Seth Godin Versus Michael Gerber – Who Wins?

Linchpin cover ImageI’ve just started reading Linchpin by Seth Godin. It’s an interesting book about how to make yourself into a Linchpin – someone who can “invent, lead (regardless of title), connect others, make things happen, and create order out of chaos.”

I’ve only read a couple of chapters so far, but one part captured my attention.

In the chapter titled “The New World Of Work”, Seth talks about how the work environment has changed over the years. The cost of labourers has become lower – if a company wants to save money, it can find labourers who will work for less than its existing workforce.

He then quotes from Michael Gerber’s book, The E-Myth Revisited. Here’s the section he quotes:

The business model should be such that the employees needed possess the lowest possible level of skill necessary to fulfil the functions for which each is intended. A legal firm ought to have lawyers and a medical firm should hire doctors. But you don’t need brilliant lawyers of doctors. What you need is to create the best system through which good lawyers and doctors can be leveraged to produce excellent results.

If you haven’t read either of Gerber’s E-Myth books, he talks about building a business model that isn’t key-person dependant i.e. it will function without you needing to do all the work. This is possible through having defined systems and processes that show every employee how to perform their duties. There are standard ways to do all the tasks in a business, and Gerber talks about documenting them and creating a turnkey business.

Seth Godin doesn’t like this approach because it’s quite different to the points he’s making in Linchpin. Here’s what Seth has to say:

His (Gerber’s) point was that you want a cookie-cutter business that you can scale fast, without regard for finding, nurturing, and retaining linchpin talent……Here’s the problem, which you’ve already guessed. If you make your business possible to replicate, you’re not going to be the one to replicate it. Others will. If you build a business filled with rules and procedures that are designed to allow you to hire cheap people, you will have to produce a product without humanity or personalization or connection. Which means the you’ll have to lower your prices to compete. Which leads to a race to the bottom. (Linchpin, pg 11)

Now, it’s been a while since I read the E-Myth Revisited. But I remember a lot of the key concepts that Gerber makes. Whilst I still have a lot of Linchpin left to read, I can see where Seth Godin is going with it. Seth’s book is aimed at helping you become the Linchpin – the person who is indispensable to an organisation or business. Gerber’s book is the complete opposite – it’s about helping business owners who have become slaves to their businesses figure out a way to build their business in a structured way.

So who’s wrong? And who’s right?

knock_out_competitionI think they both are.

Let’s start with Seth Godin. He’s talking about differentiating yourself. Being different to everyone else and providing something that no-one else can, therefore making yourself indispensable. There’s nothing wrong with this – it’s a fantastic goal.

The problem that I can see with this approach is the key-person dependency. It you’re the go-to person in your niche, then in a lot of cases you’re the one who needs to deliver the product or service. I’ve always maintained that the more you can differentiate and personalise your service the more you can charge for it. But the key-person dependency is what concerns me.

Gerber’s approach is about building a business that has a consistent way of doing things. It has staff following the same processes to deliver the same service or product. Think of it like building a franchise. You can have multiple locations of a business, but you know that you’ll get the same thing from each location. In a sense, his idea is that you don’t need brilliant people, just average people following brilliant processes.

Can this approach be easily replicated?

Yes, and no.

The look and feel of it can. You can walk into a McDonalds restaurant today and copy the store layout, the menu, the kitchen layout etc, and build something identical next door. But it won’t be the same. McDonalds is something more than just a restaurant.

Gerber’s point was that you need a point of differentiation in the first place. This is what your business is built on and is what makes it difficult to replicate. It’s about having a vision and some BHAGs. Done well, no-one else can copy them because they’re unique to you. But you don’t need to deliver them all by yourself. That’s where the concept of having defined systems and processes in place helps. You can teach others to produce your product or service that way you want it to be delivered.

In fact, I think Gerber’s last sentence sums it up well when he said “What you need is to create the best system through which good lawyers and doctors can be leveraged to produce excellent results.”

What Can Bloggers Learn from Seth Godin and Michael Gerber?

In business, you’ll soon work out that sometimes things aren’t black and white, but are delightful shades of grey (as opposed to 50 shades of grey).

It’s good to have opinions, and I’m glad that Seth Godin and Michael Gerber have their opinions. But just because I like them as authors doesn’t mean that I have to agree with everything they say.

I’m a guitarist – I have my favourite guitarists and I’ll learn lead lines that they play and incorporate them into my own style, but I won’t play everything they play, just the bits I like.

So it is in the blogging world – everyone has an opinion and some will state theirs more strongly than others.

Analyse everything and sort out what you believe.

I could have read this passage from Linchpin and decided that Michael Gerber’s ideas are now redundant. I’m glad I didn’t. Instead, I’ve though about what both authors are trying to explain, and I’ve decided that the two approaches can co-exist together.

What about you? What’s your opinion on this subject?

Do you agree with me? Or disagree?

Leave a comment below and let’s discuss this some more.

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About

Allan lives in Adelaide, South Australia with his wife and two boys. He is the founder of Blogger Business Plan and loves helping bloggers learn how to transform their blogs from hobbies into sustainable businesses.
When he's not blogging or working in his financial planning business, you'll find Allan playing guitar, reading or coaching his son's soccer team.

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6 Responses to Seth Godin Versus Michael Gerber – Who Wins?
  1. Leon Noone
    September 19, 2012 | 5:38 pm

    G’Day Allan,
    When “The E-Myth” was first published some time ago, I agreed with some and disagreed with some. I felt that some of Michael Gerber’s ideas were really bureaucratic and old fashioned. I’d been involved with performance management for some time. A lot of it wasn’t new to me.

    I haven’t read Godin’s book.

    After more than 30 years in business the most important things I’ve learnt are…..
    Marketing isn’t everything but everything is marketing. If you lack a crystal clear market focus and a specific narrow target market you’ll always have trouble.

    Performance standards are more important than goals. If your systems are poor, your people will fail. That applies whether your people are brilliant or incompetent, skilled or unskilled.

    Employees should be responsible for running the business on a day to day basis. They should also be responsible for measuring their own performance. Today’s technologies make this relatively easy to do.

    Finally, small-medium business is unique. It’s not an adolescent version of large business. Adopting practices of large business without adapting them to meet small business realities, often damages SMEs.

    Hope this helps.

    Regards
    Leon

  2. Ron Tester
    September 20, 2012 | 12:21 pm

    Great insight! Thanks for tackling this. As someone who has owned several businesses, I have been strongly influenced by both Michael Gerber and Seth Godin. I think you’re on to something when you say they are both right–it depends on what you are trying to achieve. They are different approaches, and they work in different situations.

    One thing Godin writes that I disagree strongly with is “If you build a business filled with rules and procedures that are designed to allow you to hire cheap people, you will have to produce a product without humanity or personalization or connection. Which means the you’ll have to lower your prices to compete. Which leads to a race to the bottom. (Linchpin, pg 11).” Gerber isn’t advocating hiring “cheap people,” but people that are appropriate for the job and whose work can be systematized to produce an excellent result.

    If you remember the narrative upon which The E-Myth Revisited is structured–Sarah and her shop All About Pies–they weren’t creating a business “without humanity or personalization or connection.” Sarah was creating a system by which her business could deliver consistent quality and the connection that her customers wanted. She didn’t hire drones, but she was able to hire people to replicate some of the work she had been doing to create a predictable and positive result. Nordstrom doesn’t hire drones, but you don’t have to be waited on by John W. Nordstrom to enjoy a superior shopping experience. Starbucks doesn’t hire drones, but they don’t depend on Howard Schultz to be everyone’s barista, either.
    Ron Tester recently posted..If You’re Thinking About Starting a Business, Get to Know The Lean Startup MethodologyMy Profile

  3. Ivan Kaye
    September 30, 2012 | 8:04 am

    The advantage with Systemising and Gerbers philosophy of hiring the right average person to do the job, is the opportunity to train the average people to become the best people. There is a basic level of knowledge required to become a lawyer or an accountant, prodessional or tradesman…With the right systems and procedures, backed up with the right marketing…. The “average” systemised business, that can be scaled independently from a linchpin, will win everytime!!

  4. Cheryl from BusinessChic
    November 11, 2012 | 12:04 pm

    I’ve just started reading Gerber’s books so a timely read- thank you for the insights from yourself and some savvy commenters! Based on this article I’m not sure how bloggers could earn enough in the first place to outsource tasks to others so that they can focus on their Linchpin tasks; a chicken and the egg situation IMO!
    Cheryl from BusinessChic recently posted..Comment on The Shirtmaker by busichicMy Profile

  5. Brian
    January 17, 2013 | 3:30 pm

    I loved Linchpin and just recently found out about Michael Gerber. Both will be on my upcoming blog post, “20 Business Books to Read Before, While, or After Eating Pizza.”

    If you have a fave business book of all time, you can share it w/me along with 3-4 lines about it and I’d also need your fave pizza or pizzeria.

    Glad to have found your site. Thanks for following me on Twitter.

    By the way, your commentluv plugin may not be working. In picking up my latest posts, only the ten latest comments showed up, not ten latest posts. I went to another commentluv enabled blog to see if the problem was replicated, it wasn’t.
    Brian recently posted..Comment on Frato’s Pizza in Schaumburg, IL (a Chicago area pizzeria) by Jamie ClarMy Profile

  6. James Randall
    December 6, 2013 | 1:41 am

    I don’t care how “remarkable” you are or how “indispensable” you are. Heck, I create systems that I use myself. Why? Because they save time and help me give consistent results to my customers.

    Seth Godin runs a small business called Squidoo, and I have a couple of Squidoo lenses. I had a minor technical problem, but it took MONTHS to resolve.

    Seth Godin could learn a lot from Michael Gerber.

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