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E-Myth, Rework, and Truth

A couple of the most popular business books irk me. Michael Gerber’s The E-Myth Revisited and 37signal’s Rework disagree about many things, yet both make the same fundamental error: they over-reach.

Let me make the point by citing a book that never over-reaches, Good to Great by Jim Collins. Like Gerber and 37signals, Collins asserts several axioms about what creates business success. But unlike them, he arrives at his conclusions by a very clearly explained methodology. If you disagree with the findings, you can trace back to how he arrived at them. His work is strongly argued and supported.

Now, the other two offer some terrific insights. I believe any leader would do well to read both. But both get there through the path of personal experience, and make the critical error of over-generalizing. Are they wrong within a narrow category of companies? Absolutely not. Are they wrong outside of their area of expertise? Absolutely.

For example, the 37signals guys suggest only making what you’d like to use. OK. Works fine in a high flexibility, low fixed cost industry like software development. Cost of getting it wrong is little more than opportunity cost. But if you’re making, say, cosmetics, and have a gazillion dollars of capital tied up in mixing and packaging machines, and need to build expensive inventories before you start shipping, well, let me suggest that what you like is irrelevant and what your target consumer likes is everything. Or meetings: right on, boys, they are often counterproductive, and if you are a company of ten coders, you probably don’t need them often. Text each other. Share docs online. But if you need to coordinate hundreds of people working from different disciplines and perspectives and likely with different incentives, may I suggest that without significant face-to-face time the only thing you’ll produce is chaos and mediocrity? Or virtual workspaces: right. Tell that to someone whose business is shopping malls or film production.

They aren’t wrong in their little world. They’re just, well, in their little world.

On the other end of the spectrum is Gerber’s E-Myth. He views the world from his lens of franchisers and retail. Fair enough. And if he presented his work as such, it would be a very useful guide for those pursuing similar interests. But can you imagine a very successful company like 37signals telling their employees to start wearing blue uniforms and speaking from scripts? I think not!

Gerber is out of touch with the type of small software/internet company that evolved over the  past 20 years. Worse, he completely misses the boat with solopreneurs – consultants, artists, and the like. He gets parts of Daniel Pink’s holy trinity of autonomy, mastery, and purpose, but still ends with a vision based on command and control. As Pink argues in Drive, that management style is very effective for driving productivity from defined tasks – e.g., making and selling fast food – but counterproductive where the primary work is problem solving and creativity.

So again: all wrong? No. But universal truths? Far from.

My point is that writers and theoreticians need to either be rigorously empirical like Collins or clearly state the limits of their experience. I admire Collins greatly, but don’t work like him. I write more like Gerber and 37signals, drawing from personal experience and observation. I only hope I do a better job than them at knowing my limits.

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One Response to “E-Myth, Rework, and Truth”

  1. Maurice says:

    Great article, I read both the E-Myth and Rework in the last 7 days, I absolutely loved them both but couldn’t help see a few conflicting ideas.

    But like anything you can’t throw the baby out with the bathwater, there are absolute gems in each book.

    Very excited to read Good to Great after you recommendation :).

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