As I wrote in my previous article, The E-Myth Revisited by Michael Gerber is a book about how to make small businesses work. I’m still kind of amazed how much valuable insight the book has to offer, despite its age.
Obviously, a lot has changed since the revisited version of the book was published in 1995, and you might rightfully ask how much is still applicable when the Internet disrupted everything, software ate the world, and data became the new oil.
Well, it turns out that when it comes to small businesses, be they brick-and-mortar or online businesses, a lot of things still remain the same. For example, many of the fundamental laws of what makes a business successful haven’t changed. You still need to sell a differentiated product or service that customers actually want to buy, and from you specifically. The same applies to most of the challenges small businesses face. It’s usually about people, management, or leadership.
In the book, Gerber goes through a number of different strategies that a small business owner must have in place. These include your organizational strategy, your management strategy, your people strategy, and so on. The last strategy Gerber dissects is called your systems strategy, which ties it all together.
A system is a set of things, actions, ideas, and information that interact with each other, and in so doing alters other systems. In short, everything is a system. Some systems are easier to grasp than others, and some are almost impossible to understand. The systems we can understand are, according to Gerber, the systems in a business, and he defines them as:
Hard systems, which are inanimate, non-living things, like tools, software, furniture, the colours in the office, and so forth.
Soft systems, which are either animate, living things, or ideas. People are soft systems and so is the script for Hamlet – as are sales scripts, or selling systems.
Information systems, which provide us with information about the interaction between the other two. Inventory control, cash-flow forecasting, and sales activity reports, are all examples of information systems.
Gerber goes on to argue that success in a small business requires the innovation, quantification, orchestration, and integration of these three kinds of systems. And in order for that to happen, you need a systems strategy and a business development program.
Looking at the various elements of a business through the lens of systems makes a lot of sense. When the systems are in check and work together, they enable you to create a strong brand that can be replicated, enable growth without chaos, and eventually turn your business into a systems-dependent, not people-dependent, operation.