Won't an operational manual incur many competitors?


2

I read the book*The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It*. It is said that we should treat a business as a system, as a money-making machine. We should have an operational manual, so the business system relies on this manual rather than a particular "talent". With an operational manual, a business becomes replicable. My question is, what if another company replicates your business following your operational manual and compete with you? It is true that an operational manual can facilitate the operation of a business, but won't it incur many imitators?

Strategy Management Entrepreneurs Business

asked Jan 10 '11 at 18:40
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Steven
1 point
  • You don't share the manual online... You keep then accessible by the relevant people. – Tim J 8 years ago

4 Answers


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If the aim is to franchise your business then this will be the case.

The idea is that you can employ drones to do the work who can then follow a manual, but whist I like the E-Myth Revisted book, I personally don't follow this idea. It is a good idea to have set procedures in place that are documented, but I certainly wouldn't want to take away the "creativity" of an employee.

answered Jan 10 '11 at 19:28
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Smart Company Software
1,190 points

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The manual, as others are saying, is not about removing creativity, but about removing ambiguity from your business. An operational manual cannot replace the individuals on your team, but it can define processes that everyone expects to be followed.

Even in a company that relies heavily on creative effort, for example, a graphic design company or a software company, there is still a need for an operational manual. It would include the process by which a client is pursued, the process for billing clients, the process for completing projects. It would outline the roles and responsibilities of each member of the team, by role.

If a competitor got their hands on your operational manual, they might be able to duplicate some aspects of your business, but they would not be able to copy the creative efforts, or how any individual completes their work. That is, they might copy your project life cycle in terms of defining requirements, reviewing with clients, building the work, testing, deployment, and moving to production, but there is still a significant amount of your business which cannot be documented at all.

answered Jan 11 '11 at 01:29
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Elie
4,692 points

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I would highly recommend creating a manual for any type of new business. You should document your code, write a manual for best practices in graphic design, or have step by step processes for building a hamburger.

The reason why this is important is because it allows you to scale your employee base as you customer base grows. If you do not have the systems described in the E-Myth in place and ready to go, you will be pulling your hair out when the time comes to move faster.

As for operation manuals, I agree with almost everything's that has been said. In his autobiography, Grinding it Out: The Making of McDonald's, Ray Kroc talks about a competitor who stole his operations manual one time and tried to copy it. Here's a quote form him below:

"Competition has from time to time
planted spies in our stores. One very
prominent franchise once got hold of a
McDonald’s operations manual. Word was
that he intended to use it to expand
his drive-ins to include hamburgers
and french fries. My attitude was that
competition can try to steal my plans
and copy my style. But they can’t read
my mind; so I’ll leave them a mile and
a half behind"

You definitely want to document at least the things you don't want to be doing later on. It'll help you stay organized too.
answered Jan 11 '11 at 10:35
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Andy Cook
2,309 points

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Make anyone who reads the manual sign a non-disclosure/non-circumvention agreement first.

answered Jan 11 '11 at 10:52
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User6492
1,747 points
  • 99% of NDA border on useless. The only people who benefit from them are lawyers who charge you for them. Try enforcing your NDA in court and you will see what I mean. You will spend $$$ on lawyers and important half of it will be tossed out by the judge. – Apollo Sinkevicius 8 years ago
  • The true purpose of an NDA is not to prevent disclosure, but to indicate to the other party that you consider certain information confidential (so they can't say they didn't know). In court, though, it's unlikely to prove useful. – Elie 8 years ago

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