3 Functions that Determine the Success of the Business

July 10, 2013 | By | Reply More

Michael Gerber wrote a very popular book entitled The E Myth Revisited about the myths of Entrepreneurship. He explained that there are three skills necessary for an Entrepreneur to win. Gerber said that entrepreneurs must posses and exercise all three of the following skills to succeed at business:

  • Technical Skills
  • Managerial Skills
  • Visionary Skills

success of the business

Relationship between the 3 Skills and the Functional Needs of the Business

Gerber was only partially correct. He leaves readers with the impression that the entrepreneur (alone) must constantly possess and exercise all three of these skills for the business to succeed. A key distinction is that the three skills represent the three functions of the business that must be completed for the business to succeed. The other key distinction is that the entrepreneur does not have to perform all three functions personally. In fact, the business and the entrepreneur will both be much more successful if the entrepreneur DOES NOT personally perform all three functions.

How the 3 Functions Determine the Success of the Business

The success of a business will rarely exceed the level of poorest execution of the three functions. For example, if the entrepreneur performs the Technical and Visionary functions at an excellent level, but performs the Management function at a poor level, the business success will rarely rise above the poor (Management) level. Therein lies the dilemma. The business is limited to the lowest level at which these three functions are performed.

Yet, it is extremely unlikely that any one person (in this case the lone entrepreneur) can exercise all three functions to a high enough level at one time to generate the expected business success. Hence, businesses where the entrepreneur must personally exercise all three functions will rarely succeed. Let s look further at each of the business functions to learn why this is true.

The Technical Function

The Technical function of a business requires someone to actually perform the duties of that business which attracts payments. This could include repairing air conditioners, extracting teeth, painting houses, writing computer programs, or installing tile. People who do the technical work have almost total control over what they are doing, they actually do something tangible, and they receive almost instant feedback and gratification. This is the doing function.

The Managerial Function

The Managerial function of a business requires someone to direct, coordinate, and organize the business activities of other people (and themselves) to achieve the daily and weekly success goals. People who perform the managerial function have much less control, because of reliance on others to actually perform the technical work, and they have delayed gratification of about one day to a week.

The Visionary Function

The Visionary function of a business requires someone to look years into the future, set goals and organize the business, so that current activities will contribute to the completion of these goals. People who perform the visionary function have virtually no control, because they must rely on others to actually perform the managerial and technical functions, and the many unforeseen things that will happen during the years. They perform even less, if any, doing type of work, and have delayed gratification and feedback of about one to five years.

You can see that the type of skills, activities, control and gratification periods vary widely for these three very different functions. These wide differences are the reasons it is so difficult for any one person to perform all three functions simultaneously at a level high enough for the business to succeed.

If this is true, then how do entrepreneurs get all three functions executed well enough for the business to succeed, if they don’t do it themselves?

Entrepreneurs have others perform; at least, one of the three functions for the business. We are listing several possible methods entrepreneurs can have one or more of the three functions successfully performed by others.

The Partnership Solution

The simplest way is to have a business with two or more partners, who execute different functions. This is a very common success tactic. Do the names of Gates-Allen, Hewlett-Packard, Jobs-Wosniac, Disney-Disney sound familiar? They succeeded in large part because they had at least two people accomplishing the three functions from the outset. Sometimes, it appears easier to go it alone, but if you can find a partner who wants to and is effective at performing one of the three functions, you are way ahead of the game.

As a side note, the most frequent reason business partnerships break up is because the partners are too much alike. Partners with like interests and personalities want to perform the same functions and compete to do so, while not paying attention to the other functions. Friction occurs and partnerships or businesses dissolve. How often do two programmers, or two electricians, or two salespeople, or two mechanics, etc. partner up only to see their partnership and the business implode because they focus on the same function at the expense of the others?

The Hiring Solution

Another way to is to hire someone to perform one of the functions. Normally, the function that is the easiest to hire in is the technical function. However, this fact frequently creates a conflict with entrepreneurs. Normally, entrepreneurs begin their business by performing all three functions, including the technical functions themselves. The baker bakes, the plumber plumbs, the graphic artist does graphic artistry, the printer prints, the accountant accounts, and the list goes on. The sooner entrepreneurs can have someone else perform the technical functions of the business so they can focus on the management and visionary functions, the sooner the business will start down the road to success. When entrepreneurs have others execute the technical functions they transition from being a technician to becoming a business owner.

The Franchise Solution

However, if you are excellent at performing the technical functions, you may want to bring in someone to perform at least the visionary and probably some of the management functions. The franchise structure of business has been used for years to allow performers of the technical functions to utilize the franchiser to perform the visionary functions and provide considerable guidance in performing the management functions. Look at the successes of the McDonalds, Burger King, Pizza Hut and other such franchises. The headquarters of each of these groups perform all of the visionary functions and design and teach a large part of the management functions. The franchisee performs the technical functions and some of the management functions. Through this separation of duties all three functions get performed exceptionally well to produce great successes.

A Key to Entrepreneurial Success

One of the critical keys to entrepreneurial success is to discover which of the three functions you have the greatest desire to perform and will be the most successful at completing, and which functions you have the least desire to perform and at which you will probably be the least productive. Once you have made this discovery, find a way to have others perform the functions that you do not want to do. You will want to join forces only with people who have a strong desire to perform the functions you do not want to do and have a strong desire to avoid performing the functions you love doing.

It really comes down to creating the best fit for yourself first and then creating a best fit for the people you have who perform the other functions. It is almost like the sport of baseball. There are nine positions in baseball that must be played well by all nine players in order for the team to succeed. In the entrepreneurial small business world there are three positions that must be played well for the business to succeed. Pick the position you want first then and have others play at least one, if not both, of the remaining two positions. This way you and the others who are executing the other functions, will be much more productive, have more fun, and the business will thrive.

Everybody wins!

About the Author:

Provided as an educational service by Bill Dueease of The Coach Connection, where “connecting great people with great coaches” is their goal. You may receive a free copy of the article “10 Insider Secrets Most Business Owners Never Learn” by contacting The Coach Connection at www.findyourcoach.com/0o-business-coach.htm

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