In this segment of the "All In Formula" discussion, Mike Michalowicz outlines his FASO framework—Fit, Ability, Safety, Ownership—as a systematic approach to optimizing people management in businesses. Drawing on 25 years of entrepreneurial experience, he critiques traditional title‑based hierarchies and argues for matching talent to specific tasks (Fit). He then emphasizes the importance of assessing potential rather than just past performance or innate traits, proposing hands‑on workshops as a practical method to surface future capability (Ability). Michalowicz stresses the need for both physical and emotional safety in the workplace, encouraging leaders to model vulnerability so employees feel free to bring their whole selves to work (Safety). Finally, he introduces psychological ownership, explaining how giving people control, direction, and deep knowledge of their work cultivates a genuine sense of ownership that drives performance (Ownership). Throughout, he intersperses personal anecdotes and concrete examples—such as reassigning a receptionist to relationship‑building and a salesperson to data tasks—to illustrate how each component can be applied in real‑world settings.
It reminded me of an earlier business where I was running a web hosting business and I believe most of your earlier businesses, or at least this one was a technology. Yeah.
Two tech company business. Yeah, yeah. I was at one in computer forensics, which is computer crime investigation. And I learned stuff there too. When I wrote all in, I was able to reflect back on 25 years of owning businesses and all the mistakes I've made. When it came to the people component, I've also been so fortunate. I'm in contact with. To me it's countless entrepreneurs in all different sizes and industries and learn from their mistakes too. But there's this undercurrent of businesses that are doing it right. That's what I wanted to reveal. So I found these companies that were doing really out of the box, unique, cool things that was working so well. I own some businesses now and translate it into our own businesses. We deploy these techniques and when they started working I said okay, this is system. I get it works, it's different. Let me include it in the book.
Is one of those techniques the all in formula which has four parts that you call FASO for short.
Yeah, yeah. So it, that is the big kahuna. And so there's four elements that the F and I can go through it super quick just to set the stage. F stands for fit. And what I realized, what most businesses do, and I'm guilty as charged, is that we identify the title we need to fill and then we try to get someone to match the title. But the truth is I, I assume you and almost all of humanity, we're good, really good at a few things. So the mistake is what we match people's talent to a title, areas that they can excel in a few, but not all. What we need to do is match talent to task. So what companies need to do is they need to get rid of the old pyramid structure of title, title, title and start going to this web like structure. What are the domains of demand we have? What are the special tasks that need to be accomplished in these different domains and then have people serve just the tasks they're good at. Give an example. I used to hire for a receptionist. Receptionist has to greet customers, answer the phone. But also there's data entry, invoicing. I hired a receptionist and she was wonderful at greeting customers and maintaining the social relationships. She wasn't detail oriented. The data entry and the accounting component was not good. A salesperson who was great at data actually was a closer because he could nail that data. He was horrible at maintaining relationships. So we Took our receptionist and said, oh, you're a relationship builder. That's your talent. We matched with all the relationship building tasks. She became our best frontline salesperson, the farmer, if you will. And then our closer was really good at data management, so he started doing those components and excelled there. So that was fit, that going through rapidly. A stands for ability. Ability is. Well, there's three types. There's what's called experiential ability, innate ability. But what I want to explore is potential ability. Most businesses look at experiential ability. What you've done in the past will indicate the future. You look at resumes, the success rate is abysmal. I think it's about 5% of employees that we hire are top performers for a sustained period, five years or longer. And some of us look at innate ability. That's what you know, Enneagram and Myers Brigg and predictive index and strengths finders. Those tools are excellent at finding kind of the natural wiring. But the reality is potential is what we need to look at. And this is the big kahuna that no one's considering. What will the person do in the future in the right role? So the question is, how do you find potential? You do it through a technique called workshops. Workshops are where you give people an opportunity to learn, to be educated, to experience, to demonstrate skills. And through these workshops, where people can demonstrate their potential and you can hire based upon that. And I devoted a large section of the book to this because it's very simple to do. When you understand how to do it right, it can have profound effects. The S stands for safety. We need to have an environment where the people feel, of course, physically safe. Some businesses still don't do that today, including mine. I didn't realize. And we fixed that. Emotional safety, relational safety. We need to feel that we can put our full selves out there without retribution. And great leaders will set up that environment to embrace the fullness of people and put themselves out there. They'll expose their warts, if you will, so that others will feel comfortable doing the same. The last is O for ownership. The most common question I hear is how do I get my employees to act like owners? How do I get my vendors and contractors to act like owners of my own business? And you can by deploying what's called psychological ownership. Psychological ownership is where people have the sensation of ownership because they have the ability to personalize what they're doing. They have the ability to control what they're doing, give it direction and the ability to gain a lot of knowledge around it. Those three components give people a sense of ownership. And sure enough, when you psychologically feel like an owner, you'll act like one.
