Most entrepreneurs I know do everything. Even when we bring on help, we spend just as much time, if not more, telling the staff how to do all the things that we are supposed to no longer worry about. We put out fires. We stay up late. We put out more fires. We work weekends and holidays, flake on commitments to family, and bail on nights out with friends. (Location 107)
We’re blowing it. We’re all blowing it. “Work harder” is the mantra of both the growing and the collapsing business. Work harder is the mantra of every entrepreneur, every business owner, every A-player employee, and every person just struggling to keep up. Our perverted pride about working longer, faster, and harder than everyone else in our industry has taken over. Instead of running one marathon, we are trying to sprint ten. Unless something changes, those of us who buy into this way of life are headed for a breakdown. And maybe double pneumonia to boot. (Location 113)
At this point in my life, I had built and sold one multimillion-dollar business to private equity and another one to a Fortune 500 company, written two business books, and spent a good part of my year speaking to thousands of entrepreneurs about how to grow their companies quickly and organically. (Location 180)
In an effort to be more productive, I tried it all: Focus apps, the Pomodoro method, working in blocks. Starting my day at four a.m. Ending my day at four a.m. Lists on yellow notepads. Lists on my phone. Lists of just five things. Lists of everything. (Location 187)
For example, when, after you collect revenue, you allocate profit first and hide it away (in a remote bank account), you have less money to spend. So guess what? You spend less. When you don’t readily have access to all the cash flowing through your business, you are forced to find ways to run your business with less. (Location 222)
The problem is, because you’ve prioritized a seemingly endless amount of time to running your business, you’ll continuously find a way to fill up the time. The more productive you are, the more you can take on. The more you take on, the more productive you have to be. Do you see how productivity is a trap? (Location 227)
Productivity gets you in the ballpark. Organizational efficiency gets you hitting home runs. (Location 236)
So what’s the fix? We change the system around us so that we don’t need to change (we really can’t change much anyway) and set up the system so that it will channel our natural tendencies to achieve the outcomes we want. (Location 247)
I based my book The Pumpkin Plan on the simple strategy to rapid organic growth that he taught me. It started with our first face-to-face meeting. He had spent four hours with our team evaluating every aspect of our businesses, and then we had a one-on-one immediately after. (Location 258)
“Mike,” he told me, “you need to get smarter about growing your business. You don’t want to put in all this effort, endure all this stress, only to end up with nothing to show for it. Your retirement will be spent in a rusty lawn chair with one nut hanging out of your shorts, while you regret your life of toil.” (Location 261)
It turns out that vividly descriptive visions of your client in a decrepit state, peppered with some flagrant genitalia references, is a shockingly effective sales strategy. (Location 264)
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. (Location 284)
The Survival Trap is all about getting through today at the utter disregard for tomorrow. (Location 290)
“Sustained profitability depends on efficiency. You can’t become efficient in crisis. In crisis, we justify making money at any cost, right now, even if it means skipping taxes or selling our souls. In crises, the Survival Trap becomes our modus operandi—until our survival strategies create a new, more devastating crisis that scares us straight or, more commonly, scares us right out of business.” (Location 300)
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. (Location 306)
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. (Location 319)
The optimal 4D Mix is when the business spends 80 percent of its time Doing, 2 percent of the time making Decisions for others, 8 percent of the time Delegating outcomes, and 10 percent of the time being Designed for greater efficiency, better results, and less cost in the process. (Location 327)
Analyze the 4D Mix—Set the benchmark levels for the blend of Doing, Deciding, Delegating, and Designing at which your business is currently operating. (Location 330)
Declare the Corporate Queen Bee Role—Identify the core function in your business that is the biggest determinant of your company’s success. (Location 334)
Protect and Serve the Queen Bee Role—Empower your team to ensure the biggest determinant of your company’s success is guarded and fulfilled. (Location 340)
Capture Systems—Document or record the systems you already have in place so your team can do the work the way you want them to. (Location 345)
Balance the Team—Adjust roles and shift resources to maximize the efficiency and quality of the company’s offering. (Location 350)
Make the Commitment—Devote your process to serve a specific consumer need in a specific way. (Location 355)
Become a Clockwork Business—Free the business from dependency on you, and free yourself from dependency on the business. (Location 359)
Your primary focus is to design the flow of work through 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 . . . (Location 405)
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?” (Location 407)
“Starting today, I commit to designing my business to run itself.” Include any other information you think is relevant, such as why you won’t stand for the old way of running your business anymore or what this means to you and your family. (Location 414)
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. (Location 462)
These are “the four Ds”—Doing, Deciding, Delegating, and Designing. Although you are engaged in all four of these phases to varying degrees during the course of your business’s evolution (you spent some time Designing your business before you launched it), and while your business will always have a mix of all four Ds, our goal is to get you, the entrepreneur, Doing less and Designing more. (Location 465)
Doing: This is the phase when you do everything yourself. You know it well and you do it well (enough). When you’re a solopreneur, doing everything yourself is a necessity. This is where almost every startup starts, and where most of them get stuck, permanently. (Location 470)
Deciding: In this phase, you assign tasks to other people. Whether they are full- or part-time employees, or freelancers, or contractors, they are really only task rabbits. (Location 474)
Most entrepreneurs confuse Deciding with Delegating. If you assign a task to someone else but need to answer questions to get the task done, you are not Delegating—you are Deciding. (Location 478)
Your employees do the work, but because you make every decision for them, you’re never able to grow beyond two or three employees. (Location 480)
Delegating: In this phase, you’re able to assign the task to an employee as well as empower them to make decisions about executing that task. The person is fully accountable for the completion of the task. (Location 486)
Designing: This is when you work on the ever-evolving vision for your company and the flow of the business to support that vision. The business runs the day-to-day on its own. Shoot, you could even take a four-week vacation without the business missing a beat. (Put a pin in that.) (Location 493)
“Designing the work”? Let’s use a football analogy. (Go Hokies!) It’s the story of the team owner, the coach, and the players. The players are empowered to make split-second decisions in the field of play, the coach creates the game plan and calls the plays, and the team owner designs the team. The owner lays out the vision for the franchise, picks the coach(es) to manage the team, and then watches from afar as the team puts the game plan into action. (Location 512)
As a designer, you think several steps ahead. You are strategic. You measure opportunities and risk. (Location 517)
Doing keeps you from your bigger vision of building a business. You’re already familiar with Design work. It’s what you loved when you first started—creating a vision for your company and considering the big, bold strategic moves you could make. (Location 521)
Your purpose is to design the flow of your business, point it in the direction of growth, and then make strategic decisions to fix, change, and/or improve things when the flow is not right. (Location 526)
Why am I telling you this? Because a business that doesn’t devote time to determine where it wants to go, seek ways to get there, and identify the landmarks that will offer the most direct route is destined to spin in circles for eternity. (Location 540)
A business can only experience extraordinary progress with extraordinary design. And you can only do that if you devote time to this most important endeavor. (Location 546)
In the study by the German research group, participants were dropped in the middle of a German forest and another group in the Sahara Desert. With GPS tracking devices attached to them, they were given simple instructions: walk straight for a few hours. (Location 551)
Trying to build a business by just Doing and without Designing is like walking through a dense forest while blindfolded. It is inevitable you will walk in circles and be thrown into another course if you come across a substantial obstacle. (Location 556)
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” (Location 558)
When you first want to scale your business, the Deciding phase comes quickly. The process is easy—hire people and tell them what to do. Getting them to do the work without your input? Not so easy. And we bring this problem on ourselves. Every time my staff had a question and came back to me for a decision, it made sense. (Location 562)
I thought the need to answer everyone’s questions would be short lived. They were learning the tools of the trade, and I expected the questions to slow down. (Location 567)
All they ever mastered was the BuTSOOM system that I taught them. You know, the Bug the Shit Out of Me system. (Location 569)
It starts with the “better than sliced bread” moment. You bring on virtual help, or a part- or full-timer. On the first day, the only person more excited and anxious than that employee is you. (Location 571)
In fact, that is what you want: a learner. But a few weeks later, this person still has tons of questions. She’s asking questions she should know the answer to by now. (Location 574)
When you give your employees all the answers, you block their learning. I suspect that when you first learned to drive a car, you only figured it out, for real, by driving the car. (Location 578)
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. (Location 582)
Trying to do my job and supervise my staff was like trying to type a letter and handwrite instructions at the same time. Try it. You can’t do it.* (Location 589)
Instead of capturing and utilizing the most powerful resource I had—their brains—we were all dependent on mine. As an added bonus, all those salaries drained my bank accounts. (Location 594)
Flipping between Doing and Deciding is more common than you think. That’s why most businesses don’t ever get past one or two employees. (Location 597)
Many businesses with fewer than three employees get stuck playing the waiting game, and in the back-and-forth between the doing and deciding phases. (Location 601)
Then, when they discover their workload hasn’t lightened up, and they are more stressed and strapped for cash than ever, they end up thinking, “Everyone is a moron, and I will fire them all and just do it myself,” (Location 604)
Scott explained that the delegating is a process. “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, which is repeated results over time.” (Location 610)
Ask yourself: 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? (Location 614)
When your desired outcome is also their desired outcome, you are better able to let go and let your team do their jobs. And it will be okay. It will be more than okay. You’re going to be a delegating machine. (Location 617)
Pick either entrepreneur. Gates and Bezos have both focused their energies on the Design phase from the get-go. (Location 625)
The Doing phase will never disappear fully for an entrepreneur; it will simply take up the least amount of time. (Location 627)
As for Delegating, because your business will evolve and change, you’ll have to dedicate some time for Delegating. You will delegate until you hire a delegator, whose Primary Job is to continually empower the team to make on-the-field decisions and protect you while you do the Design work. (Location 630)
future. If you want your business to run like clockwork, as Gates and Bezos have done, you must concentrate the majority of your effort into being a designer. (Location 634)
If you want to improve your body or your business or anything for that matter, you need to know what you intend to accomplish and where you are today. (Location 636)
Clarity comes from knowing your ideal target and where you are starting. (Location 637)
Every person in an organization is either Doing the work, Deciding for others about the work, Delegating the work to others, or Designing the work. As mentioned earlier, collectively I call this the 4Ds. (Location 642)
although you may not (yet) be deliberately directing it. Some people may be Doing work constantly. Another person may be Deciding what other people should be doing while Doing the work of ten people, and with the few seconds left trying to Design a forward-looking strategy. Sound familiar? (Location 647)
the business is just you, the solopreneur, your own 4D Mix is the company’s 4D Mix. (Location 650)
The ideal mix for a company is 80 percent (Doing), 2 percent (Deciding), 8 percent (Delegating), and 10 percent (Designing). (See figure 3 on page 38.) Why does a business need to dedicate so much time for Doing? (Location 651)
The other 20 percent of that ideal company mix is spread over managing and guiding the business. For you to design your company to run itself, you need to master the mix. Simply put, you need to know what your company’s 4D Mix is as compared to the optimal 4D Mix, and then use the Clockwork system to continually optimize your business. (Location 653)
So the one thing you should focus on, above all else, is the big piece, and that is the 80 percent of Doing time. Is your company spending most of its time serving clients (that is the 80 percent Doing), but not all of it? (Location 658)
If the Doing is at 60 percent, that also tells you that you’re in trouble, since your business isn’t spending enough time getting things done. (Location 660)
To the best of your ability, write down each task you did and action you took for the five days we are evaluating. (Location 674)
We will look at the entire business later, but for now let’s start by just looking at where you stand. And again, if you are a solopreneur or have a small business of five employees or fewer, either you are the business or you are a major part of the business. What do you notice? What are your realizations? (Location 739)
Warning! Since we analyzed only five days of your life, you may have analyzed a week where, for example, you were doing a quarterly tacking plan. I detail the tacking strategy in my book The Toilet Paper Entrepreneur, but the core essence is simple: tacking is a quarterly protocol where you observe the market around you and the influence it may have on your overarching goals, and then adjust your business strategy to realign with your Big Beautiful Audacious Noble Goal. (Location 746)
The optimal 4D Mix, of course, works for multi-employee companies. For example, if you have two employees (you being one of them), the average of both your individual 4D Mixes constitutes your company mix. (Location 752)
Few businesses in the world are that unique. And when they truly are unique (and successful doing it), everyone else copies them. Say goodbye to the uniqueness. Now don’t get your undies in a bunch. Your mom was right, you are special and different and all that. I’m just saying the business fundamentals stay constant for all businesses. Since you’re reading this book, I’m going to assume that you are at least willing to put your ego aside and attempt to run your business using the Clockwork system. (Location 815)
Elise and Scott did something critical to bring operational efficiency: they stopped doing what they didn’t like doing. They didn’t just delegate it; they restructured their entire business so they no longer did things that they didn’t like to do and only did the things they liked. (Location 862)
are. If you believe you need to work your ass off to grow, you will prove yourself right. If you believe you can make your business scale with little effort, you will prove yourself. (Location 865)
Then I had an epiphany: Committing to a four-week vacation—the length of most business cycles—is the perfect incentive to streamline your business. During a four-week period most businesses will pay bills, market to prospects, sell to clients, manage payroll, do the accounting, take care of administrative tasks, maintain technology, deliver services, ship products, etc. (Location 872)
It’s time for you to get some Design time. In Profit First, I implored readers to commit to setting aside a minimum of 1 percent of their revenue for profit. Even if they didn’t follow any of the other steps in the book, I knew that the action of taking 1 percent profit would accomplish two things: They would discover how easy it was to set aside that money, and they would learn to live without it. (Location 903)
Block out this time, every week, for the next eighteen months on your calendar. As you move along, you will be expanding the amount of Design time, but for now, you and I just need to ensure that 1 percent is protected for a long time. (Location 908)
How do you shift your business toward the ideal 4D Mix? How do you start the process of making your business more efficient? I started looking for solutions for my business four years ago with a simple question: What is the most efficient organization in the world? That is what we all aspire to have—an efficient organization that generates money on automatic, which, in turn, gives us the freedom to do what we want, when we want. My Google result? Squat-o-la. (Location 917)
They simply figured out what they needed, not what we needed. And that’s not replicable. (Location 931)
As I listened, what impressed me most about bee colonies was their ability to scale extremely fast and nearly effortlessly. You may have seen it for yourself. A bee buzzes around outside your window one day, and what seems like the next day, you spot a massive hive there. How do bees do it? (Location 936)
After learning how beehives scale so efficiently, I had the aha moment of a lifetime. I realized that declaring and serving the QBR would radically improve any entrepreneur’s business, and an entrepreneur’s quality of life. (Location 952)
If you read my book Surge, you might remember Cyndi’s story. In brief, I guided her through the Surge growth process; she followed it to the letter, and, in just a couple of months, went from one marginal lead a month to one solid lead a day. Her business exploded. She was now in the uncharted territory of having to turn away new prospects left and right. (Location 955)
When I asked her what her QBR was, Cyndi wasn’t able to come up with an instant answer. We discussed it, and eventually she was able to land on her company’s core function: compassionate and clear communication. (Location 961)
What single action does your business hinge its success on? That’s your QBR. Don’t worry if you don’t know off the top of your head. I have a super-simple, yet powerful, exercise coming up shortly that will reveal it for you. (Location 968)
And the other 95 percent of the time, Cyndi was busy doing the books, managing employees—you know the drill. Even with more employees, her work did not get easier; it intensified. She had more people doing stuff for her . . . effectively more hands. (Location 974)
Once we identified Cyndi’s QBR, we made the shift. She had one goal: protect the QBR at all costs. She made her team aware of just how critical the QBR (communication with clients) was. She even put up a giant peace sign in her office as a visual reminder for all that the QBR is to bring tranquility, understanding, and peace of mind to their clients. She then transferred non-QBR work away from herself and to her assistant, employees, and contractors. She pushed decisions down to her employees. And then she focused on doing the QBR work. And when she identified the last big distraction from doing the QBR work—her personal management of a large, albeit problem, client who could never be satisfied . . . she fired them. (Location 979)
Even if you have a pretty good idea of what it is, the following method is a great way to validate the QBR. (Location 991)
The sticky note method works by zeroing in on the most critical thing that any individual is doing for the company. This method can be used to declare the company’s QBR and to declare the most important thing each employee does in their role. It’s best to do this exercise in a group, if you can, since it can spark powerful realizations and conversations. If you’re a one-person band, es no problema, mi amigo. (Location 993)
We will first start with all the different major tasks being served by your employees (including yourself) in your (Location 996)
In your work, that is your Primary Job. Put that sticky note in your wallet and never forget it and never forget to do it. The Primary Job takes precedence over all other tasks . . . unless the company’s QBR is in trouble, in which case you will revert to protect and serve it. (Location 1021)
In their capacity, what are the six most important things they do for the business? The one for the wallet is the task they see themselves doing that most helps the business move forward. This is what they see as their Primary Job at your company. The one most critical role they serve, secondary to only one thing. Let’s say it together: protecting the QBR. (Location 1026)
Either they don’t understand your expectation or you don’t understand their role. In a case of inconsistency, work with that employee to understand the incongruence. (Location 1029)
Perhaps multiple people have identified a sales function or a deliverable they create as their Primary Job. In this case, consolidate those notes by sticking them together and get to the distinct Primary Jobs and lay them in front of you. (Location 1033)
So if you had, for example, twelve sticky notes left after you consolidated down from fifteen, you would want to remove six sticky notes (half the notes) and put them aside. (Location 1036)
out. I agree, they are all essential, but the question is, on which one of these functions would you hinge your business success? If you don’t pick the one thing, you will continue to dilute your business’s uniqueness and cripple its ability to run on automatic. (Location 1041)
The question is: Can you then elevate your marketing so effectively and do it so well that prospects gladly pay you in advance without ever being invoiced? Can you market so well that you never need to invoice? Can you market so well you can hinge your business success on it? The answer is a big “hellz yeah.” Kickstarter campaigns prove this is possible every day. (Location 1044)
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. (Location 1048)
Most 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. (Location 1052)
What an honor! Except it wasn’t a baseball; I threw out a roll of toilet paper (in honor of my book The Toilet Paper Entrepreneur) and the crowd went wild: it was fresh, fun, silly entertainment. (Location 1067)
For most of us entrepreneurs, eleven years of higher education seems like forever and a day, but equate it with the early years of running your business. (Location 1075)
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. (Location 1099)
And it’s a sin if you don’t cherish the QBR, either. In the next chapter, I’ll tell you how to make sure you and your team empower your quarterback—whoever is serving the QBR—to get that ball down the field and all the way into the end zone, with a “hokie” touchdown dance and all. (Location 1104)
Identify and declare your QBR and who is serving it. Yes, that’s it. If you have a small team, this exercise should take you less than thirty minutes to complete. If you have a big team, you may have to set aside a day to finish it or break the team into groups. (Location 1107)
The systems and the accountability were deadly horrible at Kings County Hospital. There is no question that systems played a central role in creating both outcomes. One hospital knew the key to moving patients quickly through the process, and the other hospital did not. Or, if it knew, it didn’t follow it. (Location 1138)
In an emergency room, the QBR is very likely the role of diagnosing an emergency medical issue and determining the proper course of action. That is a role that only the doctors (and sometimes physician assistants) can do. (Location 1145)
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. (Location 1153)
Running a business can feel like a life-or-death situation, especially when you’re overworked, overwhelmed, and overly tired. Sometimes it is a life-or-death situation—tragedies happen in many different industries. (Location 1156)
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. (Location 1165)
Every employee plays a role in either directly serving the QBR or protecting the QBR. The chef and team in the kitchen are directly serving the QBR by gathering the finest and freshest local ingredients. The rest of the team is protecting the QBR. (Location 1178)
Everyone’s job is to make sure the most important role of the business is protected, and everyone contributes to it in some fashion, either by complementing it or by stepping in when necessary, or both. (Location 1182)
If you haven’t figured this out by now, the person or people serving your QBR are probably spending too much time doing everything but serving the QBR. Likewise, your other employees are also spending too much time doing other things when they could be protecting the QBR and serving their own Primary Job. (Location 1197)
Then do it for the rest of your staff, where the center of their paper is their Primary Job. This is not only fun, it’s eye-opening. (Location 1204)
On a blank sheet of paper, write the QBR in the center and draw a circle around it, like a bull’s-eye. (Location 1205)
Look at the five other sticky notes you created—the ones that ultimately were not your QBR—and the time you spend on each task during any given week. (Location 1208)
Now draw a hub-and-spoke chart. The QBR is the hub, and tasks are placed in boxes around it. Each task’s distance (the spoke) from the QBR represents the time it takes. (Location 1212)
One common task that can be trimmed and transferred is answering questions. Most businesses get the same twenty or thirty questions from customers over and over again. (Location 1228)
Create an email response that reads: “Thanks for your question. This is a recurring inquiry, and I have created a FAQ that answers your question, as well as thirty others we get regularly. Click here.” (Location 1231)
As you go through this exercise, what do you do if you encounter tasks that are transferable, but there isn’t anyone to transfer them to? That is often a signal to make a hire. (Location 1257)
This typically means you can employ less expensive people or part-timers/freelancers for that work. The goal is to have a few expensive skilled team members at your business, focused almost exclusively on doing the most skilled work, and transferring all the other necessary, but easy, repeating tasks down the skill chain. (Location 1260)
Next, seek to transfer work to other people or systems that will free you and your expert people to take on bigger, more challenging tasks. Transfer work down to the most inexpensive resources and empower the new owner(s) of the task to achieve the intended outcome more efficiently. In other words, have them trim it. (Location 1267)
If a task can’t be trashed or transferred, it can still often be trimmed. Seek ways to reduce the time and costs of completing a task while achieving the necessary results. (Location 1271)
We’ll call it Cool Beans Jeans LLC. Using the sticky note exercise, we have determined that the work of designing the coolest jeans on the planet is the QBR, that function on which Cool Beans Jeans hinges its success. (Location 1274)
In this case, the QBR is being served by a single person. But it can often be a group of people or even a machine or computer that is serving the QBR. Write the name of this person or thing at the top of the paper. So Fat Daddy’s name goes up top. (Location 1285)
The goal is to get a quick win under his belt in the name of delegation, so the tasks that are the easiest to delegate and will have the biggest impact in protecting the QBR should be addressed first. (Location 1302)
Zil loves marketing and knows what the customers love. Time to delegate. That will bring ten more hours a week to work on the QBR—designing incredible jeans. Fat Daddy draws an arrow over that task and gets to work on bringing Zil up to speed. (Location 1308)
work. Even if you are a microbusiness of one, as soon as humanly possible, get that inexpensive work off your plate and go focus on the big, impactful stuff. (Location 1317)
So, the only “only for me” task besides the QBR is testing designs. He darkens the line to that task, to identify that it needs to stick with him for now. The only things he will do going forward is serve the QBR and the one other task. (Location 1331)
What if it really seems as though you’re the only one who serves the QBR? The objective is simple—get others serving the QBR. (Location 1337)
When multiple things are pulling for your time and attention, always prioritize the QBR over everything else. (Location 1344)
Sometimes, you’ll have to let go of your role serving the QBR. The QBR at Vitality Med Spa and Plastic Surgery Center is its development of cutting-edge processes in keeping its patients looking and feeling young, fit, and healthy. Maybe it’s obvious; maybe it’s not. (Location 1348)
She recounted how for the first three years of business she exclusively served the role of the QBR. She was researching procedures and working hand in hand with clients to make everything perfect for them. (Location 1354)
“Then one day it became very clear the business was dependent exclusively on me. The energy and effort I brought to the business was what customers were getting out of it. I realized the business was only as strong as I was on any particular day. It was exhausting and not scalable. (Location 1356)
Monique had one-on-one meetings with each employee, explaining how to customize experiences for customers, learn about their individual needs, and specify the optimal procedures. (Location 1360)
Monique also showed respect for the employees’ domain. Even though in the past she “swooped” in to fix things, employees sometimes interpreted it as interference. With clarity on how to protect and serve the QBR, Monique stopped swooping in and employees felt more confident in the service they were providing. Morale increased. Things got better—for the most part. (Location 1363)
Monique saw the blockage in the communication lines and took a unique measure. (Location 1372)
The new hire was put in charge of day-to-day operations, collected “frontline feedback” from staff, and would sit with Monique to discuss the feedback, uncomfortable as some of it was. (Location 1374)
Even the most exciting, profitable, and popular businesses can be dependent on one person. When you achieve success, meet your personal goals for impacting the world, and love what you’re doing, it can be difficult to see how pulling yourself out of the equation would make any sense. (Location 1379)
Tony Robbins has chosen to continue in his role serving the QBR for his business. So have other uber-successful experts, such as my pal Marie Forleo. (Location 1382)
Her business goes dark for two weeks every summer and winter—everyone is off. It’s part of her company culture. “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. (Location 1385)
One of Marie’s intentions is to make the biggest amount of impact on the most people. Millions, in fact. That is her Big Beautiful Audacious Noble Goal. Over the years, she has streamlined her business to meet this goal while also meeting her personal goals of living a balanced life offline. (Location 1397)
Still, with the exception of editing her content, Marie is the only person who serves the QBR. On the outside, it looks as if she is the QBR. But if Marie wanted to replace herself so her business could grow without her, she’d have to train other people to create content without her. (Location 1406)
The loud voice echoed though the office. “Create systems? I don’t even have time to get the work done, and now I have to create this detailed step-by-step document? (Location 1433)
Creating systems takes a lot of time! Doesn’t it? At least I thought it did, and you may feel the same way, too. The idea of creating systems so that whoever is serving the QBR (or doing a Primary Job) can offload other tasks is overwhelming. (Location 1435)
People are like rivers. We will seek the easiest path to get where we are going. And when you see your employees ignoring your SOPs, that is a sure sign the SOPs aren’t working. The goal of every organization should be to seek constant efficiency and improvement. (Location 1461)
To make sure the QBR is humming along, and that your company is operating at the optimal 4D Mix, you’ll need to systematize both the QBR and everything else around it. (Location 1475)
The goal is not to create systems; the goal is to capture systems—and do it easily. This is how you transfer the knowledge of tasks and get your business to run like clockwork. The best part is anyone can do this and it is ridiculously easy. First, let’s get the method that doesn’t work out of the way, shall we? (Location 1485)
How do you capture this process? It’s already out there. On YouTube and a million other video hosting sites. Just go to YouTube and type in “Best way to peel a banana” and you’ll find the technique. (Location 1498)
And don’t you dare stare them down and make them nervous. Make no judgment. Just observe. Some may do it the “right” way already. Likely, most won’t. (Location 1502)
Next, send them the video you find on YouTube on how to peel a banana. Have them watch the video and give them another banana to practice. Then have them meet with you again and show you how to peel a banana. Boom! System captured (thanks, YouTube) and transferred. (Location 1503)
Remember that the transition from Doing to Designing is like a gauge or throttle, not a switch. You want to do the work for a period of time so you can learn and relate. Then you can capture what you learn to transfer it. (Location 1511)
One search on YouTube will deliver dozens, if not hundreds, of systems for almost anything you need. Most of the work has been done for you. It may not be how you want it or the way you would do it, but the systems are there, and rated and reviewed by others. (Location 1513)
The systems have already been created. Your job is to capture what is in your head, or to use what other people have already captured from their heads. Then you go about designing the process for your team to use the knowledge that is all captured, recorded, and ready to be rolled out. (Location 1518)
Are you 1) communicating (speaking or writing), 2) making a physical action (moving something), or 3) interacting with something (working on the PC, pushing keys on the cash register)? Or, of course, it can be a combo of all three. (Location 1521)
Capture your system through recording devices. For example, let’s start with work done on a computer, since that is so common. Let’s say I invoice clients (which I have done) and my QBR is writing and speaking (which it is). I used computer-screen recording software to record my process. (I don’t want to make a software recommendation here, as it is constantly changing, but I do have a list at Clockwork.life.) (Location 1524)
As I perform the task, I just record the screen and narrate what I am doing. I then store the video in a directory labeled for that task. Now the person who is doing it has a training video they can use to replicate the process over and over again. Easy to find in the directory and easy to do since it is recorded, step by step. (Location 1527)
This process is called Attract, Convert, Deliver, and Collect (ACDC), and the power of managing the ACDC of your business is about as epic as the band AC/DC. Just with less shouting and sweat. (Location 1531)
Attract—Bring in new prospects interested in the company’s offering. Convert—Turn a portion of those prospects into customers. Deliver—Supply the customers with the product or service as promised. Collect—Ensure that the money promised by the customers is gathered. (Location 1536)
Attract Website Email Marketing Convert Website Email Marketing Deliver Shipping Admin Reporting Analysis Collect Accounting (Location 1543)
Tags: pink
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. (Location 1551)
If you wish, you can change the name from COLLECT to CASH. The goal is to make it simple for you and your team to find the recorded systems when they need to refer to them. (Location 1556)
In the beginning, employees may come back with basic questions that you forgot to include in the captured content you made. Maybe you made a video on how to ship stuff using the computer but didn’t include the login. This is where you give them the answer, and now request that they make the next, new and improved, video. (Location 1564)
I then went to the capture process I outlined above, and it was like magic. I just used a screen and video recording software package to capture the process on the PC of how to take an order and get it ready to ship. I took out my handy iPhone and filmed myself packing an order and explaining details on how to pack. (Location 1572)
We did the same for invoicing and paying bills. Video done. Recording done. The work gets done to the standard. And invoices go out. (Location 1577)
Once the systems are delegated, figure out your measurable for it and to whom it needs to be reported. (Location 1578)
For example, I want to know that invoices are going out and money is coming in. The metric is simple: what new projects have come in and what do the accounts receivable look like. After a five-minute review, I know whether the system is humming along or if there is an issue that needs to be resolved. (Location 1579)
The key is to always have one person accountable to the outcome. Make that point abundantly clear. That way, you know who to talk to when there are problems in need of a solution. (Location 1584)
As you move into the Designing phase, always look to simplify processes to get the same (or better) results than in the past, with less effort. (Location 1589)
“You often can make the biggest strides in streamlining a business through effective delegation. That’s why the first thing I look for is where the owner may not be delegating decisions. Then, I determine the decisions they must make for their business to run like clockwork, and where those decisions are distractions,” Craig explained. (Location 1592)
If decisions are being pushed up the organization, distractions are happening and time piles (idle or waiting time) appear. And if a time pile appears, Craig looks to change the process so that decisions happen faster and with less distraction. He usually can. (Location 1597)
The team knows the simple rule: make decisions throughout the production day that keep work in the green or back to green as soon as possible. Debbie can now spend more time making big-picture decisions and strategizing next steps for her company. (Location 1606)
Earlier in the book I shared my friend Scott Oldford’s insights about the delegation mind-set. Scott sells educational products, and using his delegation process, he has freed himself from doing any task in his business, including the QBR. He now spends his time looking at his company from the 30,000-foot view, which allowed him to achieve something most entrepreneurs never do: mastery. (Location 1611)
But the mistake is that most people believe 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. (Location 1617)
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). (Location 1621)
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. (Location 1624)
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). (Location 1627)
Scott’s fix to this problem is to have his employees interview him (with a recorder at their side so they don’t miss a single detail). This is a way to get freedom from the tasks. You can capture what you do for highly replicable tasks, but some things are more nebulous. Having someone interview you brings out the details. People can’t read what is in your mind, but they can get it on paper. (Location 1632)
This interview process has allowed others to carry the QBR and still adhere to Scott’s vision. Before we wrapped up our conversation, Scott said, “Focus has compound interest, Mike. Entrepreneurs try to serve everyone and do everything. They never master anything. My company is running on its own, and I devote my time to just knowing the market. I know my customers so well that I can move a million times faster than my competition. Not working in my business has given me the freedom to make moves so fast that my competition is blurry eyed.” (Location 1639)
But if you make the decisions for them, they can do no wrong. If you give them an answer and it works, they are rewarded for following your instructions. If you give them an answer and it doesn’t work, it’s not their fault. Either outcome, as long as you make the decision, is safe for them. And bonus—they don’t have to think! They just have to do. (And you already know that “doing” is your preference, so why wouldn’t it be theirs, too?) (Location 1647)
The only time to intervene is if you see them making a decision that will have extreme and dire consequences. If you spot severe danger, make your colleague immediately aware. Now you are mentoring them, not deciding for them. (Location 1662)
How do you empower someone to make decisions? Brace yourself—you must reward mistakes. When something doesn’t go right and you punish the person (lecture, point out what went wrong, chop their pay, anything), you instill fear of making the wrong decision, and therefore it is safest for them to just come back to you for decisions (keeping you in the Deciding phase). (Location 1670)
Capture a system now. Yes, you have hundreds of systems you will ultimately capture, but you won’t capture any of them if you don’t get started. Take the first step now—something small and easy, and something that you can take off your plate permanently. Capture that first system and see how it works for you. And then have the person to whom you assign the system make the next version of the recording. (Location 1680)
When I was picking Nicole’s brain about this book, she said, “I had to be brutally honest with myself, Mike. I had to think not only about what I should be doing, but what I should not be doing. Maybe I was capable of something, but was I really suited for it?” (Location 1695)
When she was fundamentally truthful about her strengths and weaknesses (and you need to be, too), Nicole realized, “I’m better at the first 20 percent of an idea, and the last 5 percent, but I am not good at everything in between. I needed people to handle the other 75 percent.” (Location 1698)
She not only got rid of the tasks that drained her; she eliminated the traditional lawyer offerings that she was not great at delivering. (Location 1706)
“For a brief period after I started this process, my income did drop a bit. But it went back up as soon as I found the right team and they came up to speed,” she said. “Even though there was an initial drop, on an annual basis, I made more.” The lesson there is, when you consider hiring, look at the annual impact, not just what might happen in the next few weeks. (Location 1710)
Nicole works just five days a month and she’s more successful than ever. She doesn’t do any QBR work, which for the firm is spot-on legal work. She focuses on managing the business flow. Do you see how replacing yourself—especially in terms of the work you do that does not feed your soul—can only help your business to grow? (Location 1718)
My modified version of that maxim reads like this: Have the right people, do the right things, in the right portions, right. (Location 1726)
Identify what your business needs and what it doesn’t. Trash what it doesn’t need so that no one is distracted by these tasks. Transfer the work to the right people. Trim the work that can be made more efficient. When you do that, you are aligning the right people with the right things. (Location 1732)
If my audience can grasp the concepts and knows how to apply them to their business within sixty minutes or less, it is a solid process. If it is hard to explain or hard to grasp, or if the entrepreneurs aren’t getting great results, the book isn’t there yet and I need to head back to the drawing board. (Location 1743)
Darren is the expert on balancing teams and bringing about extraordinary engagement from every employee. His company has taken the StrengthsFinder system, which measures an individual’s talents (among other things), and developed a powerful process to move the right people into the right roles at a business. (Location 1757)
For your people, match their strength to the role. How do you find their super strength? You ask them. Well, it is a little bit more involved than that. For example, if you are interviewing someone to write content for your website and you say, “What is your strength?,” if they have even a modicum of desire to land the job, they will likely say, “I’m really good at writing copy.” (Location 1771)
I was now able to transition the Doing to her—for nine hours a week, at first—which allowed me to Design more. The goal for early stage hires (and every (Location 1819)
The great irony is that you should not hire people based upon the skills on their résumé. The only thing you can give people is skills, and you want to give people the skills to do the work the way you do it. “Skill” jobs can be a trap. (Location 1823)
You want to hire people with a great get-it-done attitude, high energy, and high intelligence, people who are a strong cultural fit and who have a desire to do the work you need done. All these are intangibles that can’t be taught. Either they have it or they don’t. So seek out people who have the intangibles you need, then give them the only thing that you really can: the skills. (Location 1827)
What is your purpose? Your corporate mission? Purpose is the intersection of something that gives you joy and has a positive impact on others. For example, my life’s purpose is to eradicate entrepreneurial poverty. (Location 1878)
But Cyndi is cut from the Clockwork cloth, as it were, and instinctively knows she must match a person’s traits to the tasks that benefit most from those traits. (Location 1949)
As Cyndi and I worked to balance her team, making note of the tasks each team member considered to be joyful and their natural traits, it became obvious that the duties Cyndi needed to shed were actually related to Bree’s skill set with setting up systems, creating education programs, and managing the marketing technology. (Location 1954)
For a business to stay afloat and grow, it must be actively Doing things that its clients value. The Designing work is about creating the best way to do things your clients value, and have your company do those things on automatic. (Location 1970)
The QBR he identified for his company is extremely fast and accurate estimates. This gives customers, who just hours ago in many cases experienced a disaster, a very quick understanding of how they can recover and what it will cost. (Location 1973)
As I shared previously, the optimal percentages of work balance for companies is 80/2/8/10. Eighty percent is Doing: getting tasks done that directly or ultimately serve the customer and bring value to them. Two percent is Deciding for others: making necessary approvals, helping employees with decision making in unusual circumstances. Eight percent is Delegating the management of resources. To reiterate, Delegating is NOT making decisions for others; it means assigning ownership to others and providing the necessary leadership to bring about a larger outcome. Ten percent is Designing strategy. This is about making the other three levels—Doing, Deciding, and Delegating—more and more effective. (Location 1980)
As he begins the Clockwork steps, Roberto does the sticky note exercise for himself and his employees. Roberto is one of those “I can do everything” entrepreneurs, who fills a mix of roles at his company. (Location 2015)
The ending to this story may seem like a fairy tale, but any dream you have for your business, any goal you hope to achieve with your company, any contribution you hope to make to the world is possible when you are not hampered by work you shouldn’t be doing, and when your team is running like clockwork. (Location 2089)
In this chapter, I want to talk to you about the next step in the Clockwork system: Make the Commitment. (Location 2134)
The Commitment is an extremely simple, yet powerful, declarative strategy that involves clarifying whom you serve and how you serve them. (Location 2138)
I refer to them as “Top Clients.” You may call them “dream customers,” or “bestest friends,” or, you know, “just like Mikes.” Whatever you call them, you know who I’m talking about. (Location 2141)
You see, Clockwork is more than just creating the engine of your company (getting the internal stuff right); it is also consistently adding the right fuel for your engine—your Top Clients. (Location 2145)
Our commitment is to serve [whom] by [how]. Yes, it really is that simple. At my company, Profit First Professionals, our commitment is to serve accounting professionals by giving them an exclusive, powerful way to distinguish themselves from their competition. So what about Lisé? I’m pretty sure you can figure out whom she is committed to serving. But what about her “how”? (Location 2148)
Ask “how” less and ask “who” more. Who do I serve? This is the most important of all questions a business owner who is looking to streamline their business can ask. Yet we rarely ask it. (Location 2162)
For a business to run like clockwork, you must have consistent delivery of your offering. You need to have a predictable process that yields a predictable output, and to do that you must reduce variability. (Location 2166)
Fewer things for fewer people result in fewer variations, which means you can get really, really good at what you do. And with fewer variations, you need fewer resources to get the good results. Simply put: Do less and you achieve more. (Yeah, I would highlight that one on your Kindle.) (Location 2176)
I have seen wonderful businesses pivot into disdain and failure. The owners keep shifting their offering to match what the customer wants until the customer starts buying. (Location 2182)
If you have a brand-new business with no clients yet, you can go through a variant of this process I am about to outline. If you have an established business that is serving a mix of clients right now, you have a leg up on finding the right customers who align with your QBR. (Location 2193)
The main point is, once you know who your Top Clients/Customers are, the next step is to “clone” them by attracting other clients or customers who have the same qualities. (Location 2195)
The first thing I found is that while a psychographic—your customers’ lifestyles, personalities, aspirations, values, and interests—does represent a niche community, those communities are very hard to access because they don’t typically have the ever-important congregation points. (Location 2201)
For example, if you want to sell to vineyard owners (a commercial industry), there are countless vineyard associations. (Location 2205)
The acid test for the whom of your commitment is whether they have established congregation points and you can achieve consistent access to them. (Location 2213)
Gary (who I call Big G) told me, “Give me a dozen of this client. My profit will skyrocket, and I only need to do one thing for them. I found my niche!” I said, “Let me ask you something, Big G. What I just heard is that you are looking to get more clients who are ‘single mom entrepreneurs who hate their moms.’ Right?” (Location 2216)
“Where do these people consistently get together to learn from and share with one another, Gary? Where does the SMHMBC meet? You know, the Single Moms Hating Moms Business Club.” (Location 2219)
This means Gary is impeded—there’s no group to access. He can and should ask his one Top Client where she hangs out with other like-minded people in similar circumstances, because maybe there is some underground group. But there is a low chance those groups actually exist, because Gary’s psychographics are too narrow to warrant a community. (Location 2223)
He asked himself what distinct elements about his favorite customer were also something that people formed communities around. She owned a successful bakery. That was one piece. She was overwhelmed with work. That was a second piece. She was a single mom entrepreneur. That was another. She also hated her mom. There was yet another. (Location 2226)
When he searched for “single mom entrepreneur association,” he found nothing. When he searched for “single mom entrepreneur group,” he found one meetup group with twelve members. There is no question this is an important group of entrepreneurs, but it is not an opportunity for Big G to serve. The congregation points are not established, so breaking into the community will be very hard. (Location 2235)
Other people identify niches too broadly. They want to work with “rich people” or “small businesses.” Those are broad communities, and while they may have congregation points, the knowledge shared is general and their needs are all over the place. (Location 2241)
So let’s find your whom. What follows is a super-short and complimentary version of the method I detailed in The Pumpkin Plan. If you haven’t read that book, the next exercise will be enough to get the clarity you need to Make the Commitment. If you’ve already “Pumpkin-Planned” your business for explosive growth, please do this exercise anyway. The congregation point qualifier will give you new insights about your Top Clients. (Location 2247)
By targeting a narrow niche, you master the next part of the Commitment. When you know whom you are serving, you align your QBR to best serve them. UGG figured out that surfers were the whom. Brian’s QBR was the delivery of functional footwear. Of all the communities in the world, Brian loved the surfing community. (Location 2312)
So how do you service your whom? What do you do that benefits them more than anyone else can benefit them? The core concept is to refine your offering to your best customers until you get something they are ecstatically buying and recommending. (Location 2318)
I know an entrepreneur who, once he reached a point where he could stop doing the “grunt work” and focus on managing his staff, said, “Screw doing the work, all I want to do is move the pieces on the chessboard.” I didn’t like the way he stated that, because it sounded manipulative. (Location 2350)
A master chess player moves the pieces strategically to achieve the victory. Your job is to put the different pieces in your business in the best places to move your company forward. But a more apt visual is of a dashboard that allows you to keep your thumb on the pulse of your business. (Location 2356)
If the idea of metrics is getting your undies in a bunch, don’t sweat. It is not nearly as daunting as it sounds. You don’t need to be a mathematician or engineer. You simply need to pick the critical things you want to measure. (Location 2364)
“With a metric,” explained Kevin. “It doesn’t need to be some fancy computer system reporting a flashing number to a flat panel screen in the manager’s office. In fact, I recommend simple measurements, things that you can see and evaluate in the moment without the need for calculations or computer algorithms. Something like the blue light measurement.” (Location 2373)
With the bumpers piling up, Kevin looked at the thing they were waiting for, to be welded. That was the bottleneck. He noticed that the distinct blue light that welding torches put off very rarely fired. (Location 2380)
All in all, the welders were spending about 10 percent of their time actually welding. So the blue lights flickering only happened—you guessed it again—10 percent of the time. (Location 2384)
That night I hung on every word she said about how she made lumberyards more efficient by addressing the countless bottlenecks, such as changing the way trees are loaded in the hauling truck to make them unload faster. (Location 2424)
All these improvements have a small impact. But none of them were necessarily the QBR, by my understanding. (Location 2427)
“All businesses have bottlenecks, Mike. These are necessary parts of a business that must all be operating with excellence, otherwise the business will suffer. All parts of the business are important to different degrees. In order to deliver its product or service to clients, the essential parts of the business must all work. The most critical of those are the bottlenecks—the areas where production is necessary but slower than what is feeding it. (Location 2430)
All the elements of a business can be broken into four quadrants, and the QBR therefore can only exist in one of those four spots: leads or sales or deliverables or cash flow.” (Location 2434)
Adrienne explained that lumberyards aren’t unique, in that every business determines its QBR. And the QBR always sits within one of four quadrants: leads, sales, deliverables, or cash flow. (Location 2458)
These are the core four functions of every business. You must do them all well. And as we get on to playing the famous game all good business leaders play, “bottleneck whack-a-mole,” you will constantly evaluate and fix all the things big and small within these four areas, just like Adrienne did for the lumberyard. (Location 2474)
However, there are a few unique cases. For example, some businesses do work “on spec,” in which the deliverable is completed before the prospect becomes a customer. In this case, the flow would be ADCC. (Location 2479)
ATTRACT. Your metric for attracting leads may be how many people have completed a specific action. (Location 2486)
When we see our metric fall short of our expectation of three per day, our question is, “Why aren’t more people filling out our form?” The answer could be because our website is down, or because people are calling us instead, or we have an issue with the QBR (the messenger of Profit First) and nothing is trickling out on the other side, (Location 2494)
CONVERT. Our metric for converting leads into sales is the number of people who join us as new members within three months of originating as a lead. It’s a simple percentage: (Location 2497)
When that happens, you need to investigate.* Well outside our 33 percent conversion? We ask ourselves, “What’s going on with sales?” Did we introduce a new pricing structure that didn’t work? Did we hire a new sales team member? Is the quality of leads changing? We also look back up the chain. (Location 2505)
Do you deliver on what the customer expects (or better)? For some businesses, the best indicator of nailing the deliverables is that customers come back again and again (retention). (Location 2510)
Repeat after me: Cash is the lifeblood of my business. Again. Cash is the lifeblood of my business. (Location 2525)
Our QBR is getting the word out about Profit First, and I am the primary (but not exclusive) messenger. (Location 2532)
The core four areas—Attract, Convert, Deliver, and Collect (ACDC)—become the gauges on your dashboard—plus the QBR. What you need to do is first identify how you measure progress (or lack thereof) in each of these five spots, and what is your goal for each. (Location 2545)
The goal is to have a business that both generates and sustains cash and profit. In Profit First, I explain that you need five foundational bank accounts: INCOME, PROFIT, OWNER’S COMPENSATION, TAX, and OPERATING EXPENSES. (Location 2560)
If your business can’t allocate money to the percentages set, those percentages serve as a metric, an indicator that something out of the range of expectation is happening, and you need to find out why the business can’t do the allocations, and fix it. (Location 2562)
The notion of money on automatic doesn’t mean money falls into your lap without any effort. It’s not a broken ATM that somehow got jammed and perpetually spits money out at you. Instead, money on automatic is establishing a system where you sit back in the control room and watch the flow. (Location 2568)
For example, with Profit First, you set an expected income metric on a biweekly (or weekly) basis. (Location 2573)
He simply set his income target and the percentage of operating expenses (including the purchase of equipment) that he could spend. With a constant percentage of operating expenses, if income slipped, the operating expense automatically received a smaller portion. He only spent money that was pre-allocated to expenses. (Location 2580)
You don’t necessarily have to follow my categories or metrics for your dashboard, but I do suggest you have metrics that show indicators throughout your business. Also, try to key your dashboard to somewhere between five and eight metrics. (Location 2587)
But even though I fixed that, I “fixed” other things at the same time, which actually caused a new problem, which I mistakenly concluded was the same as the original problem. (Location 2604)
The dashboard of our business is our process. At times things will fail, and when that happens we need to turn (fix) one dial at a time. Take sales for example. Let’s say you notice that you have a big sales drop-off. You notice that lead flow has not changed much at all, and, if anything, has increased, but the sales team is selling way less. (Location 2608)
When she committed to a niche and targeted her marketing to that niche, over time she ramped to generating one lead a day. (Location 2673)
Cyndi told me about the clients she wanted to serve and the revenue and profit target she intended. We took her revenue/profit target long term, and asked, “What needs to happen this year to make it a reality?” That gave us the twelve-month revenue/profit target. (Location 2687)
The weekly spreadsheet included several key metrics related to gym memberships: new sales, renewals, cancellations, and any type of freezes put into place for members. The snapshot also tracked daily activity, such as how many appointments were made, how many phone calls were received, how many walk-ins came in. Finally, it tracked each location’s sales closing percentage. (Location 2739)
So Lisé wasn’t looking at her dashboard all week long; her district manager was tracking it. Lisé only looked at the summary weekly dashboard for a few minutes each week. From that information, she could tell if she needed to make an improvement somewhere. (Location 2745)
I would listen to their view of what was happening, and then provide them with guidance and encouragement. (Location 2747)
“At the end of the month, I got a mass metric sheet. Beyond my dashboard that had the key indicators, each month I would dig deep into all the numbers,” Lisé explained. “It was a very simple spreadsheet. One line was our projected goals for the entire year. The next line was last year’s numbers for the same goals. (Location 2753)
Remember, Lisé was only at the actual gym location in the beginning, but it was during those formative weeks that she would make sure that (Location 2760)
everyone knew the QBR and how to deliver it. “I had a big vision for what I wanted the gyms to look like, and I understood that I had to inspire that vision in my team,” Lisé said. (Location 2761)
Take twenty minutes right now and determine the core metrics you want to use to create your own dashboard. Remember to keep it simple; it’s too hard to track too many things. (Location 2785)
The ideal metrics to create always include a way to measure QBR performance, as well as the bottleneck(s) you have identified with the ACDC. (Location 2787)
If you’ve ever experienced the stress of an overflowing inbox, it doesn’t come anywhere near the terror I felt at looking at an empty one. In that moment, I had a realization: I thought I had finally moved past the biggest barrier to ensuring my businesses ran on its own—my ego. But, alas, I had not. (Location 2806)
The greatest irony is that while building systems is hard work, it is not busywork. You won’t be typing away all the time. You won’t be meeting with people all the time. You won’t be busy. You will be focusing on the hardest work of all—thinking. Thinking about your business—Designing your business—takes a lot of energy and concentration. So, because we’re humans, the natural instinct is to distract ourselves by doing the work. It may sound crazy that hard work is easier than hard thinking, but it is. (Location 2840)
The truth is, the thinker is getting serious stuff done. They even dedicated a statue to him—you know, The Thinker—because he has figured out that the goal is not to do stuff, but instead to think about how to get the things done. Getting shit done is not the goal. The goal is to have the company get shit done. Instead of doing the work, you need to be thinking about the work, and who you can get to do it. (Location 2850)
I can’t tell you how many times my business partner said, “You aren’t doing enough for the business. We need more of you.” I get why Ron felt this way. He was still caught up in the “do everything” mentality. Everything is important. (Location 2860)
When we started to streamline Profit First Professionals, we used one of our quarterly meetings to explain to all employees what I do to serve the QBR, and how they are supporting it. (Location 2867)
reality. I explained that my job now was making strategic moves. Planning the big moves. Spreading the word, and finding others who can spread the word. When I started PFP, I had to do it all. It was just me and Ron, after all, and we were both needed for the Doing. Now I was needed as a Designer. (Location 2870)
Clockwork is not a system for you. It is a system for your entire company. Everyone needs to know it. Everyone needs to be on the same page. Everyone needs to begin moving the leadership from Doing to Designing. (Location 2917)
Since she began applying Clockwork to her business, she also has had zero employee turnover. (Location 2939)
When she tasked her team with meeting specific revenue goals, she initially met some resistance. It wasn’t that they didn’t want to focus on revenue; it was just a new way of looking at their roles in the company. (Location 2942)
Greg’s gift is meticulousness. You see it in the way he dresses, the home he keeps, even in the way he talks. He is specific. He is detailed. He is exacting. REDCOM has built its reputation on that meticulousness. (Location 2972)