How To Create A Business That Runs Like Clockwork

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com. and today's guest is a big deal. I have to put on my, my anchorman voice. But, but before we talk to our guest, I'd be remiss if I didn't properly introduce my co host. You know him, you love him. Scott Todd from scotttodd.net landmodo.com and and most importantly, if you're not automating your Craigslist and your Facebook postings, postingdomination.com thelandgeek and today's guest is best selling author of one of our favorite books, Profit First. One of my favorite books, the Pumpkin Plan, probably one of Mike Michalholitz's favorite books. His first one, the toilet paper entrepreneur. You know Mike, he was on our podcast a while ago as well. But we're going to talk about his new book, Clockwork. Mike Michalowicz, welcome back. How are you?

It's a joy to be back, Mark. Thank you. And Scott, it's good to meet you. Thanks for having me back. I really appreciate this.

All right, Mike, let's just get into it. What the hell is klok work?

So I'll start with the subtitle. It's design your business to run itself. And what I think it addresses, Mark, is the most, I think, insidious form of poverty we have. I think when we look at entrepreneurs, business owners, we think of traditional impoverishment. They're struggling, they're broke, they have no money. But I found there's this more insidious version which is time poverty, where the business becomes all encompassing. We put our family last, put our life last. And that's what I was doing and by the way, proudly doing because I was calling myself a workaholic. And I had to do this for my family. And you know, this is, this is what success is. And I discovered it's not a business that is dependent on the hustle and grind of the owner, is a business that has no independence. A business that's truly successful is a business that can run itself, that the owner can leave and the business continues to scale. And so Clockwork is about this process. It's a simple process. It's not easy. It's a simple process of making the business run on automatic.

I love it. I love it. As I'm looking at the contents of the book, why your business is still stuck, analyze your company's time, the queen bee role, serve the qbr. What is the Queen bee role.

Great question, because that's the most common question I get. And it's the most important concept, I believe, out of the entirety of the book. So the queen bee role, well, here's how it came about, and I'll tell you what it is. I was studying business efficiency, and so I had this hypothesis of how it worked. But I started interviewing all these different companies to see how this played out, and I found I couldn't find a common thread. I went to Lewisburg, Pennsylvania, one of the largest playset manufacturers in the world, called Playworld Systems, and found that they were extremely streamlined. It's like, okay, they got the solution. Let me see if this plays out at the next stop, which was a pizza shop that could bang out more pizza than you could ever imagine with a small staff. And the processes were definitely significantly different. They had their own recipes for efficiency. And what I found is when you can't find a solution, you need. Often we need to look at nature because nature holds the ultimate truth, I think, to unlock the universe of business, at least. And I found that beehives, of all things, are extraordinarily efficient. Their use of energy is very low if they can scale a large colony very quickly. So I started studying bee colonies. And specifically, they follow a simple two rule set that I believe now every business needs to follow, too. The first role in every colony is to protect the most important function that it hinges its survivability, its success on. What that is in the beehives is the production of eggs. Now, it happens that the queen bee is the one doing that. So that's why I call it the queen bee role. The queen bee in beehives lays eggs. And the reason laying eggs is so important is that bees die very quickly. And if there's not new eggs being produced, therefore new bees being spawned, the entire colony will be wiped out within short period, usually weeks or a few months. So they have to be producing eggs. And every bee knows that there is nothing more important than the production of eggs. The second rule they follow is once egg production is occurring and that's been satisfied, they can go and do whatever their primary job function is, collecting nectar, defending the hive, heating it, or cooling it. Well, this runs parallel to business, and I'll tell you how to find it. It's best shared in example. I like to use FedEx, because FedEx is such a globally recognized brand. FedEx has something that they hinge their success on, and we all do.

It's a.

A singular thing. What we hinge our Success on is the delivery of our promise. So the first question ask every business is what is the big promise you make your customer? And maybe we make multiple. But what is the biggest, the Most important promise? FedEx is most important promise is to deliver packages on time. They offer other things, good customer service. We have print shops and stuff like that. But the number one promise is delivering packages on time. Once we know the promise, we peel back in one layer and say, what activity? That's the qbr. What activity is making that promise reality. Now, again, there's multiple things we can be doing, but what's the most important activity making that promise reality. And for FedEx, it's logistics. We promise to deliver packages on time. Therefore the movement of packages is the most important thing we do. And my argument is FedEx can't say one week, you know what, let's skip out on package delivery. Let's not worry about the logistics. It would Crush the brand. FedEx may go out of business that quickly if they ignore their core competency. The QBR for our business is found the same way. We have to determine what's the biggest commitment promise we make to customers. I'm an author. My biggest promise is to make complex entrepreneurial topics simple. That's my promise. Then I say, what's the most important activity that delivers on that promise? Well, it could be speaking. It could be what we're doing. Interviews could be something else. And I think it is. I think it's writing. What I mean by this is once you know your QBR is that's the one thing that can never go compromised. You must always be delivering on it. You always must be elevating the game for that one thing. And if you slip up in the other categories, it may hurt you a little bit, but it won't put you out of business. If I said, you know what, screw books, I'm never going to write a book again, I'm done. Or FedEx said, screw logistics, we're never going to do it again. FedEx myself will both be out of business. If I say, you know what, I'm going to put off interviews for six months because I got to write books, it may hurt some of the exposure for me. It may compromise some relations like you and I have, Mark. But if I'm still producing great books, then I'm positioned to continue to excel. And so that's why I challenge every business owner to do with clockwork, is determine your biggest promises, rewind one step, say what's the activity that supports it? That's your queen bee role. Never let it go. Compromise.

Ty with your thoughts.

I mean, it just makes sense, right? You know, because if FedEx. If FedEx were to say, hey, you know what?

We.

We gotta. We can't deliver packages today. There'll be no delivery today because we. Everybody to work on our mobile app. We're gonna have everybody testing our mobile app and we can't deliver. You know, we can't deliver today because everybody, all of our employees are gonna be doing this other activity. Everybody would. I mean, like, everybody would be like, what the heck? The Fred Smith would be out of FedEx as CEO like that because he didn't manage the priorities right. And I like the example of the queen be roll. And I do agree with you, Mike, because everything. Everything in nature does relate back to business. I mean, it's, you know, everything. If you can find it in nature, you can find it in business. Glad you brought that up.

Build on the thing you said about FedEx, Scott, because you're spot on, in my opinion, in that FedEx diverted all our people toward the mobile app and remove them from packages. Are done. The interesting thing is they actually do the reverse. They will take people out of the app development and get them on trucks to deliver packages. Happens every holiday season. The winter holidays demand surges. I think it was like a 2 to 300% demand growth in package shipments because of all the holidays in that time. What FedEx does is they say, okay, now we gotta put two people on the truck. We need to recruit managers and get them in the distribution rooms and on the trucks. We need extra staff so they will actually flow people over to make sure that core competency goes. They won't do the reverse. So I love how you said it. It's very eloquent. And it's the point. You can never compromise that core competency.

So, Mike, okay, I get my queen bee role, right? I'm super focused on my core competency. But I know I didn't. I'm speaking from my own experience. It took me years to start to scale because I had this deep fear that if I wasn't doing the work, it wouldn't get done as well as what I could do and that everything would suffer. And how do you get the entrepreneur to sort of switch in their mind that, hey, don't build yourself a job. Build yourself an actual business that can run without you.

So, Mark, there's a label for what you did. It's called being a human being. So, congratulations, that's totally normal. And that's the total stable response. And I devoted a lot of the research for this book to figuring out this phenomenon. And I now call it the superhero syndrome. And what it is, is in the beginning of a business, particularly for a solopreneur or it is necessary that we do everything, and we start believing that we can do everything. What happens then is when we make those first few hires, it is actually more efficient for me just to give everyone the answers, to swoop in and save the day. You know, that one customer that's bitching and moaning, whatever, I'll fix that. I'm the owner here. That one employee that's threatening to leave or needs some special negotiations for their circumstances, I'm a superhero. I'll swoop in and do it. As I do more and more of that activity, these two phenomena happens. First of all, for myself, it actually satisfies my ego. Every time I save the day, there's a little dopamine release, and I'm like, hey, look how great I am. Secondly, my colleagues are served by it because if they take my direction or let me save the day again, they can do no wrong. So why not have the superhero swoop in and fix it? But if we look at it from the other perspective, a superhero is kind of a negative term in my opinion. I mean, my favorite superhero growing up as a child was Superman. But when Superman comes in and fights Lex Luthor, he is disabling the military or the police force from actually doing themselves. They become more dependent upon them. If you look at the Batman flicks, the commissioner, the police commissioner has a bat phone. He's got a 911. Not to the police, but to Batman. You know, we are disabling our community, in our case, our colleagues from playing up at a higher level. We're disarming them. The other thing is, we also leave a wake of damage behind us because we're superheroes. We soup in, we fix it. Superman comes in, defeats Lex Luthor, but he decimates New York City. There's no movie about the recovery from Superman's damage like the next 50 years. And after he effed up New York. And sadly, that's the experience of us entrepreneurs. And super Sadly, I did it. Today we had a little team meeting here. And one of my teammates said, mike, what's this new program called? Author up. It's something I conceived. And she had no clue what was going on. She was getting inbound phone calls about this thing that Mike's doing. And my own employee didn't know it because I was a superhero. I had this great idea. I spent my five minutes doing it and the remaining hundred or 99% stuff that need to be done, I just ignore it. And now my team is doing cleanup behind me. And it distracts them from doing the work. They have no clue what they should be doing and brings about confusion. So what we need to do is change the label. I think this is the first significant step. No longer see yourself or call yourself a superhero. Instead be a super visionary. And the distinction between these two is a superhero saves the day. We shouldn't do that. What a supervisionary does is has a clarity around the outcome they want for the organization, for their colleagues, what the ultimate feel, touch, taste, look of the organization is going to be. And then choreographs our resources, our employees, even our clients, our technology organizes it to get to that vision and then constantly corrects in the choreographing of those resources when there's problems. That's what we need to do. And I think it starts by changing the label. I love it.

I love it. Scott Todd, what are your thoughts?

The years of rebuilding after Superman swoops.

In.

I think that is in fact one of the things too is.

I.

Think that Mark, I think one of the hardest parts of being an entrepreneur is that one component that says I'm not going to do the stuff that I'm not good at, you know, and like, I can mess around with Photoshop. I can throw words on a picture, whatever, but it's not in my. It's not in my whale house. I'm not that good at it, right? Like, I take longer to do it. I overthink it. And it would be so easy if I just gave it to somebody who they love Photoshop or whatever it is, just give it to somebody, let them do it. It's going to come back to me faster. It's going to look better. But the reality is I either don't want to pay for it because I'm like, oh my God, I'm going to have to pay somebody. Well, you can find people in today's environment. You can find people very, very cheap that like to do stuff like this, okay? Like, there's people, I kid you not, there's people on Craigslist. They will like, record like, video your entire wedding or take pictures of your wedding like, like for free just because they're trying to get experience. Now, I wouldn't say hire them really for your wedding unless you wanted to. However, you can always find people that are better at things. Than you are leverage it and then get out of it. And to Mike's point, then you don't need to be the superhero, because now you're like, you're good at doing what you do. Mike's great at writing books. Okay? Like he said, he's great at writing books, doing interviews. But it'd be terrible. I assume, if he tried to make the book cover, he'd spend too much time on it and all these other components. Leave it to the people who know what they're doing and get out of your own way, and I think your business will grow faster.

It's got so funny. So yesterday I met with my publisher. They're called Penguin Books, and I was out at the offices and like, hey, we have some cover designs. We want to talk with you. And I believe as a visionary, I have to just make sure there's congruency between what I'm trying to communicate in all forms. So for me, it was very clear saying, oh, that book cover idea stinks. That one stinks. Oh, that one's. Now we're talking. Let me tell you why I believe that's my role. I can interject for, you know, 60 seconds in where they're going and give them clarity on the path. They simply are just without direction, kind of go down as aimless path. And the response to the superheroes, you are idiots. You have no idea you're doing. Let me swoop in and do book cover design all by myself. The response of a supervisionary is, I haven't given you enough clarity. Let's reorganize our team here to move toward this goal and constantly be the tweaker in how we're marching forward. And it becomes. You get better output because they're far superior to the kind of work. They just need the understanding of the vision. So there's this commonality or cohesiveness across all things that I'm doing.

I mean, like, if you're in a question, like one time, especially to your team, like, in my opinion, if you're answering a question to your team, well, then take that. Take that question or that answer that you just gave. It's not in a vacuum. You got to take that thing. You got to have some tool or mechanism, especially when you're dealing with your team, that you can put it in place so that they can. It's like the knowledge bank, right? Like, hey, here it is. So before they go and they start to bug Mike on, hey, Mike, how do I do this? Oh, let me go check to see if this has already been answered. And then Mike can really just focus on the stuff that he's really, really good at, as opposed to being the superhero.

Right. I love that. And it's true for every employee, too. Right. Move everyone toward their strengths. And so in the book, I talk about this concept of capturing, exactly to your point, a knowledge base. I believe a lot of it can be done through video. In fact, in transferring. And one little tip I've discovered here, Scott and Mark, is that when I give a responsibility. For example, I used to do invoicing when I started as a solopreneur, even in my most current iteration, made my first hire. Her name was Jackie. I said, jackie, I need you to do invoicing. Well, what did I do is I recorded a video showing all the steps and a couple things I did. When she came back with questions, I said, well, I hired you for what's on your head of yours, so you got to make the decisions. And she did. I had to be very disciplined and not just doing the quick solution of splurting out an answer. I had to force the answers back upon her for her to decide. But I think the most important thing I did was I said, once you've mastered this process, over the next few weeks or maybe the month, I want you to record another video giving our new standard for how this procedure goes. Because ultimately, the best student in any room is the teacher. And if Jackie could teach this process and train it, I knew she had mastered it. And I also knew when, when, and if she ever decided to leave, that her knowledge wouldn't go with her. We've captured it.

Yeah. No, I love it. Mike, do you ever get any type of entrepreneurial anxiety? Right. Let's say you're taking a month off and things are going really well.

Yeah.

Do you ever think, okay, is this delegation or is this abdication?

Sure. So I get anxiety regularly, and it's funny. So most entrepreneurs, I would say, are micromanagers. So they fail to delegate. Very few. But some entrepreneurs are abdicators. And sadly, I shouldn't say that. That's just the challenge I face. I think it all gets resolved when you have the understanding what delegation is. I believe many entrepreneurs, and I myself thought that delegation was the assignment of tasks, which is not delegation. That's more like task rabbiting. You know, go do invoicing. I would say to Jackie, or go do this. I thought, he's delegating work to her. I was not. I was task rabbiting. Because then she'd have to come back with questions, I'd have to answer them, and so forth. Delegation is the assignment of outcomes. So everyone said to Jackie, we need to bill our clients timely and accurately. We've established best practice to do this. It's our invoicing. So I want you to follow the guidelines of this. And as you go through this process, if you see opportunities for improvement or you have questions, is your job to answer it once you come back in? She would. With questions, I would say, well, it's back upon you. You can make decisions and move us forward. So that's what true delegation is. And to prevent being an abdicator, I have to have some measurement of conclusion, meaning did she complete the task successfully? As I deemed, how we're going to quantify success. So those measurements become very important. How I do it. We have a daily huddle. We're small. We have 14 employees here. But when every morning. We had a meeting this morning, and we throw up the boards. We go over numbers. And I can see now, just by the flow of numbers, how the health of the business is when it comes to invoicing, which is not really a major problem. I just see how many clients have renewed for the day, and I just watch that process. And if a number is out of whack, it kind of causes a red flag or a green flag. Sometimes it goes way high, sometimes it's way low. That means it's a call to action. So I've avoided becoming or defaulting to my abdication nature by being a true delegator and having measurements in place that act as a pulse monitor.

I love it. I love it. How do you determine as the entrepreneur on a daily or weekly basis what the most important goal that you want to accomplish is for that week? Do you, as the visionary, come up with yourself and then meet with the team? Is it a team idea? Is it. I mean, how do you go about that? And then how do you know? Okay, we've executed on this.

Yeah. So we don't measure in weekly. We actually measure in daily. We call it the big one, and we measure in quarterly, so every 90 days. So I will. We do through our huddles and quarterly meetings. That's how we do it. So we as a group, we had a quarterly meeting yesterday, which was the end of Q1, even though I know we were two weeks into Q1 is the only day we could get. Basically, we do a conclusion of Q1, and then we say, what's our planning for Q2? Hopefully, at the end of Q2, we'll be meeting a little bit earlier than having this two week lag. But we explain where the business stands and where we want to go. Then each person says what's the biggest thing they can do to move us toward that common plan or intention we have and exploits their core competency. We've made the mistake. And I continue it's, you know, this is my business. I continue to lead us occasionally into mistakes of these ideas we have and then putting the wrong people on the wrong seats and then getting frustrated with them when quite frankly I put the wrong person in the wrong spot to do something. Or maybe that thing wasn't even necessary. So we do have these quarterly goals and we do it collectively on a daily basis in our huddles. And every morning we did it again this morning. Everyone goes through and say, what's the biggest one for today? So as an example, today I had a call with Gary Keller, the founder of Keller Williams, talking about some collaborative opportunities. And I explained to the team that's the biggest thing I can do to move our business forward toward the vision we have in today. Today's goal, tomorrow morning I have to report back to my team, how did that go and what's my next plan for the next one? They have the liberty to say, Mike, who cares about whatever that goal you set? Let's do a different goal and we can do this for each other. So there's cross accountability. And on the board every day we have 14 individual goals. We always have this quarterly goal for the entire organization that we're moving toward.

Wow.

I love it, Scott. Todd.

I like that idea. I might need to grab some.

We were recording actually of our huddle. I don't know if you can Google if you type profit. So the organization behind my books, or at least one of them, is called Profit First Professionals. So if you Google Profit First Professionals Huddle, I think you'll actually see it. You can watch a taping of us do it.

Alright, we're gonna do that. I'm gonna do it when we got this.

If not, I can send, I can have the link sent to you guys.

Okay, cool. That's cool.

All right, Mike. I mean, we're short on time, so is there any question we should have asked you that we didn't ask you?

No. I mean, no, I don't think so. I think the essence of Clockwork is getting out of this mindset that hustle and grind is a good thing. I think I bought into that. And listen, I understand the sentiment behind that. That's the popular nomenclature now. Is hustle, grind. It used to be workaholism ten years ago. Right. There's always a new term for it, and I understand the sentiment behind it, and I think it has a value. But I believe entrepreneurs today are absorbing it as the standard operating procedure. That's how entrepreneurs need to behave. I think that's the grand mistake. An entrepreneur is someone who choreographs resources, who organizes people and things and technology. Now all the resources available to achieve a outcome. We are not the chess pieces. We're the chess player. And that's the important thing. I want to communicate with everyone.

I love it. That's the tip of the week. We are not the chess pieces. We are the chess player. Scott. Todd, what's your tip of the week?

Listen, do yourself a favor if you haven't already done this. Go and buy and read. Listen to profit first. You got to do it. Like, I'm a big fan of this. I teach it in flight school. I teach it in accounting for land investors. I live by this thing. Go read it and execute on it. Go do it.

I love it.

Yeah. I mean, in my tip of the week again, I mean, I love all the books, but we are such. I mean, Scott, this is pretty much really what is the core of our business is creating a business and not a job for yourself. And so it would be really, really sad if you don't pick up clockwork. And the way to get it is it's going to be on Amazon and all the other places, but you want to sign up for it@mike michalowicz.com books and we'll have a link to it because there's about three people in the.

World.

And that's not including Mike's family. So go there and do that. I want to thank all the listeners.

Please.

The only way we're gonna get the quality guests like Mike Michalowicz is if you do us three favors. You gotta subscribe, you gotta rate, you gotta review the podcast. Send us a screenshot of that review to supporthelandgeek.com we're gonna send you the $97 passive income launch kit for free. Mike, are we good?

We are good. Gentlemen, thank you so much for having me.

Things might.

Scott, we're good.

We're good, Mark.

All right. Let freedom ring. Thanks, everybody.