Entrepreneurs, how much "process-coding" do you do?
Hi. By “process-coding,” I mean working out the processes in your business, like customer service, sales, marketing, other operations, etc., to such detail that nothing can go to chance.
I ask this because that’s what the “E-Myth revisited” is writing, and while on some level the perfectionist inside me agrees with it—customers like consistent quality, failure is a hard price to pay, etc.—I’m always sceptical of writers pursuing their own agenda, i.e. making things look a lot harder so that they can offer future consulting-services.
As Fidji Simo wrote in her review before, Gerber suggests treating your business as a franchise, coding everything possible to make it easy to scale and delegate tasks. While it’s entirely logical to me, he wrote and researched this book in the 70s-90s, not only the era of McDonalds, Starbucks, and Disney (of which at least two today have lost a lot of personality because of exactly that uniform attitude to doing business), but also perhaps before the era of global business diversity, meaning that the “American way” of doing business may no longer be as universally applicable.
So the question stands:
- How applicable are Gerber’s lessons to your business today, and
- is there alternative (international) thinking out there, in the form of books or, preferably, business-cases?
Vincent
P.S. since Toyota is probably one of my favourite companies today, I may already have part of the answer.
P.S. 2: On a personal note, I have to say that the conversationlist writing-styles of both Micheal Gerber’s book, “E-myth…,” and the book “One Minute Manager,” get on my nerves after a while. Maybe this is an American thing, but the constant dialogues ending with “Oh, Mr. Gerber, you’re so wise!” and “Oh, Mr. One Minute Manager, you’re so smart!” are way too sugary for my taste… even though, on many levels, both books give great advice and do so in an easily digestible package.
Related posts:
Architecture, Books, Business Process Management, Business intelligence, Entrepreneurship, Globalization, Review, operations
Interesting stuff: True there’s not much out-of-the-box thinking out there.
If I may, my alternative is “systematization”: if people understand the meaning of what they do (context, vision, …), then the chance that they execute well is higher than if you ‘process-code’ only (of course, if you do both…).
Hi Vince,I have a very geeky topping on the systematization approach of J:
From which point of view are you asking the question?
If you are planning, you shouldn’t care about exhaustively describing scenarii and distilling methods’ wisdom. I would focus on building a good, solid non-causal system with (magic) input from the future (or just feedback).
If remodeling, I would take into consideration that my nice (ideally non-causal) system has memory (inbuilt characteristic of non-causal systems). And memory (history) would probably have a very strong impact.
If revising process, I would take the method and I would try to make your company fit the model. tiny little chinese feet tightly wrapped in silk to stay tiny.
A nice compact code that helps if you are in the position 1 or 2 is the one by Schaum :
http://books.google.com/books?id=etKMvwgJb9wC&pg=PA17&lpg=PA17&dq=noncausal+systems&source=web&ots=9D42JY41Y8&sig=ebxHrRb3Pu9S8YN9hRMSr5CatLI&hl=el&sa=X&oi=book_result&resnum=5&ct=result#PPA17,M1
on page 17, in less than 15 characters you have a description, nice eh?
@Jeremy: Systemization is a nice way of thinking about it. But I suppose that even building a strategic framework and communicating that is a process (out of my head: from determining the mission & niche of the business, setting goals & objectives, forming strategies, to implementing actions… I’ll have to write a review of a good book on this subject).
I prefer the process of architecting processes enough to enable people to maximise their effectiveness. I’m not such a fan of checklists, which is what Gerber seems to suggest, though I suppose there are plenty of situations where a checklist is very effective, from a McDonalds to servicing a room at a multi-star hotel.
@Georgia: I’m looking at it from the objective of planning a people-business, i.e. finding the middle-ground between economic objectives and that magical ability of people. I’m not sure how well formulas work in that situation, apart from maybe determining performance.
From my point of view (from within a very large company), process-writing is less aimed at efficiency than risk minimization. The more you formalize processes, the more you cover yourself against risk, through both thinking ahead (identify risks and find a way to minimize them) and proper delegation (an employee cannot be blamed for following the procedure). Efficiency-seeking may be a goal indeed, for instance to help a quicker learning of the job (if you have a high turnover), but more marginally so.
I really wouldn’t advice entrepreneurs into writing processes too much too soon: business has to stabilize before you decide to bind it by a formalization. And at early stages of building a business, there is just too much on-the-way learning to be done: a process would have to be changed almost everyday, which would make them close to irrelevant.
That’s a very good point, Emmanuel. While Gerber calls his book the E-Myth (the Entrepreneurial myth), I think he really aims it at small business owners, who have problems scaling their business.
He doesn’t take the perspective of risk-minimisation so much, at least not in the sense of financial; but more of decreasing human risk—codifying functions to such an extent that you can easily find someone for the job and, pretty importantly, that you don’t have to focus on hiring the best of the best (which usually comes at a premium).
To add: while I do agree that the creative process can be a chaotic one, I do believe that a certain sense of order at the beginning can prevent a lot of teething problems later on.
[...] of principles and values in my future activities. I guess that this to some extent answers my previous question of whether process-coding is good or bad. It is good, as long as it takes environmental variables [...]
I did a lot of what you call process coding. That’s how I started my company in Texas, moved to Connecticut 2 years later and continued to run the company while it was in Texas. That was almost 20 years ago. Now my wife runs it (also long distance).
How applicable are Gerber’s lessons today: Depends. If you want to grow a business, they are very applicable. If you are happy with how things are (and the environment doesn’t change much) you probably don’t need them.
Also they have limitations. Business is not as “one size fits all” as Gerber seems to think. You have to allow for variation in your processes. Plus Gerber doesn’t talk about how to integrate your processes with your business model. Without that you might go broke trying to a very process intensive business that’s not profitable enough to support it. You need to coordinate the detail level of the process with other things.
Is there alternative thinking out there? Here’s some stuff to start with:
Work The System by Sam Carpenter – the book spends too much time trying to give you an epiphany and not enough on the details of how to do it, but it’s worth a look.
Anything by Eliyahu Goldratt. Start with “The Goal” but this is geared toward manufacturing companies and larger ones at that.
Lean Thinking by James Wormack and Daniel Jones Also geared toward manufacturers but some concepts you can adapt to service businesses.
Hope that Helps
John Seiffer
http://www.TheSmallBusinessCoach.com
What an amazing comment, John, thanks! I’ll definitely be checking out the books you recommend and I love your site, particularly this one on what to measure!
[...] third book is “The E-Myth Revisited,” by Michael Gerber, which I’ve written about extensively before, and which deals with developing a type of franchising approach regarding the starting and [...]
[...] But the article takes it further (and is also my inspiration) in that from tacit or implicit you move to explicit knowledge, meaning that processes are documented and standardised. A kind of spiral forms, indicated in the picture below. This also reminds of Gerber’s franchise methodology in the E-Myth Revisited. [...]
[...] in plenty of business “self-help” books and is, in my opinion, best solved through designing processes to be as failure-free and as simple as possible. In other words, like the preparation of a [...]