Are You Building A Person-Based or a System-Based Business?

In Michael E. Gerber's The E-Myth, he says:

"It's been said, and I believe it to be true, that great businesses are not built by extraordinary people but by ordinary people doing extraordinary things."

That sounds great, but what does he mean by extraordinary things?

He carries on to explain that the most extraordinary thing a business can commit to doing is to systematize their process.

His argument for suggesting this is that the value of a business is not in their product, but in the way they deliver that product. Their ability to deliver the exact same experience over and over again to every single one of their customers.

To become a system-based business, rather than a person-based business.

Systems don't feel natural to humans. We like to change our minds, feel a sense of freedom, and act based on our whims.

Therefore, the most extraordinary thing a person can do is to create a system that works for them.

Back to Gerber's quote. Ordinary people? Don't businesses want to hire the best of the best?

Sure, but if the business relies on that exact person's skill or knowledge, then you don't have a system. You've got a person-based business.

Most businesses are run this way. But a person-based business isn't really creating value, they're just delivering products that meet spec.

An ordinary business with a system becomes extraordinary (and valuable).

Get Smarter (Without Trying)

If you found this useful, consider joining Top Of Mind Weekly – a short email I send on Thursdays where I share ideas that are top of mind where Technology, Marketing, and Culture overlap.