Innovation in Small Business – Who’s Doing It?

Michael Gerber’s “The E-Myth (Revisited)” has really stuck with me the past couple of months since I first picked it up.  One of the fundamental definitions in the first few chapters of the book is the differentiation between the following 3 “people” that actually inside each person who starts a business:

  • The Entrepreneur:This is the dreamer who creates an opportunity out of everything.  As Gerber puts it, this is the the character who “lives in the future, never in the past, rarely in the present.”
  • The Manager:This is the planner and the systems-maker.  “If The Entrepreneur lives in the future, The Manager lives in the past.”  The manager is all about ensuring the status quo is maintained.
  • The Technician:This is the day-to-day doer.  Gerber says that the credo of The Technician is “If you want it done right, do it yourself.”  This is often the one that gets the idea to start a business – if you’re a better technician than your boss, surely you could have a better overall business and make more cash, so you go start one.

Pay careful attention to that third definition.  It’s The Technician that often wants to start the business and this can be great.  If the business gets by and does all right, The Technician can usually handle things and be fine for a while.  The trouble is that The Technician is often too static to adapt to a systemic change and is paralyzed when uncontrollable factors take over.

A few weeks ago ago I had a conversation Cyndee Todgham Cherniak via Twitter.  Cyndee is a Canadian international trade and sales tax lawyer affiliated with Lang Michener LLP and an adjunct professor at Case Western teaching a course on NAFTA.  If you use Twitter, follow Cyndee.  Her tweets about the challenges that regular people are facing when systemic changes occur will give you pause in your day.  Her bio is here and you can follow her on Twitter here.

The conversation began with Cyndee tweeting about a woman who expects her business to decline further than the 50% decline she’s already seen since 2008 once the Harmonized Sales Tax (HST) is introduced in Ontario later this year.

This won’t be a forum for the discussion on HST as there are enough of those across BC and Ontario at the moment.  I asked Cyndee about steps this woman has taken to adapt and the response was that she had sold her house, moved to a smaller condo and begun working harder for new clients.

My interpretation (solely my interpretation and not necessarily how things went) is that this woman applied more capital to a venture that was losing favour, set to be directly disadvantaged by the HST and she began working harder.

In my mind, this isn’t adaptation and nor is it conducive to the best outcome for a business.  The rules of the game are always changing and starting a business means that you need to be able to put on The Entrepreneur’s hat when you need to – The Technician cannot see you through a change such as the HST or a downward economy.  Customers are loyal, but the market is always indifferent and harsh.

Gerber’s book really pushes the idea that the proprietor of a business needs to wear each of those hats in a balance that’s appropriate for the respective setting.  I think you can outsource these, too, so long as you’re aware.  If you’re a great Technician or Entrepreneur, you can certainly engage a Manager, or someone who can impart the skills and pieces to get you up to speed in Management to the degree it’s appropriate for you.

Regardless of the method, adaptation is key. Throwing money at a problem isn’t adaptation, it’s a bandaid.  Sometimes it’s the very real solution to a problem, but if you want to bet that solely increasing the intensity of an activity by throwing more money at it will cause real adaptation to systemic change… more often than not, I’m willing to take that bet.

 

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