What Is 'Clockwork' & How Can It Change Your Business? | JJ Ramberg Interview

There's this idea out there for people who don't run their own companies that once you start your own company, your time is your own. You've got tons of freedom. The truth is, for most people, that is not true. I remember for me having my second baby and being in the delivery room on my email answering messages to my co-founder. But there is a way, according to our next guest, where you can have both work and life and a balance even in those early years. He says that you can create a business that runs itself. Mike Michalowicz is the CEO of Profit First Diverse Professionals, a group of accountants, bookkeepers, and coaches that are helping drive profitability at entrepreneurial businesses. He is also author of the new book Clockwork: Design Your Business to Run Itself. That is a dream come true.

It is, and I've lived that too, not having a baby, that part, but with being absent with my family, even though I was present with them in person, absent in mind because I was working away.

By the way, that's not just if you own your own business, it's if you have a job that, you know, People's jobs don't, don't turn off. Okay, so tell me how the audience can create a business that runs itself. You say it talks about a 4D mix.

Yes. So we have to understand that most businesses go through 4 stages of independence. The first stage is doing. So when you start your business and you started a company, you have to do all the work in it, right? The next level up is called deciding. Most entrepreneurs mistake it for delegation, though. Deciding is where, say, you hire me and you say, Mike, I need you to do invoicing. And I come back a minute later and say, should I, JJ, sort it by last name or first name? And you're like, oh, just do by last name. You make all the decisions. You're task rabbiting me. To get out of that, we need to do true delegation, which is the assignment of outcomes.

Yep.

Where you say, Mike, I need you to invoice clients on time so we get paid consistently and accurately. Can you handle that? Yes. And Mike, you make all the decisions around this. So if you come against any roadblocks, you navigate the way around it. The challenge is when I make decisions, you as the entrepreneur need to actually support all my decisions.

Exactly.

So even the bad ones, like if I mess up, you have to say, oh, that wasn't the outcome we wanted, but Mike, I'm very proud of you. You actually made a decision that you felt was in our best interest, right? So support all decision-making and then go to the final D, which is designing. Designing is where you have that vision for the outcome of your business and you navigate around the tactical and strategic decisions to orchestrate all all of the people and resources you have to get to that vision. That's where entrepreneurs need to spend a good portion of their time designing, not doing.

Got it. That's the real thing is, right? Once you hire good people in-house or outsourced and you get them and you trust them, then you have more time to spend elsewhere and you can trust them. Okay. Declare your QBR.

Yeah. Stands for the Queen Bee role.

Mm-hmm.

So as I was writing this book, I studied all these different businesses to try to find the common thread of efficiency. Couldn't find it, JJ. Then I found that beehives have the answer. Now, I don't know if you've ever seen this. You'll see a bee flying around your house and all of a sudden this like massive hive is there the next day. They're extremely efficient and they all know, every bee knows the most important function of a beehive is the laying of eggs because eggs spawn new bees and that's what they need to survive and ultimately thrive. Every bee knows that that queen bee role, the queen bee is the one who lays eggs, has to be happening. If it's failing to happen, it's everyone's responsibility to get spawning again. Now, one critical mistake entrepreneurs make, they say, "Oh, I am the queen bee, therefore I'm the most important." The queen bee is not the most important bee. She serves a critical function. But if the queen bee fails to deliver on it, she's expunged and a new bee is spawned. So it's the role that's protected. And every business has a QBR, the one critical role that your business hinges its success on. You need to find it. Define it and then protect it.

I love that. So it's not a person. The queen bee is not a person. It is something that needs to get done, right? This needs to get out the door by January 3rd or whatever it is.

Exactly.

Whatever you have. Okay. Capture systems.

So businesses have grown up on SOPs. We were told, you know, I have checklists and write these great documents that specify everything the business does and they sit on the shelf and no one ever looks at them. They're very inefficient, particularly nowadays, because technology is advancing so quickly. If I write an SOP around You know, UPS's shipping process and I give it to an employee, UPS may update their website and now the SOPs are relevant.

Yep.

The new standard is capturing and what you do is you record an activity as you're doing it. The next time I process an order on UPS, I actually just film it using some screen capture software. I then give it to my employee and say, follow this script here. But here's the key. If I now assign this task to you to do it, ultimately the best student is the teacher. I need you to record one more video explaining how to do the process because by teaching it, you've mastered it. And now I've truly given you the process to handle.

Well, and also it's my job if something has changed from your video, right, to update everything for the next person who might have to do it. Okay, and then finally you talk about taking a vacation because the truth is you don't even know— your company will never function without you if you are always there.

That's exactly right.

You might be surprised. Things work out okay.

And we entrepreneurs, we play this dumb game. We say, oh, we're going away for a week and here's what we do. The week before we leave for a week, we crunch in as much work as possible. We try to bridge over while we're away. So we, we do all this proactive stuff. Then the day we return is the scramble and say, what can we do to catch up? That's not a business that's running itself. That's just a bridging technique. What I found is businesses need to declare the entrepreneur a 4-week vacation. I know.

You're—

I agree. But here it is. Every business experience, pretty much every element of the business in monthly cycles. If you can extract yourself from business for 4 consecutive weeks, they can run without you. You have an independent business. I'm not saying tomorrow morning you're going away for 4 weeks, but I'm saying maybe a year or 2 years from now you are going away for 4 weeks. Once you make that declaration, we have this mind shift. It's like, oh my gosh, how am I going to pull this off? We start bringing in resources.

Right.

I'm an author and, you know, it's pretty contingent upon me writing books. I have a 4-week vacation coming up. We have 10 employees at the office and I feel very confident it's going to be running itself.

Your vacation is— you mean your book tour?

No, no, no, no, no, no, no. Work.

What's the vacation?

Yeah, it's a digital disconnect too. Like, I have no email, no nothing.

Wow. But I like this idea of if you say it and you plan for it, then you have that mindset of I've got to make sure that this is going to work and I can leave and feel comfortable and not be stressed while I'm gone.

That's right. Just watch out for one thing happened to me during my first test. First, I tested going away for a week, then 2 weeks. I went to Australia for 2 weeks disconnected. I didn't expect this problem. Ego. My ego kicked in. They didn't need me at the office. There was no emails, right? I'm like, aren't I important? And actually start to reinsert myself in the business and unwind the progress we made. We have to redirect our ego to something greater, that by having a business that runs itself, we can actually scale and serve a greater purpose.

Yeah, there's so many good things you can do. Spend time with family, nonprofit work, whatever you want to do. All right, Mike, congratulations. This is book number what for you?

5.

Oh, 5. I remember number 1, Toilet Paper Entrepreneur.

Yes!

Wow, you're good. All right, so fun to see you.

Good seeing you.