Here’s Eddie, which kind of rhymes with steady. Does him writing here every week count as him and I going steady? Probably.
The E-Myth Revisited is a book written by business consultant and writer Michael E. Gerber. He is a passionate spokesman for igniting the entrepreneurial spirit and promoting small businesses. I have written a brief review on my website, however, there are several concepts that merit more attention and words than what could be expressed in a short critique.
The most profound yet simple concept that Gerber expresses relates to the three different personalities that reside within the small business owner: the entrepreneur, the manager, and the technician. This paradigm is important in explaining each role the small business owner plays in the execution of their business plan and how a small business owner can thrive, both professionally and personally.
The entrepreneur is the personality that is visionary and forward-thinking. It is the hub of creativity, abstract thought, hope, and desire. The entrepreneur is the optimistic element of one’s essence and is the driving force behind the business. New business plans, a shift in strategic direction, creating novel products, and similar activities are the fruits of the entrepreneurial mind.
The manager lives in the past. He thrives on order, planning, and predictability. The author uses the example of a homebuilder: the entrepreneur is the house-builder and moves on to the next project as soon as the first one is completed while the manager makes the house liveable by mending the issues of the entrepreneur. The manager is pragmatic, sensible, and provides a practical counterweight to the entrepreneur. While the entrepreneur is the energetic creator, the manager is the composed maintainer.
The technician is the doer that lives in the present. He is concerned about the nuts and bolts of a particular task. Rather than being an energetic visionary like the entrepreneur or a multi-tasking manager, the technician is craftsman that prefers to take things more slowly and each task one at a time. As such, the technician mistrusts those he works for as they are always trying to get more work done than is desirable.
In essence, the entrepreneur creates the new ideas and initiatives, the manager gives form and discipline to them, and the technician provides the labour and physically creates them. How these personalities interact will determine the level of happiness and success of a small business owner. Many people start businesses thinking from the technician’s point of view, as they are angry with their current boss or company for interfering with or perverting their work. However, the technician soon discovers that their dream of owning their own business was foolhardy, as the technician did not want to assume their roles of entrepreneur and manager, which every small business owner must do to survive and grow. Managing these personalities and tasks are critical to ensuring a productive and fulfilling enterprise.
Gerber writes within the realm of the small business owner, however, his model can be readily applied to our personal lives. Models must sacrifice accuracy for simplicity and utility; while Gerber’s thesis lacks detail, the logic and applicability are apparent. Whether you family and economic unit consists of just yourself, or with your spouse or any number of other parties, the elements of the entrepreneur, manager, and technician are visible within and divided among each person to varying degrees. Recognizing these aspects is key to promoting fiscal efficiency, developing a life strategy, and promoting fulfilment and harmony.
From a strictly personal finance perspective, the three personalities are easy to discern. The technician roughly translates into the technical expert, of the person who compares PE ratios, resolutely follows the stock market, can cite contribution limits etc. The manager evaluates past mutual fund performance, evaluates what brokerage account to use, and is in perpetual fear of the CRA. This space is where the vast majority of PF blogs exist. This drives their readership and their revenue. Sadly, this is largely the extent of their knowledge.
The critical element that is missing is the entrepreneur – the visionary, the strategist, the creative mind. This is the personality that often gets developed last, if at all, yet is arguably the most important one. The entrepreneur does not read, nor intensely cares about MERs or RRSPs. In fact, the entrepreneur likely does not read personal finance books at all. From a personal finance point of view, the entrepreneur is the personality that is reading about theoretical economics, scouting and evaluating small businesses, carrying a notepad to record ideas, conversing with friends and business acquaintances about a new business venture etc. This is what is entirely devoid from the PF sphere. Setting a retirement goal and allocating tax refunds between the RRSP and TFSA is not strategic nor entrepreneurial; it’s pseudo-managerial at best.
Next week’s post will develop this concept more thoroughly and future posts will provide very practical and concrete advice on how to advance your potential within this paradigm.