Clockwork: Design Your Business to Run Itself
Mike Michalowicz
Portfolio/Penguin (August 2018)

Here is a system that can help almost anyone to grow a business that can (almost) run itself

Mike Michalowicz (my-KAL-oh-wits) once asked Ryan Lee how he has been able to run his company, Freedyn, a multimillion-dollar business with just a couple of virtual employees. Working only a few hours a week, the rest of his time is spent thinking about his business. How did he do it? How does he continue to do it?

“You need a system, Mike. You need a system that you know at the start of every day you are going to follow throughout the entire day. And then only react when something unexpected happens. Otherwise you monitor its progress, and if you are not satisfied with its performance, you make small tweaks and adjustments…Then we would simply measure it. If my metrics showed that it wasn’t working well, we tweaked it — one element at a time — until it did work…Our revenue doubled. We have predictability.” Lee and his associates had created a system that could be managed by one person. They repeated it daily. Measured it. And over time, “surely improved it but never deviated from it.”

The key word in Clockwork‘s subtitle is “design.” Michalowicz explains how to do that. Lee’s account places great emphasis on process. You need a framework within which to organize sequential, sometimes repetitive operational actions. Alignment is important and so is cohesion.

For example, in the first chapter, Michalowicz examines what he characterizes as “The Seven Steps of Clockwork.” They are easy to list but don’t be fooled.  If you are like most people who now struggle to make their business profitable, focusing too much time and energy on doing what is urgent rather than thinking about what is important,  you face a significant challenge: to move toward Designing — or re-Designing — your company to run itself while other people or resources take care of the Doing part. Where to begin? Check out the material on Pages 14-19.

These are among the other passages of greatest interest and value to me, also listed to suggest the scope and depth of Michalowicz’s coverage:

o Chris Winfield (Pages 4-5 and 175=176)
o Deciding/Delegating (13-14, 23-26, and 112-114)
o Designing (13-14 and 23-27)
o Core business functions (14-15 and 56-70)
o Balance the team (15-16 and 121-151)

o Scott and Elsie Grice’s story (20-22 and 49-52)
o Analyze the 4D Mix (20-55)
o 4D Mix (23-49)
o Active Time Analysis (40-45)
o Vacation time (49-55 and 227-231)

o Four-week vacation (53-54 and 217-236)
o Operation Vacation (53-55 and 225-233)
o Exercise: Hub and Spoke (77-84)
o Capture systems (101-120)
o ACDC Model (108-111, 178-188, and 202-203)

o Top clients/customers (158-166)
o Bottlenecks (171-174, 175-176, and 201-202)
o Pushback (204-216)
o Go on Vacation — For Real (222-225)
o Ryan Lee (237-240)

As I worked my way through Michalowicz’s lively narrative, I realized that much of the information, insights, and counsel he provides could be of substantial value to entrepreneurs, of course, but also to executives in large organizations who have direct reports who, in turn, also have direct reports.

Years ago in response to someone who asked him why he highly admired small companies, GE’s then CEO, Jack Welch, said this: ““For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy.”

Throughout his 20-year tenure as CEO, Jack Welch did everything he could to “clockwork” the GE organization. Whatever the size and nature if your own organization may be, Clockwork is a “must read” that can help your organization become and remain lean, efficient, and profitable.

Those who share my high regard for this book are urged to check out two others: Tim Ferriss’ The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich and Eric Ries’s The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.