In his book The E-myth revisited, Michael E. Gerber defines the 3 personalities of each business owner and points out that a lot of small business owners fail because of the lack of balance between these personalities. In this article, we explore why.
In this video, we explore the 3 personalities of each business owner and a very common mistake leading to their burnout and business failure.
Hey friends, welcome back to my channel where I talk about business and technology. Today we are exploring an idea that comes from the book the E-myth revisited by Michael E. Gerber, namely the 3 personalities of a business owner and how the lack of balance between them very often prevents the success of the business. If you haven’t seen it yet I did a review of the book which you can find here.
Alright, the 3 personalities, we start off with the Entrepreneur.
The Entrepreneur is the visionary, the dreamer, the innovator, the energizer, the one who lives in the future. Very often the Entrepreneur has a strong need to control everything in the present in order to be able to concentrate on the future. The work of the entrepreneur is strategic and focused on developing the long-term vision of where the business is going and how to get there.
They often see other people as obstacles to the success of their dream. The Entrepreneur makes a mess that someone needs to clean while also striving for control.
And that’s where the Manager personality comes in.
The Manager is the one who cleans up the mess of the entrepreneur. The pragmatic one, the planner, the one to put the things created by the entrepreneur in order and to turn the vision into action. The Manager lives in the present, looks at the past, and strives for order. It’s the tension between the Manager and the Entrepreneur that creates greatness.
Moving on, we have the third personality, namely the technician.
The Technician is the one that actually works hands-on in the business, sells its product or services, and delivers it. It is the doer, the one living in the present and striving for control of the workflow. A technician is a specialist – it could be a baker, a carpenter, an accountant, or an engineer.
Alright, if we all have the 3 personalities in us, what is the problem that leads to business failure then?
The Lack of Balance
Yes, every business owner has or should have these 3 personalities in them. They should know how their product or service is made or delivered, which is the technician’s point of view. They should also be able to structure the work in the business and delegate the appropriate responsibilities to the people working in it, that’s the manager’s role. The business owner is the one who defines the vision and the direction of the business, which is the entrepreneur’s responsibility.
What ends up happening is that most small business owners have one of the 3 personalities dominating the other 2, and most of the time it’s the technician dominating the entrepreneur and the manager. The technician is working non-stop and inefficiently (because no manager to put things in order) and without growing and innovating (no entrepreneur dreaming about the future). No matter which one is the dominant party, however, this disbalance always has devastating effects not only on the business but also on the personal life of the business owner.
According to Michael E. Gerber, this happens because most people who start a small business are technicians who experience an entrepreneurial seizure and decide to quit their job in order to do it for themselves. The reasons for that vary from person to person but some of the most common ones are dissatisfaction with the company, the boss, the projects, the salary, or just the idea that they can do everything on their own without having to deal with a boss. They don’t start a business to create jobs and a system for value generation, but rather they start a business to create a job for themselves where they will have the freedom to work the way they want to. Most of them think that a business is just the work that they are good at. But that’s not true because a business is so much more including marketing, sales, finance and accounting, human resource, and most importantly innovation. This means that being an amazing chef doesn’t make you automatically a good restaurant owner.
Let me give you an example. We can take any profession to illustrate this so let’s look at John who is a senior designer at a big company. He gets frustrated at his job and decides to start his own creative agency. He wants the freedom to work on what he likes when he wants, and how he wants to. He wants to work on interesting projects and follow his own ideas. He might even earn more money doing so. So John registers “John’s Awesome Designs”.
However, after some time it turns out running a creative business requires a lot more than being a great designer. Suddenly John has to work with an accountant, deal with finances, contracts, and legal advisors, do sales, market his services, deal with grumpy clients, etc. John starts to realize that building a creative business is not the same as freelancing and definitely not the same as being an employee for someone else.
There’s so much to do as a business owner rather than just the technical work that John eventually starts to burn out. He reaches his limits, gets demotivated, the quality of his work drops, his health and social life take a hit. After some time John realizes he has lost the motivation to build his business. He catches himself postponing client communication and just trying to find time to go back to his designs (or going back to just being a technician). He starts seeing clients as an annoyance that keeps him away from his comfort zone which lays in the creative work.
So what happened? Well, John reached his limits as a technician business owner. Every business reaches such a limit of the comfort zone of the owner. The technician’s limit is defined by how much work he/she can do. The manager’s limit is defined by how many technicians he or she can supervise and organize. The entrepreneur’s limit is defined by how many managers he or she can engage in the pursuit of their vision.
So what can John do?
- Where do I wish to be?
- When do I wish to be there?
- How much capital would that take?
- How many people doing what and how?
- What technology, knowledge, and skills will be required?
So friends, were you aware of the 3 personalities within you as a business owner? Have you gone through a similar scenario as the one with John? I definitely started my first business as a technician so I’m curious to hear about your experience. Let me know in the comments!
If you liked this video give it a thumbs up and check out the book review I did on the E-myth revisited. I will also be covering more on this topic with the next video diving deeper into the the life cycle of a business and how the 3 personalities affect it. Oh and join my newsletter if you haven’t already!
Thank you and see you soon.
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