The E-Myth is Still Alive Darn It!

Nov. 1, 2009
As I write this, I realize that thoughts of HVAC Comfortech 2009 still linger. There's no opportunity like that show to talk with so many successful owners

As I write this, I realize that thoughts of HVAC Comfortech 2009 still linger. There's no opportunity like that show to talk with so many successful owners and managers — all of whom are looking for one innovative idea or a reminder of a forgotten gem of wisdom to help accelerate their company to unprecedented success.

Thinking about the seminars, and the discussions I had with old and new friends at HVAC Comfortech, I am amazed at how many issues and areas of conflict in an HVAC business revolve around communication. So many conflicts in life are caused by too much, too little, or no communication.

I am reminded of a book that was published more than 20 years ago called the E-Myth written by Michael Gerber. The central premise of the book is that technically-oriented people starting their own business often forget that just as they had to once learn and use their technical expertise, they must also learn to manage the operations of a company.

It seems that contracting businesses in the middle-sized range — with 5 to 25 employees — struggle more with the “E-Myth” syndrome than any other.


When a company has 1 to 5 people, everyone knows what everyone else is doing. The business is relatively easy to manage because the owner still has a handle on every situation, every job, and every customer.

In comparison, a company with 20 or more employees is usually a structured corporation, with systems and procedures in place that helped the owner achieve that level. These “large” companies have middle managers to run different areas of the business.

Documentation usually exists with defined job descriptions that everyone understands. Procedures are not only documented, but every employee knows they must be followed or there will be personal consequences. In other words, work orders, job requisition forms, time tickets, etc. must be completed accurately and on time or their personal paycheck will be impacted.

So what happens to companies that are between small and large (which, according to Dun and Bradstreet, is 83% of the HVACR industry)? Middle-sized businesses start small — usually a service technician with capability and drive deciding to set up their own shop.

In those early days, success is exciting and fun to manage. The owner treats all employees as buddies. Usually, it's over a beer on Friday night where the owner manages to keep track of progress on the jobs of the past week. Corrections and changes aren't hard to communicate because he or she and the employees are friends and don't adhere to that stuffy differentiation between boss and employee.

Enter the years of a mid-sized company. Suddenly, to keep up with growth, more employees must be hired, more jobs must be managed, and more costs must be documented to maintain profitability. Now, it's not so easy to keep track of every job; communication becomes more difficult. Everyone is too busy for those Friday night meetings. Jobs start to fall through the cracks, overruns become common, and the company makes less money.

The owner spends more time dealing with angry customers that poor internal communications and a lack of systems has created.

Middle management is put in place because all the business books say that will solve the problem. It certainly is a good step, but only if the owner allows the managers to manage. Too many times, the owner — still remembering the days when he or she had control over everything and when everyone was a buddy — overrides the manager, maybe not directly, but covertly (and perhaps even subconsciously).

Job descriptions and systems are created, but everyone knows the procedures don't necessarily have to be followed. They think to themselves, “The owner, after all, doesn't always follow them — and he (or she) is still my buddy, right? The owner is still in charge, so as an employee I will do what he or she does, not what my manager says.”

The owner, who has unkowingly and inadvertently created this scenerio, laments the days when business was easier, customers weren't so demanding, and employees actually did what they were told.

If by reading this column, you find yourself staring at yourself in the mirror, or you recognize these traits in the owner of your company, please read or re-read the E-Myth. Then write me with ideas on how you, as an owner, have overcome the issues, or how you've seen owners overcome this issue.

This is a subject that really needs continuous discussion — HVAC Comfortech reminded me.

DO YOU AGREE OR DISAGREE? Or do you just have a comment to contribute? Please send your feedback on this article to [email protected]