Mike Michalowicz: "Fix This Next"

Hey, guys, it's Mike Michalowicz here, the author of Fix this Next. And I wanted to create this special podcast episode just for you to talk about what's in Fix this Next. Now, if you're getting this on download day, this is the day the book's available. So the book released on April 28th. If you're listening now, but for the entire week, I have set up a special offer for you. So if you want to check that out before I share details, you can go to Fix this next dot com, forward slash, multi, M, U, L, T, I slash after that, and I'll bring you to the special offer page. Lots of bonuses. All right, let's get into Fix this Next and why I wrote this book. You know, it was interesting. I sent out a survey about five years ago. It takes me about five years to write a book. And I surveyed my readership and asked them, what is your biggest challenge? Well, this was the most interesting feedback I ever got. People didn't know people. The same people, on occasion received, responded the same day with different responses saying, it's sales challenge. Oh, no, it's efficiency challenge. I don't know. We had hundreds of respondents, and it was very clear that the biggest challenge business owners have is knowing what their biggest challenge is. That's why I wrote Fix this Next. We need to pinpoint what to work on. I suspect if you're like me, you know, the typical day I'd come into, I'd come into work and I'd have this vision or plan for the day, but I'd be overwhelmed by all the emails and the questions pouring into my office. My agenda was more dictated by my email than it was my vision. I was putting out fires, you know, and then, you know, this experience over time, you're just. You're working so hard on your business, but it seems to hit these ceilings. The revenue ceiling, the profitability ceiling. It doesn't seem you can get forward. Well, if you've been trying to hustle and grind your way through a business and you're well into that, maybe a year or more, you. You've proven that the hustle and grind won't work. We need to identify the one impactful thing that we can do in our business right now to drive results. Well, let me explain how the Fix this Next system works. First, I want to introduce you to a simple model that I explained in the book that shows why we stay stuck. And you can do this on a piece of paper. So if. If you have a piece of paper handy and available. Draw it out. You can also do this in your mind. Um, so if you're driving right now, you can just think about it, but keep your eyes on the road. And here's how it works. Write the letter A on the center of a piece of paper, right in the center, and circle it. What A represents is where your business is right now in this moment. For many businesses, it's crisis or demand. There's something going on that you need to address right away. So that's point A. Now, I want you to draw an arrow in any direction you choose away from a. Just a short distance, draw, you know, an inch or so, but draw an arrow going out of A. What that represents is a decision that you can make that gets us out of crisis. The power of that decision is it gets us away from A. Now I want you to draw another arrow now in a different direction. This would be a different choice. That gets us away from A. So maybe if you drew one up, you can draw one down or to the right or to the left or whatever. Once you've done that, let's draw four or five more arrows so you get kind of these spokes coming out from A in different directions. Now what I want you to do is draw the letter B in the top left of that piece of paper. And my question for you is really simple. How many of your arrows are pointing to letter B? B represents the vital need. Your business has, what it needs from you right now, how many of those arrows pointed to B? And chances are very few, if any. You see, when we live in crisis, and I call this model the survival trap, when we live in crisis, any action we take that gets out of crisis gives us temporary, but only momentary relief. It gets us out, it presents us with a new A. Then you're in new crisis, and now you got to address the needs and demands of that moment. You draw another arrow out. And without knowing where B is, the vital need of your business, where your business needs to go, we keep on taking actions and directions that start moving us all around the paper. It never gets us going forward. That's the power of the fix. This next tool is to find the way out. And now you have a really simple model to use that you can draw to represent the struggle we have. It's not about making decisions, I guess, out of crisis. It's about making decisions that get us out of our current situation in the direction of where we need to be consistently moving toward it. And if B was there the whole time, every arrow we drew of course, would be going from A to B. So the question is, how do you identify the B? Well, that's what Fix this next is about. And it is based upon the business hierarchy of needs. The business hierarchy of needs is something I developed as I was studying businesses and found that there's a common DNA structure, if you will, within all businesses. Think about Maslow's hockey of knees. I don't, I don't know if you're familiar with it, but how Maslow's hy of needs works is it is a system that identifies where we pay our attention to or where we pay attention to when needs are not being satisfied. There's five level, Maslow's hierarchy. The base level being physiological needs. Then above that are needs that are safety oriented. So shelter, clothing, physiological needs. The base could be air, drinking water, food. As you go up the hierarchy from physiological to safety needs, then we have needs like belonging to a community and esteem and ultimately self actualization. But what Maslow argues is no matter what level we're experiencing, if a base level need is compromised, we revert to it. So right now, as you're listening to this and compiling your own thoughts, you may be working in the self actualization component of your needs. But if, if all of a sudden you know, you're eating right now and you start choking on whatever you're eating, all of a sudden your, your body will biologically respond by, by coughing and trying to get it out. We revert to satisfying the most base level needs first. And until the base level needs are satisfied, you can't aspire or climb up to the higher level needs. Well, the business hierarchy of needs works in the same way with one fundamental but critical difference. The critical difference is while we are biologically wired into our own bodies. You know, if you and I are walking down dark alley and we feel this fear, wide should definitely turn around and walk out. Because harm is coming our way. And the reason we know that is our senses are triggering it. Sight, smell, touch, and so forth. We are biologically wired to our hierarchy, but when we look at our business, we're not biologically wired to it yet. Many business owners say, I'll trust my gut or instinct to navigate what my business needs. And that's why we stay stuck, keep on drawing arrows out of a, you know, I think we need to hire a rainmaker. Oh, we gotta cut sales, sales, we gotta increase sales, we gotta cut prices or whatever. We draw arrows in different directions. Well, what we do, the business hierarchy needs, is we can pinpoint exactly what our business needs from us. Our gut sensation may be a beacon, a general direction. But the hierarchy of needs backed with empirical data pinpoints exactly what we need. Now the business hierarchy of needs is also may have five levels, just like Maslow. And here's how the levels work. The base level need is sales. Every business needs sales. It's the. The. It's oxygen for a business, if you will. It's like breathing air. Without it your business will suffocate. Immediately above that is profit. Profit is the creation of stability for an organization. Your business can have all the sales in the world. But if it has no profitability, it is at risk of going under because it's on a check to check survival. I have a friend, very close friend, actually had a 250 million dollar business, a very healthy sales line. But they didn't master profitability. They had one fundamental mistake they made and it put them out of business. Businesses with a long Runway of profitability could sustain that. We put a lot of significance in revenue at the discount or, or at the disregard for profitability. So these work in correlation. And even at these two levels, so many businesses get confused. So I want to be very clear about this. The goal is you need sales, you have to have sales. It's the creation of cash. But more sales is not better. In fact there's some people say sales cures all and that is totally not true. Sales puts more obligation and responsibility on your organization. You must deliver on that. So sales is taking on more obligation. Profitability is the balance that it de stresses the organization cause it gives you Runway. It allows for you to have inefficiencies. It allows for you to flourish. And it allows invest in the business owner's ambitions and dreams. It allows you to move the business and the owners forward. So sales is foundational. But it works only in correlation with everything else. So the question about the sales level is do we have enough sales to support a degree of profitability? If the answer is yes, then we look at the profitability level and say do we have profitability or that degree? Have we achieved it? If not, we have a profit issue. And many businesses, and we're going through the COVID crisis right now. Many businesses are reverting to looking for more sales when really the opportunity is to focus on profitability. To reduce costs, to increase margin, to identify the products that actually make money and jettison the ones that don't. To focus on the clients that make money and jettison the ones that don't. Those are all profit Considerations. Once you have a sales and profit at adequate levels and it's adequate to support the next level, which is order, you move on to the focus on order. Order is the creation of efficiency, organizational efficiency. It's where there's no dependency on the owner. So many small businesses, it's only as hard as the owner works, as many hours as they put in, and the day the owner stops, the entire businesses collapse. Well, that's a problem because now if you ever decide to, God forbid, go on a vacation, the business is slowed down. So the first goal is to extract the business owner from the core competencies and needs of the business. Actually, in our own business, we did this by implementing what we call the four week vacation. I went on four week vacations to test and understand where the business is dependent on me for the ongoing operations. And then once we identify that, we're able to delegate it to our team here. So Kelsey sees the president of our company. She handles some, but so do other people. Jenna, Amy, Lisa. Lisa, Jeremy. We delegate it out, which now allows me to reinsert myself in the business in the ways that I have a strength and enjoyment, which is being a spokesperson for the company, doing things like we're doing right now, you know, pretending these podcasts or doing speaking engagements or writing books. But if I stop that, the core competencies of our products and so forth continues on. That's removing the business owner and that's a part of efficiency. Also, we want to have what's called linchpin, linchpin redundancy, where there's no dependency on any other employee themselves. So not just the owner, but any employee. These efficiencies allow the business to achieve the next level. Once a business has sales, profit and order efficiency, you structure yourself to provide impact. That's the fourth level of the business hierarchy of needs. Impact is the creation of transformation. It's where you realize your business is not in the business of transactions, it's in the business of transformations. The example I've been using recently is Harley Davidson. You can buy a motorcycle anywhere, but when you buy a Harley Davidson, your life is transformed because now you're part of a community. And of course, it's not just motorcycles. Anyone can do this. And transformation isn't just belonging to a community. I bought a Traeger Smoke grill or Smoker grill and talk about community. When I called them and said, hey, I'm smoking up some prime rib, how to go about this? The guy on the other end is like, yeehaw. He's like, I got Someone new to the family, welcome on board. And just went on and on how excited he was and welcomed me. And I felt now I belong to this smoker family and I can't wait to get out there and grill. So that's another way of belonging. But it can just be transformation. And when, when you serve a client that they say, wow, my life has just been changed. Thank you so much for how you've gone about serving me. That's what transformation is. They see you beyond the commodity that you offer and therefore they put value in you beyond the commodity. Then the fifth and final level is called legacy. Legacy is a creation of permanence. And if your company, if you pursue this level and get to this level, what I found is that this is the day you realize you were never a business owner but a business steward, that you've brought something to life and that the business wasn't about you, it was about who it serves and how it serves and that you give it life to live on without you. That's the intention, is that the business can continue on into perpetuity and be of great service to other people in the absence of you, in the absence of leadership. That's legacy in the business sense. So just like Maslow's hockey of needs, we simply ask ourselves questions. Are we satisfying the base? Are sales being addressed adequately to drive profit? Is profit being dressed adequately to support order? And so forth up the business hierarchy of needs. Now in the Fix this next book, I have 25 questions you can go through to analyze exactly what your business needs to address. And by saying yes or no and looking at the data around these questions, you will pinpoint the next thing you need to work on one last component of Fix this next I want you to understand the third major component. So we start off the survival trap. Now explore the bhn. The third and final component is called omen stands for objective measurement. My gosh. Evaluation frequency. I forgot there was two words, evaluation frequency and nurture. And this is how it works. We once we pinpoint what we need to work on in the business hierarchy of needs, we then ask what is the objective? Now we know I need to bring on more clients. What's the objective? Well, the objective is bring on more clients to tune of say 20 clients a week. That would bring sales health to me. Then we go about the measurements to see what indicates good clients at 20 times a week. Now that's one of the measurements is the frequency. Every week is a 20. But the quality clients may be their revenue. The products are Requiring from you and so forth. So you put in the measurements to know if we're achieving that objective. Then we go to evaluation frequency how often you check your progress. And for a business that's bring on 20 clients a week or that's the objective, probably checking in once a week makes sense. You know, checking in once a year obviously is not checking in frequently enough to make adjustments and see how you're progressing. And checking in once a second is absurd. But there's always context. You know, if I'm a doctor and I'm checking the health of your heart because you had a heart attack, checking the, you know, blood pressure and the pulse every second is probably something I want to do. So you have to look at the context of what you're measuring to determine the frequency. The last part of Omen is nurture. And the concept here is that when we pick an objective, a measurement and the evaluation frequency, we may have not picked the exact right things. Maybe different objectives would have been better. Maybe we should have set different metrics, or maybe we should be evaluating this more frequency. Nurturing is giving yourself the the right to dynamically adjust your settings to make sure the business is moving forward. Sadly, many business owners that set an objective and then after a period of time like, oh, did we get it? No, damn it, what'd we do wrong? And they start over again or they get it like, all right, that's great, we got it. But they're not measuring it and they're not nurturing it and tweaking it. So it's just becomes arbitrary. And in the beginning when we subjectives, we may not know in full context what the right objective or measurements are or frequency should be. So then we need to nurture and tweak it. Also, I really encourage you to check with your frontline, the people closest to the problem usually have the best answers for that problem. So that's the Omen model. Once you know what to fix with the bhn, with the Omen is how you fix it. Many business owners just go about fixing the next thing, the urgent thing, the apparent thing. But with the fix this next strategy, now you can focus on the impactful thing and put one deliberate step in front of the other and march right to be past it and toward your vision. I wrote Fix this next for businesses that were in crisis, but I was considering micro crisis predominantly. We lost clients. A new competitor comes up and starts taking opportunity from us, we lose an employee. Whatever the challenges are that we're experiencing on a daily basis. Well, right now as we're talking or as you're listening in, we are in a recession and the COVID situation is extremely serious and it's caused this macro crisis that's affecting businesses throughout the globe, this micro crisis. So this book, why didn't intend it for the situation is perfectly suited for the situation. Small business owners are needed more than ever now. I want to challenge you. I want to challenge you to stand up, step forward and start kicking some ass. Because you are the backbone of this economy. We need your success. And I know it's almost this perverted need because the world has punched us in the eye, it gave us a bloody nose to boot, and the world is saying, but save me. And so this is your opportunity to stand up, step forward and kick some ass. I want to invite you to get fix this next.com to go to fix this next.com multi and get the book Fix this next at that website fix this next.com multi m u l t I/go there. I have a special offer running April 28th for a few days and what you will find on this page is a set of bonuses I've developed to help you navigate crisis, to help you move your business forward, and for you to survive and yet thrive in this market. We need you more than ever. And I hope Fix this Next is of great service to you. Thanks for being a listener to this podcast. I'm wishing you continued success. And get out there and kick some ass, my friend.