Clockwork: Design Your Business to Run Itself

by Mike Michalowicz

  With the team supporting Ruth’s goals and specific solutions and outcomes, the company had a record-earning next quarter. Ruth said, “The more I see their efforts, the more I am willing to trust my team. I am so grateful they fight for what they believe in, for margin, and for me, because they know that’s important.”

  * * *

  As your business begins to tick along beautifully, you will be met with resistance from the usual suspects—your staff and your partners—and from people you don’t expect. Your family may question your new freedom and express concern about potential cash flow problems. Your colleagues may wonder why you turned in your workaholic badge and give you a hard time about your new way of running your business. No matter who pushes back against the way you now run your business, remember that they, just like you, are only human. They’ll get there. And so will you. The proof’s in the pudding, as they say: a profitable business that runs like clockwork.

  CLOCKWORK IN ACTION

  Start having active conversations about your vision and plan for your business. Talk with and listen to your partners, colleagues, vendors, clients, and family. Open, active dialogue greases many wheels in transitioning a business to run itself. Action is everything, so start the conversation now. Or, better yet, instead of interrupting the people around you, take the action of getting it on your calendar and theirs.

  CHAPTER TEN

  THE FOUR-WEEK VACATION

  “Two years from now my family and I will be living in Italy. We will be sipping on limoncellos from our apartment balcony overlooking Rome.”

  When Greg Redington made that announcement to our mastermind group during our perfunctory pre-meeting personal updates, it caught everyone’s attention. It wasn’t what we expected to hear. When one of us asks, “Anything cool going on?” the replies typically are one of the famous three: “Nah, nothing new,” “All is good,” or “I’ve got this weird pain in my [fill in the blank].” But Italy? Huh? WTF?

  At first, we thought Greg was joking, that he was just making a flippant comment. When we realized he was serious, we were all taken aback.

  “Greg, do you mean Italy, Italy? Like the boot-shaped country? Or are you talking about that new Little Italy neighborhood popping up in your town?” I asked, still confused about the prospect of leaving his booming business in New Jersey to head to another country, permanently. Or at least permanently enough that he was going to declare Rome as his new hometown and the Pantheon as his favorite stop for a morning cup o’ joe.

  Greg is the founder of REDCOM Design & Construction LLC, a commercial construction management firm serving New York and New Jersey. He had grown his business into a substantial company, earning $25 million in annual revenue. He enjoyed the work tremendously, but the business was still dependent on him. Greg wanted more out of life and more time in his life. He wanted to be released from serving the QBR.

  Greg’s gift is meticulousness. You see it in the way he dresses, the home he keeps, even in the way he talks. He is specific. He is detailed. He is exacting. REDCOM has built its reputation on that meticulousness. In an industry where construction errors, redos, and on-the-fly changes are commonplace, REDCOM does the project right from start to finish. They build magnificent structures, perfectly . . . you know, like the Pantheon, but in New Jersey. But up until this point, Greg was serving the QBR. As the final step of designing his business to run itself, he had to step out of serving the QBR. And he wanted to do it in grand fashion, by living out a long-held dream.

  When my fellow masterminders pushed Greg for more details, he explained that he had wanted to move his family to Rome, Italy, for a year. To do that, he committed to the final stage of establishing a Clockwork business. He removed himself from his business, to a point where it had to stand on its own. And the result was astonishing. Greg returned from Italy after two years, to a business that was now double its size, doing $50 million in annual revenue and with double the staff.

  That’s what I’m working toward, and what I call on you to work toward. Not the number, but the freedom where you can leave the business and have it still drive forward. You’ve already made significant headway in that direction. You’ve gone through the seven-step process, and hopefully, you’ve already started to see improvements in business efficiency. You’ve calmed your mind and developed systems. Heck, just by reading this book all the way through you’re further along than most entrepreneurs. It is time to schedule your four-week vacation.

  You can do this. I promise you, you can. And sure, maybe some people will think you’re joking when you tell them your plan. You may get pushback from your friends, who may be jealous because, for whatever reason, they are not able to take a four-week vacation. You may get strong pushback from your family, who may be nervous about money. And you may—scratch that, you surely will—get pushback from your colleagues, who don’t believe that taking a four-week vacation is possible or deserved for business owners. It’s okay. In my experience, pushback from others is usually a sign that you’re doing something that challenges the preprogrammed, drone-like mind-set that asserts things need to be the way they always were. Of course, you’ll want to address your family’s concerns about money so that they can enjoy the vacation (cough, read Profit First, cough cough), but ignore the rest. You’ve worked the system, and now you’re going to reap the rewards.

  Even if all you do with your four weeks off is sit in your backyard and watch the squirrels, you and your business will be better for it. After all, if your business can hold its own—and even experience growth—with you out of the picture, how much easier will it be to run your business when you get back? (Answer: Heaps. Tons. Loads easier.)

  You don’t need to leave that vacation behind, either. Greg didn’t. After two years of living in Rome, it was tough for Greg to leave Italy. So when he returned to his company, he made sure he brought a little bit of Italy back with him. No, not a limoncello. Greg brought back a Fiat Cinquecento. The fabled mini-car is parked inside his office’s “hangar” for display and quick drives. On a warm spring day, Greg will take it for a little drive. Not all over town, of course, just in Little Italy.

  And what about working in his business? Was Greg happy to return to serving the QBR? Actually, yes. That is the power of Clockwork. You aren’t forced to leave your business; you are freed to leave. This means you are freed to do what your heart sings out to do. Greg thrives on leading detailed construction projects. When he returned from his dream of living in Italy, he did only the work he wanted to do. Greg has become a specialty player for his company. He no longer swoops in to “fix things.” The company is running well on its own, and he is free to do the work he does best, and loves best. And the results are even more magnificent.

  WHY A FOUR-WEEK VACATION?

  Most businesses go through a full business cycle within four weeks. This means that most businesses have activity within all four of the ACDC stages of a business: Attract, Convert, Deliver, Collect. If you look at your business over the last month, it is likely there was some effort made to attract clients. Perhaps you had another client give you a referral, or you ran an ad, or you spoke at a conference, or you sent out an email blast, or you had visitors at your website, or a combination of all the above. It is also likely that during the past four weeks your business made an effort to convert prospects into new clients. Maybe you had a sales call, or your website has an active “buy now” option, or an automated email campaign asked for the sale. In short you tried (and hopefully have been able) to convince someone to buy from you. During the last four weeks, you probably worked on a project for a client, or created a product, or shipped goods; you tried to deliver something in part or in whole per a request of a client. And throughout the last four weeks, you managed the cash flow; you probably paid some money out and (hopefully) brought some more in.

  In a four-week cycle, most businesses will also experience internal issues or challenges, big or small—an
interpersonal conflict on your team, a flu epidemic, a technology breakdown, someone will forget to do something, or someone will remember to do something but, unfortunately, it’s the wrong thing. And during those four weeks you’ll also probably deal with external problems, such as disgruntled customers or a competitor’s new product launch or a banking error or a vendor failing to deliver on a promise.

  When you are removed from the business for four weeks, it is likely that the vast majority of things your business faces on a daily basis will happen, so you must find a way for the work to get done and the problems to be solved in your absence. When you are gone only a few days, the business can often delay the resolution of problems until you return. But if you are gone for a few weeks, the business is forced to support itself. And when a business can support itself for four weeks, you know you have achieved a Clockwork business. You can put the certified stamp of Clockwork approval on your company’s door, and now have the freedom to get out of Dodge permanently, if you like.

  So let’s put this mofo business to a test, and get you out of the office and to a destination elsewhere. Maybe it’s Rome to sip on limoncellos with Greg and his wife. Or maybe you’d rather spend a month with a friend. No matter what you do with your time off, or where you go, we need to get you out of the office both physically and virtually. We need you out, without access to your team.

  GO ON VACATION—FOR REAL

  For years I pondered how to get out of my own businesses. No matter if I was doing the work, deciding for others about the work, delegating the work, or designing the work, I always felt trapped by the business. I was sure that I “just had to be there.” As I shared in chapter one, even on the few occasions that I took a vacation, I really didn’t “vacate”—I may have physically gone away, but I stayed connected. I would connect with the office multiple times during the day. I would check email constantly. I would “sneak away” to make client calls, to write proposals, to just work. Then one day I accidentally found how to take a real vacation, one that disconnects you from your business so that it needs to live on its own.

  I went to Maine.

  Now, there are plenty of places to visit in Maine that will allow you to stay connected to your business. The place we chose to visit—not so much. I booked a vacation at an all-inclusive camp in the Lakes and Mountains region of Maine, called Grant’s Kennebago Camps. I fit the planning for the vacation into my busy work schedule, so in my haste I didn’t fully evaluate the camp’s website. I saw the “all-inclusive meals” part. I saw the beautiful lake. I saw pictures of families boating and having fun, all with big smiles on their faces.

  What escaped my attention was that, in those pictures, mom and dad and their kiddos were wearing camouflage.

  When we arrived at the camp, we quickly realized I had booked our family vacation at a hunting and fishing camp. And the only “family” part about the camp was that the campers were hunting families of deer.

  We were totally disconnected from the outside world—no cell, no TV, no nothing. The only radio station we could find was broadcasting out of Canada . . . in French. I took Spanish in high school. Yo no hablo francés-o.

  The first day I was in detox from constant connection. Will the business die without me? The second day, I began to analyze my options. I could drive into town every day to check in. The nearest town was an hour away, and I was seriously contemplating a two-hour round-trip commute to check in with work. Or I could just enjoy the time with my family. All of it. By the third day, I was at peace and loved the vacation.

  I’m sure you’re not surprised—the business didn’t die. Did my team have problems? Sure. Did they fix the problems on their own? Some of them, yes. For those problems they couldn’t solve, they bought time so I could fix them when I returned. They did a great job of managing our customers’ expectations, which meant that, even though they did have problems, the customers knew their problems were being addressed.

  We ended up having the time of our lives. We skipped rocks, hiked, and boated around the lake. We spotted geese and mooses! Or is it meese and gooses? The vacation was so powerful, right then and there we declared our family mascot as the moose. It is powerful and serene, even though the impression at first glance is that it is a little bit goofy, which is very much our family creed.

  Today, I reflect back on that life-defining vacation and remember everything with such joy. Including the hysterical “bat attack” and “leech assault” stories that Krista and I will gladly share with you over dinner. We recall every single detail of those stories and more. The work I missed? I don’t recall anything about it. In fact, I can’t remember a single business initiative I had going on then.

  As I write this book, I’m planning my four-week vacation, and at the top of my mind is how to ensure a disconnect. I need to guard against my own weakness to find excuses to “check in” and ruin the test. When you think about where you want to go on your vacation, and what you want to experience, take into account how connected you want to be. Remember my story about the first time I visited Australia? I was in a different, upside-down time zone than my team, and so I felt completely disconnected—even though I had email and could video call and text. And boy, did I use that technology to screw things up and annoy my team. Will you need to force the disconnect by choosing a place with limited options for you to check in with work? Maybe. It certainly helps. Remember, you are not taking this vacation as a necessary break from your business, as much as your business is getting a necessary break from you.

  Design your vacation around the type of experience you and your loved ones would like to have, with the intent of being disconnected. The combination of enjoying yourself while away will help keep your mind off of the business, and the inability to connect will protect you from caving in to the temptation to “check in” and F everything up.

  The goal behind planning your four-week vacation is to free you from your business so that the business can learn to run itself. This is the final step of the surgical operation of separating you from your conjoined twin, the business. And this is a test to make sure both you and your business can live without each other. If this exercise were a medicine bottle, the warning label would read “You may reclaim your life.”

  You need to do these steps now, even if you are a single-practitioner business, because even a single-practitioner business can find ways to have at least partial independence from the owner doing all the Doing. You can automate processes and deliverables. The technology exists and the subcontractors are out there to bring large amounts of independence to any size business.

  The four-week vacation is designed for the owner of the business. You are the one we need to set free. And if you want to get your business to the highest Clockwork level (where it is pure smooth sailing), you can do a four-week vacation for your staff, too. My assistant, Kelsey, is going on a three-month sabbatical the same year that I am doing a four-week vacation, and we have already projected our best performing year yet.

  The four-week vacation does not need to be something of extravagance. You can do it anywhere you want, and do it within a budget that you can afford. You just need to achieve certain goals:

  Physically disconnect from the office.

  Virtually disconnect from the office. There is a way to do this, even if there is cell and Wi-Fi where you are.

  Let the business run for the entire time without you connecting. You can go to Maine (awesome) or you can go to your mother-in-law’s (let’s just say, that may not rank up there with Maine). But there is a budget-friendly way to do this. Your business needs you to do this so it can grow. You need to do this so you can grow.

  OPERATION VACATION

  When planning your four-week vacation, start by picking a date that is eighteen to twenty-four months from today. Yes, you can do it faster and split in six months. Or super fast and just split tomorrow. But that won’t likely give
you the time to prepare. If you plan your four-week vacation more than a year out, you’ll have a chance to live and work through that same four weeks on the calendar year, which is crucial to effective planning.

  Once you commit to your vacation, you will likely notice an immediate shift in your mind. First you’ll have the “Oh, shit, what have I done” moment. That’s normal. You’ll get over that within twenty-four hours. Then you will notice your focus will no longer be on the super short term, or simply what is urgent now. Thoughts such as “How do I get through today?” will shift to “How can I make this happen without me?” “What needs to change so that this aspect of my business can run without dependency on me?”

  To make your life easier, I have broken down the tasks you need to complete at various milestones. This will help you stay the course so you can actually get to Rome, or Maine, or Rome, Maine (yes, it exists), or wherever you want to hang for twenty-eight days.

  EIGHTEEN MONTHS OUT—

  DECLARE IT

  Put your vacation dates on the calendar. Block it off. Do this now, as you read this. Don’t delay. Your freedom and your company’s success depend on it.

  Tell your family, your loved ones, the people who will hold you accountable about your vacation—especially if they are coming with you! They will hold your feet to the fire.

  Then declare it to me. If you haven’t done so already, email me at Mike@OperationVacation.me, telling me that you are committing to the four-week vacation. To make sure I see it, please put in the subject line “My Clockwork commitment.”