Clockwork: Design Your Business to Run Itself

by Mike Michalowicz

the growth opportunities we know we should grab by the horns, the visionary work that is crucial to explosive growth, the stuff we love to do, is set aside day after day until that notepad with all of our ideas is lost under a sea of papers and to-do lists, never to be found again.

Parkinson’s Law—“our consumption of a resource expands to meet its supply”—to

When we give ourselves less time, we also need to figure out where to focus the remaining time.

It’s not about doing more with less. It’s about doing less with less to achieve more.

You need to do the right tasks with your restricted time and have other people do the right tasks with their restricted time. In other words, a business that runs like clockwork is ...

As painful as it can be to be stuck in the grind, our belief that we need to “work more” and “work harder” becomes familiar. Despite our exhaustion, the situation is comfortable, so the same problems yield the same solutions. Working long hours does not require us to step out of our comfort zone, or learn something new, or let go of our ego-driven need to micromanage.

You doing the work, or inserting yourself in other people’s work, may be all you know to this point. It may be very comfortable by now. Stop doing it.

The Survival Trap is what I call that never-ending cycle of reacting to whatever comes up in your business—be it a problem or an opportunity—in order to move on. It’s a trap because as we respond to what is urgent rather than what is important, we get the satisfaction of fixing a problem.

I was addicted to doing whatever anyone wanted at whatever price they offered. I prostituted my business to survive just one more day, and then I continued that behavior as I expanded into multiple disastrous businesses.

The Survival Trap is what’s keeping you from driving toward your vision, or meeting short- or long-term goals. In some sense, we know this. We feel guilty about that five-year plan we haven’t looked at in seven years. We see other businesses launching new initiatives or products in alignment with trends, and we wonder how they found the time to predict and respond to the changes in our industry. (They must have superpowers, right?) We know we’re behind in terms of making the best use of innovations in technology and workplace culture. And we know that in order to take our business to the next level, we need to get back to our visionary roots—the ideas and plans and heart we had when we first started our business.

How you allocate your business’s time between the Doing, Deciding, Delegating, and Designing functions is called your 4D Mix, and getting it in the right proportions is crucial to helping your business run itself.

your company so that other people and other things can get the work done. Commit to putting your company’s output first and your productivity second. How do you do this? Simple . . . you will find better answers when you ask better questions. Stop asking “How do I get more done?” and start asking, “What are the most important things to get done?” and “Who will get this work done?”

going to do.” Their business was entirely dependent on Elise, and in just two months without her, the wildly successful company was in wildly dire straits. It took only two months. This is what we business owners fear the most—that if we step away from our businesses, if we check out, even for a few days, our businesses will suffer or die. I know I’ve felt this countless times, and used this fear as a justifiable reason to work, work, work, and then work some more. I suspect you have, too. (Here’s a little secret: The work is never done.)

What you may not realize is that getting your business to run without you begins with you, and how you view your role in your company. We first must move you from Doing to Designing.

Designing a business that runs itself is doable. In fact, it is very doable. To pull it off, you have to shift away from Doing and focus more and more of your time on Designing the flow of your business.

Of the twenty-eight million small businesses in the United States, more than twenty-two million don’t have a single employee.* In other words, the owner is doing everything.

Business owners who have two or three employees can get stuck spending most of their time in this phase. Your employees do the work, but because you make every decision for them, you’re never able to grow beyond two or three employees. Work becomes a constant and distracting stream of questions from employees.

Initially, you must reward your employees’ ownership of a task—not the outcome—because the goal is to shift the responsibility for decision making from you to them. If they are punished for wrong decisions, you will only be training them to come back to you for decisions. You, too, have made wrong decisions in the past; that’s how you grew. They will make wrong decisions, and that is how they will grow. The Delegating phase can be extremely difficult for entrepreneurs, because we can do everything perfectly (in our mind) and get frustrated when they don’t. You must get past this perfection mind-set if you ever want your business to successfully run itself.

A 2009 study by the Max Planck Institute for Biological Cybernetics in Tübingen, Germany, confirmed that people trying to find their way through a forest or a desert devoid of landmarks (and without the sun as a beacon) tend to walk in circles. People walked in circles as tight as sixty-six feet while thinking they were walking perfectly straight. That is like putting a blindfold on and trying to walk across a football field, the short way, one sideline to the other, and never making it across. Researchers concluded that in the absence of clear markers of distance and direction, we make a continuous stream of micro adjustments to what we think is straight, but those adjustments are biased to one side more than the other. Our constantly changing sense of what is straight keeps us walking in a loop. We circle and circle, ultimately perishing, when we could have easily gotten out of the weeds by just walking straight. You can overcome this tendency if you have a distinct landmark to move toward, and if you are lucky enough to be equipped with a compass or GPS. The distinct and distant landmark allows us to constantly recalibrate our direction and stay straight. Even when an obstacle presents itself, we can avoid it, move around it, or run from it, and then again spot our landmark and use it to correct our

Time to establish what your company’s Big Beautiful Audacious Noble Goal is. Time to think about the impact you are intending to have on your clients. Time to figure out the right strategy to achieve that impact. And time to determine what metrics you will use to measure the progress of your company and your team. This is your company’s destination and your vision for it.

Navigating the terrain of growing an organization needs a designer who looks beyond the constant stream of challenges and opportunities immediately in front of them and instead charts a path to success. And that designer is you. Yes, even if you’ve lost touch with the vision you once had, even if you feel you haven’t seen your creativity in the last decade, and even if you wonder if you truly have what it takes to navigate your ship to new, prosperous shores—you are the best person for the “design” job. You can do it.

The learning—the true learning—is in the doing. You must experience it for it to become ingrained in you. Our employees must experience the decision making for it to become ingrained in them. The irony, of course, is when you hire someone to do the work, you specifically are doing

it so you can reduce your work. But if you allow yourself to make all the decisions for them, your work increases, and their growth stops in its tracks.

Having to oversee my staff didn’t reduce my hours. I actually worked more, because I was constantly pulled away from the work I should have been doing to make a decision for someone else. Then, when I got back to my work, I would have to sync up again, which as you know all too well, takes time. The distraction of being the decider made me super inefficient. Employees would put their work on hold as they waited their turn to ask me a question. They literally stopped taking action until I gave them direction. My work stopped and so did theirs! Tryi...

This experience led me to believe I had to get more work off my plate, so I would hire another person. And another. And another. Until I was making decisions for an entire team and trying to do my work at night, on weekends, at the crack o’ dawn. As a result, the company became more inefficient, because all of those people were waiting for me to make decisions. Instead of capturing and utilizing the most powerful resource I ...

No, your people are not idiots. Far from it. They just need you to stop Doing and Deciding and start Delegating not just the deeds, but the decisions. For real.

“The biggest problem is that no one has taught entrepreneurs the mind-set of delegating.

It’s not that they don’t know they need to delegate. They just need to get into the mind-set of letting go. Then, when they are committed to it, they need to do it the right way.”

“First, you assign a task. Then you assign the responsibility. Then you ask them to own the results. Finally, you ask them to own the outcome...

Would my life be easier if my employees were empowered to make decisions, and I felt confident that they would routinely make decisions that would sustain and grow my business? Would my life be easier if my employees acted like owners?

It’s important to remember that Doing, Deciding, and even Delegating maintain your business. Designing elevates your business.

How did Mike make the shift from Doing to Designing a world-class business (which was acquired in the summer of 2017 for, as Rob put it, “a sick amount of cash on the barrelhead”)? They did it by changing the question they asked. They no longer asked, “How do I get the plumbing work done?” Instead, they asked, “Who will get the plumbing work done?” That simple change of question started to bring the answers that made them business designers. For you to become your business’s designer, you can no longer ask “how,” but “who.” That one question, “Who will get the work done?” will open your eyes to a business that will cruise right to the design phase.

The best part is, streamlining your business doesn’t take a ridiculous amount of work to build a bunch of new systems. In fact, it is ridiculously easy when you realize that you already have all the systems. The goal is to simply extract them from where they are already documented—in your head. You’ll learn how to do that in chapter five. And when we do that, you will be free to do what you do best. Whatever work you do, it can be broken down

We discussed it, and eventually she was able to land on her company’s core function: compassionate and clear communication. Cyndi said, “When I speak with my clients, no matter what is going on, good or bad, I find a way to make them understand the circumstances and bring them back to a state of confidence. I give them peace of mind. For us, that communication keeps everything on track.”

Here is the super hint to help you identify your QBR: For most small businesses, the role is most often served by the owner or the most expensive employee(s). And as a critical reminder, it is not the owner or the employee themselves. It is the role they serve. We are talking about the Queen Bee Role here, emphasis on

entrepreneurs automatically assume that they are the QBR, but this is key: The QBR is never a person, or machine, for that matter. It is always a role, a function, or a task. So while you may be fulfilling the QBR right now, and perhaps are even the only person serving the QBR, that doesn’t mean it always has to be you. In fact, it shouldn’t.

Bettina is being forced to change her life plan, and the hospital is losing one of its best doctors because it has set up a never-ending work flow—aside from patient care—that cannot be sustained. Would giving Bettina a productivity hack help to reduce her stress? No, because the hospital already has given her dozens of them, and with her “free time” it quickly finds a dozen new ways to fill it up with more work, with things like insurance claim disputes. Imagine that? You’re having life-saving heart surgery and your surgeon takes a break in the middle of the operation so that he can argue with an insurance agent why he used ten stitches during the last operation instead of the insurance-mandated three. You know the saying “Don’t busy the quarterback with passing out the Gatorade”? This is because the QBR is so important. The quarterback has a job to do. He has got to move that ball down the field, not dole out drinks to rehydrate his teammates. Similarly, Bettina shouldn’t be bothered with tasks that interfere with serving the QBR. It’s so obvious that it is hiding in plain sight. Bettina needs to save lives first, last, and all the time in between, yet she is often stuck passing out Gatorade. It’s more than just a shame; it’s a sin.

To make sure the QBR is protected, a well-run ER makes sure the doctors who serve the QBR do nothing but identify the medical issue and prescribe a course of action. If a doctor is filing papers, directing staff, or idly waiting on the patient to be assigned a room, he or she is not protected, and therefore the QBR itself is not protected. An unprotected QBR can result in dire consequences. In operating like an efficient beehive, the support staff must make sure that the

QBR is running unabated, and that every other task, no matter how small or how big, no matter how important or insignificant, no matter how urgent or trivial, is handled by someone other than a doctor.

The number one goal for you, and for everyone on your team, is to protect the QBR so that the QBR can drive the business forward without distraction or interruption. That’s it. That’s the main goal. That’s the one thing that will make your business skyrocket to organizational efficiency. Protect the QBR. Always.

“There’s nothing in our business that is life or death,” Marie says. “And our customers love it, because it inspires them to emulate us in their own businesses. My customers and my colleagues replicate what we do.

get so much energy out of my work, it would actually hurt me to stop doing it. The day will come when I am ready for the business to live and grow beyond me, and that is when I will find others to serve the heart of the business. But for now, I’m not changing a thing. I think I will have a million graduates of B-School first.”

When you serve the QBR, you are the heart of the organization. When you choose to have others serve the QBR, you become the soul of the organization.

Just get it off your plate by capturing what you already do on video, or via a few other methods I am about to teach you. If you wait to establish the perfect process before you transfer it, you’ll never find the time to get it right. So hand it off, then work with that person to get it right.

Everything you are doing in your business will fall into one of these four categories. So on a sharing platform that your team can access, like a cloud-based drive, create a directory called SYSTEMS. Under that directory, create four more: ATTRACT, CONVERT, DELIVER, COLLECT. When you capture a marketing process, put it under ATTRACT. When you capture a process of shipping your product, put that under DELIVER.

have a quote from one of my heroes, George Washington, in which he addresses the importance of singular accountability. “My observation is that whenever one person is found adequate to the discharge of a duty, it is worse executed by two persons, and scarcely done at all if three or more are employed therein.” If a founding father of the free world felt this was of critical importance, you and I should consider the same.

delegation is a 10 percent you/80 percent them/10 percent you quotient. You devise what your team needs to do and task it to them (that’s the first 10 percent). Then, they do 80 percent of the work, and the remaining 10 percent is still you making decisions and measuring results. Scott explained how this is just a trap. Either you have none of it or you have all of it. We need to get to none.

The process of delegating is not a magical switch of handing something off to someone else and everything is roses. Instead, Scott explained, you go through stages. The first stage is giving tasks (but you still make decisions). The second stage is giving responsibility to make decisions (but they don’t own the result they are trying to achieve). The third stage is allowing determination of the result of tasks (but they don’t own the outcome, which is the benefit it will deliver to the company). And the fourth stage is getting employees to own the outcome. This is a process of education in which you must give the tasks and responsibilities first, but then grow and guide the employee to knowing how they want to impact the company and working back from that.

When your employees don’t execute the task the way you want, you will, like most entrepreneurs, probably get upset and accuse the employee of falling short. But the real reason you’re dissatisfied is because you didn’t give enough detail or guidance when delegating (which is why entrepreneurs tend to

revert to the Deciding phase). Most entrepreneurs, in their head, know exactly what they want, but they don’t put it into words (um, or let’s see, a video recording). Scott’s example is that we see the perfect oven in our head. It has six hundred parts. Yet all we tell the employee is, “Give me something that cooks food.” The employee comes back with a pile of sticks and...