Mike Michalowicz explains the Phoenix Effect, a narrative structure for business: start with a compelling vision, reveal the struggles you faced, then show how you overcame them. This approach builds credibility by avoiding both unrealistic perfection and hopeless struggle.
I'm JJ Ramberg. Here now with the top tip to help your business grow is Mike Michalowicz. He is the CEO of Profit First Professionals, a group of accountants, bookkeepers, and coaches who drive profitability for entrepreneurial businesses. He is also author of the new book, Surge: Time the Marketplace, Ride the Wave of Consumer Demand, and Become Your Industry's Big Kahuna. So good to see you, Mike. Always awesome to see you. And I love hearing your tips because they are always actionable, like sort of concise and actionable.
Well, thank you, thank you. And the tip I have for you today I think is highly actionable. It's something used in movies. It's called the Phoenix Effect. If you ever saw a movie and you wonder how the audience gets all rallied up and excited about them, it's because movies follow an arc called the Phoenix Effect. They start off with a high point. Everything's perfect, Tom Cruise is perfect, everyone's perfect, and it's about the first minute or two. Then the bullet shot, people die, dog gets kicked, it hits this low point. In the closing scene, Tom Cruise, blood coming out of the face, ocean wave going over him, and now he has to avenge the death of his family. And the rest of the movie, he climbs out of it. That arc gets people excited in supporting him. But if you just have a high point or just a low point, people aren't interested. They want to see the arc. We have the same opportunity in our business. Talk about that grand vision you have, that high point, what you're looking to achieve. Get people interested in that, but then let them see your struggles, warts and all, the difficulties you've had to achieve it, but how you are consistently climbing out of it. That will get people rallying along with you and supporting you.
I think, yes, so you basically hook them in with the big idea.
Yes.
Show them that you're real, right? This idea can actually happen because I'm showing you what struggles we've had and how we're dealing with them. That's exactly right. And so you're taking people along the ride with you.
That's it. And the problem so many businesses do, they just say the high point. We have this grand vision and we are perfect. That actually causes envy. We kind of reject people who are so perfect.
Well, it's either envy or you don't believe them.
Or you don't believe them.
Right, because nobody's perfect. Everybody has problems.
Oh yeah, you're right. You see a successful person, like, how do they get all that money? They must be dealing drugs. Like, we come up with an explanation of how they got there which is often not necessarily true, but we don't believe that's really possible. Conversely, some businesses say, "We've always been struggling. Please do business with us. We're desperate." We pity them. We actually avoid them. So you have to show this arc.
All right, great. Again, actionable. This is a way for us to think about telling our own stories.
Thank you.
Thanks so much, Mike.
Thank you.
