Gerber’s approach has revolutionized many a business in the past couple of decades, encouraging entrepreneurs to think big, create businesses they can grow and scale easily. It’s the McDonald-ization effect, creating operations that provide adequate–not exceptional–products or services, at the lowest possible cost to the business owner. The goal is to standardize everything, use solid systems, and then let other people run the show while you’re off on vacation or working on other aspects of your business empire.
Godin has been very critical of this model. In his book Linchpin, he quotes Gerber as saying:
“The Model Will Be Operated by People with the Lowest Possible Level of Skill. Yes, I said lowest possible level of skill. Because if your model depends on highly skilled people, it’s going to be impossible to replicate. Such people are at a premium in the marketplace. They’re also expensive, thus raising the price you will have to charge for your product or service. By lowest level of skill I mean the lowest possible level necessary to fulfill the functions for which each is intended. Obviously, if yours is a legal firm, you must have attorneys. If yours is a medical firm, you must have physicians. But you don’t need to hire brilliant attorneys or brilliant physicians. You need to create the very best system through which good attorneys and good physicians can be leveraged to produce exquisite results.”
“Here’s the problem…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 labor, you will have to produce a product without humanity or personalization or connection. Which means that you’ll have to lower your prices to compete. Which leads to a race to the bottom. Indispensable businesses race to the top instead.”
I love both of these books, and feel you can gain a lot from both theories. My own approach is a hybrid: I believe wholeheartedly in the power of great systems, and I hire amazing people with leadership skills and unique personalities to inject heart and soul into those systems. As I said in my last post, I tell my staff we don’t have an “insert smile here” policy. I want them to use their own warmth and friendliness to make customers feel welcome and appreciated, and I encourage them to use their own judgment when situations arise that aren’t covered in our training manual. But I also work hard to make sure our training is comprehensive, and that we have well-written procedures and policies to cover the majority of our daily operations.
I absolutely believe that you want to avoid a business that competes on cost alone, leading to a “race to the bottom” as Godin puts it. Compete with quality, integrity, character, values, uniqueness and commitment to fantastic service.
Have you read either of these books? Which approach makes more sense to you?