Clockwork: Design Your Business to Run Itself

by Mike Michalowicz

  In Perth, I was literally on the other side of the world—almost directly opposite on the globe from my home in New Jersey. The time difference between the two places is twelve hours, so my day was their night and vice versa. This meant my team slept while I worked the day away in Australia. And when they were awake and cranking it in Jersey, I was asleep and dreaming of shrimp on the barbie. With the extreme time difference, if my team needed anything, they couldn’t immediately get ahold of me, nor could I get ahold of them.

  After a couple of days of this, I began to feel as though the world didn’t need me. It was the ultimate disconnect. The difference between freedom and not being needed was stark. Really, it was a bucket of cold water to the face. I always wanted to be free of my business, but no one calling me, not even to ask for my credit card to pay for the office pizza party. Well, jeez, that was tough to accept. My team wasn’t just running the business; they were running it without me. I had spent years designing a company that could run on its own, and now I had proof that I’d pulled it off. The realization that I was not needed? That just tore into my soul.

  Alone again at my table, the downward spiral of thoughts kicked in. I was alone in Australia, locked in solitary confinement by a wall of Danishes and apple turnovers, and no one at my office even cared. I mean, not a soul needed me. Cue: Panic! Would they even notice if I went on a walkabout in the outback and never came back?

  So what did I do? The only thing a human being faced with their own dispensability would do: I reinserted myself into the business. I started sending emails with questions and requests. I made busywork for myself and others. I started throwing wrenches into the well-oiled machine I created. As soon as my team in Jersey woke up, they saw dozens of emails from me, all of which made my team slow down, start stumbling on tasks, and seeking my input on how to proceed. It instantly made my schedule in Australia that much more demanding. Brilliant, right? If you think even for a second my decision was smart, just picture me. There I am, sitting with a smorgasbord of food around me, surrounded by Australian grandmas (who apparently like to frequent Miss Maud), barking out commands in voicemails to my team, and as a result, hampering my own company.

  Let’s be clear on this: I’ve never claimed to be the smartest tool in the shed. A tool, maybe. Okay, I was definitely a tool. This was not about my brains, this was about my ego. This was about human nature. You may have experienced a similar need to remain relevant in your own business, or in other aspects of your life. Maybe when you sent your kids off to college. I know my wife and I felt that. All of a sudden, a house of commotion became an empty warehouse of “now what?” First, you get the amazing “this is the first day of my life” feeling of relief when they walk out the door. Then, when dinnertime rolls around, and there’s no one yelling, “What’s for dinner, Ma?,” the realization that you’re not needed takes your breath away. It’s painful! So you pick up the phone and call them, get all up in their business in an effort to make yourself indispensable. I had already lost two of my kids to college and had one on the verge of going; my ego couldn’t take losing my last child—my business. By reinserting myself into the company, I was trying to pull my “adult child” back into the house with me. It wasn’t good for my team, and it wasn’t good for me.

  The truth is, our kids still need us after they go off to college, and our team still needs us when they’re running the business on their own. They just need us in a different way.

  Dealing with your own bruised ego is just one of the ways you—and others in your organization—may resist the streamlining process I’ve detailed in this book. When you start implementing the Clockwork system, you may experience blowback or resistance from your team, partners, colleagues, friends, family . . . and yourself. Expect it. Plan for it. And above all, be patient with yourself and others. Change is hard, man. We’re only human beings. And human beings are notorious for being awfully human.

  IT FEELS CONTRARY TO WHAT WILL WORK

  The greatest irony is that while building systems is hard work, it is not busywork. You won’t be typing away all the time. You won’t be meeting with people all the time. You won’t be busy. You will be focusing on the hardest work of all—thinking.

  Thinking about your business—Designing your business—takes a lot of energy and concentration. So, because we’re humans, the natural instinct is to distract ourselves by doing the work. It may sound crazy that hard work is easier than hard thinking, but it is.

  Just like if you had two options: 1) Try to dig a ditch in fifteen minutes, or 2) try to solve a Rubik’s Cube in fifteen minutes. The ditch, even as hard as it is physically, for many people, will be easier to complete. Since we are almost guaranteed to see a result with the ditch, many people will turn to that. Or try the Rubik’s Cube for just a few minutes and get frustrated that the @#$! yellow center square is still on the @#$! other side from all the other @#$! yellow pieces. So then we throw the cube down, and run outside into the rain and dig the ditch. Thinking takes a lot of energy, a lot of patience, and a lot of concentration.

  Also, when we are “thinking” and “not doing,” it feels as though we are not bringing benefit to our business, because we often don’t get immediate results from thinking. We want the instant gratification of checking tasks off a list, filling a quota, delivering services, reaching a goal.

  The truth is, the thinker is getting serious stuff done. They even dedicated a statue to him—you know, The Thinker—because he has figured out that the goal is not to do stuff, but instead to think about how to get the things done. Getting shit done is not the goal. The goal is to have the company get shit done. Instead of doing the work, you need to be thinking about the work, and who you can get to do it.

  Don’t fool yourself into believing that just because you’re sitting there with your chin resting on your fist—naked—that you are not working. Heck, everyone knows the best ideas come when you’re in the shower! Why? Because you are not doing work—no email, no calls, none of that. You are doing the most important work: thinking. I now seek out saunas whenever I’m traveling because they are like showers on steroids (I can’t do anything in there . . . including moving). I just sit and think, and sure enough I get my best work done in them.

  Want to know how to design a business that runs itself just like clockwork? Ask yourself big powerful questions and let your mind work on it. And remember, just because you’re naked doesn’t mean it’s not work!

  PUSHBACK FROM PARTNERS

  I can’t tell you how many times my business partner said, “You aren’t doing enough for the business. We need more of you.” I get why Ron felt this way. He was still caught up in the “do everything” mentality. Everything is important. Everything is critical. Everything is urgent. Ron would say, “You used to run circles around this place. I’ve never seen someone work so hard. Now you are never around.” Which, you and I know, is because of the move from the Doing to the Designing phase, but to the outside world—or even your business partner—it may look as if you have just abandoned the business.

  Ron has a heart of gold. I admire him, and I know how much he cares for our business, and for our clients, and for our mission of eradicating entrepreneurial poverty. He takes everything to heart, and he wants everyone to have an extraordinary experience. I trust him more than anyone in the business world.

  When we started to streamline Profit First Professionals, we used one of our quarterly meetings to explain to all employees what I do to serve the QBR, and how they are supporting it. I explained that Profit First was a concept I had created eight years before the business even existed, including it in my first book and subsequently expanding on it in an article I wrote for the Wall Street Journal. It was the time I had to work on the concept and improve it that made it a reality. I explained that my job now was making strategic moves. Planning the big moves. Spreading the word, and finding others who can spread the word. When I started PFP, I had to do it
all. It was just me and Ron, after all, and we were both needed for the Doing. Now I was needed as a Designer.

  Ron and I met privately and I asked for more help getting the day-to-day off my plate, and he was not happy about it. We had a lot of tough, heated conversations in which he asserted that I had to spend more time working in the business and less time writing and speaking. As I said earlier, our QBR is spreading the message of eradicating entrepreneurial poverty, so what he was asking me for would not help us grow our business but would actually restrict it. But for Ron, who was busy all day, every day, my plan seemed counterintuitive.

  His understandable pushback against my efforts to make PFP run without me (and him) came to a head when we hired a new employee, Billie Anne. She was quite capable with tech, which thrilled me, because up until that point, I was the only person in-house who had the skill set to work on technology. With more experience in this space than the other five full-timers at our office combined, I was the obvious choice to head up our app development work. But because I was focused on trying to serve the QBR, and because I still hadn’t removed myself from managing other projects, I only got around to working on our tech project sporadically.

  At the time, we were developing software that would be essential for PFP members. I had been leading the project for five months but had only managed to get the software to the point where it was functional but not usable. It wasn’t yet at the level that would make our members want to work with it, indicated by the fact that even after the first release of the software they still preferred just working with spreadsheets and paper.

  I met with Ron, gave him an update about the project, and said, “I want to give this to Billie Anne. She can handle it.”

  Ron was adamant that I stay the course. He said, “When you take something on, Mike, it’s your responsibility to see it through. You’ve got to work harder. Push through.”

  What Ron was saying wasn’t wrong; it was consistent with his experience, but that experience was not consistent with operational efficiency; instead, it was consistent with the brute force approach of “just be more productive.” I blame it on lacrosse.

  Growing up, Ron and I were on the same lacrosse team in high school. Ron was a better player than I was (and, I recently discovered, still is, when he schooled me in a face-off at a recent alumni game). Everyone on the team has to pull their weight, plus some. Ron knew the golden rule of lacrosse all too well: when any player is down or not playing well, the team captains have to play harder. You don’t seek to do less, you toughen up and do more and more and more. Of course, a lacrosse game is a sprint. The entire playing time is one hour. Business is a marathon, the entire “game” being played over years, decades, or a lifetime.

  “We’re not the players on the lacrosse team, Ron,” I told him. “We’re the team owners. We have to act like owners, and since we haven’t hired the coaches yet, you need to serve that role as I serve our QBR. We need to coach our team, our employees, and give them the strategy to win. We’re off the field now.”

  I think he heard what I said, but it didn’t land. That meeting didn’t end well. So, out of respect for Ron, I stayed on as lead for the tech project. What I did do was run a test, with Ron’s permission. I had Billie Anne help me with one tiny piece of the project, which she knocked out in no time. Then I went back to Ron, told him I got one piece done with Billie Anne’s help, and showed him the results.

  Ron said, “Wow! She’s fast. Let’s do that again,” and he agreed to let Billie Anne take on more and more of the tasks. Now she’s leading the project. Over the course of three weeks, I convinced him, by showing him Billie Anne’s results, that it would be better if I pulled out of the project. More important, he convinced himself. Ron is smart and thirsts to learn, but just like you and me, he is comfortable with the familiar. He worked harder on the field than any other lacrosse player, me included. He worked harder at work than any of his colleagues, hence his success. But now he had to let go of the comfort of hard work and start supporting choreographed work. Sometimes your biggest resistance, if it doesn’t come from you, will come from your business partners or executive team. They are human and need guidance with change. Take small steps toward organizational efficiency, and prove through tests that everyone on your executive team needs to move toward Designing and away from Doing.

  Now, because I’m not working on the software project, I have time to meet with international partners and negotiate international contracts for PFP. Under the leadership of Femke Hogema, we opened a new location in the Netherlands and brought on thirty members with little effort. We then launched a location in Australia with Laura Elkaslassy, and she is already proving she can serve the community (and grow our organization) in extraordinary ways. Next up: Mexico, or Japan, or somewhere else. They are in the works, but the QBR is always the priority.

  You will be challenged by partners who are still playing like team captains—not coaches or owners. It’s not because they are wrong, or bad. It’s because they are doing what they have always done. Work with your partners. Meet them halfway, and then halfway again, until they finally see the benefits of organizational efficiency.

  I did a quick day trip to Chicago and met up with my longtime friend Rich Manders. His company, Freescale Coaching, has been so successful in bringing efficiency, growth, and profitability to companies that prospects are putting down $10,000 deposits to have the privilege of getting his coaching a year or more from now. Yes, he is that good.

  We were walking down Michigan Avenue to a group meeting we were attending, and I asked Rich, “With all your success helping companies grow, what would you say is the most common and biggest roadblock businesses need to get past?” I fully expected something about the finances, marketing, and/or the product mix.

  Rich looked at me and said, “That’s easy. It’s always a lack of communication and clarity among the executive team. Always.”

  Clockwork is not a system for you. It is a system for your entire company. Everyone needs to know it. Everyone needs to be on the same page. Everyone needs to begin moving the leadership from Doing to Designing.

  PUSHBACK FROM EVERYONE ELSE

  As you move into the Design role and shift your business to the optimal 4D Mix, you will likely get pushback from other people—your staff, your vendors, your shareholders (if you have them), and even your customers. Pushback from these groups is easier to deal with than the pushback from partners, because, ultimately, you’re in charge; you’re not sharing in the decisions with someone who has equal decision-making authority.

  Pushback does not mean that you are on the wrong track, nor does it mean you have to barrel through conflicts that come up without a second thought. Expect to meet resistance along the way and plan for a strategy to address it in advance. This will help you manage it. Ultimately, pushback comes from a place of fear and insecurity. Clear communication goes a long way in mitigating some of those feelings, as does managing expectations, listening to questions and concerns, and providing reassurance.

  Some people feel strongly about traditions, legacy, and company culture. Listening to their feedback will help you to make the transition to a Clockwork business smooth and successful. After all, you can’t anticipate every mistake or wrong turn, but the people who do business with you now can certainly help you spot them.

  When Ruth Soukup of Living Well Spending Less began working with Adrienne Dorison on clockworking her business, she identified the company’s QBR as product design. They create products that help women simplify their lives, and their business growth depends on improving on those deliverables and creating new offerings.

  Ruth is the primary person serving her company’s QBR. She authored a New York Times bestselling book Living Well, Spending Less and creates planners and other helpful tools. It won’t surprise you to learn that Ruth discovered she was wearing too many hats, and that she needed to let her staff take on some of h
er duties. She and Adrienne set a goal of freeing up three “coffee shop” days a week—time when Ruth could focus on design and expanding her vision for the company. It soon became clear that in order to meet this and other goals, she would have to add people to her team. Ruth brought on a new CMO (chief marketing officer) and a creative director, which helped immensely.

  As Ruth told Adrienne, “Giving me three days of ‘focus time’ has forced every department to adjust to support that goal. They track how many times I meet that goal, which is one of their metrics. We’re not there yet, but we’re getting there. Everyone is working well together and stepping up to do what needs to get done.”

  Ruth went on to explain that, for the first time in the history of her company, she was not stressed out during a major product launch. Since she began applying Clockwork to her business, she also has had zero employee turnover.

  Ruth also addressed the way her team handled conflict and put a system in place for acknowledging concerns and finding solutions. For example, up until then, Ruth had been the only person focused on revenue and cash flow. When she tasked her team with meeting specific revenue goals, she initially met some resistance. It wasn’t that they didn’t want to focus on revenue; it was just a new way of looking at their roles in the company.

  “I can’t even tell you how amazing it is,” Ruth added. “When we started this process, our fourth quarter sucked. We had just added a lot of people and we had two poor-performing months. My team came to me and assured me we were doing the right thing, and to trust that we could handle it. They took the reins, created a new product in four days, and crushed it.”