393 | Masters Of Business: An Interview With Michael E. Gerber - Beyond The E-myth

Dec 20

[00:00:00]

What's up everybody. I'm Chaz Wolf gathering the Kings podcast. Oh my goodness. Today is an honor. I am excited for this show. I'm excited for every show, but this one particularly marks a moment, not only for gathering the Kings, but for me,~ uh,~ with this guest, I'm super excited. I want to introduce a special guest here.

Chaz Wolfe: Kings and Queens, entrepreneurs and dreamers everywhere. It is an absolute pleasure and privilege, honestly, to introduce to you the guests here

today. [00:01:00] Okay. He's a true visionary. This is Michael E Gerber, the brilliant mind behind the groundbreaking books, the E Myth and the E Myth Revisited. ~Um, ~I could go on and on about this guy's track record, just celebrated his 87th birthday, and he has graced us with his presence here today. His insights on systems of process are going to tear some minds up today.

And I'm excited for that, Michael. Welcome to the show.

Michael E. Gerber: I'm delighted. Thank you, Chaz.

Chaz Wolfe: ~Well, ~I,~ uh,~ I really tried to trim that down because your history is just so rich. I didn't know what to put in that intro there, but,~ uh,~ this conversation,~ uh,~ is going to be probably like none other. We've done hundreds of episodes here, but man, this is something new and exciting.

~Uh, but, ~but Michael Gerber is not new and the E Myth and your mindset is not new. And so we get to have some really rich fun here today. ~Um, ~Michael, ~can you, ~can you just give us a quick snapshot of your life's work that you've been doing with entrepreneurs?

Michael E. Gerber: ~Um, well, it will, ~it will take a quick snapshot, Chaz. ~Um, ~I didn't start early in my life. I hear all of those [00:02:00] stories about I sold,~ um,~ pumpkin seeds when I was 12. ~Um, ~I, yeah, like that. I didn't. I didn't. I wasn't interested in business at all. ~Um, ~in fact,~ um,~ I didn't get into business. Until my 40th year. And that was not because I was interested in business.

It was because,~ uh,~ my brother in law,~ um,~ his name is Ace~ , um, ~asked me to do him a favor. Ace had a small advertising agency in Silicon Valley. And he said that his biggest problem is he creates leads for his clients, but they don't know how to convert them into clients. And would I meet with,~ um,~ one of his clients in Silicon Valley~ , uh, ~to discuss how to fix,~ um,~ his ability to do that. And I said to ~Ace, ~Ace, I don't know why [00:03:00] you're asking me to do that. I don't know anything about business. ~Um,~ so what am I going to talk about? And they said, Michael,~ um,~ trust me. You do. Let's just meet with Bob for an hour and see what happens. ~Well, ~that invitation about let's see what happens has always been an intriguing one for me.

Chaz Wolfe: that's right.

Michael E. Gerber: So I said sure Ace, let's do it. And so Ace takes me to meet with Bob, and Bob and I sit down in front of each other, and Ace says, Bob, this is Michael. Michael, this is Bob. ~Um, ~Michael is going to,~ um,~ listen to you about your problem in converting leads into sales, and something's going to happen. And while that happens, I'm going to take off, Ace says, and I'll be back to pick Michael up in about an hour. And he takes off.

Chaz Wolfe: Okay.

Michael E. Gerber: So Bob says to me, so Michael. Thanks for sitting with me here. What do you know about my [00:04:00] business? And I said, nothing, Bob, he looks a little uncomfortable with that answer.

Chaz Wolfe: ~Uh ~huh.

Michael E. Gerber: And so Michael, if you don't know anything about my business, what do you know about my product? And I said, less than that. So if you don't know anything about my business, you don't, you get the point and you'd known anything about my product, how are you going to help me?

Chaz Wolfe: Yeah.

Michael E. Gerber: And I said, I haven't a clue, Bob. But anything's I can and we got an hour to kill. So let's see what happens.

Chaz Wolfe: Let's see what happens.

Michael E. Gerber: And that's what we did. So we sat there with me asking Bob some questions about his business, about his product.

And as time goes on, and I don't mean a lot of time, it ~didn't take, ~didn't take much Chaz. I began to realize that Chaz doesn't know anything about business either.

That's

And interestingly, he owns one. And

Chaz Wolfe: Yeah.

Michael E. Gerber: so it just [00:05:00] triggers this question in my mind. So Chaz, if you don't know anything about business, and you obviously don't, why did you start one?

And there, therein resided The most interesting question of all, if you don't know anything business, why did you start one? How did you start one? What did you expect to happen?

Chaz Wolfe: Yeah.

Michael E. Gerber: And as that happened, I realized that Chad also didn't know anything about selling,

Chaz Wolfe: ~Right.~

Michael E. Gerber: that selling is a system. And I learned that in the most ridiculous ways possible by learning how to sell encyclopedias when I was a ~very, very, ~very young man.

Chaz Wolfe: I love that.

Michael E. Gerber: And as I began to learn how to sell encyclopedias, I learned that it's not about selling encyclopedias. It's about learning the script for selling encyclopedias. And it's not just learning the script about [00:06:00] selling encyclopedias. Am I boring you?

Chaz Wolfe: No, this is so good. Keep it going.

Michael E. Gerber: ~Um,~ learning, it's about mastering the script

Chaz Wolfe: Yeah,

Michael E. Gerber: for selling encyclopedias.

No, not that way, Michael. This way. No, not that way, Michael. This way. Now, let me hear you say it. And so the guy who taught me how to sell encyclopedias gave me a 15 minute script and he sent me home to memorize it. Not just to learn it, to memorize it, and then come back the very next day and to repeat what I'd memorized. And that happened day one, day two, day three, day four, until I got it down. And then finally... He said, you're ready, and they took me out on the street, and they dropped me off in a neighborhood, and they said, now you do it, and that's exactly what I did, Chaz. Now you do it.

Chaz Wolfe: That's [00:07:00] right.

Michael E. Gerber: I walked down the street, and I knocked on the door, and I said what they taught me how to say that I'd mastered in the week I'd spent with the man who taught me how to sell by memorizing the script that sells. Understand that the script sells, you don't. And the minute I got that, I understood selling is a system, and Bob didn't know that. But as I've learned, Chaz, the years that followed, nobody knows that. I don't mean nobody, ~sort of. ~I mean nobody, period. But I also learned that nobody knows that management is a system, that marketing is a system, that leading is a system. That a business is a system, and if a business isn't a system, you don't have McDonald's.

Chaz Wolfe: That's right.

Michael E. Gerber: And if you don't have [00:08:00] McDonald's, you're simply wasting your time. But if you do have McDonald's, holy cow! 40, 000 plus stores started by a guy who never graduated from high school, Ray Kroc. How did you do that, Ray?

Just like this. And that's what I started to learn in that interview with Bob that started the e myth and created everything I've been doing in the years that followed.

Chaz Wolfe: Yeah. A system of systems. ~You, ~you said something here that made me,~ um,~ recognize something that I've learned about you. ~Um, ~that actually you learned from, it sounds like from your saxophone teacher. ~Uh, ~I'm gonna read you the quote ~that I, ~that I found here because I think that it's applicable to what you were just saying.

You said that your teacher told you this. You don't make music. Music finds you. And your job is to practice, Michael, exactly how and what I tell you. [00:09:00] It sounds a lot like what you were just saying, doesn't it?

Michael E. Gerber: ~Exactly, ~exactly.

Chaz Wolfe: Can you expand~ on, ~on your teacher?

Michael E. Gerber: I started that when I was 12, so I started that when I was 12 with a teacher named Merle Johnston and they, my folks drove me to,~ um,~ Melrose and Western from Anaheim, Melrose and Western in Los Angeles, to study the saxophone with Merle Johnston, who'd been referred to me by my saxophone teacher.

in Newark, New Jersey.

Chaz Wolfe: ~Well... ~Okay.

Michael E. Gerber: And he sent me to Merle Johnston, who was his teacher, and said, Merle, you got to meet this young man, because he's going to be absolutely stunning if you agree to teach him. So we went up to meet with Merle and I waited for Merle in his waiting room and Merle comes out and says, now you, and I go into Merle's teaching room

Chaz Wolfe: Yeah.

Michael E. Gerber: and he [00:10:00] puts something in front of me.

He says, now play this. Sound familiar?

Chaz Wolfe: little bit, right?

Michael E. Gerber: Now play this. No, not like that. Like this. No, not like that. Like this. And he takes me back out then to my parents, he said, I'll teach Michael, but you've got to take him here and leave him here by bus. You don't get to drive Michael to his lesson.

Chaz Wolfe: Yeah.

Michael E. Gerber: And Michael's going to complain about what happens here.

And it's absolutely true. I'm a monster.

Chaz Wolfe: ~Well,~

Michael E. Gerber: And I'm a monster because my students need a monster. They don't need a nice guy.

Chaz Wolfe: ~Right. ~

Michael E. Gerber: To let them off the hook. They need a monster who insists that they practice three hours a day at least. I just listened to a recording by just astonishing saxophonist. That was years ago. This was just this [00:11:00] week. And they said, so we understand that you practice. He said, well, that's an understatement.~ well, Um, ~I practice nine hours a day.

Chaz Wolfe: wow.

Michael E. Gerber: Nine hours a day. You get what I just said. Nine hours a day. I have never met anybody in business who practiced anything nine hours a day, let alone three hours a day.

Chaz Wolfe: Yeah.

Michael E. Gerber: And until and unless you approach it systemically, You will never create anything even close to, even resembling, a McDonald's. And until you, in fact, understand that, you'll never truly understand the genius of Ray Kroc, or the genius of, name [00:12:00] the entrepreneur you have in mind.

So we're not talking here to, in quotes, entrepreneurs. ~Um, I, ~I, I will apologize in advance to those in your audience who are listening to us. We're not talking about entrepreneurs. We're talking about what I call technicians suffering from an entrepreneurial seizure.

Chaz Wolfe: That's right.

Michael E. Gerber: We're talking about people who go into business ~doing it, doing it, doing it, ~doing it,~ busy, busy, busy, ~busy.

Who have an inkling what great business is all about.

Chaz Wolfe: Yeah. You said,~ um,~ you said this quote here that is funny because you just referenced your saxophone teacher or the teacher of teachers as a monster. ~Um, ~but you've said, and actually many. Places where you've spoken publicly that you've pissed off more entrepreneurs than anyone else on earth. ~And, ~and I think that if we put you in the position of this incredible, ~you know, ~teacher that you got to sit at the feet of ~and we, ~and ~we, ~we, if we put you in that place of honor where you've been able to teach hundreds [00:13:00] of thousands of entrepreneurs or.

~You know, ~technicians having an entrepreneurial seizure, as you say,~ then,~ then wouldn't we be so inclined to be pissed off by you and because you're a monster and you're going to, ~you know, ~agitate our thoughts. And so ~kind of ~in that vein, talk to the technician right now, they just, they're ~kind of ~trying to understand what you just said.

You're saying I'm not an entrepreneur. You're saying I'm having a seizure. What do you mean by that?

Michael E. Gerber: ~Well, ~what I mean is that the 99 percent of all businesses on the street are started, as I've said, by a technician suffering from an entrepreneurial seizure who wants to go out on his own. In short, he wants to get rid of the boss. He to get rid of the boss,~ uh,~ to make more money,~ um,~ to be his own boss.

Chaz Wolfe: Yeah.

Michael E. Gerber: And not with an inkling,~ um,~ that behind a true entrepreneur is the urge to create. ~You know, ~in Genesis jazz,~ um,~ it says, born in the image of God.[00:14:00]

Chaz Wolfe: Yeah. I believe that.

Michael E. Gerber: I've added to that, born to create. And I've added to that, born to create a world fit for God. So my calling is what one might say, A truly religious one. And when I say a truly religious one, I mean that in the most earnest way possible.

That it's a religious calling. It's a calling that if it's true that we're born in the image of God, ~born to create, ~born to create a world fit for God, anything less than that is dishonorable. Anything less than that is not serving God, is not serving your reason for being here, is not serving the higher calling. That I'm suggesting great entrepreneurs are responding to, and as a result of that, we end up in that ignoble place of simply doing it~ doing it, doing it, doing it, ~without the passion required to [00:15:00] create something magnificently great.

Chaz Wolfe: Yeah.

Michael E. Gerber: And if one is called to do something less than magnificently great, one needs to be Woken up

Chaz Wolfe: Yeah.

Michael E. Gerber: what's missing in this picture.

And I can't help but do that because I've studied under the most magnificent teachers on the planet from the age of 12, the monsters who taught me, who had no patience with my less than magnificent desire to create the greatest sound on the planet. No, not like that, Michael, like this, Michael, no, not that, Michael, like this, Michael.

Oh, my God, Michael, and then when something happens, said that early when something happens, meaning you don't make music, Michael, ~music finds you,~ music finds you when you practice, practice, practice, practice, and suddenly it shows up,

Chaz Wolfe: Yeah.

Michael E. Gerber: and when ~it shows up, ~it shows up as this immensely intangible [00:16:00] surprise.

It's almost like,~ like, ~did I just do that? No, it did.

Chaz Wolfe: Right.

Michael E. Gerber: And, oh, I want to find it again. And so you practice some more. Oh, I want to find it again. And you practice some more. And it's just remarkable,

Chaz Wolfe: Yeah. It's a beautiful relationship ~you know, ~in this case, you're talking about music, but we can easily translate it as you're saying to, to business because it's excellence. Really business, ~you know, ~sports, marriage, like whatever we're talking about,~ it, it's just, ~it's

Michael E. Gerber: name it,~ ~name it,~ whatever,~ whatever you're calling music, sports, business, art, whatever you're calling, every single one of them call for the very same thing. Every single one of them are inspired by the very same thing. There's no one bigger than God. So if I'm born in the image of God, and that's hard for me to believe.

Even today, at 87, it's just [00:17:00] as hard for me to believe that today as it was at 12. But if that's the case, and I believe that, then it's just that wow of Steve Jobs. It's just that wow of Ray Kroc. It's just that wow of Mother Teresa. ~You, ~you understand if that's in store for every single human being on the planet, ~why would I,~ why would I wait for anything else?

Chaz Wolfe: Yeah. The folks listening here today, some are resonating with you and they're like, yes, I'm living, ~you know, ~the exceptional life, ~you know, ~and I'm doing this thing. ~I'm, ~I'm, I have a purpose. I've, I have a calling, I'm pressing into it. ~You know, ~I'm recognizing that there's systems ~and, ~and this is all like,~ they're,~ they're in tune with this.

And then there's maybe another group of the audience that are, they want to believe this, like you're saying that they are creator, as opposed to just, ~you know, ~I got rid of the boss. I did it for money. They might still be in that place. And. You talk about the thing that makes the shift is it's a perspective change.

And [00:18:00] what you've said in the past is that basically in order to get unstuck or get out of the place of one and move to the next is a perspective change. And so you're talking about this identity shift of me going from not just. I'm a business owner, or even lower than that,~ I'm, I'm, ~I'm an electrician, or I'm ~a, ~a marketer, or whatever the technician role is, and level up and become the other pieces that you talk about in the e myth.

But even above that, you're talking about, I'm a builder. I'm a creator. This is my identity. This is who I am. And I can apply that in all areas of my life. How does one get there?

Michael E. Gerber: there is a way to get there. that's what I've been spending my 50 years since the light went on doing. And pursuing that question, how does one get there? And to get there, I've created what I call the Eightfold Path. An eightfold path is the part of the process to go from a company of one, where the vast majority of erstwhile businesses are, from a company of one [00:19:00] to a company of 1, 000.

And it starts with a dream. So the first step on the eightfold path is, I've got a dream, a vision, a purpose, a mission, a job, a practice, a business, an enterprise. The evolution of an enterprise from a company of one to a company of one thousand. And I can walk every human being through that path.

Chaz Wolfe: Yeah.

Michael E. Gerber: So the first step is discovering what your dream is.

Way back in 1977, when I started my first company with my then partner, Tom. Tom and I were sitting there on the very first day when we started it, the Michael Thomas Corporation, Michael Thomas. And Tom asked us, so what are we going to do, Michael? And I said,~ well,~ let's look at it step by step, Tom. The first step.

is I have a dream. Now I'm explaining to Tom what my dream is, not what our dream is.[00:20:00] You understand what my dream is? Because I was the entrepreneur in that relationship. Tom was my partner in that relationship.

Chaz Wolfe: ~Right.~

Michael E. Gerber: So I was leading that relationship. With my mind, with my soul, with my spirit, with my heart.

And so Tom was asking me the appropriate question. So is your dream, Michael? My dream is, and I said this explicitly, to transform the state of small business worldwide. That's why we started the Michael Thomas Corporation to transform the state of small business worldwide. So that's my explicit statement of my dream.

So then if I'm talking to somebody, a client, a student, every single individual who's listening to us right now, who's saying, yeah,~ well,~ how do I do that, Michael? You [00:21:00] do that in exactly the same way that I did that, Frank, Jim, Judy, Marty. Chaz,

Chaz Wolfe: Yeah.

Michael E. Gerber: what's your dream? Follow after me to transform the state of blank worldwide.

What's the blank? That's the vertical market that you're intending to transform in the creation of the company. That you're going to grow from 000 worldwide. Why worldwide, Michael? Because if you do it once, you can do it everywhere. That's what Ray Kroc knew. That's what Steve Jobs knew. If you can do it once, you can do it everywhere.

Provided you do it systemically.

Chaz Wolfe: Right?

Michael E. Gerber: Provided you do exactly what my saxophone teacher did. No, not like that, Michael. Like this, Michael. No, not ~like, not, ~[00:22:00] not like that, Michael. Like this, Michael. And he conveyed to me the script.

Chaz Wolfe: Yeah.

Michael E. Gerber: So you understand what I'm saying to every single would be entrepreneur? You're creating a script, Jerry.

And what do I mean by a script? ~I mean ~literally a script like this, just like this. How do you think Ray Kroc replicated job number one,

Chaz Wolfe: Right.

Michael E. Gerber: his hamburger stand, in Des Plaines, Illinois? To the degree he could create job number 2, job number 3, number 7, number 20, number 40, number 62, etc. In exactly the same way that he did job number 1.

How do you think he did that?

Chaz Wolfe: Yeah.

Michael E. Gerber: By creating a script. What's a script? It's a system that's ~sort of ~like this. Not ~kind of ~like this, but explicitly like this. That's [00:23:00] what they meant when they said a business format franchise,

Chaz Wolfe: Right.

Michael E. Gerber: not a trade name, not a sort of ~like, ~maybe, hopefully, wouldn't it be, but exactly like this, Ray Kroc said, no, that's not how this is the way, not like this way, you get my point.

So that was the first step in the process. I have a dream. The second step is I have a vision. In order to fulfill my dream, I have to have a vision. It's visual, it's emotional, it's functional, and it's financial.

Chaz Wolfe: It's good.

Michael E. Gerber: Get that in order. Visual first. Emotional second. You got my point. Functional third. Financial fourth.

Explicitly like that. Not sort of like that. Not maybe like that. Not emotional first. Not functional first. Not [00:24:00] financial first. But visual first. Why? Because the first impact is when I see it.

Chaz Wolfe: Yeah. That's right.

Michael E. Gerber: And until I see it, I can't feel it. So it's not, I feel it first, it's I see it first. Blah, blah, blah, blah, blah, blah.

The red and the yellow of McDonald's. Get it? The golden arches. You don't feel them, you see them.

Chaz Wolfe: That's right.

Michael E. Gerber: Am I being too

burdensome?

Chaz Wolfe: No. No. You're. Be hard on him, monster. Let's go.

Michael E. Gerber: Yeah.

Chaz Wolfe: What's the third

Michael E. Gerber: Perfect. the third step? is my purpose. Now, what is that dream, vision, purpose, mission? It's the product of a true entrepreneur, which raises the question, Chas, what is a true entrepreneur? A true entrepreneur is four distinct things. A true entrepreneur is a dreamer, a thinker, a [00:25:00] storyteller, and a leader.

Get that. A dreamer, a thinker, a storyteller, and a leader. Nobody has ever defined an entrepreneur as we have.

Chaz Wolfe: Yeah.

Michael E. Gerber: A dreamer, a thinker, a storyteller, a leader. The dreamer has a dream, the thinker has a vision, the storyteller has a purpose, and the leader has a mission.

Chaz Wolfe: That's

Michael E. Gerber: My brother in law, Marty Sklarm, went to work at Disney directly out of college. And Disney hired him to write story.

Chaz Wolfe: right. Okay.

Michael E. Gerber: to write the story of Disney, to write the story of Disneyland, to write the story of Walt. So Marty had the astonishing job. To write the story of Walt. Cause Walt couldn't write the story of Walt. Marty was to write the story of Walt. That's how we started at Disneyland.

Marty stayed with Disney for [00:26:00] 44 years.

Chaz Wolfe: Wow.

Michael E. Gerber: Marty opened every single one of Disney's... Grand lands, Disneyland here, Disneyland there, Disneyland there, et cetera, et cetera, et cetera. Marty was the president of Walt's Imagineering. Disney Imagineering. What's an Imagineer?

Chaz Wolfe: Yeah.

Michael E. Gerber: to a degree nobody else has.

Chaz Wolfe: Yeah.

Michael E. Gerber: And that's what people see when they walk into Disneyland. They see the world in a way they never have before.

When Imagineer would go to Walt and say, ~look at this, ~look at this, Walt would always say, no, I've seen that before.

Go back and do the real work. And he would do [00:27:00] that ~again and ~again and again and again. Just beat the living crap out of him.

Chaz Wolfe: no, not ~like this, ~like

Michael E. Gerber: No, not ~like, ~no, not like this. Like what?

Chaz Wolfe: Right.

Michael E. Gerber: And they'd go back and they'd ~press against it, press against it, ~press against it. Can you imagine living in a world in which you were constantly pressed to go find something nobody'd ever seen before?

That's the work I've been doing with the new entrepreneur. That's the work I've been doing with those. Folks who are technicians suffering from an entrepreneurial seizure with absolutely no clue whatsoever why they're there. That's why I've been so tough on everybody.

Chaz Wolfe: Yeah.

Michael E. Gerber: That's why I have insisted that every single person that comes to me.

~Um, ~reads Marty Sklar's books, goes to Disneyland, understand how that [00:28:00] was invented, goes to McDonald's, understand how do you create 40, 000 stores when ~the average franchise,~ the average franchise produces significantly less than 50.

Chaz Wolfe: Yeah,

Michael E. Gerber: Think about that 40, 050. What's missing in this picture, Chaz?

That's the question we're constantly asking.

What's missing in this picture? When you're satisfied with 50, forget about 50, you're satisfied with 3. What's missing in this picture? What's driving you? What's driving you is you want a job.

Chaz Wolfe: Yeah.

Michael E. Gerber: What's driving you is personal income. What's driving you is something significantly less than something that could be there.

Chaz Wolfe: Yeah. It's too small.

Michael E. Gerber: You got it.

Chaz Wolfe: Do you believe based on your earlier comments around, ~you know, ~you and me created in the image of God, [00:29:00] therefore we also create. And~ , um,~ this imagineering concept that you just introduced maybe to listeners for the first time, aren't they imagineering their own world?

~Like ~Marty did ~the, the, ~the, any entrepreneur ~don't, ~don't

they have the power to,

Michael E. Gerber: true entrepreneurs, if they don't rise to the level of imagineer, ain't doing it. ~Um, ~if they don't rise to that level, they ain't doing it. And if they ain't doing it, it leads to dissatisfaction,

Chaz Wolfe: that's right.

Michael E. Gerber: yes, but, yes, but, yes, but, yes, but, um, as the smallest of the small keep on saying to me, yeah, but I'm happy.

Yeah, but I'm satisfied. No, you're not. Understand that if you were born in the image of God and I say, if you were born in the image of God,~ um,~ that's Genesis. I didn't say that. You understand? God supposedly said that if you were born in the image of God, you were born to create. And if you were born to create, then no wonder you're dissatisfied.[00:30:00] You haven't taken on that mantle to the degree you were meant to take it on.

Chaz Wolfe: Yeah.

Michael E. Gerber: And you understand it's not my diss dissatisfaction with you. It's your dissatisfaction with yourself. So if we can't approach your life with that reality, then we're being dishonest with each other.

Chaz Wolfe: Yeah. Yeah.

Michael E. Gerber: discover what the Imagineer was ordered to go back and discover by Walt isn't my dictum. It isn't my order. It isn't that I'm tough. It's that it's tough.

Chaz Wolfe: Yeah.

Michael E. Gerber: It's that to become a [00:31:00] creator on the planet is the hardest thing in the world to do.

And so your discomfort is... Your unwillingness to accept the mantle.

Chaz Wolfe: Yeah.

Michael E. Gerber: And because you're unwilling to accept the mantle, you're unhappy with yourself. You can't help but be unhappy with yourself. And here I am, simply honoring that discomfort and saying, and there you are.

Chaz Wolfe: Hey, Kings and Queens, Chaz Wolf. I want to talk to you about something that's super important to me. We put a lot of time and effort. We meaning myself and my team into this podcast, into the content that goes out every single day. And if you have been getting any sort of value or insight from this, we want it to be able to reach other business owners too.

So we would love if you would like. Comment, share, leave a review, post, share again, all of the things on social media, on all the different platforms, [00:32:00] or even on the podcast mediums of Apple and Spotify, we would love to be able to get our content into more hands, more entrepreneurs so they can grow their business as quick as possible.

Together, we are building a community of like minded entrepreneurs who are committed to growing their businesses to new heights. So let's do this. Let's help each other. Let's help each other grow.

~The,~ the mantle or identity of, ~you know,~ taking it up as I'm a creator, right? I'm made in the image of God and I can go forth in that way, which then has led to the dissatisfaction ~or, ~or just maybe the realization that I'm made for more or that I can create more. And it's not that I'm not grateful for what I have already created.

But I just know that the potential is so much greater. ~Talk, ~talk about that for a second,

Michael E. Gerber: Nothing more. So you understand the dream, the vision, the purpose, the mission, the job, the practice, the business, the enterprise, the dream, the vision, the purpose, and the mission are the foundation for the creation that I'm stepping out to do. The next [00:33:00] step is the job and the job is your client fulfillment system. So at the heart of McDonald's is a client fulfillment system.

This is how we do what we do. This is how we do what we do every single time we do it. Not sort of like that, but explicitly like that. What is that? What is that? What is that? So Ray Kroc went to work on McDonald's, not in McDonald's, on McDonald's to invent that system.

And he went to work to invent that system. And he invented that for the very first store and that system ~Um, ~expressed the nature, the quality,~ um,~ the content of what McDonald's was to be. in every single store from that point on. So that system needs to be invented. That client fulfillment system is what my [00:34:00] client is then stepping out to do in the job. Once having invented that system, once having orchestrated that system, once having turn keyed that system, the next step is the practice. And I call the practice is the three legged stool.

Chaz Wolfe: Okay.

Michael E. Gerber: Lead generation, lead conversion, client fulfillment. Lead generation, lead conversion, client fulfillment. This is how we reach out to the market.

This is how we convert the leads that we create from the market to create a customer. And this is how we convert the customer into a client. What's the difference between a customer and a client? Customer buys once or twice or four times. Client keeps on coming back.

Chaz Wolfe: Wow.

Michael E. Gerber: So that's the franchise prototype.

Chaz Wolfe: ~Right.~

Michael E. Gerber: The franchise prototype is nothing more or less. [00:35:00] Then the three legged stool, lead generation, lead conversion, client fulfillment, turnkey. And that's the heart of the business. What's a business? A business is nothing other than up to seven turnkey practices, plus a turnkey management system. Let me say that again.

A business is nothing other than up to seven turnkey practices, lead generation, lead conversion, client fulfillment. fulfillment seven times, plus a turnkey management system. The turnkey management system is the overseer of the turnkey practice. Like this, just like this, every single time, mastered.

Mastered. Mastered.

Chaz Wolfe: Let's hang there for a half second. Cause you've got some ~really, ~really good stuff there. ~The,~ the system of [00:36:00] practicing is the individual, like he created it, then he practiced it, but then ~you, ~you very quickly moved into, he worked.

On you talking about Ray Kroc ~and, ~and we've entrepreneurs, we talk about this all the time, work on the business, not in the business, you basically created this frame. So ~let's, let's, ~let's not move on too fast here because there's working on the business. You talk about being able to transcend yourself. So that you can transform yourself and you ~kind of ~just very practically showed us how that works. It's the day to day, and that's happening in multiple different functions, and then that's being managed by managers, but then above that is this transcended perspective or the transcended entrepreneur who sees the entire machine, the machine of machines, talk about that for just a little bit and how that person way up here has to transcend.

~Well, ~that in order to get up there, they have to transcend to be able to see that the machine of machines. Talk about that.

Michael E. Gerber: ~Well, ~Absolutely. Well, you understand that Ray Kroc didn't go to work in that first hamburger stand in Des Plaines, Illinois. [00:37:00] Ray Kroc opened two offices. One, the store. And two, the corporate office. Home office. So Ray Kroc worked in the home office. ~Well, ~he worked on the store, but at the same time, Ray Kroc went to work on Ray Kroc to invent the perfect entrepreneur. So you might say that all personal development work, Tony Robbins, whomever, whatever, is really nothing other than what I've invented when I say, go to work on it, not in it. You go to work on your life, you don't go to work in your life.

Chaz Wolfe: Yeah, that's right.

Michael E. Gerber: Go to work on your life, to create your life, to realize your dream, your vision, your purpose, your mission.

So I'm essentially saying the very same thing about your life. You must have a dream, you must have a vision, you must have a purpose, you must have a mission. Because to the degree you don't have a dream, a [00:38:00] vision, a purpose, and a mission, you don't have an expanded life. You don't have a capability. to grow beyond where you are.

You don't have the capability, let alone the instinct to go beyond the technician suffering from an entrepreneurial seizure. Creating the job that you go out doing it, doing it, doing it, doing it. You go out to do your life, doing it, doing it, doing it, doing it. Busy, busy, busy, busy, going nowhere. And you understand that most lives, Chaz, are going nowhere. Now I don't wanna be... What is it? I don't wanna be...

Chaz Wolfe: Yeah, Debbie downer. ~Uh, I, ~I don't think, ~I mean, ~it's drifting, they're drifting. They're just,

Michael E. Gerber: They're just doing it, doing it, doing it, doing it. It comes up, we do it. It comes up, we do it. It comes up, we do it. Most lives... are miserable lives. Most lives are unhappy with life. Most lives [00:39:00] are uninspired in their life.

Chaz Wolfe: That's right.

Michael E. Gerber: And so if most lives are uninspired in life, you can imagine most fathers are uninspired fathers.

Most mothers are uninspired mothers, which means that most children are uninspired children,

Chaz Wolfe: Yeah. Sad.

Michael E. Gerber: also means that most teachers are uninspired teachers. So if that's true, and we can prove that to be true, all we have to do is look at them, and you'll see it. And the moment you see it, you understand you have to come face to face with it, how much of a dread.

Most schools are, most classes are,

Chaz Wolfe: ~Yeah,~

Michael E. Gerber: most lives are, ergo most businesses are, most jobs are. So when I [00:40:00] began to study the saxophone with Merle, I didn't realize I was studying my life with Merle,

Chaz Wolfe: Right.

Michael E. Gerber: because he never said it, but it was not that far a leap to be able to infer it, and the process of inferring it.

To be able to see it, and the process of being able to see it, to be able to feel it, ~and so forth, and so forth, and so forth, ~and so forth, and the world just wakes up for me, and says, look Michael, just look Michael, and there you'll see it. And that's all I'm saying to everybody who's listening to us right now.

Chaz Wolfe: Yeah. That's powerful. All right. Give us,~ uh,~ give us enterprise. What's the last step here?

Michael E. Gerber: ~Well, ~that's the lovely thing about this, it's a step in a process. First the dream, second the vision, third the purpose, fourth the mission, fifth the job, sixth the [00:41:00] practice, seventh the business, eighth the enterprise. And if a business is nothing other than up to seven turnkey practices with a turnkey management system with the objective to create a turnkey business, then the final step is a turnkey enterprise.

And a turnkey enterprise is nothing other than up to seven turnkey businesses plus a turnkey leadership system. And there you go. The business is a district. The enterprise is a region. The practice is, you got my point. And as you go back to it, you begin to see the relationship between the first step to ~the second, ~the second to ~the third, ~the third to ~the fourth, ~the fourth to the fifth, et cetera, et cetera, et cetera, et cetera.

And that's how you grow a significant enterprise. And it's [00:42:00] the only way you grow a significant enterprise. It's a turnkey process. First this, ~then this, then this, ~then this. And to the degree you stay with that, no, not like this, Michael, like that, Michael, no, not ~like ~this, Michael, like that, Michael, no, not ~like, ~you get my point. And to the degree you get that, you suddenly see it's a system. a business development system. And if it weren't a business development system, it wouldn't work. And that's why the vast majority of businesses who even presume to create a successful company don't work. Because it isn't a system. And until it's a system, it sucks. And there you go.

Chaz Wolfe: Yeah. ~You're, ~you're giving it to them straight. ~Um, ~and ~I want to, ~I want to press on you one quick thing here,~ um,~ because there's a lot of entrepreneurs. ~Uh, ~who, in order to even be an entrepreneur, there's typically,~ um, you know, ~there's some personality traits [00:43:00] that,~ uh,~ like you said, maybe ~I want to, ~I want to get rid of the man, right?

~I want to, ~I want to be my own boss. ~I want to, I want to, ~I want to, I've got ~these, ~these,~ uh,~ personality things, whether it be autonomy or I'm a nonconformist, I don't want to do it like you told me to do it. I just want, I want to be free. ~Right? ~Like we talk about freedom all the time and as entrepreneurs.

And so you have this, possibly this person who doesn't like order, who, who loves the idea of business, but everything you've described today as business is system it's order. ~It's ~it's steps. ~And, ~and that person is running from all of those things. That's why they don't want a job. That's why they probably didn't do well in school, like all of these things.

So how does that person, and I'm not saying every entrepreneur is like that, but how does the person who maybe doesn't naturally value order or. A system or even be able to recognize what you're talking about is a system. They may have just heard you say it and they're like, Oh, okay, I get it. But I'm not naturally inclined to that.

What would you

say to that person?

Michael E. Gerber: He's lost. I'm not speaking to him. You understand, I'll speak to him [00:44:00] until we find that he's lost. That he's not interested in learning. You understand, it started with your creator. Born in the image of God, ~born to create, ~born to create a world fit for God. There couldn't be anything more liberalizing than that statement.

I didn't say you're born to order. I didn't say you're born to memorize my script.

Chaz Wolfe: ~Right.~

Michael E. Gerber: I said you're born to create your own.

Chaz Wolfe: Wow.

Michael E. Gerber: So ~the, ~the dream, the vision, the purpose, the mission go back to the beginning. The vision is to invent the McDonald's of blank. So in my case, my vision was to invent the McDonald's of small business development services.

And what do I mean by the McDonald's of small business development services? ~I mean, ~to invent a system that could scale in identically the [00:45:00] same way that McDonald's was capable of scaling.

Chaz Wolfe: ~Right.~

Michael E. Gerber: ~Um, ~therein resides the art of scaling. The art of scaling is exactly that, an art. This is how you draw. This is how you paint.

~This is how, this is how, this is how, ~this is how. If I'm not able to teach them how to, Then I'm wasting my time trying to teach them two,

Chaz Wolfe: It's good.

Michael E. Gerber: because what two is the most successful small business in the world? There isn't a company on the planet that has survived without order. There isn't a company on, I'll say that again.

There isn't a company on the planet that has survived without order. Without order. There's no magic without order. There's no scalability. Without order, there's no replicability. Indeed, if I intend to create [00:46:00] chaos, meaning any which way~ , um, ~do it any way you want, do it any way you want, do it any way you want, sell it any way you want, manage it any way you want, it's the stupidest dictum I could ever deliver to any human being on the planet, any way you want.

Chaz Wolfe: Yeah,

Michael E. Gerber: Any way you want is stupid. Any way you want doesn't work.

Chaz Wolfe: that's

Michael E. Gerber: You understand it may work for you, but it doesn't work for him. It doesn't work for her. Cause she's saying, yeah, but tell me how. And you're saying you can't. Nor do I want to.

Chaz Wolfe: Yep.

Michael E. Gerber: What I'm saying is invent your own. How do I do that? Any way you want. ~Well, ~what do you mean, any way I want?

Chaz Wolfe: Right.

Michael E. Gerber: ~Well, ~that's how I did it. Any way you want, Mary, Marty, Jerry, Jim. Any way you want is the art [00:47:00] of entrepreneurship. No, that's the art of stupid. And so if you want to be a stupid artist, do it any way you want. And stand there ten years from now and say to me then, Michael, you let me down.

Chaz Wolfe: Right.

Michael E. Gerber: You didn't teach me a way. You taught me stupid.

Chaz Wolfe: Yeah.

Michael E. Gerber: And of course that is a way. That of course is a way. But understand, it's the stupid way. Yes.

Chaz Wolfe: Yeah. ~Well, I, I, ~I receive on behalf of all the listeners,~ uh,~ you being a monster and going, Hey, it's dumb. Don't do it. ~Um, ~but inside of that, actually what I heard you say was that ~it's a, ~it's a coverup to, I don't know how to teach you, or I don't know. What I'm even doing,

Michael E. Gerber: You got it. You got it. I don't know how to teach you. I never learned how to teach you. I never went to school to learn how to teach you. I never studied with anyone to learn how [00:48:00] to teach you.

I'm

Chaz Wolfe: they got to back up. Yeah. ~They got, ~they got to back up in the steps to get back to ~that, ~that creation first,~ uh,~ so they can create the job. ~And then, and then, ~and then there's eventually the ability to teach, but there's a lot of entrepreneurs today that are probably operating. Not probably,~ you, you know, ~better than anybody they are operating in chaos.

~Um,~

and that's why they, that's why they come to you. ~Um, ~that's why

Michael E. Gerber: ~Just, just, ~just remember, go back to the beginning when I was 12. ~Um, ~and,~ um,~ go back to the beginning when I was 18. ~Um, ~when I was learning how to sell encyclopedias. Just imagine if the guy who was the manager of Encyclopedia Sales said to me then,~ Well,~ just go out and do it. ~Well, ~how do I do it?

Any damn way you want. And he handed me the

Chaz Wolfe: Good luck.

Michael E. Gerber: Encyclopedia and said,~ So,~ figure it out. Hear me, figure it out.

Chaz Wolfe: Yeah. Cause I don't know. I don't

know how.

Michael E. Gerber: how successful would I have been if he said, Just figure it out. I would be as [00:49:00] successful as everybody else is who starts a business. of all small businesses at Chas fail, 80% of all Munk. So small companies fail.

80% of all small companies fail, and the vast majority of the 20 left are failing. ~Doing it, doing it, doing it, ~doing it, just making it on your own in whatever way they're doing it. But not succeeding at all.

Chaz Wolfe: Yeah,

Michael E. Gerber: Is that what we want to do? Is that what we want to lead people to do? ~I mean, ~I think not. So then what, when somebody asks me, so what did you learn and how did you learn it?

I can teach them that there is a way. I can teach them to succeed at it, but they've got to be a truly serious student and to the degree they're not a truly serious [00:50:00] student, bug off, because I don't want to waste my time struggling with somebody who isn't a truly serious student, who says to me, teach me how, and I say, here, take this script, go home and memorize it, Come back tomorrow memorized and we'll do what's next

Chaz Wolfe: want

Michael E. Gerber: and if he doesn't go home And if he doesn't memorize it There is no day two.

Chaz Wolfe: Yeah.

Michael E. Gerber: Do you understand? There is no day two.

Chaz Wolfe: Yeah.

Michael E. Gerber: He chose. There is no day two.

Chaz Wolfe: Yeah, it's good.

Michael E. Gerber: And there should be no day two for the vast majority of people who go out on their own ~doing it, doing it, doing it, ~doing it. ~Busy, busy, busy, ~busy. And it's just a tragedy, Chaz. Just an infinite tragedy. Because there could be [00:51:00] a day two if they simply followed instruction.

Chaz Wolfe: ~Or, ~or wanted to be better. ~Um, ~like you said, maybe it's a contentness, right?

Michael E. Gerber: Yeah. Wanted more than to be better. Were willing to do the work to be better.

Chaz Wolfe: Yeah.

Michael E. Gerber: Wanted to learn how?

Teach me Michael. Teach me Michael. Teach me Michael Teach. I can teach you Chaz. I can teach you Jerry. I can teach you Judy. I can teach anybody and everybody to transform their company of one into a company of 1000.

But only if you're willing to do the work. work? Step one, step two, step, you got me.

Chaz Wolfe: ~He, ~he just gave it to you. Yeah. We've got this phrase inside of gathering the Kings. Of course, this is a podcast, but we have a vibrant,~ uh,~ high achieving mastermind group for entrepreneurs and a phrase that we use is grateful, but not done. And it has this position of, we've got [00:52:00] members that have made a lot of money.

And successful. They're the ones often that you've described as so grateful for my position. They're the most humble actually. And they're the hungriest. They're the ones out there looking for the next level. They want to be taught. They want to, they're listening to podcasts. ~They're, ~they're trying to get to the next level of themselves and for their family, for their business.

~Um, ~because ~it's not, ~it's not a number. It's not a, like a, Oh, I did it. I didn't arrive, like we're still on the journey. You're 87. You're still on the journey right here. Part of your journey is obviously giving back. And it has been ~for, ~for a long time.

Michael E. Gerber: ~Absolutely.~

Chaz Wolfe: Michael, ~I have, ~I have one last question here for you.

As we wrap up, I want you and you get to pick the age, but I want you just to reach back into time. And I want you to imagine the ~younger, ~younger Michael. And I want you to tap him on the shoulder and whisper in the ear. What do you tell him?

Michael E. Gerber: There are seven steps to building a truly transformational company. The first [00:53:00] is the technician. The second is the manager. The third is the CEO. The fourth is the entrepreneur, the founder. The fifth is the coach. The sixth is the mentor. And the seventh is the imagineer. Every single would be entrepreneur who goes through the process of inventing a new company is going to go through each and every one of those steps.

Step one, step two, step three, et cetera, and so forth. The technician is a mechanic. Do you understand the technician is really two people, the engineer and the mechanic. The engineer invents the system. The mechanic masters it.

Chaz Wolfe: That's right.

Michael E. Gerber: The next step, the manager is the overseer. The overseer watches [00:54:00] over the technician, watches over the engineer, watches over the mechanic to make absolutely certain they're following the process.

They absolutely must follow ~step by ~step by step by step. The third step is the CEO. The CEO is the leader and the leader tells the story to the manager who lives the story. with the technician to transform the state of mind to go beyond who they are, where they are, to do something they hadn't imagined they're there to do. The fourth step, the founder, is the entrepreneur. And the entrepreneur tells the story to the CEO. And the story to the CEO is a story beyond what the [00:55:00] CEO imagined the CEO was there to do. All of that is in it. Now we're going to work on it, and that's a three step process. The coach, the mentor, and the imagineer. ~I, ~I like to say to folks, the only thing I lost at 87 is my memory. And it just

Chaz Wolfe: I think you've crushed the memory here today.

Michael E. Gerber: ~It's just, ~it's just astonishing to me. I'll get into a process, and I'll forget the next word. So I apologize to anybody about forgetting the next word, but thank you, Chaz, for reminding me.

Chaz Wolfe: Yeah.

Michael E. Gerber: So you didn't forget.

So that's wonderful. So once one looks at those seven steps, in it and on it, once one absorbs those seven steps, one sees that there is no not [00:56:00] doing, not understanding, what's required to create a great growing company. It's a turnkey process. that every single one who's listening to us can in fact engage in.

Indeed, I'm saying, Chas, must engage in. It's not something you have to think about. It's something you have to do. And in the process of doing what I just described, doors open up, windows open up to a degree you can't possibly imagine right now. So there you go.

Chaz Wolfe: The power of everything that you've shared. I hope that the listener not only got quiet,~ um,~ as I did and listened, but I hope they go back and I hope that they practice,~ um,~ not like this, but like this,~ uh,~ you have been,~ uh,~ of course, incredible here today, but,~ uh,~ your journey, your history ~is, ~is like I said, at the beginning, it's just so rich.

~Um, it's like, ~it's like talking to.[00:57:00] ~You know, ~someone who has experience in all these industries, because you do,~ you've,~ you've led people, entrepreneurs want to, ~you know, ~technicians, the people who are having seizures all across the world. And,~ uh,~ it has been an absolute honor here today. ~I, ~I know that you're still,~ uh,~ very active.

~Um, ~and so how can a listener best engage with you, your companies, social media,~ should, should they, ~should they get a book? ~Like what's the, ~what's the entry point or how can they find you if they're listening right now and they want more Michael E Gerber.

Michael E. Gerber: ~Well, ~it's really ~very, ~very simple. Go to michael at michaelegerber. com. Go to michael at michaelegerber. com. Tell me one of two things. One, you've read The E Myth Revisited or you haven't read The E Myth Revisited. If you've read The E Myth Revisited. and applied the E Myth Revisited to your practice, tell me that too.

If you've read the E Myth Revisited and haven't applied the E Myth Revisited to your practice [00:58:00] sufficiently, tell me that too. If you haven't read the E Myth Revisited, get it, read it, and then get back to me.

And finally, you might be ready, if you've applied the E Myth Revisited to your practice, to become a co author with me.

I've now written and published 22 vertical market e myth books. The e myth accountant, the e myth attorney, the e myth chiropractor,~ etc, etc, etc, ~etc. And I'm providing an opportunity for those singularly brilliant individuals. Who've applied the E myth religiously to your practice to become the one who gets to co author that book with me, for whom, for every single one in that vertical market industry, the chiropractor, the attorney, the accountant, et cetera, and so forth, to take [00:59:00] our process out to every single one in our industry.

To transform the state of small business worldwide. Michael at michaellygerber. com waiting to hear from you.

Chaz Wolfe: Wow. ~Well, ~we have,~ uh,~ we'll put all that in the show notes,~ um,~ and for the ones that rise to the occasion and,~ uh, what a call, ~what a call to action. ~Um, ~I just love today, your belief ~in, ~in humans really, but just the entrepreneur,~ uh, the, the, ~the person, the individual,~ uh,~ your belief that they are made for more and that they can create.

Thank you. ~Uh, ~more,~ uh,~ is inspiring. And I just want to thank you again for being here. ~Uh, ~it's so appreciative to not only have you in the presence, but be able to pull some of those nuggets out that you've been regurgitating ~for, ~for decades now. Thank you for giving it to us. Blessings to you, your family,~ uh,~ and all of those coauthors that are going to continue to write those vertical books with you.

Thank you for being here, Michael.

Michael E. Gerber: My delight chance. Thank you.[01:00:00] [01:01:00]

That’s right, we’ve got the ‘Worlds #1 Business Guru’ for you all today! In this groundbreaking episode of Gathering the Kings podcast, host Chaz Wolfe talks to extraordinary businessman and author, Michael E. Gerber. Known for his revolutionary books, 'The E Myth' and 'The E Myth Revisited', Gerber shares a multitude of insights on systems and processes in business. Reflecting on how his journey began in business at age 40, he explains the crucial art of creating systems for business growth, from a one-person company to a company of a thousand. Gerber also talks about the importance of order, structure, and discipline in transforming businesses and personal lives. This episode is a must-listen for entrepreneurs craving success and scalability in their firms. Hit play, now!

Michael E. Gerber:

Email: michael@michaelegerber.com

LinkedIn: https://www.linkedin.com/in/michaelegerber/

Chaz's favorite morning drink to fuel him for his day

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