Article | July 6, 2015

Business Solutions Interviews The E-Myth's Michael Gerber

Source: RSPA
RSPA RetailNOW 2015 Gerber Preview

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An edited transcript follows of Michael Gerber’s interview with Business Solutions president and RSPA chairman Jim Roddy. Gerber, author of best-seller The E-Myth Revisited and five other E-Myth books on the topic of small business and entrepreneurship, will speak at Retail Solutions Providers Association (RSPA) RetailNOW on August 3 in Orlando.

Roddy: My first question for you is, Michael, you have many opportunities to speak around the world and with a lot of giant organizations, a lot of giant associations. Why take time to present to retail IT solutions providers and vendor executives at RetailNOW? What’s intriguing to you about the group and about our niche?

Gerber: Well, you’ve got to understand that I laughingly call myself Mr. Mainstreet. My whole career, if you will call it that, in the industry I call small business has been with very, very small companies, and those very, very small companies are from the smallest of small, that means one guy working out of his home to hundreds of “guys” and ladies working out of a small business center, and so the interest is paramount because it’s the heart of our economy.

Small business, as you know, provides the majority of new jobs, provides the majority of new innovations, provides the core energy underlying what we talk about as the American Dream, but the American Dream is a mind-set, and I have been addressing that mind-set not only here in the United States, but worldwide with tens of thousands of small business owners as clients as well as millions of them as readers of my now 21 books.

So this is what I’ve been doing. This is what I’m interested in. This is my passion, and, despite what you said, that I speak to very, very large organizations, the reality is that some subset of the organizations I speak to, while a number of them are very, very large, the vast majority of them are small.

The organizations themselves personify the members or employees, or etc. and so forth, that they have and that is, small organizations of small business owners and that could be an insurance agency with independent agents, that could be just about anything you could think of. So, the long and the short of it is, this is where I live, this is what I do, this is my passion.

Roddy: Got it, that’s great. Before I dive into some specifics that you offer from the book and how that might apply to the RetailNOW audience, it sounds like what you just said, an underlying message is to the small business owner, the small business manager, “You’re in control.” We’ve heard a lot of presidential candidates making their announcements saying, “I’m going to bring back the American Dream,” but is your stance that the American Dream is still there, it’s achievable, here are the things that you need to do, you’re in control as a small business owner, is that kind of the fundamental principle to what you’re going to speak to at RetailNOW?

Gerber: Well absolutely, and the American Dream was just that. The American Dream was never that, in fact, the government institution is going to bring something to the man on the street. The American Dream was always that the man on the street is free. He has, she has, the freedom to choose his or her path and to grow based upon his will, his passion, his desire, his dream, her imagination, and so, yes, not that you have control, because none of us really do, but that you can exercise control, continuously to the degree that you learn, in fact, what the word control means.

Control can only be garnered by this mind-set of a leader and the intelligence of a system, the mind-set of an entrepreneurial leader and the intelligence of a system designed to provide me with the ability to scale a result that otherwise is almost impossible to achieve, ergo, your industry is a product of that mind-set.

But of course every business on the face of this Earth is either a product of that innovative mind-set, that systems solution, or it fails. So the two ingredients that entrepreneurial mind-set, that independent minded individual, that one who is free to grow, to the degree he or she exercises the will and the imagination to grow, and the systems which are the product of it. That’s control.

Roddy: I love it, very well said. So I have some other passages I want to share with you, that I think you will enjoy, because I’m going to be reading some of your writing right back to you, so I’m sure you’re going to agree with it. I’m hoping you can expand upon these, these are some passages from the E-myth, and I’ve pulled them out, and I really think they apply to the audience of IT solution provider executives who you’re going to speak to at RetailNOW and the folks listening to this on our Business Solutions website.

So you write, “luck and speed and brilliant technology have never been enough, because somebody is always luckier, faster, and technologically brighter.” Can you expand upon that for our audience?

Gerber: Well, it never stops, does it? Just when you think, now we’ve got it, you lose it. And here’s a guy like Steve Jobs, he’s completely transformed the world of business in many industries. Apple, to the degree it has and possesses the spirit of a brilliant entrepreneur like Steve Jobs will continue to do that, so understand there’s always the horse and buggy turning into a Ford motorcar, a Ford motorcar tuning into …, and on and on and on and on. Next, next, next, next, next.

So, what has to be constant within all of that, the improvements are impossible for us to anticipate. That’s the reality of it because you and I are doing that, somebody over there is doing that and somebody isn’t telling us that he’s doing that, or she’s doing that, they’re just going to do it and then suddenly, bam, there we are. They just took away what we thought we owned.

That’s happening increasingly faster and better every single day of our lives. So what does that call for? That calls for a flexibility of consciousness among the guys on the street — your guys, my guys, our guys, us — who constantly have to understand what the true product is, and that’s never changed. The true product is the evolution of our skill at managing, developing relationships with the people we’re engaged with, and nobody has technologized that.

We today are no smarter than we were two hundred years ago about that. But to the degree we’re working on our ability to be smarter about that, whatever the changes are that come our way, our consciousness, our sensibilities will be here.

Best capable of utilizing that as a smart tool to support smart relationships which are absolutely critical to the success of any company, and as I say, nobody’s technologized that. Of course, there are always robots. So the only thing we have to be concerned about is the fact that there will be robots and then we don’t even have to be here anymore.

Roddy: Yes, watch out for the robot that can be flexible by himself and evolve on his own, and think for himself, because right now, we’re the ones who can do that.

Gerber: Then they run the show.

Roddy: Yes, exactly. They’re either going to serve us or we’re going to get overrun.

Gerber: There we go, but let’s not think about that because then we’re all out of business.

Roddy: Alright, that leads me to a whole other line of questions which is probably for a totally different audience. A couple of other quotes I want to share with you. So, at Business Solutions we frequently preach to our readers the concept of being a total solutions provider. Don’t just sell part of the solution, sell the whole solution, be a total solutions provider. You write, “Unless you’re customer gets everything he wants, every single time, he’ll go someplace else to get it.”

Gerber: Yes, and what do I mean by that? I’ve been talking about that with you here from the very moment I started to speak, and that in fact is the perception your customer has must be set, established, and have the opportunity to establish, at the very beginning.

At the very beginning, you’re not saying to them, listen we’re a total solutions provider, a one stop shop, anything you need, we got. That’s not the positioning of a truly intelligent systems seller. The positioning is that no one understands your business better than you do, but nobody understands you better than we do.

Our job is to continually understand more, more, and more what frustrates you in your business, what’s inhibiting you from getting what you truly want from your business, and making certain that we help you stay on top of that. That’s our guarantee, that’s our business, that’s what we do, that’s what our people have been trained to do. By developing a systematic way within which we’re in a relationship, you can absolutely put that in the bank.

Roddy: So, that sounds like, Michael, a great statement to make, but it sounds like a solutions provider really needs to be on their game before they say that, like they’ve really got to be educated, they really have to make sure they do thorough research.

Gerber: Of course they do, but isn’t that the point?

Roddy: Yes.

Gerber: Isn’t that the point that I’m making is, if you’re going to say that, you’ve got to do that, and if you’re going to do that, you have to develop the means to do that. And in order to develop the means to do that, you truly have to more than just a guy who understands the tools, the technology. You have to be a guy who understands the business of the guy you’re selling the technology to.

Roddy: Yes, one of the earliest lessons in business I got is we need to learn our customers better than they know their own business — really study their industry, really study our suppliers. That’s what it sounds a lot like what you’re saying, you can’t just go in there and pitch, you’ve got to go on there, ask questions.

Gerber: You’ve got to ask questions and that has to be routine, meaning you need to have a system through which you truly dig down deep into his or her business and his or her frustrations in his or her business before you can begin to even think solutions, before you can even begin to think about how to position the story about what you do.

Roddy: Right, I’ve seen people do this wrong where the correct way to do it is probe to understand, sometimes people do “probe to sell,” where they’re just looking for the customer to say something to be like oh, now I’m going to go on and close them.

Gerber: Well, the customer always knows when you just did that, because all that is sell surveying and manipulative. We’re not talking about being cute, clever, or manipulative, we’re talking about being truly of service. So the degree your company isn’t truly of service — not just the technology that you sell, but the people within your company and the mind-set of the people within it — is not truly of service, you will not win this game.

Roddy: Yes, well said. My last question for you is a quote about hiring, and about people, and so you write, “It is literally impossible to produce a consistent result in a business that depends on extraordinary people.” Can you talk about the balance — and I don’t know if it’s a balance or if it’s a paradox — between you want to hire great people who are going to grow your organization, but at the same time constructing a business that doesn’t need great people. Can you kind of help me connect those two in my mind?

Gerber: Well, yes, let me define what I mean by great people because the definition of “great people” varies from one person to another person, to another person, who believe they need good people.

Great people to me are people who are empty of convictions that they’ve gained from experience in our industry. Great people are people who are in fact free of those convictions. Great people are passionate students: “Teach me, teach me, teach me, and teach me.”

So, if I get a person who’s open, enthusiastic, smiles a lot, genuinely enthusiastic about life, about work, about opportunity, that to me is the greatest of all great people.

Because to the degree I have spent time developing the systems that are absolutely critical for my company to achieve the differentiation my company is aiming to achieve in the mind of my perspective and existing clients and customers, then my very first job with every apprentice I’m bringing into my company is to teach, inspire, train, coach, mentor that individual to become a master of that system. Until that individual knows how to become a master of that system, he’s not ready to go to the next step. Great people are created inside of great companies.

Roddy: I love how you use the word apprentice. A lot of times people hire, they call an employee like everybody does, but what you’re talking about is, I’ve always recommended that people, hire somebody who eventually could kick your butt, somebody who’s going to be able to back fill for you. Then you can move on to different thing and I guess tying in with the E-Myth, you’re talking about somebody who can build your system, somebody who can enhance that system, somebody who can run that system. That’s an apprentice, you’re teaching them your system. Am I hearing you correctly?

Gerber: Yes, I’m teaching them that system, but I talk about the five essential functions of an entrepreneurial business. The first and critical function is called “inspiration.” That creates an epiphany.

So I need someone who is capable of being inspired, and we have to provide inspiration all the time. That’s one of the most difficult things to do in any organization is to provide inspiration all the time with people who have ceased to be inspired.

The second essential function is education. Now that I’ve had this epiphany, now that I’ve been inspired, now I’m going to learn, I’m going to understand the heart of it. So inspiration, education, education produces understanding.

The third is training. Now I’ve got to actually practice it — demonstrate that what just inspired me, what I just learned and understood better, I can now do.
So inspiration, education, application, I can do that. Now I understand it, but now I’ve got experience of it, which grows within me to the point where now I can understand the next phase, which is implementation, and that is systems wide.

So effectively I’m going to take what I’ve learned and now I’m going to apply it in a broader spectrum throughout the organization — and then continuous improvement.

So my point being, that I want to bring in the least experienced person, not the most experienced person as an apprentice, and what they’re going to learn as an apprentice is our way.  Our way is not this dogmatic thing that is rigid. Our way is our system— how we do it here that enables us to be as successful as we are, whatever the role might be for the individual that we’re bringing in.

If that person can’t learn our way, they can never get to the point where they can begin the process of innovation, quantification, and orchestration, which is the true and continuous process of developing a business.

They can never do that if they can’t master something we’ve taught them to master, if they cannot let go sufficiently of their ego to understand that there is something to exercise effectively out there in the world, “Hi, my name is Michael Gerber, you don’t know me but I’m from …” the script, and so forth.

If they can’t do that, believe me, they will never become that great person, and if they do, they will simply become that great person in your company, and then realize, they don’t need you, they can go out and do it on their own, and that’s how many of your resellers were created.

Once I learn it, what do I need you for? I’ll go do it myself. So a reseller is typically someone who’s learned what he’s learned in somebody else’s organization and then went out and started his own company.

Roddy: Yes, that happens a lot.

Gerber: That’s because they didn’t do it the way I’m describing it.

Roddy: Very interesting, very good take.

Gerber: So great people are great people. You can see them. It’s like you go into a restaurant and somebody waits on you and you go, now that’s great person. We had this little thing we used to do: “You look like a winner to me.” You leave a card with that waitress and it says, open this after I’ve gone, and it says, “You look like a winner to me. I’ve seen lots of people wait on tables, but it’s rare I’ve ever seen somebody wait on tables with enthusiasm and joy that you naturally express, I’d love to talk to you about a new opportunity.” Great people are sitting all over the place waiting to be recognized. It’s learning to recognize them that’s key.

Roddy: Yes, learning to recognize them and bring them into an organization that has a system that can be taught so you can innovate and adapt.

Gerber: Well not just the system, but the heart. A great company isn’t just systems. That’s engineering. It isn’t just systems, it’s creativity, it’s inspiration, it’s imagination, it’s energy, it’s the spirit, it’s the soul, it’s the heart of the business, it’s a joyful place to be. We’re doing things that make a difference in the world; we believe in what we do, we believe in our customers.

We’re constantly looking out for better ways to help our customers be better at what they do, because when we help our customers to be better at what they do, they hire more people because they grow more, and as they hire more people, they have a profound impact, a positive impact, on the economy. And as they have a profound impact on the economy, I know that we can scale that, we can make that happen in more and more and more restaurants. More and more and more grocery stores. It’s the heart of America, that’s why we’re here, that’s what we do. So that spirit has to be fostered among your people.

RetailNOW 2015 will be held August 2-5, 2015, at the Gaylord Palms Resort and Convention Center in Orlando, FL. For more information on the RSPA, go to

As a special gift to Business Solutions readers, Michael Gerber will answer your questions at no cost. Just click the “Ask Michael” button to submit your question.


Special Solution Provider Offer! Michael Gerber has extended a special offer to Business Solutions subscribers for his product called “The Course: Beyond The E-Myth: The Evolution of an Enterprise: From a Company of One to a Company of One Thousand.” For $295, you can learn what Gerber calls “the secret sauce for creating a Great Growing Company.” For more information or to purchase The Course, please click here and you will be redirected to Michael’s website.