Last Thursday I made a presentation to his leadership team on Michael Gerber’s principles of Innovation, Quantification and Orchestration.
If you’ve read the E-Myth Revisited you understand the power of his message for small businesses, and the impact systems have for growing a business. Mid-size as well as Fortune 500 size businesses sometimes lose track of these fundamentals. It’s important for you and your team to be mindful of these are you continue to grow.
Here’s a brief review of these principles, with a note of caution on Gerber’s principle of innovation.
Gerber’s Innovation didn’t foresee Digital Disruption, Gerber’s Innovation is more focused on innovating present systems.
Michael Gerber, in the E-Myth Revisited defines Innovation as:
“It is the skill developed within your business and your people of constantly asking, ‘What is the best way to do this?’ knowing, even as the question is asked, that we will never discover the best way, but by asking we will assuredly discover a way that is better than the one we know now?”
As we wrote in Are Best Practices Dead?, Innovation today is often a startup moving to a whole new platform or way of conducting business to disrupt the present industry. Digital photos eliminated Kodak. Uber virtually eliminated taxis. In his article, Best Practices are Dead, Tom Puthiyamadam outlines how digital transformation is eliminating the reliance of best practices as a viable strategy for improvement.
Let’s review these three practices of Innovation, Quantification, Orchestration with some quotes by Michael Gerber to add context for each:
Innovation
“Creativity thinks up new things. Innovation does new things.” - Theodore Levitt, Harvard Business School
Innovation is about creating new systems, enhancing existing systems. It’s doing things in a better way.
The Systems Innovation Process
A system consists of a series of steps, or "benchmarks" that work together within the system to produce a desired result.
At the end of this process, your newly "innovated" system doesn't exceed the performance of the "old" system, go back through the steps again. Keep cycling through the steps until you develop an innovated system that improves performance.
Quantification
-Michael Gerber, E-Myth Revisited
Quantification is the objective evaluation of business performance. Quantified information prevents micromanagement. Know the right measurements for each system. Monitor these to ensure your systems operate effectively.
Key Performance Indicators
You need Key Performance Indicators to tell you me how your system is performing. Quantification is three levels: strategic, business, and systems indicators.
Systems like Metronome Growth Systems allow my customers to monitor these at each level of the business.
The Business Quantification Process
The Discipline of Quantification
Most of this is rudimentary for a mid-sized business. Yet I know businesses on a large scale that fail to do this. It’s fundamental and must not be neglected.
Orchestration
"The need for Orchestration is based on the absolutely quantifiable certainty that people will do only one thing predictably - be unpredictable."
~ Michael Gerber, E-Myth Revisited
Orchestration commits to your customers and employees "this is the way we do it here." Orchestration is about producing consistent, predictable results through your proprietary way of doing business. It’s develops Your DIFFERENTIATION.
There are multiple ways to win, as we explained in Strategy – How to Win? There are two choices, Low Cost or Differentiating. Only the true low-cost player can win with a low-cost strategy.” A.G. Lafley, Playing to Win: How Strategy Really Works.
The process of Orchestration defines your differentiation.
The Orchestration Process
Orchestration engages your organization in what’s discovered through your innovation and quantification processes. Here’s the E-Myth’s simple step-by-step system for how a leader can orchestrate any system.
The biggest frustration/issue is, as circumstances change; systems need to change. Your business/system development process is not stagnant; it’s ongoing.
Growth demands Strategic Discipline.
You need disciplined people, engaged in disciplined thought, to take disciplined action, to produce superior results, to make a distinctive impact in the world.
Discipline sustains momentum, over a long period of time, to lay the foundations for lasting endurance.
It’s the framework for Good to Great:
A winning habit starts with 3 Strategic Disciplines: Priority, Metrics and Meeting Rhythms.
Meeting Rhythms achieve a disciplined focus on performance metrics to drive growth.
Positioning Systems helps your business achieve these outcomes on the Four most Important Decisions your business faces:
DECISION |
RESULT/OUTCOME |
PEOPLE |
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STRATEGY |
|
EXECUTION |
|
CASH |
Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We align your business to focus on Your One Thing! Contact dwick@positioningsystems.com to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you.
Adequate sleep is a major impact on engagement and effectiveness at work, particularly for an owner or CEO. 24% of people surveyed report insufficient sleep makes them less productive at work, and 13% report making more mistakes. We’ll explore getting more sleep with our guest blogger Karoline Gore providing the ideas to help you sleep better, next blog.