopposite?That inorder toget yourpeople todowhatyouwant, you’ll first have to

createanenvironmentthatwillmakeitpossible?That hiring people, developing people, and keeping people requires a

strategy built on an understanding of people completely foreign to mostbusinesses?

Thatthesystemisindeedthesolution?Thatwithoutanideaworthpursuing,therecanbenoPeopleStrategyatall?But with that idea you can finally say, just as our young Manager said,

“That’swherewereallyshine!”

Management,people,systems.AsIwatchedSarahtakeallthisin,Isawthattheidea of this integrated view of business had begun to take hold of herimagination.

Gonewastheresistance,thedoubt,andthefearthatwhatIhadbroughttoherdoorwasbeyondher,somethingunreachable for thebakerofpiesshehadcometobelieveshewas.

Whatshewasbeginning tograsp is thatshewasaworthyopponent,moreworthy than shehad ever realized, and that thegame Iwasdescribing forherwas the samegame shehadbeen taught toplaybyher aunt, years ago inhermother’s kitchen, with such loving attention. That there was absolutely no

difference!Shesmiledatme,asthoughreadingmythoughts.“I’mbeginningtoseetheconnectionbetweenallthesethingswe’vetalked

about,” she said. “They’re all beginning tomake sense.The puzzle is comingtogether.IcanseethepartsmergeintoanexcitingpicturethatInowknowhasbeenthereallalong!Allthatneededtobedoneforthepicturetotakeformwasforsomeonetomovethepiecesintotheirproperplace.I’dliketodescribeitforyou,thepictureI’mbeginningtosee,beforeIaskyousomemorequestions.”

“Gorightahead,”Ismiled.“Infact,I’dbedisappointedifyoudidn’t.”“It all goes back to my childhood, of course. To the spirit I spoke about

earlier.TowhatIfeltlikeasalittlegirl.AndIknownowthatI’mnotalone;thatI’mnottheonlyonewho’severfeltthatway.

“That there were probably lots of other little girls and boys who weresufferingthesamesortofexperience.Andlotsofgrownmenandwomenwho,likeme,arestillcarryingaroundtheimpactoftheirearlychildhoodexperiences.

“AndsoIseemyexperiences—thecorrallingofthewildhorse,thestuffingawayofthespiritmyteachersandmyparentstrainedmetodosowell—asthebeginningofaphilosophyformybusiness,aphilosophythatmybusinessneedsif I’m ever going to offer anything of true value to my employees and mycustomers.

“‘Therewillbenostuffingofthespirithere,’mybusinesswillsay.MaybeIshould put it up above the door to remind everyone who comes in what ourpurpose is.”Shegrinned. “Or,maybebetter yet, ‘Let thy spirit run free!’Yes,that’sbetter.Itevenfeelsbetter.”Shelaughedaloudwiththejoyofit.

Asshecontinued,itbecamesocleartomewhatamiraculousgiftspeakingcanbe.

IsawthatSarahwasn’tsomuchtalkingtomebuttoherself,discoveringasshe spoke themiracles that livedwithinher,withinher experience,withinherrelationship with her aunt, within her extraordinary imagination. Discoveringtruths she never knew she knew. Discovering all the wealth that was waitingthereinsideofhertobeunearthed,tobeexplored,tobetreasuredasthewordscametumblingforth.

Asthoughthewords,oncefreedbythespeakingofthem,combinedwiththeairtobecomesomethingelseagain.Avision.Understanding.Expansion.

Sarahcontinued.“Mypictureofthebusinessalsogoesbacktowhatmyaunttaughtmeabout

caring.“Ifmyauntwerealivetoday,shewouldsay,‘Ifeveryonecares,thepieswill

takecareofthemselves!’

“AndsoIcanseemybusinessasaschool,aschoolaboutcaringthatteachesallthelittlethingstomyemployeesthatmyaunttriedsohardtoteachme:Whatitmeanstopayattention.Whatitmeans—toourspirits!—tobepresentwiththewholeofourselvesineverythingwedo.

“MyGod, I thought I hadn’t learned anything!” she said tome, her eyeswidewiththeastonishmentofwhatshehadjustunderstood.

“ButIhad.Ihad.AndnowI’mgoingtotakeherplace.Thatlovelywoman.That sweet, gentle, determined, old woman. I’m going to take her place. I’mgoing to become themaster inmyownkitchen, just as shewas themaster inhers.

“Andtherulesofthegame—whatajoyit’sgoingtobetocreatethem.Rulesaboutdress.Rulesaboutcomportment.Rulesaboutthetoolsweuseandhowweuse them. Rules about the floor and the walls and the counterspace, howwecleanthemeverynightandeverymorning,howwegivethemtheirfinaltouchsothattheyabsolutelyglow!Rulesaboutthepietinsandaboutthecupboardsinwhich we store things. Rules about glass, rules about silver, rules about tin.Rulesabouttheovens,howthey’reheated,howthey’reopenedandclosed,howthey’re cleaned. Rules about opening up, and closing up. Rules aboutmoney,about keeping the books, about balancing at the end of each day.Rules abouthair,aboutfingernails!”

Sarah’seyeswereflashingasshepouredoutthebeginningofhervision,ashervisionbegantotakeshape.Shedidn’tneedtoknowwhatthespecificruleswereyet;whatwasimportantwasthatshegetatasteoftheexercise.

Asherauntsaid,“Thepieswilltakecareofthemselves.”Sarahwasonherway.

“Talktomemoreaboutmanagement,”Sarahsaid.“IheardyousayearlierthatIdon’tneedprofessionalmanagerstobesuccessfulinmybusiness;that,infact,I’mbetteroffwithoutthem.What’swrongwithhiringexperiencedmanagers?”

“Everything’swrongwithit,Sarah!“Because,ifyoudon’tknowhowtomanage,howareyougoingtochoose

them,andhowareyougoingtomanagethem?“Youcan’t!“Because they will manage by the standards they have been taught to

managebyinsomebodyelse’sbusiness.Notbyyourstandards.“RememberDelegationratherthanAbdication?“Youcan’tdelegateyouraccountabilities,Sarah.

“Delegatingyouraccountabilitiesisabdication.“You,astheShareholder,astheowner,astheCOO,astheVP/Marketing,as

theVP/Finance,whatever positionsyou take,must take full accountability forwhat’sgoingoninyourbusiness.

“Andtodoso,youmustleadthecompanyinthedirectionyouintendittogo.

“Andthatmeansyoumustsetthestandard.“And one of the most important set of standards you must establish is a

Management System through which all managers, and all those who wouldbecomemanagersinyourcompany,areexpectedtoproduceresults.

“Standards surrounding your Primary Aim. Your company’s StrategicObjective.Therulesofthegame.Thestoryyou’vebeentellingmeaboutyouraunt and about her extraordinary kitchen. And the standards that define thevisionyouholdinyourheart,andinyourhead,forthebusinesscalledAllAboutPiesthatyouintendtorealize!

“You don’t need professionalmanagers tomanage to those standards.Allyouneedarepeoplewhowishtolearnhowtomanagetothem.Peoplewhoareaspersonallycommittedtothosestandardsasyouare!

“Inshort,youneedpeoplewhowanttoplayyourgame,Sarah.Notpeoplewhobelievetheyhaveabetterone.

“So,youneedtoinventtherulesofthegame,whichbecomethefoundationofyourManagementSystem.

“Andoncehavingcreated these rules, oncehavingcreated thisgame,youneedtoinventthewaytomanageit.

“Because your managers don’t simply manage people; your managersmanage the System by which your business, All About Pies, achieves itsobjectives.

“TheSystemproducestheresults;yourpeoplemanagethesystem.“AndthereisaHierarchyofSystemsinyourbusiness.“ThisHierarchyiscomposedoffourdistinctcomponents:“Thefirstis,HowWeDoItHere.“Thesecondis,HowWeRecruit,Hire,andTrainPeopletoDoItHere.“TheThirdis,HowWeManageItHere.“TheFourthis,HowWeChangeItHere.“And the ‘It’ I’m referring to is the stated purpose of your business. At

Federal Express it’s ‘When You Absolutely, Positively Have to Get It ThereOvernight!’

“The‘It’ofyourbusiness,Sarah,isCaring.“HowdoyouexpressCaringwhenyouanswerthetelephone?

“HowdoyouexpressCaringwhenyoutakeapieoutoftheoven?“HowdoyouexpressCaringwhenyoutakethemoneyfromacustomer?“Andsoforthandsoon,ineverythingyoudoatAllAboutPies.“AndyouranswertothosequestionsisHowYouDoItHere!Itisthesum

totalof everythingyou’vecreated, everydistinctprocess forperformingeverylittle task at All About Pies. Every bit of which is documented in yourOperationsManuals.Everybitofwhich is taughtatyour school.Everybitofwhich ismanaged to, and improvedupon, anddiscussed amongyouandyourpeopleforaslongasyou’reinbusiness!That’swhat‘It’is.‘It’isyourBestWay.‘It’iswhatyoubelievein.‘It’iswhypeoplebuyfromyou,workforyou,lendtoyou,trustyou.

“Andjustasinthehotelwe’vevisited,itisthesystem,notonlythepeople,thatwilldifferentiateyourbusinessfromeveryoneelse’s.

“Imaginetryingtoproducesuchaconsistentresultwithoutsuchasystem!“Imagineeachmanager ineachofyour future fourstoresdoinghisorher

ownthing.“Howwouldanythingbecommunicatedconsistentlyinsuchabusiness, in

whicheveryformoflanguage,everyideaoforganization,everykindofprocessand system were expressed in an individual and subjective way by each andeveryoneofyourpeople,withoutanystandards,withoutanyagreement,withoutanyconsistencyinform—infact,withoutanyconsistencyinjudgment?

“Isthatanappealingpicture?”Iasked.“I’mexhaustedjustthinkingaboutit,”Sarahresponded.“Iknow,anditisevenworsethanyoucanimagine.“But a Management System is something else again. And when it is

combinedwithawell-conceivedMarketingSystem…”

17

YOURMARKETINGSTRATEGY

Whatwehavehereisafailuretocommunicate.

Anonymous

YourMarketingStrategystarts,ends,lives,anddieswithyourcustomer.So in the development of your Marketing Strategy, it is absolutely

imperativethatyouforgetaboutyourdreams,forgetaboutyourvisions,forgetaboutyour interests, forget aboutwhatyouwant—forget about everything butyourcustomer!

Whenitcomestomarketing,whatyouwantisunimportant.It’swhatyourcustomerwantsthatmatters.Andwhatyourcustomerwantsisprobablysignificantlydifferentfromwhat

youthinkhewants.

TheIrrationalDecisionMaker

Trytovisualizeyourcustomer.He’sstandingbeforeyou.He’s not frowning; nor is he smiling. He is perfectly neutral. Yet, there’s

somethingstrangeabouthim.Comingoutofhisforehead,reachinguptowardtheceiling, isanantenna!

Andattheendoftheantennaisasensor,beepingawaylikecrazy.And the sensor is taking in all of the sensory data around it—the colors,

shapes,sounds,andsmellsofyourstore,oryouroffice,ortherestaurantwhere

you’remeetingforlunch.Thesensorisalsotakinginsensorydatafromyou:howyouarestandingor

sitting,thecolorofyourhair,howyourhairiscombed,theexpressiononyourface—Isittense?Areyoulookingdirectlyathimorofftotheside?—thecreaseinyourslacks, thecolorofyourshoes—Aretheyshined?Are theyworn?Arethelacestied?

Nothingescapesthesensorasitabsorbsthestimulifromtheenvironment.Nothing escapes your customer as he absorbs the information he uses to

makehisdecisiontobuyornottobuy.Butthisstepinthebuyingprocessisonlythefirst.It’swhatthesensordoeswiththeinformationthat’sofinteresthere.Becauseit’showthesensorprocessestheinformationthatwilldeterminethe

decisionyourcustomerisabouttomake.Thinkofthesensorasyourcustomer’sConsciousMind.Itsjobistogathertheinformationneededforadecision.Mostofwhatitdoes,however,isunconscious;thatis,automatic,habitual.So even though your customer’sConsciousMind is actively absorbing all

mannerandformsofimpressions,itistotallyunawareofmostofthem.Itcandoit—literally—initssleep.Infact,itcan’tstopdoingit!Fortunately,theConsciousMinddoesn’tneedtobeaware.Forit’snotyourcustomer’sConsciousMindthathastomakethedecisions.It’syourcustomer’sUnconsciousMind.It’sinyourcustomer’sUnconsciousMindwherealltheactionis.It’s in your customer’s Unconscious Mind where the second step of the

buyingprocesstakesplace.Whatisyourcustomer’sUnconsciousMind?It’s like a vast, dark, underground sea in which a multitude of exotic

creaturesswimabout,singleandinschools,silentlyseekingoutfood,eachwithentirelydifferentneedsandtastes.

Thosecreaturesareyourcustomer’sexpectations.Andtheseainwhichtheyswimisatrulyforeignplacetoyourcustomer.Hehasnoideawhat’sswimmingarounddownthere.What’slurkingbehind

somesubterranean rock.What’s lyingstill andquiet asa stoneon thebottom,waitingpatientlyanddeliberatelyforsomesweetmorseltowanderby.

Butyoucanrestassuredthateverycreatureinthatsea—everyoneofthoseexpectations—isaproductofyourcustomer’slife!

Of his reactions, perceptions, attitudes, associations, beliefs, opinions,inferences,conclusions.Anaccumulationofallhisexperiencessincetheinstant

ofhisbirth(andforallweknow,beforeit)tothisverymomentwhenhestandsbeforeyou.

And all his expectations are nothingmore or less than themeans throughwhich the sum of them all—your customer’s personality—gets fed what itneeds.

The food it needs comes in the formof sensory input from theConsciousMind(the“surface”).

Andif thefoodiscompatiblewith itsexpectations, theUnconsciousMindsays,“Yes.”

Andifthefoodisincompatiblewithitsexpectations,theUnconsciousMindsays,“No.”

Andthatdecision,yesorno,ismadeattheinstantitgetsataste!In a televisioncommercial,we’re told, the sale ismadeor lost in the first

threeorfourseconds.Inaprintad,testshaveshown,75percentofthebuyingdecisionsaremade

attheheadlinealone.Inasalespresentation,datahaveshownus, thesale ismadeor lost in the

firstthreeminutes.And all that happens after that psychographic moment of truth, after the

buyingdecisionismade,isthattheUnconsciousMindsendsitsansweruptotheConscious Mind, which then goes back out into the world to assemble therational armament it needs to support its already determined emotionalcommitment.

Andthat’showbuyingdecisionsaremade.Irrationally!Ifanyonecaredtodoit,itcouldprobablybeprovedthatnooneyethasever

madearationaldecisiontobuyanything!Sowhenyourcustomersays,“Iwant to thinkabout it,”don’tyoubelieve

him.He’snotgoingtothinkaboutit.Hedoesn’tknowhow.He’salreadydoneallthe“thinking”he’sgoingtodo—heeitherwantsitor

not.What your customer is really saying is one of two things: he is either

emotionallyincapableofsayingnoforfearofhowyoumightreactifhetoldyouthe truth, or youhaven’t providedhimwith the “food”hisUnconsciousMindcraves.

Eitherway,littleornothoughtentersintothetransaction.Despitewhatwewouldliketobelieve,thedecisionwasmadeunconsciously

andinstantaneously.Infact,itwasmadelongbeforeyouevermet.Butyourcustomerdidn’tknowit.

TheTwoPillarsofaSuccessfulMarketingStrategy

Thequestion thenbecomes: Ifmy customer doesn’t knowwhat hewants,howcanI?

Theansweris,youcan’t!Notunlessyouknowmoreabouthimthanhedoesabouthimself.Notunlessyouknowhisdemographicsandhispsychographics.Demographicsandpsychographicsarethetwoessentialpillarssupportinga

successfulmarketingprogram.Ifyouknowwhoyourcustomeris—demographics—youcanthendetermine

whyhebuys—psychographics.Andhavingdoneso,youcanthenbegintoconstructaPrototypetosatisfy

hisunconsciousneeds,butscientificallyratherthanarbitrarily.Again,demographics is thescienceofmarketplacereality.It tellsyouwho

buys.Psychographics is the scienceofperceivedmarketplace reality. It tells you

why certain demographic types buy for one reason while other demographictypesbuyforanother.

LetmegiveyouanexampleofhowthesesciencesmightbeutilizedinyourMarketingStrategy.

Notice the shade of blue on the jacket of this book. I call it “IBMBlue.”Why?Becauseit’sIBM’scolor.That’swhy,Iimagine,IBMiscalled“BigBlue”inthemarketplace.

Whythatspecificshadeofblueratherthananother?Whyblueatall?Becausethatshadeofbluehasanextraordinarilyhighappealandpreference

toIBM’sCentralDemographicModel.Theyseethatshadeofblue,andit’sloveatfirstsight!Everheardtheexpression,“TrueBlue”?That’swhatthatparticularcoloris:

thecolorIBM’sCentralDemographicModelconsumerknowsitcandependon.WhatdoyouthinkwouldhavehappenedhadIBMchosenorangeinsteadof

blue?Well, since orange is at the opposite end of the preferential spectrum for

IBM’sconsumer,theIBMsuccessstorymaynothavebeensomomentous.It’s

hard to imagine “BigOrange” instead of “BigBlue.” I think IBM’s customerwouldhavehadtroublebuyinganorangecomputer!

Now,Iknowthatsoundsridiculous,butyoucantestitifyoulike.Remember the little test I suggested earlier in this book, the onewith the

navybluesuit?I’dlikeyoutovisualizesomeonewearingsuchasuit.Canyouseehiminyourmind’seye?Deep navy blue, vents in the back, possibly a pin stripe. Sharply creased

trousers.Whitestarchedshirt.Aredandbluestripedtie.Black,highlypolishedwing-tipshoes.

Nowhowdoyoufeelabouthim?Doeshelookbusinesslike?Doeshelooklikesomeoneyoucantrust?Doesheappeartorepresentsomethingsolid,reliable,dependable?Ofcoursehedoes.Researchshowsthatthenavysuitisperhapsthemostpowerfulsuitaperson

canwearinbusiness.Instantimpact.Nowvisualize theverysamepersonyoudidbefore,but this timehe’snot

wearinganavybluesuit.Nowhe’swearinganorangesuit.That’sright,atwo-pieceorangesuit!Anexpensiveoneatthat.Andwithit,he’swearingawhite-on-whitesilkshirtandagreenandwhite

stripedItaliansilktie.Andasilverbeltbucklewithhisinitialsingreenjadeacrossitsface.Andadiamondtiepin,twocarats,glimmeringoutatyoujustabovethetop

buttonofhisvest.Andproudlypeekingoutofhisfinelycreasedorangepants,anincomparable

pairofwhitelizardcowboyboots!Canyouseeit?Doyougetthepicture?Well,youbettertakeitfastbecausehe’soutofbusiness!Andwhat’s important toknow is that thedifferencebetween the twomen

isn’tinthem—it’sinyourmind.YourUnconsciousMind.What’s more, the difference is perceived instantly without a moment of

thought.The fact that you couldn’t conduct serious business with the man in the

orangesuitbutyoucouldifhewerewearingbluesaysthatthereisnosuchthing

asreality.Atleastasweunderstandit.Realityonlyexists insomeone’sperceptions,attitudes,beliefs,conclusions

—whatever you wish to call those positions of the mind from which allexpectationsarise—andnowhereelse.

Sothefamousdictumthatsays,“Findaneedandfillit,”isinaccurate.Itshouldsay,“Findaperceivedneedandfillit.”Becauseifyourcustomerdoesn’tperceiveheneedssomething,hedoesn’t,

evenifheactuallydoes.Getit?Those perceptions are at the heart of your customer’s decision-making

process.And if you know his demographics, you can understand what those

perceptions are, and then figureoutwhatyoumustdo to satisfy themand theexpectationstheyproduce.

Youcanknowyourcustomer’spsychographicreality.Each demographic model has a specific set of perceptions that are

identifiableinadvance.Womenofacertainage,withacertainamountofeducation,withacertain

size family, living in a certaingeography,buy forvery specificpsychographicreasons.

Those unconsciously held reasonswill be different from another group ofwomen, of a different age and marital status, with a different educationalbackground,livinginadifferentpartofthecountry.

Andthesedifferencespredeterminewhateachgroupbuys.Areyoubeginning togetasenseof thecomplexityof thisbusinesscalled

marketing?Ihopeso.Becauseuntilyoudo,untilyoubegintotakeitseriously,untilyougiveitthe

earnestattentionitdemands,yourPrototypewillcontinuetobetheonlythingitcouldhopetobeunderthecircumstances—acrapshoot!

AtGERBERBusinessDevelopmentCorporation,wehavecreatedtoolsforour small business clients to begin the often arduous task of makingdemographic and psychographic determinations, and how to position theirPrototypeinthemindoftheirconsumer.Theimpacthasbeenastonishing.

Smallbusinessesthatactedlikesmallbusinesseswhenwemetthembegantooperatewithintelligence.

Theircustomerscamevividlyalivetothem,oftenfortheveryfirsttime.Inquiry, the active solicitation of specific information, and controlled

experimentationreplacedtheguessing,blindhope,andfeverishbusyworkthatprecededthem.

Innovation, Quantification, and Orchestration became the driving forcesbehindtheirefforts.

Thefactis,anysmallbusinesscandoit.Andeverysmallbusinessmust!If Mature businesses, such as IBM, McDonald’s, Federal Express, and

Disney,takesuchthingsseriously,thenhowcanyounotdothesame?Yourbusinessisfarmorefragilethanabigbusiness.Soifanything,youmusttakemarketingmoreseriouslythanabigbusiness

does.Andtimeisrunningout.Wehaveenteredthe“unforgivingage.”Anageinwhichcountlesssmallbusinesseswilleitheracceptthechallenge

ofaninformation-gluttedsocietyorbedestroyedbyit.An age in which your customer is deluged by so many products and

promisesthathebecomesswampedinconfusionandindecision.Thechallengeofourage is to learnourcustomer’s language.And then to

speakthatlanguageclearlyandwellsothatyourvoicecanbeheardabovethedin.

Becauseifyourcustomerdoesn’thearyou,he’llpassyouby.Nodoubtyoufeelfrustratedasyoureadthis.Youmustbeaskingyourself:

How do I do it? How do I determine my customer’s demographics, hispsychographics?Whatcolorstouse?Whatshapes?Whatwords?

Butifyou’reaskingthosequestions,you’rewellonyourway!For the purpose of this book is not to answer those questions but to raise

them!Not“howtodoit”but“whatneedstobedone.”Unless you understandwhat needs to be done, unless you understand the

essentialimportanceofmarketingtoyourPrototype,unlessyouunderstandthatyour customer is far less rational inhis convictions andexpectations thanyouhadeverimagined,unlessyouunderstandthatyourPrototypeisyourproduct—allthe“howtodoit”intheworldwon’tmakeabitofdifferencetoyou.

Butwe’renotfinishedyet.WehaveonemoresteptotakeinyourBusinessDevelopmentProgram.YourSystemsStrategy,thegluethatholdsyourPrototypetogether.

“Iknowyoudon’twanttotalkabout‘howtodoit,’”Sarahsaid,squintinghereyesformockemphasis,“butifyouwanttoleavethistablealive,you’regoingtohavetogivememorethanthat!”

“How do I determine the demographics and psychographics of my mostimportantcustomer?”sheimploredme.

“Well,” I began, “let’s start where you are.What we already know aboutyourbusiness is that it’sattractingsomeone to it.That thepictureyouhave inyourmindabouttheAllAboutPiesyouwishtocreateisn’tthatforeignfromtheone you’ve created. That while you didn’t clearly formulate the ideas at thebeginningofyourbusiness,wenowknowthatyourinnerEntrepreneurwasbusyall thesame.That theCaringyouwishtoexpress in theAllAboutPiesof thefuturewas in you all the time. It’s expressed today in the delicious quality ofyourpies,thebeautyofyourshop,and,Imightadd,thelovely,albeitfrazzled,stateofyourbeing.”

Shesnortedquietlyinresponse,andIwenton.“So,Ibelieveit’ssafeforustoassumethatthepeoplecominginyourdoor

todayareunconsciouslyexpressingtheirpreferencefortheCaringyouhavesoeloquentlysharedwithme.They’rebuyingitevennow!

“Thefirstquestionyoumustask,then,is:Whoarethey?“Whoaremycustomers,specifically?WhatistheirDemographicProfile?“Howdoyouanswerthatquestion?Youaskthem!“You ask each and every one of them, by having them complete a

questionnaireinreturnforafreepie!“Thefreepieisthepriceyoupayforthatinformation.“Theanswersyougetwillprovetobeabonanza!“But,whileyou’reat it,youmightaswellget thepsychographicdatayou

need,aswellasthegeographicdatayouneed.“Howdoyoudothat?Youfindoutonyourquestionnairewhatcolorsthey

prefer,whatshapes,whatwords.Youfindout thebrandsofperfumetheybuy,automobiles, clothes, jewelry, food. You match those brands to the ads andcommercials that sell them, and you discover by becoming interested inwhatmessages are being sent to your customers by other companies—who aresuccessfullysellingtothem—whatmessagesyoumightsendtothosecustomers,who are demographically and psychographically the same as your existingCentralDemographicModel,tointentionallycomeinyourdoor.

“Howdoyoufindthem,thosepeopleyouhavenotyetmet?Youbuyalistof those who fit your Central Demographic Model in what you’ve nowdeterminedtobeyourTradingZone!

“What’syourTradingZone?It’sthegeographicperimeterwithinwhichyourcurrentcustomersmainlylive.Youtaketheiraddressesfromyourquestionnaire,identify them on a map, draw a line around them, and that’s your first-passTradingZone.

“Youthenbuyalistofdemographicallycorrectpeoplelivinginthatarea.“Is that enough ‘how to do it’ for now?” I asked Sarah with mock

impatience.“Willthatkeepyoubusyforawhile?“Becauseifitis,I’dliketogobacktothe‘whattodo’foraminute.There’s

alotmoretoitthanmeetstheeye.”

“Thismarketingthingisn’tnearlyascomplicatedasImighthavemadeitseem,”Icontinued.“Butit’simportantthatyoutakeitseriously.Becauseitmostoftenis regarded by small business owners asmerely ‘good common sense.’And Ihaveseenmoreoftenthannotthattheonlydefinitionof‘goodcommonsense’is‘myopinion.’Thatmostsmallbusinessowners,sufferingastheydofromwhatI’vecome to call ‘willfuldisinformation,’ simplydecidewhat theywant todowithout any information at all, without any interest in what’s true, and thensimplydoit.Stationerydesignedbythelocalquick-printerwitha logothrownin.Colors picked by theirwives. Signs designed by the local sign guywhoseexperience is in painting signs, not in determiningwhat colors and shapes arepsychographicallycorrect.

“Inshort,Sarah,whileyoudon’thavetogooverthescientificdeepend,youdo have to be sensitive to the science of the marketing art. You have to beinterested in it. In fact, you have to be interested in everything your businessneeds.Youhave tobecomea studentof theartofbusinessand the scienceofbusiness.Andthat’sthe‘whattodo’partofall this.Doyourealizehowmuchmarketing money is spent by companies like McDonald’s, Federal Express,Disney, andWalmart to get it just right? Do you realize howmuch time andattention companies like Pepsico and American Express spend to get theirbrandsjustright?Andhoweasyitistomissthemark?Andwhatitcoststhemiftheydo?

“Inasmallbusinessyousimplycan’taffordtospendthemoneytheydo.Butyou can afford to spend the time, the thought, the attention, on the samequestionstheyask.

“Andthat’swhyIkeepongoingbacktothetrueworkofthesmallbusinessowner—thestrategicworkratherthanthetacticalwork.Becauseifyou’redoingtacticalworkallthetime,ifyou’reworkingallthetimedevotingallyourenergyinyourbusiness,youwon’thaveanytimeorenergylefttoask,letaloneanswer,all of the absolutely critical questions youneed to ask.You’ll simplyhavenotimeorenergylefttoworkonit.

“Theownerofthebusinessmuststartoutbyaskingmarketingquestions.

“TheCOOmustcontinuetoaskmarketingquestions.“The VP/Marketing is absolutely accountable for asking marketing

questions.“Infact,thereisn’tafunctionorpositionwithinthecompanythatisfreeof

askingmarketingquestions,ifbymarketingwemean,‘Whatmustourbusinessbe in themindofourcustomers inorder for them tochooseusovereveryoneelse?’

“Andso,seenfromtheappropriateperspective,theentirebusinessprocessbywhichyourcompanydoeswhatitdoesisamarketingprocess.

“Itstartswiththepromiseyoumaketoattractthemtoyourdoor.“Itcontinueswiththesaleyoumakeoncetheygetthere.“Anditendswiththedeliveryofthepromisebeforetheyleaveyourdoor.“In some companies that process is called Lead Generation, Lead

Conversion,ClientFulfillment.“Inyourbusiness,Sarah,it’scalledMarketing,Sales,andOperations.“Butwhatever you call it, it is the essential keyprocess that runs through

everybusiness.“And it is howwell-integrated that process is, how totally and completely

connectedeachpartoftheprocessappearsinrelationtotherestoftheprocess,that will determine how successful you are at getting them to come back formore.

“And it isgetting them tocomeback formore that is thePrimaryAimofeverybusiness.

“BecausewhatMcDonald’s knows, andwhat FederalExpress knows, andwhatDisneyknows—indeed,whateveryextraordinarybusinessknows—isthatthe customer you’ve got is one hell of a lot less expensive to sell to than thecustomeryoudon’thaveyet.

“Andthat’swhythebusinessprocessofLeadGeneration,LeadConversion,andClientFulfillment is socritical to thegrowthofyourbusiness.And that’swhatmarketingis.Thewholeprocess.Notjustapartofitbuttheentirething.

“Anditneverstops!“And so, while the VP/Marketing and the VP/Operations and the

VP/Finance each have their own specific accountabilities, they share onecommon purpose—to make a promise their customer wants to hear, and todeliveronthatpromisebetterthananyoneelseontheblock!

“And theplacewhere they join eachother is at thepositionofCOO.TheCOO is the driver of all this. The COO connects each part of the businessprocess.TheCOOmaintainstheintegrityofthewholebyactingasthearbiteroftheStrategicObjectiveheisaccountableforfulfilling,oftherulesofthegame

heisaccountableformaintaining,ofthegamethebusinesshaschosentoplay.“And it is there, at that point in themiddle,whereHierarchy andProcess

meet.“Itisthere,atthatpointinthemiddle,thatyourbusinesscomestogether.“Itisthere,atthatpointwhereyourManagementSystemandyourBusiness

DevelopmentProcessplayouttheirrespectiverolessovividly.“Itisatthatpoint,thepointIhavecalledthePowerPointinanearlierbook,

thatabusinesstrulybecomesalive.“Wherethestaticanddynamicnatureofeverygreatbusinessmeets.‘Thisis

howwedoithere,’andthen,‘Thisishowwedoithere,’andthen,‘Thisishowwedoithere,’overandover,andstilloveragain.

“Continuousimprovement.“Electrifying,ecstatic,alive.“Todowhat?“Todeliverthepromisenooneelseinyourindustrydarestomake!“That’swhatmarketingis,Sarah.That’swhatyourbusinessmustbe.Alive,

growing,committedtokeepingapromisenocompetitorwoulddaretomake.“That’swhatneedstobedone.Areyoureadytodoit?”“Justwatchme,”Sarahsaid.“Thenlet’sgoontothelastpartandtieitalltogether,”Isaid.“Let’stakealookatSystems,andtheabsolutelyessentialroletheyplay.”

18

YOURSYSTEMSSTRATEGY

The world thus appears as a complicated tissue of events, in whichconnectionsofdifferentkindsalternateoroverlaporcombineandtherebydeterminethetextureofthewhole.

WernerHeisenberg

PhysicsandPhilosophy

ThroughoutthisbookIhavetalkedaboutsystemswithoutreallydefiningwhatasystemis.Soletmedothathere.

Asystemisasetofthings,actions,ideas,andinformationthatinteractwitheachother,andinsodoing,alterothersystems.

Inshort,everythingisasystem.Theuniverse,theworld,SanFranciscoBay,the office I’m sitting in, theword processor I’m using, the cup of coffee I’mdrinking,therelationshipyouandIarehaving—they’reallsystems.

Somesystemswecanunderstandandsomewecan’t.Let’stakealookattheoneswecan.Thesystemsinyourbusiness.

ThreeKindsofSystems

There are three kinds of systems in your business: Hard Systems, SoftSystems,andInformationSystems.

Hard Systems are inanimate, unliving things. My computer is a HardSystem,asarethecolorsinthisoffice’sreceptionarea.

SoftSystemsareeitheranimate—living—or ideas.YouareaSoftSystem;soisthescriptforHamlet.

Information Systems are those that provide uswith information about theinteractionbetweentheothertwo.Inventorycontrol,cashflowforecasting,andsalesactivitysummaryreportsareallInformationSystems.

TheInnovation,Quantification,Orchestration,andintegrationofthesethreekindsofsystemsinyourbusinessiswhatyourBusinessDevelopmentProgramisallabout.

What follows are examples of each, and how they integrate to produce adesirableresult.HardSystems

At E-Myth Worldwide, we used to use “white boards” extensively inseminars,internalmeetings,andconferenceswithclientsandprospectiveclients.Sincethevastmajorityofourworkwithclientsisdonebytelephone,fax,andmail—rather than in our facilities as we did when The E-Myth was firstpublishedin1986—wehavefewsuchmeetingstoday.

As you’ve probably guessed by now, our facilitieswere operated (and, ofcourse,stillare)underrigidstandardsofcolorandcleanliness.

Color standards at the time dictated thatwe usewhite boards, rather thanblackones,andbluemarkers,rather thanwhitechalk.Unfortunately,ourcolorstandardsalsodictatedthatourwallsbewhite.

It wasn’t long before a conflict developed between our standards ofcleanlinessandourstandardsofcolor.

Attheendofaseminar,ameeting,oraconference,thepersonaccountableforthatparticulareventwastoleavetheroomintheorderinwhichhefoundit.This includedcleaning theboard-work,whichwasnotouremployees’ favoritejob.

Notthattheywouldn’tdoit;theywould.Butintheirhastetogetitdonesotheycouldgetonwiththeworktheypreferredtodo,theeraserwouldoftenflyuncontrollablyovertheedgeoftheboard.

It wasn’t long before our once gleamingwhite walls began to show uglystreaksandsmudgesofIBM-blueink!

Itdroveuscrazy.

Wemountedanall-outcampaign.WeheldBlueInkOntheWallsMeetings.Wewrotememosentitled:

TO:AllPersonnel.SUBJECT:BlueInkonWalls.

WecreatednewBoardCleaningPolicies.WecreatedCleaningTeams.WecreatedWall Tours.We createdBoard Spot Checks.We installed signs aboveeveryboardsaying:BECAREFUL!

Butnomatterwhatwedid,nomatterhowhardwetried,nomatterwhatwesaid to our normallymeticulous people—blue ink got on thewalls. Our onlyapparentrecoursewastopaintthewallswhiteoverandoveragainorgobacktoblackboardsandwhitechalk.

Neitherwasacceptable.Andthat’showourPrevent-a-SmudgeSystemwasborn.We had one standard that insisted on impeccably cleanwalls and another

standardthatmadethefirstoneseeminglyimpossibletouphold(whiteboards,whitewalls,blueink).Inshort,wehadaconflictbetweenwhatwewantedandwhatwehad.

Thetwonecessarycomponentsofconflict.Theessentialconditionsforinnovation.Theconditionsthatgivebirthtoasystem.But a third component was needed to translate the conflict we were

experiencingintoremedialaction:will.Weweredeterminedtolicktheproblem,andwouldnotrestuntilwehad.Willappliedtoanyconflictcreatesenergy.Conflict without will creates frustration. An engine turning, but going

nowhere.Conflictwithwillcreatesresolution,amovementbeyondthedilemma.Voilà!TheE-MythWorldwidePrevent-a-SmudgeSystem!Itwassoobvious.Sosimple.WeinstalledaclearLucitecollararoundeachboard.Extending four inches out from each edge of the board, the Lucite collar

literallystoppedtheblueinkcarnageinitstracks!Inonefellswoop,thewallswereclean.Ourpeopleweredelighted;ourclientsamazed.

The constant painting,memowriting, sign creating, team invading, policypollutingactivitiesthathadpervadedourorganizationformorethanthreeweekswerehistory.

Andallbecauseofafour-inchLucitecollar!AHardSystemforproducingahumanandtotallyintegratedresult.Asystemsolution toa typicallypeople-intensiveproblem.Withoutanyone

havingtopayattentiontoit.Leavingmefreetowritethisbook,oranythingelseIcaredtodo.

After all, that’s thepurposeof a system—to freeyou todo the thingsyouwanttodo.SoftSystems

Thingsneedtobesold.Andit’susuallypeoplewhohavetosellthem.Everyone in business has heard the old saw: 80 percent of our sales are

producedby20percentofourpeople.Unfortunately,fewseemtoknowwhatthe20percentaredoingthatthe80

percentaren’t.Well,letmetellyou.The20percentareusingasystem,andthe80percentaren’t.AsellingsystemisaSoftSystem.AndI’veseensuchsystemsproduce100percentto500percentincreasesin

salesinalmostnotime!What is a selling system? It’s a fullyorchestrated interactionbetweenyou

andyourcustomerthatfollowssixprimarysteps:

1. 1.IdentificationofthespecificBenchmarks—orconsumerdecisionpoints—inyoursellingprocess.

2. 2. The literal scripting of the words that will get you to each onesuccessfully(yes,writtendownlikethescriptforaplay!).

3. 3.Thecreationofthevariousmaterialstobeusedwitheachscript.4. 4.ThememorizationofeachBenchmark’sscript.5. 5.Thedeliveryofeachscriptbyyoursalespeopleinidenticalfashion.6. 6. Leaving your people to communicatemore effectively, by articulating,

watching, listening, hearing, acknowledging, understanding, and engagingeachandeveryprospectasfullyasheneedstobe.

AtE-MythWorldwide,wecallitthePowerPointSellingSystem.Acareerdevelopmentcompanyweworkedwithputitinthehandsofpeople

withnoexperience,andrevenuesincreased300percentinoneyear.Anadvertising agencyput it in thehandsofpeoplewithnoexperience in

eithersellingoradvertising,andrevenuesincreased500percentintwoyears.Ahealthspaputitinthehandsofpeoplewithnoexperience,andrevenues

increased40percentintwomonths.Ifyouputittoworkinyourcompany,itwilldothesameforyou,nomatter

whatkindofbusinessyou’rein.The Power Point Selling System is composed of two parts: Structure and

Substance.Structureiswhatyoudo.Substanceishowyoudoit.The Structure of the System is all of the predetermined elements of the

Process,andincludesexactlywhatyousay,thematerialsyouusewhenyousayit,andwhatyouwear.

The Substance of the System is what you—the salesperson—bring to theProcess,andincludeshowyousayit,howyouuseitwhenyousayit,andhowyouarewhenyousayit.

StructureandSubstancemergeinthesellingprocesstoproduceafarmoreextraordinaryresultthananysinglesalespersoncouldiflefttohisowndevices.

Let’slookmorespecificallyatthemostimportantcomponentofthePowerPointSellingSystem—whatyousay.OrwhatwecallatE-MythWorldwide,thePowerPointSellingProcess.THEPOWERPOINTSELLINGPROCESS

ThePowerPointSellingProcess isactuallyaseriesofscriptsdefining theentireinteractionbetweenthesalespersonandthecustomer.

Thesescripts(orBenchmarks)are:

1. 1.TheAppointmentPresentation2. 2.TheNeedsAnalysisPresentation3. 3.TheSolutionsPresentation

THE APPOINTMENT PRESENTATION Most salespeople fail at theoutset of the selling process because they don’t realize the purpose of anAppointmentPresentation.

Mostbelievethat thepurposeofanAppointmentPresentationis toqualifythecustomerandascertainwhetherornotheisaviableprospect.It’snot.

ThepurposeofanAppointmentPresentationisonethingandonethingonly:tomakeanappointment.

TheAppointmentPresentationmoves theprospect fromwherehe is to thesecondBenchmarkintheprocess,theNeedsAnalysisPresentation.

Itisaseriesofwords,deliveredonthetelephoneorinperson,thatengagetheprospect’sunconscious(remember?)byspeakingprimarilyabouttheproductyouhavetosellratherthanthecommodity.

Forexample:

“Hi,Mr.Jackson.I’mJohnnyJoneswithWalterMittyCompany.Haveyouseentheremarkablenewthingsthatarebeingdonetocontrolmoneythesedays?”

“Whatnewthings?”“Well,that’sexactlywhyIcalled.MayIhaveamomentofyourtime?”

Theproduct?Financialcontrol.Controlisthekey.ThepresentationtellsMr.Jacksonthattherearethingsgoingonintheworld—“remarkablenewthings”—thathedoesn’tknowabout(he’soutofcontrol),buthecannowbecomefamiliarwiththem(gaincontrol!)byjustspendingafewmomentswithJohnnyJones.

And it tells him that instantly! Mr. Jackson’s emotional commitment isalreadymade.Allthatheneedsnowistofindtherationalarmamenttosupportit.That’swhatJohnnyJones’sjobis.That’swhytheappointmentwillbemade.

Simpleandeffective.Itmakesappointments.Todowhat?TodelivertheNeedsAnalysisPresentation.

THENEEDSANALYSISPRESENTATIONThe first thing youdo in a

Needs Analysis Presentation is repeat what you said in the AppointmentPresentationtoreestablishtheemotionalcommitment:

“Remember, Mr. Jackson, when we first talked I mentioned that someremarkablenewthingsweregoingonintheworldtocontrolmoney?”

Thesecondthingyoudoistelltheprospecthowyouwouldliketoproceedtofulfillyourpromisetohim:

“Well,whatI’dliketodoistotellyouaboutthosethings.Atthesametime,I’d like to showyousome incrediblyeffectivewaysmy firm,WalterMittyCompany,hasdevelopedtohelpyoutocontrolmoneyhereinyourbusinessOkay?”

Thethirdthingyoudoistoestablishyourcredibilityintheprospect’smindbycommunicating two things.First,yourcompany’sexpertise issuchmatters:“WeareMoney-ControllingSpecialists”(we,atE-MythWorldwide,call thataPositioningStatement).Andsecond,yourpersonalwillingnesstodowhateverisnecessarytoutilizethatexpertiseonhisbehalf:

“Letme tell youwhywe createdour company,Mr. Jackson.We’ve foundthatpeoplelikeyourselfarecontinuallyfrustratedbynotbeingabletogetthemostoutoftheirmoney.Frustratedbypayinghigherinterestratesthanthey have to. By working with financial experts who don’t seem to knowwhatthey’redoing.Bybankingwithabankthatdoesn’tseemtohavetheirbestinterestatheart”Andsoon.

“Dothesethingseverfrustrateyou.MrJackson?OfcoursetheydoAndthat’swhyWalterMittyCompanyhascreatedaMoney-ControllingSystemthatmakesitpossible foryoutoget themostpreferential treatment in thefinancialarenawhilepaying the least for it.Now I know that sounds toogoodtobetrue.Butletmeexplainhowweproposetogoaboutdoingthatforyou….”

HereJohnnyJonesiscommunicatingthatheunderstandswhatfrustratesMr.Jackson, and that he has the expertise to alleviate those frustrations—notpersonallybut systematically—through theuseof theWalterMittyCompany’sMoney-ControllingSystem.

The fourth thing you do in a NeedsAnalysis Presentation is describe theWalterMittyCompany’sMoney-ControllingSystemandwhyitworkssowell.Notwhatitdoesbuttheimpactitwillhaveontheprospect:

“TheWalterMittyCompany’sMoney-ControllingSystemisdesignedtodothreethings,Mr.Jackson.

“First, it enables us to know what specifically bothers you aboutcontrollingyourmoney.Becauseweknowthatcontrollingmoneymustbepersonallytailoredtoeachandeveryoneofourclients.Inordertodothatwe’vecreatedwhatwecallatWalterMittyCompanyaMoneyManagementQuestionnaire.Byaskingyoutheseparticularquestions,we’rewellonourwaytohelpingyougetwhatyouwant.BeforeIleavetoday,I’llreviewtheQuestionnairewithyou.

“Once the Questionnaire is completed, we return it to our FinancialSystems Group. This is a group of financial specialists who review yourQuestionnairetomakecertainthatithasbeencompletedaccurately.

“Ifithas,theyentertheinformationintoourMoney-ControllingSystemthathasbeendesignedtoanalyzethisinformationandcompareitwiththebroad spectrum of data we’ve assembled over the years. Once havinganalyzed the information, the System will then create personally tailoredsolutionsjustforyou,Mr.Jackson.Waystosecurethekindofpreferentialtreatmentwe talkedaboutearlier,butat the lowestpossiblecost.Waysofcontrollingyourmoneyandusingittoyouradvantage,notsomeoneelse’s.

“ThesesolutionswillthenbepreparedintheformofaFinancialReportthatI’lldelivertoyoupersonallyandreviewwithyouatthattime.

“Should any of our solutions make sense to you, we’ll be more thanhappy tohelpyou implement them. Ifnot, thenat leastwe’llhavestartedtheprocessofbecomingbetteracquaintedsothatwemaybeofassistancetoyousomeothertime.

“In any case, the Financial Report is yours—at absolutely no costwhatsoever. It’s our way of saying we’re serious about what we do, andwouldbehappytoworkwithyou,whethernoworinthefuture.

“So let’s review theQuestionnaire together, andwhenwe’re done I’llprovideyouwithasummaryofsomeoftheremarkablenewthingsthatarehappening in the world to control money. And then I’ll take yourinformationbacksowecanprepareyourFinancialReport.Okay?”

The fifth thing Johnny Jones does in the Needs Analysis Presentation iscompletetheMoneyManagementQuestionnaire.

ThesixththingJohnnyJonesdoesisprovidetheprospectivecustomerwiththe informationhe promised and showhimhow relevant it is to theFinancialReporthewillbepreparing forhim. (Hecouldhavedone thisat theoutsetoftheir meeting, during the Needs Analysis questioning process, or now, at theend.)

ThesevenththingJohnnyJonesdoesintheNeedsAnalysisPresentationismakeanappointmentwiththeprospectivecustomertoreturnwiththeFinancialReport,remindinghimthatJohnnyJoneswillhavesomevaluablesolutionsforhim—atnocost!—andthatJohnnywilltakewhatevertimeisnecessarytohelpthe prospective customer understand those solutions, whether he decides toimplementthemornot!

Upon completion of the Needs Analysis Presentation, Johnny Jones willhavemade an appointment that will bring him to the third Benchmark in thePowerPointSellingProcess,theSolutionsPresentation.

THE SOLUTIONS PRESENTATION The Solutions Presentation is theeasiestcomponentofthePowerPointSellingProcess.BecauseifJohnnyJoneshasdonehisjobeffectivelyuptothispoint,thesaleisalreadymade.

Mostsalespeoplethinkthatsellingis“closing.”Itisn’t.Sellingisopening.That’swhat theNeedsAnalysisPresentationdoes. Itopensup theprospectivecustomer to a deeper experience of his frustration and to the opportunitiesavailabletohimbygoingthroughthequestioningprocesswithyou.

Younowhavesomethingtogivehim.“Remarkable new things” that will make it possible for him to receive

“preferential treatment” in the “financial arena” so as to secure the kind of“control”overhismoneyhe“deserves”andata“preferentially”lowcost.

In other words, by knowing you (or Johnny Jones), your prospectivecustomer is going to: (1) be on the inside of the financialwinners circlewithpeoplewho are in the know; (2) be treated like important people are; (3) usemoneylikethe“pros”do;and(4)gaincontroloverhislife.

Andhe’sgoingtogetallofthiswithoutpayingtoohighapriceforit!Whatmorecouldanyoneaskfor?The Solutions Presentation simply provides the rational armament for the

emotionalcommitment(rememberthat?).Here Johnny Jonesbrings theprospectup-to-dateby reviewingeverything

he said and did during the Needs Analysis Presentation. The prospect hasforgotten all those psychographically compelling things by now.But hewon’tforlong—they’reapartofhim.

Then Johnny Jones reviews in great, patient, and earnest detail every lastword,comma,andnumberinhisprospectivecustomer’sFinancialReport!

He asks questions to make certain that the prospect feels that this is hisFinancialReport,notWalterMittyCompany’s.

AndwhenJohnnyJonesisdone,whenhe’sreviewedallofthecomponentsoftheFinancialReportpreparedjustforhisprospect,Mr.Jackson,heaskshimthisquestion:“Oftheoptionswe’vesuggestedhere,Mr.Jackson,whichdoyoufeelwouldbestserveyourightnow?”Andthenwaitsfortheanswer!Becausethenextpersonwhospeaksisgoingtomakeapurchase.Ifthat’sJohnnyJones,he’sgoingtobuya“nosale.”

Andthat’sall,exceptforwritingupthesale!Ofcourse,there’severythingelsetodo.Whathappenswhentheprospectsaysthis?Whathappenswhentheprospectasksmethat?Andsoforth.Butbelieveme,whetheryou’resellingsheetsandpillowcases,computers,

swimmingpools, flowersand fertilizer,canaries,puppies,orQuonsethuts, thePowerPointSellingProcesswillwork.

HowdoIknowthat?Becauseitalreadyhas!ButiftheProcessistoworkforyou,youmustbewillingtogothroughitthe

sameway every single time.Using the samewords the sameway every time.ReviewingtheFinancialReportthesamewayeverytime.

Andbydoingitthesamewayeverysingletime,youwillnothaveasellingpersonbutasellingsystem.

ASoftSystem.A completely predictable technology for producing formerly unpredictable

results.Andyouwillbeabletotelljusthowpredictableitisthroughtheuseofan

InformationSystem.InformationSystems

ForanInformationSystemtointeractwiththeSoftSysteminourexample,itshouldprovideyouwiththefollowinginformation:

INFORMATION BENCHMARK

Howmanycallsweremade? 1Howmanyprospectswerereached? 2Howmanyappointmentswerescheduled? 3Howmanyappointmentswereconfirmed? 4Howmanyappointmentswereheld? 5HowmanyNeedsAnalysisPresentationswerescheduled? 6HowmanyNeedsAnalyseswereconfirmed? 7HowmanyNeedsAnalyseswerecompleted? 8HowmanySolutionsPresentationswerescheduled? 9HowmanySolutionsPresentationswereconfirmed? 10HowmanySolutionsPresentationswerecompleted? 11Howmanysolutionsweresold? 12Whatwastheaveragedollarvalue? 13

The information should be recorded on a form, either manually or as adatabaseonyourcomputer.

TheInformationSystemwilltracktheactivityofyourSellingSystemfromBenchmarktoBenchmark.

Itwilltellyouanastonishingnumberofthings.ItcouldtellyoutherateofconversionbetweenanytwoBenchmarksinyour

SellingProcess.ItcouldtellyouatwhichBenchmarkanyparticularsalespersonneedshelp.

Which of your people are “on the system”—that is, using the Selling Systemverbatim—andwhichonesareoffit.

Ifyouhadcalculatedthecostofmakingacall,youcouldthencalculatethecostofcompletingthenextBenchmarkintheprocess,andfromthatderivethenext,andsoon,untilyoucalculatetheactualcostofmakingonesale.

Inshort,theInformationSystemcouldtellyouthethingsyouneedtoknow!Thingsyoudon’tknownow.Things you need to know in order to develop, control, and change your

SellingSystem.And thingsyoualsoneed toknow inFinanceandProductionandProduct

Development.If your Systems Strategy is the glue that holds your Franchise Prototype

together,theninformationisthegluethatholdsyourSystemsStrategytogether.Ittellsyouwhenandwhyyouneedtochange.

Without it, youmight aswell put on a blindfold, have someone turn youaround three times, and set outwith a dart in your hand,waiting for a signalfromtheheavenstothrowit.

Notaverypromisinggame.Butone,itseems,mostpeopleinsmallbusinessaredeterminedtoplay.

HardSystems,SoftSystems,InformationSystems.

Things,actions,ideas,information.Thestuffofwhichourlivesaremade,andthestuffofyourbusinessaswell.Doyouseehowdifficultitistoseparateonefromtheother?Doyouseehowintertwinedtheyare?DoyounowunderstandwhatImeanbyyourbusinesssystem?Andwhyitisabsolutelyessentialthatyoubegintothinkofyourbusinessas

afullyintegratedsystem?Thattoapproachanypartofyourbusinessasthoughitwereseparatefrom

all the rest would be lunacy, because everything in your business affectseverythingelseinyourbusiness.

That your Primary Aim and your Strategic Objective and yourOrganizational Strategy and your Management Strategy and your PeopleStrategyandyourMarketingStrategyandyourSystemsStrategy—allof themaretotallyinterdependent,ratherthanindependentofoneanother.

ThatthesuccessofyourBusinessDevelopmentProgramtotallydependsonyourappreciationofthatintegration.AndthatyourPrototypeisthatintegration.

Ifyouunderstandallofthat,thenthisbookhasbeenworthourtime.If you don’t, take off the blindfold, because there’s no going around one

moretime.We’vegotbusinesstoattendto.There’snotimelefttotrustadartinthedark.

Wewerealmostdone.SarahknewitandIknewit.Allthatwasleftwastotiethe pieces together. To help her to integrate everything we had talked abouttogether.Tohelphertoseehowitwasallapplicable—indeed,essential,toherbusinessAllAboutPies.

“IunderstandwhatyoumeanbyHardSystems,”shesaid.“Thesignonmyshop, thefloors, thewalls, thedisplaycases, the tables,mypeople’suniforms,andsoforth. Inotherwords,allof thevisualelementsofmybusinessand the

waytheyallfittogether.Infact,whenit’salldonecorrectly,theentirebusinessshouldlooklikeonefullyintegrated,beautifullydesignedsystem.

“IevenunderstandwhatyoumeanbyInformationSystems,”shecontinued.“My ability to extract from the day-to-day operation of my shops (she wasalready thinking about four shops, rather than one!), howmany pies are sold,whatkindofpies, thetimetheyweresold,howmanycustomerscameineachshopandwhen,howmanyboughtpiestogo,howmanyslicesofpieweresoldtoeatonthepremises,howmanyofthecustomerswhoboughtpietoeatonthepremisesboughtapietogo,andsoforth.AndIcanimagineagooddealmorethanthatIwouldliketoknownowthatI’vebeguntothinkaboutit.

“WhatIdon’tfullyunderstandis theSoftSystemspart.Canyoutellmealittlebitmoreabout that? Ican’tpossibly imaginemypeopleusing—whatdidyoucallit?ThePowerPointSellingSystem?”

“Isuspectyoudowithoutrealizingit,”Isaid.“Remember what I talked about early on when we were discussing

Innovation? ‘Hi,haveyoubeen inherebefore?’ asopposed to ‘Hi, can Ihelpyou?’

“Well,what’syourversionofthat?“Remember when we talked about the Game Worth Playing and the

recruitmentprocesstheManagerusedatthehotel?“What about the script he used when he told the story about the Boss’s

game?What’syourversionofthat?“Andrememberwhenwetalkedaboutthehotel’schecklists,andthenwent

ontodescribetheManagementSystemthatdefinedthem?What’syourversionofthat?

“Infact,”Icontinued,“everywrittenorverbalcommunicationwithanyonewhocomesintocontactwithyourbusinessisaSoftSystem.Whatsofewofusunderstand is the power of thosewordswhen they are totally integrated.Thatyourrecruitmentscript,andyourshop’sname,andthetrainingyouconduct inyourschool,andthewordsinyourcustomerbrochures,andyourads,everythingyou say,mustwork together just as the visual components of your shopmustworktogether,tomakeonepowerfullyeffectivemessage.

“ThatyouareAllAboutPies,andthatthereisnoone,absolutelynooneelselikeyou.

“Thereisnooneelsetellingthesamestory.“Thereisnooneelseusingthesesamewordsinexactlythesamewayasyou

are.“AndthatthesewordsrepresenttheIdeabehindAllAboutPies.“TheIdeathatcomesfromyourmindandyourmindalone.

“TheIdeathatyourauntunderstoodsowellandthatyouunderstandsowell.“TheIdeaofyourbusiness,whichisthelifebloodofyourbusiness.Whichis

theheartofyourbusiness.Whichisthespiritofyourbusiness.“Andyouknownowhowvaluablethatspiritis,Sarah.It’stobecherished.

It’stobesharedwithothers.It’stobesetfreeupontheworld.“That’swhatSoftSystemsare.Doyouget itnow?Doyouseehowallof

thisfits together intoone lovely,endurable,howeverever-changing,wonderfulwhole?

“CanyouseenowwhyIsaythatTheTechnician’sroleisnotenoughbyfar?That there’ssomuchmore tobedone ifyourbusiness isever to liveup to itspotential?

“Andthatit’sfun!”Sarahwasgrinningfromeartoear.

Formoreinformation,visitusatwww.e-myth.com.

19

ALETTERTOSARAH

Freedomdoesnotcomeautomatically;itisachieved.Anditisnotgainedinasinglebound;itmustbeachievedeachday.

RolloMay

Man’sSearchforHimself

DearSarah,Ithasbeensaid that therearenoaccidents in theuniverse,andso Imight

considerittobeprovidentialthatonthisverydaythatI’mwritingthislettertoyou, I have just finished reading, for the third time, RolloMay’s remarkablebook,Man’sSearchforHimself.Whata lessonthatbookholdsforallofus inbusinesswhowouldbelieve that today’shot subjectsof corevalues,meaning,purpose, and empowerment are advanced thinking when, in fact, Rollo Mayspokemoreeloquentlyaboutthoseverysamesubjectsin1953!

For that matter, who among us today in business recalls May’s Age ofAnxiety,orCamus,orDostoyevsky,orKierkegaard,orKafka,orOrwell,orT.S.EliotinTheHollowMen,orDavidRiesmaninTheLonelyCrowd?Tothem,however,thequestionwasnotoneofsuccessinbusinessbutoflifeanddeath!

Ifwe had such a yearning for values in 1953whenMay’s bookwas firstpublished,andwehavesuchayearningforvaluestoday,whathashappenedtousintheinterim?TheColdWar?Atriptothemoon?Korea?TheVietnamWar?Cambodia?TheSexualRevolution?TheFeministRevolution?TheCivilRightsExplosion? The Psychological Revolution? The New Age manifesto and thecomingmillennium?Onehellofa lot Iwouldsay!Andyet,afterall that,andfortyyears,wearestillsearchingformeaning,forsomethingtobelievein,and

speakingaboutitasthoughitwerebrandnew!What lessons haven’twe learned here at the end of the twentieth century,

Sarah? Maybe we just don’t care enough. Meaning, it seems to me, is theproduct of caring, not vice versa.Whatwe care aboutwevalue.And so, as Ilookaround,Iseethatweareinsomeveryfundamentalwaydisconnectedfromcaringsufficientlytobeabletofindtruemeaninginthethingsthatwedo.

Whichisnottosaythatwedon’tcareaboutanything;weobviouslydo.Wecare about making money. We care about being safe. We care about beingprotected.WecareabouttheSuperbowl.

ButIthinkthatthethingswehavecometocareaboutareinsignificantwhenplacedonthescalethatDostoyevsky,orCamus,orTolstoy,orKierkegaard,orKafka,or theOldTestament,or theNewTestament,orRolloMaywoulduse.Theproblemis,Sarah,we’re justnotveryseriouspeople thesedays.Weevenspeak about values, when we speak about them, as though they were acommodity like a sweater or a pair of Gucci pumps that can be acquired bywriting a check. Much like the Leadership, Empowerment, Management,Relationship, andQuality Training seminars that abound today. As though bygettingalittletrainingwewillsuddenlyfindourselvesfullofmoresubstantialstuff.Ithinknot,Sarah.

Ithinkthatwe,playingourendgameatthebottomofthetwentiethcentury,are going to need one hell of a lotmore than anything our “trainers” have instore forus. I thinkweneeda shock, a self-administered shock, so jolting, sooutrageous,sounsympathetic toour littlewants, thatwe’lleitherbeblownoffthe planetwe’ve each shaped for ourselves—our personal little spaces—whenweleastexpectit,orwewillburntoacrisprightthereonthespot,nevertobeheardfromagain.

And therein lies the problem,Sarah, and, of course, the opportunity.Howdoesonecometothepointinhisorherlifewhenheorsheisnotonlyreadybuteager and willing—however terrifying the prospect might be—to self-executesuchaleapoffaithwithoutanyguaranteesthatitwilldoanygood?

That,dearSarah,iswhereIbelievewelefteachothernottoolongago,atacrossroads,whereIstoodandwatchedyouwalkoffonyournewlydiscoveredpath,thinkingtomyselfthatIknewwhereyouweregoingandwhatyouwoulddiscoverthere,and,atthesametime,realizingIknewnothingofthesort.Thatthe path you had chosen reached both forward in time and back to yourchildhoodandthe“spirit”youhadthoughtyoulost.

ButwhatIknowtobetruefrommyownlifeexperienceisthatyouwillnottrulyrediscoveryour“spirit”inthepastbutwilldiscoveritiswaitingforyouinthefutureonthepathyouhavenowchosen.Yourspiritisn’tbehindyou—itis

wayaheadofyou;ithasalreadymadeitschoice!Allthatneededtohappenwasforyoutomakeyours,andyouweretogetheragain!Prettymetaphysicalforahard-headedguylikeme,perhaps,butwhileIcan’tproveit, Iknowwithoutashadowofadoubtthatitistrue.

I know, because the very same thing has happened tome, time and timeagain,whenIwasopentoit.Iknowthatmyspiritiswaitingoutthereinfrontofmeononeofanynumberofathousandpaths,andthatit’suptometochoosethat onepathonwhichmy spiritwaits, and to stepout on it brightly,withouthesitation, to pursue the I, which is the greatest one I can possibly be. To bespirit-full,thatis,spiritual.Thatistobeintouchwithmysoul.

And there, inourspirit,Sarah, iswheremeaning lies.There, inwhatyouraunt called caring. It is your spirit that cares, Sarah.While your parents andteachersthoughtitwasdisruptiveandtriedtotakeitawayfromyou,yourauntknew,Sarah,whatyou’vejustfoundout.Thatyourspiritwaswaitingthereallthetime!Ithadn’tgoneanywhere;youhad.Andthepathyouarenowonisthesamepath you and your auntwere on, there in the kitchen, and there in yourlittle girl’s bed on the summer morning as you breathed in the rich, delicatesummerair,andthereamongthefouroaks,andtherewithyourhandonthefaceoftheblackhorse.

Yourpathhas alwaysbeen there foryou,Sarah.You simplygot lost.Youdidn’t trust it. In your need to be assured, as any little girl would, that yourparentswouldn’tleaveyouandthatyourteacherswouldloveyou,youbecamedisconnectedfromyourself.But,fortunately,notforever.

Because this path you’re now on, this entrepreneurial path,winds aroundcornersthatwillamazeyouattimes,andevenshockyouatothers.Tobesure,itwill be anything but certain, but that’s why it is so exciting! It’s the path ofsurprise.It’sthepathofconstantengagement.Andbecauseit’sallthosethings,it is truly the path of life, or, asRolloMaymight have called it, “the path offreedom.”Hesaid:“Thusfreedomisnotjustthematterofsaying‘Yes’or‘No’toaspecificdecision:it is thepowertomoldandcreateourselves.Freedomisthecapacity,touseNietzsche’sphrase,‘tobecomewhatwetrulyare.’”1

Andso,Sarah,whilewehavetalkedagreatdealaboutyourbusinessanditsrelationship to you, while we have spoken about planning and systems andcontrols and management, about people development and organizationaldevelopment and marketing development, and all those many parts of yourbusinessyoumustbecomenotonlyawareofbutattentiveto,IwouldberemissifIleftyouwiththeimpressionthatanyofthosethingswillmakeanydifferenceatallunlessyourememberonething:keepthecurtainup.

The curtain is your Comfort Zone. And your Comfort Zone has been the

falsemaskyouputonwhenyouwerealittlegirl,becauseitwassafewhenyourspiritwasnot.YourComfortZonehasbeenthecurtainyouhaveplacedinfrontof your face and throughwhich you view theworld.YourComfort Zone hasbeenthetightlittlecozyplanetonwhichyouhavelived,knowingalltheplacestohidebecauseit’ssosmall.YourComfortZonehasseizedyoubefore,Sarah,anditcanseizeyouagain,whenyou’releastpreparedfor it,becauseitknowswhatitmeanstoyou.Becauseitknowshowmuchyouwanttobecomfortable.Becauseitknowswhatpriceyouarewillingtopayforthecomfortofbeingincontrol.Theultimateprice,yourlife.

So,Sarah,ifthisnewpath,iflivingwithyourspirit,meansanythingtoyouatall, ifyou trulycareabout it, thenguard itwithyour life.BecauseComfortovertakesusallwhenwe’releastpreparedforit.Comfortmakescowardsofusall.

Andso,good-byefornow.Pleaseletmeknowhowyou’redoing;howthebusinessisgoing.Andremember,myheartwillbewithyouwhereveryouare.

MichaelE.Gerber1

Epilogue

BRINGINGTHEDREAMBACKTOAMERICANSMALLBUSINESS

You should know now that a man of knowledge lives by acting, not bythinkingaboutacting,notbythinkingaboutwhathewillthinkwhenhehasfinishedacting.Amanofknowledgechoosesapathwithheartandfollowsit.

CarlosCastanedaASeparateReality

Thisbookisnotsimplyaprescriptionforsuccess;it’sacalltoarms.Butthiscalltoarmsisnotacalltodobattle.It’sacalltolearning.Howtofeel,think,andactdifferentlyandmoreproductively,morehumanly

than our existing skills and understanding allow. Today’s world is a difficultplace.Humankindhasexperiencedmorechangeinthepasttwentyyearsthanithasinthe2,000thatprecededthem.

Boundaries that once served us—geographically, politically, socially,emotionally—no longer exist. The rules are constantly changing. But peoplecannot livewithout boundaries,without structure,without rules. So new oneshave sprung up and proliferated in order to fill the void left by those that nolongerseemtoserveour“NewAge”condition.

Unfortunately,inaworldofacceleratedchangethereislittletimeforrulestotakehold.Assoonasthenewrulesareuponus,theytooareswallowedupin

theinsatiablevortexofchange,followedalltooquicklybymorerules,andthenstillmore.

Theresultofallthischangeischaosanddisorder,eachchangebringingwithit an evenmore turbulent world than the one before it with fewer and fewertraditionstoholdonto.Aworldintrouble,whereconfusionreigns.

Butthetroubledidn’tstart“outthere”intheworld.Ifitdid,we’dreallybein trouble. Becausewho among us knows enough to control or even have animpactonwhat’shappening“outthere”?Ifitissodifficultforustodoanythingaboutourbusinesses,how in theworldarewegoing todoanythingabout theworld?

We can’t. It’s that simple.And any call to arms that suggestswe can is astopgapmeasure,acalltodisillusionmentandultimatelytodisaster.Becauseourstopgapmeasures are not solutions.Our feeble attempts to fix theworld can’tchange the overall condition. If they work at all, they can only change thecircumstancesinwhichwefindourselvesatanygivenmoment.

No,wecan’tchangetheworld“outthere.”Andfortunately,wedon’thaveto;wecanbeginmuchclosertohome.Wecanbegin“inhere.”Infact,ifwe’retosucceed,wemust.Because thechaos isn’t“out there” ineveryoneelse. It’snot“outthere”intheworld.Thechaosis“inhere”inyouandme.

Theworld’snottheproblem;youandIare.Theworld’snotinchaos;weare.Theworld’sapparentchaosisonlyareflectionofourowninnerturmoil.Iftheworldreflectsalackofgoodsense,it’sbecauseeachoneofusreflects

thesame.Iftheworldactsasifitdoesn’tknowwhatit’sdoing,it’sbecauseeachoneofusacts thesame. If theworld isviolent,andgreedy,andheartless,andinhuman,andoftenjustplainstupid,itisbecauseyouandIarethatway.

Soiftheworldisgoingtobechanged,wemustfirstchangeourlives!Unfortunately, we haven’t been taught to think that way.We are an “out

there”society,accustomedtothinkingintermsofthemagainstus.Wewanttofix theworld so thatwecan remain the same.And for an “out there” society,coming“inside”isaproblem.

Butnowisthetimetolearnhow.Nowisthetimetochange.Becauseunlesswedo,thechaoswillremain.Andwecan’taffordthiskindofchaosmuchlonger.We’resimplyrunningoutoftime.

BridgingtheGap

Andthat’swhatthisbookisreallyabout.Bridgingthegap.Betweenthe“outside”andthe“inside.”Betweentheworld“outthere”andtheworld“inhere.”Andyour smallbusinesscanbecome thatbridge.Thebridgebetweenyou

andtheworld.Thebridgethatcandrawtogethertheworld“outthere”andtheworld“inhere”insuchawayastomakebothmorehuman.Insuchawaythatmakesbothmoreproductive.Insuchawaythatmakesbothworldswork.

For like theBoss’shotel,your smallbusinesscanbecomeyourdojo,yourpracticehall.JoeHyams,inhisbookZenintheMartialArts,tellsuswhatadojois:

Adojo isaminiaturecosmoswherewemakecontactwithourselves—ourfears, anxieties, reactions, and habits. It is an arena of confined conflictwhereweconfrontanopponentwhoisnotanopponentbutratherapartnerengagedinhelpingusunderstandourselvesmorefully.Itisaplacewherewecan learnagreatdeal ina short timeaboutwhoweareandhowwereact in the world. The conflicts that take place inside the dojo help ushandle conflicts that take place outside. The total concentration anddiscipline required to study martial arts carries over to daily life. Theactivityinthedojocallsonustoconstantlyattemptnewthings,soitisalsoasourceoflearning—inZenterminology,asourceofself-enlightenment.1

Andthatisexactlywhatasmallbusinessis!Asmallbusinessisaplacethatrespondsinstantlytoanyactionwetake.A

placewherewecanpracticeimplementingideasinawaythatchangeslives.Aplacewherewecanbegintotestalloftheassumptionswehaveaboutourselves.Itisaplacewherequestionsareatleastasimportantasanswers,ifnotmoreso.Itisaplacewheregeneralizationsmustgivewaytospecifics.Itisaplacethatdemands our attention. A place where rules must be followed and orderpreserved.A place that is practical, not idealistic. But a placewhere idealismmustbepresentforthepracticaltoserve.Itisaplacewheretheworldisreducedto manageable size. Small enough to be responsive, but big enough to testeverythingwehave.Atruepracticehall.

Aworldofourown.

AWorldofOurOwn

And that after all is the “DreamofAmerican SmallBusiness,” the dreamthat has served as the catalyst for so many entrepreneurial—and not soentrepreneurial—efforts.

Tocreateaworldofourown.What is this Entrepreneurial Revolution people are talking about today,

wheremillionsofusaregoingintobusinessforourselves?It’s nothingmore than a flight from theworld of chaos “out there” into a

worldofourown.It’sayearningforstructure,forform,forcontrol.Andforsomethingelseas

well. Something more personal. Something less distinct, yet much moreintimately connected with who we are as human beings. It’s a yearning forrelationshipwithourselvesandtheworldinawayimpossibletoexperienceinajob.

Unfortunately, aswe’ve already seen, the “dream” is rarely realized;mostsmallbusinessesfail.Andthereasonisobvious.Webringourchaoswithus.

Wedon’tchange.Wetrytochange“outthere.”Wetrytochangetheworldbystartingasmallbusiness—butwestaythesame!

Andsothesmallbusinessthatwasstartedtogiveusanewworldbecomesinsteadtheworstjobintheworld!

The lesson to learn from all this is simple:we can’t change our lives bystarting“outthere.”Allwecanproduceintheprocessismorechaos!

We can only change our lives and create a world of our own if we firstunderstandhowsuchaworldisconstructed,howitworks,andtherulesofthegame.Andthatmeanswehavetostudytheworldandhowweareinit.Andinordertodothatweneedaworldsmallenoughinscopeandcomplexitytostudy.

Asmallbusinessisjustsuchaworld.And a Business Development Program can be a means to study it most

effectively.And the Franchise Prototype can provide our study with the discipline it

needstosucceed.Innovation, Quantification, and Orchestration become the practice that

brings us and our opponent—whoever that may be—to the discovery of ourlimits,ourweaknesses,ourstrengths.Tothediscoveryofwhatreallyworksintheworld rather thanwhatour imaginationsmightwishwouldwork.For in amartial arts contest, there is no room for imagination.Wecouldget killedoutthere!

Innovation,Quantification, andOrchestration provide the belief system ofourbusiness,thephilosophicalbedrockofourinteractionwiththeworld.Theybecome our source for learning, for creating, for expanding beyond our self-imposedlimits.

AndthroughInnovation,Quantification,andOrchestrationourbusinesscanbecome somethingmore thanmerely a place to go towork. It can become aplacethatsatisfiesmoreofourselvesthanjustTheTechnician.ThereisaplaceinBusinessDevelopmentforthewholeofourselves.Fortheinnovator,forthemaintainer, for the doer. For The Entrepreneur, The Manager, and TheTechnicianineachoneofus.

Yoursmallbusinessandminecangiveusmorelife.

AnIdeaforAction

Butdoesitwork?WillthemodeloftheFranchisePrototypeworkforyou?ThereisanoldChineseproverbthatsays:

Whenyouhearsomething,youwillforgetit.Whenyouseesomething,youwillrememberit.Butnotuntilyoudosomething,willyouunderstandit.

In short,my answer is a resounding, “Yes!” It doeswork. Every time it’sapplied. And it will work for you. It works because it requires the fullengagementofthepeopleworkingit.Itcan’tbedonehalf-heartedly.Itcan’tbedone frenetically. It can only be done intelligently, reasonably, intentionally,systematically,andcompassionately.

TheveryProcessofBusinessDevelopmentcreatesinstantaneouschangeinthepeoplewhoengageinit.

Andthatisthekeytoitssuccess.Those who engage in the process must remember their aim in order to

continue it.And in theprocessof remembering, theiraimbecomes tethered tosomethingrealintheworld—theirbusiness.Aplaceinwhichaimscanbetestedin a concrete, practicalway. The business becomes a symbol for the life theywish to live, avisiblemanifestationofwho theyareandwhat theybelieve.A

living,active,evolvingtestamenttothewillofman.But,Iaskyounottothinkaboutitanymore.It’stimetoact.Becauseuntilyoudo,youwon’tunderstandit.Andwhenyoudo,therewillbenothinglefttothinkabout—you’llbewell

onyourway.Untilthen,it’sjustanothergoodidea,justanothercreativethought.It’stimetoturnitintoaninnovation.It’stimetoBringtheDreamBacktoAmericanSmallBusiness.It’sbeengonefartoolong.1

Afterword

TAKINGTHEFIRSTSTEP

Sonowwhatdoyoudo?Nowthatthefireisburning.Nowthatyouwanttogetstarted.Nowthatyou

wanttoturnyourbusinessintoalittle“moneymachine,”aturn-keyoperation.Well, likeSarah,andthousandsofsmallbusinessownersjust likeher,you

musttakethefirststep.YoumuststepbackfromyourbusinessandlookatitthroughyournewE-

Mytheyes.Youmustanalyzeyourbusinessasitistoday,decidewhatitmustlooklike

when you’ve finally got it just like you want it, and then determine the gapbetweenwhereyouareandwhereyouneedtobeinordertomakeyourdreamareality.

Thatgapwilltellyouexactlywhatneedstobedonetocreatethebusinessofyourdreams.

Andwhatyou’lldiscoverwhenyoulookatyourbusiness throughyourE-Myth eyes is that the gap is always created by the absence of systems, theabsence of a proprietarywayof doing business that successfully differentiatesyourbusinessfromeveryoneelse’s.

SinceThe E-Myth first appeared in 1986, we at E-MythWorldwide haveassisted thousandsof small-businessowners in taking that first stepback fromtheirbusinessestodiscoverwhatthegapwasineachoftheircases.

Wewouldlovetodothesameforyou.ItbeginswithourinvitationtotakepartinourfreeE-Mythexperience.Youwilllearnhowtocrossthebridgefromwhere you are towhere youwant to be in your business, your life, and yourfuture. The E-Myth experiencewill take you to a place you have never beenbefore,anditwillfeellikehome.

Totakeyourfirststep,simplycompletetheformatthebackofthisbookandfollowtheinstructionsprovided.

Andremember…

Whenyouhearsomething,youforgetit.Whenyouseesomething,yourememberit.Butnotuntilyoudosomethingwillyouunderstandit.

Let’sgetstarted.

MichaelE.GerberE-MythWorldwide

SantaRosa,CaliforniaJune,2001

AbouttheAuthor

MICHAELE.GERBERistheFounder,ChairmanandCEOofE-MythWorldwide,the company he founded in 1977 to provide small-business owners andentrepreneurswiththehelptheyneedtobuildabusinessthatworks.Sincethen,E-Myth Worldwide has provided more than 25,000 small and emergingbusiness-owner clients with the means to radically transform their businessesand their lives. It is fast becoming worldwide the largest and most effectivesmall-businessdevelopmentresourceofitskind.

Thoughtbymanyas“theleadingvoiceofsmall-businessinAmerica,”MichaelGerber has spoken to thousands of small-business owners, managers, andcorporate executives throughout the world about the truly profound role theentrepreneurialperspectivecanplay in thereinventionof theworld’seconomyandculture.Hismessageisunique,compelling,andpragmatic.Andbestofall,as his thousandsof readers, business clients, and seminarparticipants attest, itworks.

If you are interested in havingMichael Gerber address your organization, orwish to receive more information about Mr. Gerber’s innovative E-MythMastery Program, books, and tapes, call Toll Free: 800-221-0266 (US &Canada) or 707-569-5757 (worldwide). Or write to: Michael Gerber, E-MythWorldwide,2235MercuryWay,Suite200,SantaRosa,California,95407.VisitusatourWebsite:www.e-myth.comorsendusanemail:info@e-myth.com.

Visit www.AuthorTracker.com for exclusive information on your favoriteHarperCollinsauthor.

AlsobyMICHAELE.GERBER

E-MythMasteryTheE-MythManagerTheE-MythContractorTheE-MythPhysician

Copyright

THE E-MYTH REVISITED. Copyright © 2007 by Michael E. Gerber. All rightsreserved under International and Pan-American Copyright Conventions. Bypayment of the required fees, you have been granted the non-exclusive, non-transferablerighttoaccessandreadthetextofthise-bookon-screen.Nopartofthis text may be reproduced, transmitted, down-loaded, decompiled, reverseengineered,orstoredinorintroducedintoanyinformationstorageandretrievalsystem, in any form or by anymeans,whether electronic ormechanical, nowknown or hereinafter invented, without the express written permission ofHarperCollinse-books.MobipocketReaderMay2007ISBN978-0-06-144677-110987654321

AboutthePublisher

AustraliaHarperCollinsPublishers(Australia)Pty.Ltd.25RydeRoad(POBox321)Pymble,NSW2073,Australiahttp://www.harpercollinsebooks.com.au

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UnitedKingdomHarperCollinsPublishersLtd.77-85FulhamPalaceRoadLondon,W68JB,UKhttp://www.uk.harpercollinsebooks.com

UnitedStatesHarperCollinsPublishersInc.10East53rdStreetNewYork,NY10022http://www.harpercollinsebooks.com

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2TheodoreLevitt,MarketingforBusinessGrowth,p.56.

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