© CEO Focus 2007

The Emyth Myth

The Emyth Myth

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© CEO Focus 2007

The E-Myth Revisited - Michael Gerber

Business Owners Are Really Three People!

Entrepreneur: The Dreamer/Creator - Future

Oriented

Manager: The Pragmatist/Planner/Organizer

Technician: The Doer

The Typical Small Owner is 10 % Entrepreneur,

20% Manager & 70% Technician

Without a balance among the three personalities

your business will mirror your own lopsidedness!

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© CEO Focus 2007

The Technician

Represents the Tactical view of the business - not

the Strategic view

Technical work does little to more the business

forward or create business value

If the business depends on its owner, the owner

doesn’t own a business, he or she owns a job

Business growth is limited by how much the owner

can accomplish themselves

Transition to employees - helpers with the technical

work. Abdication or Delegation?

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© CEO Focus 2007

The Manager

The Manager function is defined by a transition from

doing the day-to-day work that produces revenue

to organizing and supervising others who will do

the day-to-day work

Represents a difficult challenge because employees

will rarely do the work as efficiently or as

effectively as the business owner

Worth of doing something well versus doing

something that you shouldn’t be doing at all?

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© CEO Focus 2007

The Entrepreneur

The Entrepreneur creates the vision and direction for

the business. This is the Highest Impact activity

for the business owner and the business

The Entrepreneur is obsessed with building a

business that works without them!

The Entrepreneur prepares himself/herself for

growth and their company for growth by building

a foundation and structure that can carry the

weight imposed by growth

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© CEO Focus 2007

Pop Quiz

Making a million-dollar sales call, T or E?

Mentoring a key employee, T, M, or E?

Planning/strategizing, T, M, or E?

Meeting with a key customer, T or E?

Filling in for your CFO for a couple days, T or E?

Meeting with your bank to discuss new loan terms, T

or E?

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© CEO Focus 2007

What is the “E?”

So you want to be more Entrepreneurial……..now

what?

Write down the actual activities you will do

week-in and week-out to be more

Entrepreneurial

Exercise #1 and Exercise #2

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© CEO Focus 2007

There is no E!

They are all just jobs/work!

However:

If we have to “work,” let’s do the right work

What is the right work?

© CEO Focus 2007

16 Hats

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© CEO Focus 2007

Concept

• Every Business Owner is always engaged in a

variety of activities

• We call this “Wearing 16 Hats”

• We can wear low-value hats or high-value hats

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© CEO Focus 2007

Low-Value Hats

• Customer Service Rep

• Salesperson

• Operations Manager

• Computer dude

• Bookkeeper

• Worker bee

• Babysitter

• Manager

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© CEO Focus 2007

The 16 High-Value Hats

1. Supercloser

2. True CFO

3. Visionary

4. Chief Strategist/Planner

5. Mentor

6. Chief I.P. Officer

7. Cheerleader

8. Standard Bearer

9. Chief Model Officer

10. Model Implementer

11. Key Relationship Holder

12. Decider

13. Marketing Mastermind

14. Frontman

15. High-level Floater

16. Technology Mastermind

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What is a job worth? 16 Best Hats Pay 16 Average Hats Pay 16 Worst Hats Pay Factor

Model Implementer 115,000$ Key job holder 40,000$ Worker bee 30,000$ 4

Supercloser 240,000$ Sales Manager 102,000$ Salesperson 54,000$ 4

Marketing Mastermind 200,000$ Marketing Manager 85,000$ marketing assistant 43,000$ 5

Technology Mastermind 215,000$ Technology Manager 105,000$ Computer support 45,000$ 5

Chief Strategist/Planner 160,000$ Manager 55,000$ Firefighter 25,000$ 6

Front man/High Level Networker 350,000$ Lead Salesperson 122,500$ Salesperson 54,000$ 6

Standard Bearer 165,000$ Manager 55,000$ Babysitter 25,000$ 7

True CFO 290,000$ Controller 50,000$ Bookkeeper 37,000$ 8

Chief IP Officer/Innovator 210,000$ Chemist/Inventor 68,000$ Tinkerer 25,000$ 8

Key Relationship Holder 350,000$ Purchasing Manager 85,000$ Customer Service Rep 41,000$ 9

Decider 620,000$ Manager 55,000$ Spoke/wheel decision-maker 25,000$ 25

Visionary 620,000$ Occasional seminar attendee -$ None -$ 100,000

Mentor 155,000$ HR Manager 83,000$ Screamer -$ 100,000

Cheerleader/Motivator 620,000$ Manager 55,000$ None -$ 100,000

Chief Model Officer 620,000$ Reactive Entrepreneur 30,000$ None -$ 100,000

High Level Floater 300,000$ None -$ None -$ 100,000

Notes:

Assumptions: 25 employee company, Zip code 46256

Source Salary.com 8/11/09

© CEO Focus 2007

What Hats are You Wearing

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How you spend your time

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Delegation Line

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The Emyth Myth

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© CEO Focus 2007

Every day you wear four collars

• The 4 Collars

Blue Collar

White Collar

Green Collar

Dog Collar (Fatal Error #16)

• The collar you wear most often

determines the growth of your

organization and your wealth

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© CEO Focus 2007

The Categories

• Blue Collar CEO

High frequency, low-value activities

Examples:

• Driving a route truck regularly

• Filling what should be a staff position

• Spending a day at the customer service desk because someone called in sick

• Serving as the primary point of contact for a low-value customer

• Running errands, such as picking up office supplies, delivering customer orders, or picking up parts/supplies

• Low-impact or repetitious sales activities

• Bottom Line: You own a job

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© CEO Focus 2007

The Categories

• White Collar CEO

High frequency, high value activities

Examples:

• Many management activities. Most CEOs start off with all the management activities, and as the business grows, the lower-value activities get delegated to other managers

• Serving as the primary point of contact for a high-value customer

• Most high-impact sales activities

• High-impact financial activities such as banking relationships

• High-impact operational activities

• Bottom Line: Mostly Management & Sales Activities

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© CEO Focus 2007

The Categories

• Green Collar CEO

Low frequency but very high value activities

Examples:

• Planning/Strategy

• Management & Mentoring of key staff

• Standard bearer

• Dreamer/Creator

• Futurist. The futurist understands the upcoming political, industrial, economic, and technological landscape. He or she then translates this understanding and prognostication into a direction for the company.

• Motivator/Inspirer

• Bottom Line: The 16 Hats

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© CEO Focus 2007

The Green Collar CEO

• What are the characteristics of a Green Collar CEO?

Highly entrepreneurial multi-tasker

Dreamer/Creator

Future Oriented

Knows how to harness the power of their CEO ADD

Outstanding calculated risk-taker that makes bets on themselves and WINS

Has a profitable business that runs well without their daily input

• Bottom line

A Green Collar CEO is the best CEO inside of us, the CEO we should and can be!

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© CEO Focus 2007

Dog Collar CEO

• You can’t ignore the Dog Collar

These are the non-delegable activities that TRAP you

Examples:

• If you regularly fill in driving a route truck, this is Blue Collar. If you fill in for an emergency, this is Dog Collar

• Stuck fulfilling the duties of a position you can’t fill

• Playing the backup role for some positions; stop-gap

• Bottom Line: Mitigate not eliminate and acknowledge

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© CEO Focus 2007

The Delegation Line

• Your Delegation Line represents your

income potential

I can accurately predict your income and

how much your business will be worth by

computing your Delegation Line

Your ongoing Goal: MOVE THE LINE

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© CEO Focus 2007

The Delegation Line

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Moving the Line

• Not as simple as delegate more

• Factors:

Maturity of the company

Risk tolerance

Perfectionism

Micromanagement

CEO’s ability to deal with loss of control

Willingness to buy back your own time

LOVE

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© CEO Focus 2007

The Emyth Myth

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© CEO Focus 2007

Moving the Line

• Get rid of activities “below the line”

Forget- “Do it, dump it, delegate it”

Instead:

• Eliminate

• Automate

• Delegate

– Partial vs. functional 98/2 delegation

• Relegate/Do

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© CEO Focus 2007

Moving the Line

• 98/2 Delegation©

Delegation never as simple as off-loading the function

Stratification

Accounting Example

• Book-keeping

• AP/AR

• Controller

– Payables “circler”

• CFO

• Bank relationship manager

• Fundraiser

• Signing checks

Within each of these functions 98% can be delegated but the 2% that MATTERS is kept

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© CEO Focus 2007

Moving the Line

•98/2 Delegation© is like mining

98% of mining is moving worthless dirt

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© CEO Focus 2007

Exercise

Where do you

spend your

time?

Non-delegable

portion (2%) Potentially delegable Stop/Start

Top function #1

Top function #2

Top function #3

Top function #4