Latest / Matt Brown Show - Conversations That Power The Business World. / MBS985- Fix This Next with Mike Michalowicz

Transcript

MBS985- Fix This Next with Mike Michalowicz · Matt Brown Show - Conversations That Power The Business World.

0:00
SPEAKER_02: I used to watch the Batman series on television.
0:03
SPEAKER_02: This goes back to the early or late 70s, early 80s.
0:07
SPEAKER_02: And uh I will never forget that the commissioner, the police commissioner, had a red Batphone where he could call Batman in when there was a problem in the city.
0:17
SPEAKER_02: Well, here's the problem: the superhero Batman would swoop in and fight the evil villain and save the city yet once again.
0:26
SPEAKER_02: But there were two things that consistently happened.
0:28
SPEAKER_02: The city would experience destruction, buildings would fall, and so forth.
0:32
SPEAKER_02: And the police force became less capable of defending itself.
0:37
SPEAKER_02: As entrepreneurs, we have this superhero syndrome where a problem presents itself.
0:42
SPEAKER_02: It's like, oh, we'll swoop in and save the day yet again.
0:45
SPEAKER_02: And we fix the immediate problem, but we don't realize the weight of damage we leave around us, taking shortcuts, neglecting other needs.
0:53
SPEAKER_02: And our team becomes disempowered.
0:57
SPEAKER_02: They don't learn how to fend for themselves.
1:00
SPEAKER_02: They actually become more dependent upon us.
1:03
SPEAKER_01: Hello and welcome back to yet another cracking installment of the Matt Brown show.
1:08
SPEAKER_01: Before I introduce our guests for this episode, who is just such a powerhouse, I'm really excited to bring this amazing talent from uh the US to you today, uh, Mike Mikalovitz.
1:19
SPEAKER_01: But uh just want to say firstly thank you to all of you who have emailed me uh from the audiobook we released as part of the last pod storm.
1:27
SPEAKER_01: Please do keep those emails coming.
1:29
SPEAKER_01: You can get in touch with me at hello at mattbrown show.com.
1:33
SPEAKER_01: It's very, very awesome to be interacting with you and hearing all the amazing things that you are building, despite a very tough business environment.
1:42
SPEAKER_01: So today we are gonna be talking about this uh idea of Fix This Next.
1:49
SPEAKER_01: It is a book that was written by Mike Mikkelowitz.
1:52
SPEAKER_01: He has written not one, but I mean like five different books.
1:55
SPEAKER_01: And before the age of 35, Mike had sold already two multi-million dollar companies.
2:01
SPEAKER_01: So what makes Mike really interesting is that he uses his business benches to essentially research and test different theories for entrepreneurs.
2:11
SPEAKER_01: I mean, his why is just really really compelling, and that's to eradicate uh entrepreneurial poverty.
2:17
SPEAKER_01: Um, and uh, you know, Mike is just such an innovator as well.
2:20
SPEAKER_01: He's the creator of something called Profit First, which we discussed in this episode, so keep an eye out for that one.
2:26
SPEAKER_01: And he is the creator of something called clockwork, it's a powerful method to make any business run automatically.
2:33
SPEAKER_01: In addition, he has created a number of different concepts that are being used today all around the world by entrepreneurs in their business, including Profit First, Surge, the Toilet Paper Entrepreneur, and the Pumpkin Plan.
2:47
SPEAKER_01: So he's a real thought leader, and in fact, Simon Sinek even deemed Mike as quote the top contender for the patron state of entrepreneurs.
2:56
SPEAKER_01: So he's a quite a big deal.
2:58
SPEAKER_01: So, what can you hear about uh today in this episode?
3:01
SPEAKER_01: So uh we cover this idea of scale and problem prioritization.
3:06
SPEAKER_01: So as a business owner, it's quite easy to think that you have to solve everything all the time, otherwise you won't succeed.
3:13
SPEAKER_01: Um, and so sometimes we take on too much.
3:16
SPEAKER_01: And he talks about this idea called the superhero syndrome, which I think is hilarious, but uh pay careful attention to that one.
3:24
SPEAKER_01: And we share this really amazing idea called Parkinson's Law and its relationship to profit.
3:29
SPEAKER_01: Um he shares uh a really an awesome story about Apollo 13 and the idea of resources, spending and time and how we can all do more with less.
3:39
SPEAKER_01: Uh we also talk about his TED talk, where he reveals a new formula, something called sales minus profit equals expenses, and we'll talk about that formula in the relationship and context to behaviors as entrepreneurs.
3:53
SPEAKER_01: And then a really powerful idea, something that I executed last year, is called the power of the four-week vacation and what that means for your business.
4:03
SPEAKER_01: And just so so so much more, guys.
4:05
SPEAKER_01: So, this is part one of a two-part series.
4:07
SPEAKER_01: We we are going to get Mike back for part two.
4:10
SPEAKER_01: Had such a great conversation, and I'm sure you'll enjoy this too.
4:14
SPEAKER_01: So, without further ado, let's get on with the show.
4:17
SPEAKER_01: Hello, ladies and gentlemen.
4:19
SPEAKER_01: Welcome back to the live edition of the MapRound Show.
4:22
SPEAKER_01: Today I'm joined all the way from New Jersey by Mike Mikelevitz.
4:25
SPEAKER_01: Welcome to the show.
4:27
SPEAKER_02: Matt, thank you for having me.
4:29
SPEAKER_01: So today we are gonna be talking all about you.
4:32
SPEAKER_01: You've done some incredible stuff.
4:34
SPEAKER_01: Um I'm just gonna bring up uh the just one of the books.
4:37
SPEAKER_01: There's obviously quite a few that you've written.
4:39
SPEAKER_01: Uh, this one here is Fix This Next.
4:42
SPEAKER_01: This is your latest one came out uh not too long ago.
4:45
SPEAKER_01: Uh make the vital change that will level up your business.
4:49
SPEAKER_01: But uh before we get into all the cool stuff and all the rad meat and the potatoes, uh, why don't you give us the uh uh the elevator pitch, Mike?
4:58
SPEAKER_01: Um uh for our audience who around the world who potentially don't know uh or haven't heard of you, uh why don't you fill them in?
5:04
SPEAKER_01: What's the headline?
5:05
SPEAKER_01: What do we need to get to hear about?
5:07
SPEAKER_02: So the headline is uh I'm an author for small business owners, and what I'm trying to do is simplify the entrepreneurial journey.
5:17
SPEAKER_02: Just to give it context, I'm an entrepreneur myself.
5:19
SPEAKER_02: I I've been my entire adult life.
5:21
SPEAKER_02: Um I've had the blessings of owning and building companies and selling them.
5:25
SPEAKER_02: Actually, had one acquired by a Fortune 500.
5:27
SPEAKER_02: I did a private equity deal.
5:29
SPEAKER_02: But I think the greatest kind of experience I had was my hardest.
5:33
SPEAKER_02: I actually started a business that was such a calamity.
5:36
SPEAKER_02: I lost everything, all my my home, everything.
5:39
SPEAKER_02: And it forced me to reinvestigate what makes an entrepreneur successful.
5:45
SPEAKER_02: I've been a full-time business author now for 13 years.
5:49
SPEAKER_02: And uh honestly, every book I write, I'm investigating something I don't understand or I thought I did, but I didn't.
5:55
SPEAKER_02: And I'm trying to find the solutions that make profitability more simple, efficiency more simple, marketing more simple, all those elements.
6:03
SPEAKER_01: Yeah, it's really refreshing.
6:05
SPEAKER_01: Uh it's an interesting idea, right?
6:07
SPEAKER_01: Just to figure the truth out for yourself.
6:09
SPEAKER_01: Because I think in entrepreneurship, the truth's almost always subjective.
6:13
SPEAKER_01: I mean, uh my mentor who's got, you know, he's a billionaire basically.
6:17
SPEAKER_01: And he keeps every time the first time I went to him, I was like, hey, how do I do this thing?
6:20
SPEAKER_01: Whatever that thing was.
6:21
SPEAKER_01: And he was like, I don't know why you're coming to me.
6:23
SPEAKER_01: Because the more the more I know about entrepreneurship, the more I know I don't know anything.
6:28
SPEAKER_02: Right, right?
6:29
SPEAKER_02: Yeah.
6:29
SPEAKER_02: Isn't that funny?
6:30
SPEAKER_02: The more we discover.
6:31
SPEAKER_02: Yeah, I've also found something, I think it's called Occam's or Oxham's rule.
6:36
SPEAKER_02: Uh, but basically what the concept is the more simple the solution, the more likely it's the right solution.
6:43
SPEAKER_02: And what I found is that entrepreneurship, at least my experience, is it's just an barrier of complexity.
6:47
SPEAKER_02: When something isn't working, just you know, work harder at it and do more things.
6:51
SPEAKER_02: And uh what I'm finding is is that the truth is peeling away the complexity, doing fewer things better, has consistently proven to be a more successful model for me.
7:03
SPEAKER_01: Yeah, I I um I've totally subscribe to what you said, and we'll get into that and pack that a bit more.
7:10
SPEAKER_01: Um, just before we do that though, have you heard of this idea called struggle porn?
7:14
SPEAKER_01: Have you heard about that before?
7:16
SPEAKER_02: No, I'm not familiar with that.
7:17
SPEAKER_01: So it's this idea that to your point, like you're talking about being efficient, right?
7:21
SPEAKER_01: Um, and then there's this doctrine that says, well, if you start a business and you become an entrepreneur, you must just work hard.
7:28
SPEAKER_01: That's just hard, hard, hard and put yourself in the dirt, you know, because that's that's what it takes to be successful.
7:34
SPEAKER_01: Um, and uh to your point, uh at least in my experience, I work hard, but I don't kill myself getting results.
7:41
SPEAKER_01: Do you know what I'm saying?
7:42
SPEAKER_01: Because to your point, there's a there's a system that you can employ to essentially create the outcomes that you want in your business and for yourself personally.
7:51
SPEAKER_01: Like I'm a family man, uh, and so like I have to be responsible and put my family first always, even before my business.
7:58
SPEAKER_01: Um, and so working myself into the dirt would never it's not a doctrine I can follow.
8:05
SPEAKER_01: Your your doctrine around efficiency and figuring out systems and all that kind of cool stuff is the way to go.
8:10
SPEAKER_01: It's the way that you know I've built several scale businesses, um, and I'd really like to use that preamble to kind of get into the book that you wrote, right?
8:19
SPEAKER_01: Which is all around problem prioritization, right?
8:22
SPEAKER_01: Or fix the market.
8:23
SPEAKER_01: Exactly.
8:23
SPEAKER_01: So, how do you prioritize problems?
8:26
SPEAKER_01: I mean, in especially in a business, like as a startup, you know, you do have to work much, much harder than usual.
8:31
SPEAKER_01: Sure.
8:32
SPEAKER_01: Um, but everywhere you look, there's problems.
8:35
SPEAKER_01: There's problems in sales, product, marketing, it's like legal HR, everywhere is a mess.
8:40
SPEAKER_01: Uh so where does the rubber hit the road for you there?
8:45
SPEAKER_00: Stay with us, we'll be right back.
8:49
SPEAKER_01: Hey there, I know being an entrepreneur can be a very lonely experience.
8:53
SPEAKER_01: You sometimes get stuck, don't you?
8:55
SPEAKER_01: Well, if you're like me, being stuck sucks.
8:57
SPEAKER_01: But what if you could access the minds of over 850 CEOs who have built companies generating billions of dollars in revenue and access all of that knowledge in a fraction of a second?
9:09
SPEAKER_01: Well, the good news is you can't literally do that today.
9:12
SPEAKER_01: What my team have built is MathBrown AI.
9:14
SPEAKER_01: It is trained on all the interviews, over 850 of them that I've done to date, all my books, all the knowledge capital that's been generated over the last 10 years right here on the Math Brown show.
9:24
SPEAKER_01: And you can get access to all of that right now for free.
9:27
SPEAKER_01: So, how do you get access to this?
9:29
SPEAKER_01: Well, head on over to mapbrown show.com and at the top you'll see community.
9:33
SPEAKER_01: Hit that link, sign up, it's absolutely free, and you'll be given instant access to Matt Brown AI and a community of over a hundred thousand subscribers.
9:49
SPEAKER_02: Well, it's the realization that only one thing at any given time can be the most important thing.
9:55
SPEAKER_02: So when when people say, Oh, we have 10 top priorities, that that uh that already is in conflict.
10:01
SPEAKER_02: You can only have one top priority, it's the definition of most.
10:06
SPEAKER_02: What I did was I looked at businesses in all different industries.
10:11
SPEAKER_02: I was industry agnostic, so from a retail shop to professional services to manufacturing, and looked for a common DNA throughout all businesses.
10:22
SPEAKER_02: And I think I found that there's these 25 elements that every business must have and be achieving to uh elevate their success.
10:30
SPEAKER_02: But similar to a chain, like if there's a chain from Johannesburg to New Jersey, that'd be a long chain, but there's a chain between me and you, and the goal was to uh strengthen the chain, the mistake would be to just start fixing every link to try to improve every link because that chain will always break in the exact same spot, which is the current weakest link.
10:53
SPEAKER_02: If we simply identify that weakest link of the chain and improve that, now the strength, the entire strength of the chain has been elevated to the next weakest link.
11:01
SPEAKER_02: If we improve that, it increases even more.
11:04
SPEAKER_02: Well, this illustrates how entrepreneurs behave.
11:07
SPEAKER_02: Entrepreneurs are constantly fixing everything, but nothing works.
11:11
SPEAKER_02: And it's this mentality fixing everything is like we're fixing every single link, but until we find the one link, this is gonna work.
11:18
SPEAKER_02: So, what I did is I identify these 25 different elements of business, and what we can do simply they stack on each other.
11:26
SPEAKER_02: So we can do is identify um is is the weakest link at our base currently?
11:32
SPEAKER_02: If not, is it a level above?
11:34
SPEAKER_02: If not, a level above.
11:35
SPEAKER_02: And once we find the weakest link, we we resolve it, we go back to this base and start building up again.
11:40
SPEAKER_02: Maybe another illustration is like building a structure.
11:42
SPEAKER_02: If I'm gonna build a five-story building, the mistake, and some entrepreneurs myself do this and have done this, is we build the fifth floor first because that's the big thing we want to do and compress the world, but there's no foundation below it, and it comes crashing down.
11:58
SPEAKER_02: Conversely, some other business owners constantly focus on the base of business.
12:02
SPEAKER_02: I said already the very base of every business is sales, the generation of cash.
12:05
SPEAKER_02: Some entrepreneurs can say we're gonna keep on selling more and selling more, but they're building a bigger and bigger foundation, but then the other elements above it, like profitability, efficiency, collapses within it.
12:15
SPEAKER_02: So it works relationally.
12:17
SPEAKER_02: Start the base, find the weakest link, improve the link, start the base again, find the next weakest link, and improve that.
12:24
SPEAKER_01: So it's kind of like if I were to draw a reference for for maybe people who are battling to follow, it's kind of like Maslow's hierarchy of needs, but for business.
12:33
SPEAKER_02: That's exactly what it is.
12:35
SPEAKER_02: And that's where I based it.
12:36
SPEAKER_02: So Maslow identified there's five levels of needs for the human, for human life, for the human experience.
12:44
SPEAKER_02: Foundationally, he argued that every human has physiological needs.
12:47
SPEAKER_02: So you and I need to drink water and eat food, breathe air.
12:50
SPEAKER_02: Without those elements, our biological system has been compromised, we will die.
12:55
SPEAKER_02: And therefore, it's the number one priority.
12:57
SPEAKER_02: And Maslow argued once that's adequately satisfied, and the key word here is adequately satisfied, we elevate to higher level needs.
13:04
SPEAKER_02: The next level need is safety, protection from harm, you know, weather conditions, or physical violence.
13:09
SPEAKER_02: Above that, our needs like belonging to a community, it's the highest level of self-acquisition.
13:13
SPEAKER_02: But what he argues anytime if the base level need is compromised, I can't breathe there, you know, what we're discussing right now in this podcast is no longer relevant to me.
13:22
SPEAKER_02: I can't breathe there, I must breathe there.
13:25
SPEAKER_02: So we always go back to the base to make sure it's adequately satisfied.
13:28
SPEAKER_02: Well, in the business, I create what's called the business archive of needs, and it was a direct translation from Maslaw for business, with one substantial difference.
13:36
SPEAKER_02: We, you and I are wired into ourselves.
13:38
SPEAKER_02: I know if I can't breathe, I know if I'm hungry, you know that too.
13:44
SPEAKER_02: Uh, we know if we're in harm's way.
13:46
SPEAKER_02: Our senses trigger the sight, smell, hearing, touch.
13:48
SPEAKER_02: Like they work collectively, and our brain triggers uh an action to take or a feeling.
13:54
SPEAKER_02: But in our business, we're not physically wired into our business.
13:58
SPEAKER_02: Many entrepreneurs believe we are.
14:00
SPEAKER_02: You know, we trust our gut.
14:00
SPEAKER_02: Our instinct says, I got, I'm gonna do this.
14:02
SPEAKER_02: I heard Clubhouse is a hot app, I'm gonna hop on that because everyone else is on that, or whatever the things of the day.
14:08
SPEAKER_02: And then we get frustrated we're not seeing results because we have to find empirical data.
14:13
SPEAKER_02: And this is the key the great differentiator between our biological survival, which is our senses, and the business entity survival, which is data.
14:20
SPEAKER_02: We need to look at the data and say, where are we struggling?
14:23
SPEAKER_02: We may have sales going on, but are we extracting profit from it?
14:26
SPEAKER_02: If not, we can see in our numbers, we need to set up a profit system and start extracting it and so forth.
14:31
SPEAKER_02: So there's five levels of needs in the business heart given needs, we must look at the empirical data to pinpoint where that weakest link is and then resolve it.
14:39
SPEAKER_01: What's at the top?
14:41
SPEAKER_01: Right at the top.
14:43
SPEAKER_02: So for a business, the highest level I call it legacy.
14:45
SPEAKER_02: I'll go through the five levels real quickly.
14:47
SPEAKER_02: So foundationally, sales.
14:49
SPEAKER_02: Sales is the creation of cash.
14:51
SPEAKER_02: So cash is like oxygen, you're not breathing.
14:54
SPEAKER_02: But also like oxygen, if you simply get more and more oxygen in your system, at a certain point it becomes detrimental again.
15:00
SPEAKER_02: You can actually sell your business into difficulties.
15:03
SPEAKER_02: And I see it pretty regularly.
15:04
SPEAKER_02: Business says, oh my gosh, we don't have enough money, we need to sell more.
15:08
SPEAKER_02: But really, what they have is not enough profit.
15:10
SPEAKER_02: They sell more, they put more stress on the organization, more responsibility to deliver on the sales, and they get really in trouble.
15:16
SPEAKER_02: So we need sales to create cash.
15:18
SPEAKER_02: Next level is profit.
15:20
SPEAKER_02: Profit is the creation of stability for an organization.
15:22
SPEAKER_02: It's runaway.
15:23
SPEAKER_02: If you have cash reserves, uh you don't have to worry for day-to-day survival.
15:28
SPEAKER_02: Once your profit is adequately satisfied, the next need that presents itself is order.
15:33
SPEAKER_02: Order is the creation of efficiency.
15:35
SPEAKER_02: This is where there's no dependency on the owner in the beginning, but ultimately any employee where we don't have any linchpins, one person fails to deliver it and the business collapses.
15:43
SPEAKER_02: There's redundancy in place, systems and automation.
15:46
SPEAKER_02: Once that's adequately satisfied, there's concerns of impact.
15:50
SPEAKER_02: Impact is where we serve clients in a transformal, transformative way as opposed to a transactional way.
15:56
SPEAKER_02: You know, this is where we're not a commodity, this is where clients are consistently saying, Oh my gosh, my life has been changed.
16:02
SPEAKER_02: And it's not the one-off, it's not the one client says, This is great.
16:05
SPEAKER_02: This is where every client is saying, my life has changed.
16:08
SPEAKER_02: The highest level is legacy.
16:10
SPEAKER_02: Legacy is the creation of permanence, and this is where a business is designed to live into perpetuity.
16:15
SPEAKER_02: It's not about generational ownership, it's about generational service.
16:18
SPEAKER_02: It's where generations of clients will be served because this cloud, this company's been set up to live on into perpetuity, having transformative services delivered and are doing it in a very efficient, profitable way that generates more and more sales.
16:32
SPEAKER_01: Yeah, I love that.
16:33
SPEAKER_01: I think that's really cool.
16:34
SPEAKER_01: I love that.
16:35
SPEAKER_01: Because I think it it I think in in many cases, entrepreneurs actually need a framework to latch on to.
16:40
SPEAKER_01: Uh, because um, if you don't have something to marry what you your personal experience is, right?
16:47
SPEAKER_01: And uh with this framework, you kind of get lost.
16:50
SPEAKER_01: It's it's very easy to want to consume everything.
16:53
SPEAKER_01: Um and uh in the or at least in my experience, I don't know what you found, but for me, entrepreneurship is is essentially the the idea of marrying internal philosophy with with the external data that you mentioned.
17:06
SPEAKER_01: Um and and getting that kind of balance right.
17:09
SPEAKER_01: Um and then again having that kind of framework, whatever that is for you, to kind of make sense on what type of decision should you make now, or where should I put my focus?
17:20
SPEAKER_01: Should it be on sales, or to your point, you know, is it about um structure or systems or whatever the case is?
17:27
SPEAKER_01: Um and oftentimes we we there there is no book for this stuff typically.
17:31
SPEAKER_01: Though there wasn't, you know, 40 years ago.
17:34
SPEAKER_01: You know, that's why I wrote it, right?
17:36
SPEAKER_01: Yeah, exactly.
17:37
SPEAKER_01: Exactly.
17:37
SPEAKER_01: I mean what have you what have you found about that idea of marrying marrying internal philosophy with you know external data in order to become successful?
17:46
SPEAKER_02: Oh, I I agree with it fully.
17:48
SPEAKER_02: Um I think to your point, we latch onto a random belief, the next thing that presents itself and we we go for it.
17:56
SPEAKER_02: I call this the survival trap.
17:58
SPEAKER_02: In fact, it's how I open the book.
18:00
SPEAKER_02: And um most businesses do, most business owners, is the next thing that presents itself, we latch on to and say, this is the thing that needs to be taken care of, let's go all in until the next thing presents itself and we tackle that.
18:13
SPEAKER_02: It's almost a randomization.
18:15
SPEAKER_02: So whatever presents itself next, we put urgency on it.
18:18
SPEAKER_02: There's a popular saying it says we as entrepreneurs focus on the urgent to the direct neglect of the impactful.
18:25
SPEAKER_02: And I just want to make a little shift to that.
18:27
SPEAKER_02: And I don't even think we focus on the urgent, we focus on whatever presents itself.
18:30
SPEAKER_02: So if I open my email in the next hour, there'll be 50 problems presenting itself.
18:34
SPEAKER_02: If I open it five hours from now, there'll be 50 new problems.
18:37
SPEAKER_02: Whatever I see next, and I say that's the one, I'm giving it urgency.
18:41
SPEAKER_02: But now it's just it's just this randomization.
18:43
SPEAKER_02: One of the analogies I use in the book is hikers, and you hear this all the time hikers lost in the forest, and uh they lose their way and they start moving in these circuitous patterns, trying to escape.
18:56
SPEAKER_02: They think they're moving forward, but they're moving in circles.
18:59
SPEAKER_02: And sadly, if they're found, well, if they're found alive, that's a wonderful thing, but sadly many uh pass away going in these circles.
19:06
SPEAKER_02: But whenever they're found, whatever their circumstance is, often they're found a very short distance from the way out, but they're moving in circles.
19:13
SPEAKER_02: Well, that's what I see for businesses too, is we just tackle issue after issue, thinking we're moving forward, but we're just moving this pattern of repetition.
19:24
SPEAKER_02: And so for many businesses, we hit that glass ceiling, whatever it is.
19:29
SPEAKER_02: It's a revenue number that we just can't seem to get past or something.
19:32
SPEAKER_02: It's because we're just repeating this pattern of focusing in different apparent issues.
19:37
SPEAKER_02: So we can get real clear about what the biggest challenge is, the weakest link in the business, and we need to devote our energy there.
19:44
SPEAKER_02: Now, I'm not saying neglect other things because I it's funny, I've had calls with entrepreneurs saying, All right, I've studied your business hierarchy of needs.
19:51
SPEAKER_02: It's very clear to me I have a profit issue, for example, and we need better profit margins.
19:56
SPEAKER_02: So within each of these levels, those five levels I shared, there's specific needs within five needs.
20:02
SPEAKER_02: So collectively, five needs times five levels, there's 25 needs that are common in all business.
20:06
SPEAKER_02: One of them is margins, and that's at the profit level.
20:09
SPEAKER_02: And so I've had people say, Yeah, I gotta a margin problem, I gotta resolve this, but I I gotta sell.
20:15
SPEAKER_02: I don't have time to do this.
20:17
SPEAKER_02: So I gotta hop on sales.
20:18
SPEAKER_02: Plus, you know, we we have to serve our legacy.
20:22
SPEAKER_02: The thing is, concentrate in an area to fix does not mean we ignore the others.
20:27
SPEAKER_02: They simply continue to run um at a minimum on automatic, but they're still served.
20:33
SPEAKER_02: It's just where do we concentrate our excess energy to a full resolution?
20:37
SPEAKER_02: Just like in Maslow's hierarchy right now, we may be experiencing self-actualization, you know, conversation, intellectual thought.
20:44
SPEAKER_02: But you and I are both breathing right now, that base level is still being satisfied, it's just a subconscious, automatic behavior.
20:50
SPEAKER_02: So in our business, all the elements, yes, they must continue.
20:54
SPEAKER_02: They don't all need your attention at the same time.
20:56
SPEAKER_02: It's where we concentrate our attention to bring something to resolution that matters.
21:01
SPEAKER_01: Yeah, it's really, really cool.
21:02
SPEAKER_01: It was a uh I can't remember who uh I was having the conversation with, but we're talking about scale.
21:08
SPEAKER_01: And uh the idea being that to scale something, you're well, in to your point, you feel like in a normal day, you feel like you need to tackle everything, right?
21:18
SPEAKER_01: Because if you don't get through it all, you're not gonna make it.
21:21
SPEAKER_01: Um and there's a lot of pressure and anxiety that goes along with that in many cases.
21:25
SPEAKER_01: Um, and then the there's a counter idea which I wanted to share with you, not to get your view on it, but and the view is this uh to to scale a business, sometimes you need to let problems burn.
21:38
SPEAKER_01: You don't need to fix every problem all the time.
21:42
SPEAKER_01: You can let it burn.
21:43
SPEAKER_01: And I when I first heard that, I was like, what, really?
21:45
SPEAKER_01: And then I started to apply that in my own business.
21:48
SPEAKER_01: In fact, the and and then what I what I started to to uh become aware of was the longer I let something burn, somebody else got it.
21:56
SPEAKER_01: And what that allowed me to do was to actually focus on What you're describing, which are these high value business engagements or interactions, you know?
22:06
SPEAKER_01: Um, what do you say to that?
22:07
SPEAKER_01: Leaving problems, let it burn.
22:09
SPEAKER_01: Is that something you should do?
22:11
SPEAKER_02: Yeah, so I I have a parallel uh explanation.
22:14
SPEAKER_02: I call it the the superhero syndrome.
22:17
SPEAKER_02: And uh I don't know, uh I used to watch the Batman series on television.
22:22
SPEAKER_02: This goes back to the early or late 70s, early 80s.
22:26
SPEAKER_02: And uh I will never forget that the commissioner, the police commissioner, had a red Batphone where he could call Batman in when there was a problem in the city.
22:36
SPEAKER_02: Well, here's the problem: the superhero Batman would swoop in and fight the evil villain and save the city yet once again.
22:44
SPEAKER_02: But there were two things that consistently happened.
22:47
SPEAKER_02: The city would experience destruction, buildings would fall and so forth.
22:51
SPEAKER_02: And the police force became less capable of defending itself.
22:56
SPEAKER_02: As entrepreneurs, we have this superhero syndrome where a problem presents itself.
23:01
SPEAKER_02: It's like, oh, we'll swoop in and save the day yet again.
23:04
SPEAKER_02: And we fix the immediate problem, but we don't realize the weight of damage we leave around us, taking shortcuts, neglecting other needs, and our team becomes disempowered.
23:16
SPEAKER_02: They don't learn how to send for themselves.
23:18
SPEAKER_02: They actually become more dependent upon us.
23:21
SPEAKER_02: So this concept of letting problems burn it resonates with me because we're disempowering employees from being the firefighters to put that out.
23:30
SPEAKER_02: So what I did, and I and I believe you know, identity is actually the biggest driver of behavior.
23:35
SPEAKER_02: So if we have an identity for ourselves, we'll act consistently with it.
23:38
SPEAKER_02: I may have not used the word superhero, but that's how I saw myself that I could fix anything.
23:42
SPEAKER_02: I started to change my label from being a superhero to a supervisionary.
23:48
SPEAKER_02: I still got my big fat ego, so I gotta feel good about myself.
23:52
SPEAKER_02: So I call myself a supervisionary.
23:54
SPEAKER_02: But now the way I behave is different in a line with that.
23:56
SPEAKER_02: Visionary is someone that has a clear vision of the outcomes they're intending for the organization.
24:02
SPEAKER_02: My job now is to choreograph the resource around me to get us there.
24:05
SPEAKER_02: Not to carry us there, not to be the superhero that fights our way there.
24:09
SPEAKER_02: My team are the superheroes.
24:10
SPEAKER_02: They get us there.
24:12
SPEAKER_02: But my goal is to put that stake in the ground and keep pointing to that's where we're going.
24:17
SPEAKER_01: Yeah, that now that resonates with me because we've, you know, we we've gone through this whole process now.
24:22
SPEAKER_01: You know, we have this founder value called visionary leadership.
24:25
SPEAKER_01: So all of our ex go have to be visionary.
24:28
SPEAKER_01: We don't want management in visionary positions.
24:31
SPEAKER_01: It's a bad idea for that exact reason what you described.
24:35
SPEAKER_01: Um I want to double down on um on what you mentioned there about behaviors.
24:41
SPEAKER_01: I was watching your TED talk, just skipped through it, and you were talking about uh this idea of Parkinson's law.
24:47
SPEAKER_01: Um and uh and I think this is a great point of departure to talk about what is Parkinson's law, and then what is the relationship from there to you know behavior.
24:58
SPEAKER_01: You talk about behavior and these needs, you know.
25:00
SPEAKER_01: Um how does this all come together synergistically?
25:06
SPEAKER_01: Stay with us.
25:07
SPEAKER_00: We'll be right back.
25:10
SPEAKER_01: Hey there, I know being an entrepreneur can be a very lonely experience.
25:14
SPEAKER_01: You sometimes get stuck, don't you?
25:16
SPEAKER_01: Well, if you're like me being stuck, stuck.
25:18
SPEAKER_01: But what if you could access the minds of over 850 CEOs with both companies generating billions of dollars in revenue and access all of that knowledge in a fraction of a second?
25:29
SPEAKER_01: Well the good news is you can't literally do that today.
25:32
SPEAKER_01: What my team have bought is Mac Brown AI.
25:35
SPEAKER_01: It is trained on all the interviews, over 850 of them that I've done today, all my books, all the knowledge capital that's been generated over the last 10 years right here on the MacBook Show, and you can get access to all of that right now for free.
25:48
SPEAKER_01: So, how do you get access to this?
25:49
SPEAKER_01: Well, head on over to MacBrown Show.com and at the top you'll see community.
25:53
SPEAKER_01: Hit that link, sign up, it's absolutely free, and you'll be given instant access to MacBrown AI and a community of over a hundred thousand subscribers.
26:09
SPEAKER_02: Yeah, so Parkinson was a theorist, I believe from the 1950s, studying human utilization of resources.
26:18
SPEAKER_02: Now, the majority of his research, I believe, was in the utilization of time.
26:23
SPEAKER_02: Well, his argument was that when we allot more time, we make more time available to complete a task, the longer it'll take to complete that task.
26:32
SPEAKER_02: So for example, now, if you and I are discussing a contract or something, and I say, I'll get you the contract in one week, is that acceptable?
26:40
SPEAKER_02: And you say yes, it will likely take me a week to get you that contract.
26:44
SPEAKER_02: But if you and I, the same people, have the same conversation, but the problems changed is I say, Can I get this to you by tomorrow?
26:50
SPEAKER_02: And you accept, now it's constrained the availability of time, and I'm likely to get it done within the next day because I have less time to get it done.
26:58
SPEAKER_02: Well, this application of resources doesn't apply just to time, it applies to all assets, any anything, including money.
27:06
SPEAKER_02: Uh my book, Problem First, is rooted in this concept of Parkinson's law.
27:10
SPEAKER_02: The idea here is as money expands, the more revenue our business generates, almost uh uncannily, we seem to have an expense rate that increases at the same rate as the income.
27:22
SPEAKER_02: The more we make, the more we spend.
27:24
SPEAKER_02: It's like, gosh, I thought once I hit that million dollars US that I'd you know that I'd be free.
27:30
SPEAKER_02: But no, uh, maybe it's two million or ten, and we keep on amplifying it, but the expenses seem to go at the exact same rate.
27:38
SPEAKER_02: That's the application of Parkinson's law.
27:39
SPEAKER_02: More available money, the more we spend.
27:42
SPEAKER_02: So we need to constrain it.
27:43
SPEAKER_02: That's the benefit on the flip side of Parkinson's law.
27:46
SPEAKER_02: So as we expand resources, we can consume more.
27:47
SPEAKER_02: But if we constrain them, it's forced through reality.
27:50
SPEAKER_02: We use less because there is less, but also become very innovative.
27:54
SPEAKER_02: If someone's given less time to do something, that's when they invent and find the shortcuts, the ways to navigate through.
27:59
SPEAKER_02: If someone's given less money to do something, they find ways to resolve that situation with less money.
28:06
SPEAKER_02: Actually, just one little vignette I thought is an interesting story.
28:10
SPEAKER_02: Uh, there was a movie called Apollo 13.
28:13
SPEAKER_02: It was about the US uh and Russia was in a space race, Russia sends up Sputnik, the US responds, put a man on the moon, Apollo 13th is the 13th lunar landing module.
28:23
SPEAKER_02: And um, they send this this uh rocket ship up, and right away uh there's a there's calamity that strikes.
28:32
SPEAKER_02: Uh the they have problems with the rocket boosters, it goes off trajectory.
28:36
SPEAKER_02: Uh NASA reports up to the astronauts you know, you're in trouble.
28:41
SPEAKER_02: Our only goal now is to get you back.
28:43
SPEAKER_02: We're aborting the mission.
28:45
SPEAKER_02: But they didn't have enough fuel, there was too much damage to the ship to even get back.
28:49
SPEAKER_02: So they invent this idea that the uh engineers that if we simply align you with the moon, we can use the moon's gravitational pull to kind of slingshot you back to Earth.
29:00
SPEAKER_02: You know, when they didn't have the fuel, they were very innovative to find a new way, use gravity to slingshot you.
29:07
SPEAKER_02: But my the I think the most compelling part was if you ever saw the movie, and this is a real story, as the shuttles kind of returning to Earth, uh, they start losing oxygen.
29:18
SPEAKER_02: And they had still 24 hours or something to return, but they had about five hours of oxygen left because the carbon dioxide filtration system had failed.
29:25
SPEAKER_02: Well, in the next scene of the movie, this happened in real life, the engineers dump on this table, there's like six or seven of them sitting there, duct tape and different random materials.
29:35
SPEAKER_02: And the lead engineer says that's the stuff they got up there.
29:37
SPEAKER_02: We have to build a carbon dioxide filtration system out of this stuff.
29:41
SPEAKER_02: And they created it out of duct tape and these weird wires and stuff like that.
29:47
SPEAKER_02: And uh they save those astronauts and they return to the Earth.
29:49
SPEAKER_02: It's a true story.
29:50
SPEAKER_02: Here's what's fascinating in the application of Parkinson's law NASA spent a massive, massive budget on creating oxygen creation or carbon dioxide filtration systems of$50 million or something.
30:05
SPEAKER_02: But those engineers, the same engineers that spent$50 million to create the first version, made a second version with duct tape and so forth.
30:11
SPEAKER_02: Now, that's Parkinson's law.
30:14
SPEAKER_02: Less resources, less time, innovation kicks in, forced frugality.
30:17
SPEAKER_02: Now, I am not suggesting like, oh, they should make rocket ships out of duct tape, but that's the solution.
30:21
SPEAKER_02: But here's why you argue the more money that's allotted to, and these are the smartest people on the planet, they are rocket scientists after all.
30:28
SPEAKER_02: The more money that's allotted to them, the more they spend.
30:32
SPEAKER_02: They comply with Parkinson's law.
30:34
SPEAKER_02: More resources, find the solution for$50 million.
30:37
SPEAKER_02: When they're given no money, no time, they found a solution, which means somewhere in between is the ideal solution.
30:43
SPEAKER_02: Same thing for entrepreneurs.
30:45
SPEAKER_02: When we constrain money, when we constrain time, constrain resources, we become highly innovative.
30:50
SPEAKER_02: And the better solution usually is when we start constraining what's available to us.
30:55
SPEAKER_01: Yeah, I think that's um something I've I read a lot of autobiographies, and like Elon Musk is relentless around his deadlines.
31:02
SPEAKER_01: It's the same thing.
31:03
SPEAKER_01: It's like, cool, you're gonna do this by this date.
31:05
SPEAKER_01: And the guys are like, What?
31:07
SPEAKER_02: Yeah, that's impossible, right?
31:10
SPEAKER_01: Can't do it, and then they do it.
31:12
SPEAKER_01: So uh, you know, I've taken I'm you know, historically I've always taken a similar approach.
31:16
SPEAKER_01: I would like if someone said to me no, I can only get it to you by like Friday and it's and it's Tuesday, I'll be like, No, you can give it to me tomorrow morning.
31:22
SPEAKER_01: And then they'll be like, Oh panic, but then I get it tomorrow morning.
31:26
SPEAKER_01: So you do that 365 days a yeah, you start to build a culture of like high performance and just you know a bit of business, and that's ultimately what uh what we have to do, right?
31:36
SPEAKER_01: Um I want to double down on this formula, you know, the the the the the the formula, the old formula, the way that um you describe it as sales minus expenses equals profit.
31:47
SPEAKER_01: And then you say there's a there's actually a new way to determine things, and this is again tying back to Parkinson's law to next teams, which is uh the new formula from your perspective is sales minus profit equals expenses.
32:00
SPEAKER_01: Can you walk us through that, please?
32:02
SPEAKER_02: Of course, of course.
32:03
SPEAKER_02: So that's um from a profit.
32:05
SPEAKER_02: First, as I was researching that book, I I came across a statistic that was uh confounding.
32:11
SPEAKER_02: There was a study uh emanated out of the US, became a global study, salted by US Bank initially and went global.
32:18
SPEAKER_02: But uh what they identified is that 83% of small businesses are cash flow even or negative, meaning they are surviving check by check.
32:29
SPEAKER_02: Now, small business is defined in this study by a company that does$25 million US annual revenue or less.
32:37
SPEAKER_02: Uh that's a that's my business.
32:38
SPEAKER_02: I think perhaps it's yours.
32:40
SPEAKER_02: It's probably a lot of folks listening in.
32:41
SPEAKER_02: The vast majority of small business is what makes up the economy.
32:44
SPEAKER_02: 99% of the the global economy or small business of business is small business.
32:50
SPEAKER_02: There's 300 million of us globally, by the way.
32:53
SPEAKER_02: That means there's 250 million plus companies that are surviving check by check.
32:57
SPEAKER_02: Now, here's what is so confounding.
33:00
SPEAKER_02: The vast majority of entrepreneurs, in fact, I would say every entrepreneur I've ever interviewed or surveyed uh started a business in part for financial freedom.
33:09
SPEAKER_02: You know, we we want a business where we can have personal freedom to do what we want when we want, and financial freedom, meaning we don't want to be constrained by finances.
33:17
SPEAKER_02: We want to be able to not worry about bills.
33:20
SPEAKER_02: But the funny thing is, those are the two reasons we start a business.
33:24
SPEAKER_02: Those are the two things that don't seem to happen.
33:25
SPEAKER_02: People are working their butts off and uh they don't have any money to show for it.
33:29
SPEAKER_02: They're panicked, they're stressed.
33:30
SPEAKER_02: So I'm like, wow, if that's the reason we're doing it uh and it's failing, what's wrong with us?
33:35
SPEAKER_02: Are we as non-federal community, you know, is there something missing in our brain?
33:38
SPEAKER_02: Are we dumb?
33:40
SPEAKER_02: And that's when I saw the formula.
33:41
SPEAKER_02: I was like, oh my gosh, the formula that's been in front of us for eons, ever since the invention of modern accounting, is wrong.
33:49
SPEAKER_02: Sales minus expenses equals profit makes logical sense.
33:53
SPEAKER_02: You must have revenue returnover that comes into your business, you subtract the expenses that you've incurred, and what's left over is profit.
34:01
SPEAKER_02: It is a logical mathematical prof uh solution.
34:05
SPEAKER_02: But when it comes to human nature, we are uh biological, we are emotionally driven or behavioral.
34:11
SPEAKER_02: That is a logical system formula, but it's not a behavioral formula.
34:16
SPEAKER_02: Sales minus profit equals expenses is a behavioral formula.
34:20
SPEAKER_02: And here's how it works every time sales comes in, you immediately take a predetermined percentage of that sale and put it into a profit account.
34:29
SPEAKER_02: You actually transfer the cash and hide away for yourself.
34:32
SPEAKER_02: Then what's left over is what you've available to spend for your business, the operating expenses.
34:36
SPEAKER_02: That's Parkinson's law.
34:38
SPEAKER_02: See, if a thousand dollars came in under the old formula,$1,000 of sales, now I look at expenses.
34:43
SPEAKER_02: Oh, there's a thousand dollars to spend, we spend it all.
34:46
SPEAKER_02: And then we look at the end of the formula and say, Oh, there's no profit this year, maybe next year.
34:51
SPEAKER_02: In the new formula that I'm proposing, the profit first formula, sales come in,$1,000, we subtract our predetermined profit percentage, say 20%, put it aside, it's$200, now there's$800 left.
35:04
SPEAKER_02: And we say, Oh, this is why I throw my business office.
35:07
SPEAKER_02: So it constrains the amount of money that's available to you.
35:10
SPEAKER_02: The old formula told us that profit comes last.
35:12
SPEAKER_02: And I'll think about human behavior is when something comes last.
35:15
SPEAKER_02: It means it's insignificant, it means it can wait.
35:17
SPEAKER_02: I love my family, that's why I put my family first.
35:19
SPEAKER_02: I don't say put them last.
35:20
SPEAKER_02: You know, I care about my health, put my health first.
35:23
SPEAKER_02: I don't say, you know, I love health, it's so important to me, I'm gonna put my health last.
35:26
SPEAKER_02: It makes no sense.
35:27
SPEAKER_02: But we put our profit last.
35:29
SPEAKER_02: And in fact, it's it's in the common vernacular.
35:33
SPEAKER_02: We call it the bottom line, the year end, the final take.
35:36
SPEAKER_02: All those terms say profit comes last.
35:39
SPEAKER_02: And therefore, for most businesses, it never happens.
35:42
SPEAKER_02: If you take your profit first, you've assured your profitability, and your business is now telling you what's available to spend.
35:48
SPEAKER_01: Sure, that's powerful.
35:49
SPEAKER_01: Hey, um, I really love that idea.
35:52
SPEAKER_01: I love this kind of counter counter-logic idea.
35:55
SPEAKER_01: Um, because for it is all about behavior at the end of the day.
35:58
SPEAKER_01: And again, I want to double down on behavior.
36:01
SPEAKER_01: You also talk about this idea of working with your behaviors.
36:04
SPEAKER_01: You in other words, you know, double down on what you do anyway.
36:08
SPEAKER_01: Um, and it's uh if I could just maybe throw one comment in there.
36:13
SPEAKER_01: Uh well, I don't know again, I don't know where this stuff comes from.
36:16
SPEAKER_01: You from from some interview on the show.
36:18
SPEAKER_01: Uh, but uh it was, you know, uh it goes like this focus on your strengths, not your weaknesses.
36:26
SPEAKER_01: And then you build your team around your weaknesses.
36:28
SPEAKER_01: Like I'm not a financial brain.
36:29
SPEAKER_01: Like if I balance meetings, I'm like, oh like I've spent time trying to digest this stuff.
36:35
SPEAKER_01: I'm a sales guy, marketing guy, uh product guy.
36:38
SPEAKER_01: Um so like I have people to fix that problem for me and to explain stuff to me.
36:42
SPEAKER_01: Also, like legally, no interest, I can't handle contracts, lawyers must deal with that.
36:47
SPEAKER_01: Um, and those are all my weaknesses, right?
36:49
SPEAKER_01: So I have people to fix that.
36:51
SPEAKER_01: Um do you subscribe to that idea?
36:53
SPEAKER_01: And and what is then the relationship to that idea to you know working with your behaviors as an entrepreneur?
37:00
SPEAKER_02: So I absolutely subscribe to the idea.
37:02
SPEAKER_02: Uh I I think a business should always be strength-based, meaning what are your strengths as an owner?
37:08
SPEAKER_02: You can amplify strengths by miles.
37:10
SPEAKER_02: Weaknesses can be improved, but only by inches.
37:13
SPEAKER_02: So the weaknesses I have are the strengths of other people.
37:16
SPEAKER_02: So um we can build very lean teams when everyone is leaning into their strengths and they're they're structured in a way that they complement each other.
37:25
SPEAKER_02: Now, one of the things we have, one of our strengths that we often deny are our existing patterns and habits.
37:34
SPEAKER_02: Finances are such a great example.
37:37
SPEAKER_02: My accountant uh tells me all the time, Mike, you know, log into your accounting system, extract out the income statement, and tie that into your balance sheet, know the cash flow statement, and tie these things together and run metrics, and you're gonna know the health of your business.
37:51
SPEAKER_02: But what my behavior is, my strength, to make like many entrepreneurs, is to log into my bank account and just assess what I have there.
37:59
SPEAKER_02: It's way faster, it's way more effective for me.
38:01
SPEAKER_02: If I have money, I spend it.
38:02
SPEAKER_02: If I don't, you know, I gotta sell something quick, I panic.
38:06
SPEAKER_02: So if that's my behavior, the goal is not trying to break behaviors.
38:11
SPEAKER_02: That's very hard.
38:12
SPEAKER_02: Instead, channel behavior to get the outcome you want.
38:15
SPEAKER_02: I'll share an example of my personal life and I'll translate it into business.
38:18
SPEAKER_02: Uh, I wanted to exercise my entire life.
38:20
SPEAKER_02: I thought I always saw the value of exercise.
38:23
SPEAKER_02: And um, I did it, but it was on and off.
38:25
SPEAKER_02: I was never religious about until about seven years ago.
38:28
SPEAKER_02: Uh I don't miss a workout ever.
38:30
SPEAKER_02: And what happened seven years ago was I was getting frustrated that I wanted to work out, but I wake up in the morning, go to the bathroom, then go get a cup of coffee, start sipping it, saying, I got to work out today.
38:42
SPEAKER_02: I start reading the paper, and then I'm like, oh my gosh, I'm late for work and I miss yet another workout.
38:47
SPEAKER_02: What I did was I deconstructed my behavioral pattern.
38:50
SPEAKER_02: Get up in the morning, go to the bathroom, go to get a cup of coffee.
38:54
SPEAKER_02: Then I said, Can I put a behavioral intercept in place?
38:57
SPEAKER_02: Meaning if I'm doing something consistently, that's a strength, that's a pattern I repeat consistently.
39:02
SPEAKER_02: Can I intercept it to channel myself to the outcome I want, which is exercise?
39:06
SPEAKER_02: So what I did was I put my gym shoes on top of my toilet seat.
39:11
SPEAKER_02: And when I wake up in the morning, I walk to the bathroom like I always did, but the only way I could use the bathroom was to grab my gym shoes.
39:18
SPEAKER_02: Now they're in my hand, and the little momentum has started, I just put on my feet, my god, they're on my feet anyway, just walk downstairs in the gym, start exercising.
39:27
SPEAKER_02: That little intercept became a huge impact on how regular I work out.
39:33
SPEAKER_02: I said, Don't dismiss.
39:34
SPEAKER_02: Well, what I noticed when it came to my business, same thing.
39:38
SPEAKER_02: I would log into my bank account, see how much money I had, make a determination.
39:42
SPEAKER_02: So I said, Well, what if I pre-allocate money at my bank before I spend it?
39:47
SPEAKER_02: So I know what it's intended for.
39:48
SPEAKER_02: So that's where I set the system, and I talk about it in detail probably first, but I set the system with different accounts.
39:53
SPEAKER_02: One, for example, is profit, one's uh for tax reserves, because uh any country I've ever visited, the government's got a long, sticky hand, they grab taxes, so I gotta pay those.
40:03
SPEAKER_02: So I set these accounts.
40:05
SPEAKER_02: Now, when, for example,$1,000 came up, came in, I wouldn't have a thousand dollars.
40:10
SPEAKER_02: I'd carve it up first.
40:11
SPEAKER_02: So money would come into the bank, I put some in the profit account, those$200, I put$100 in the tax account, and so forth.
40:18
SPEAKER_02: Now, when it came time to spending money, I would go to the OpEx account, operating expense account, and see what's in there.
40:25
SPEAKER_02: So same pattern.
40:26
SPEAKER_02: Log into my bank account, see how much money is available.
40:29
SPEAKER_02: I looked at the opex account, and it wasn't a thousand dollars.
40:32
SPEAKER_02: Money has been pre-allocated to its intended use.
40:34
SPEAKER_02: It may now, in this case, be$400.
40:37
SPEAKER_02: I say, okay, work with$400.
40:39
SPEAKER_02: It instantly started to shift the way I was utilizing money, but I didn't have to shift a thing about myself.
40:45
SPEAKER_02: The exact same behavior, just an intercept, something to leverage what I was already doing.
40:51
SPEAKER_01: Yeah, it's very interesting, Nati.
40:53
SPEAKER_01: I think um I think I I I love the idea of becoming self-aware as a on as an executor, right?
41:00
SPEAKER_01: Because that's that that's everything in entrepreneurship's execution.
41:03
SPEAKER_01: Um and you know, uh you have to know you have to be self-aware about what you are good at executing.
41:11
SPEAKER_01: Number one.
41:12
SPEAKER_01: And then number two, you've got to have, you know, once you become self-aware, you can start to recognize these patterns as you say.
41:18
SPEAKER_01: You know, these patterns that either are uh that have negative consequences or those that have positive outcomes.
41:24
SPEAKER_01: Um and so I mean in many cases, um again, this goes back to my idea of like, you know, uh marrying that internal philosophy with the external data of business is that you have to become internally self-aware about what it is that you're executing and then your point around the bank account stuff, which I love, is you know, the external data stuff, right?
41:44
SPEAKER_01: So what what like system or process or policy do you need to implement to to govern yourself, you know, around uh around execution, because it's it's for me it's it's it's it's like good governance is is incredibly valuable.
41:59
SPEAKER_01: And I love the word that you mentioned about momentum.
42:03
SPEAKER_01: So governance and momentum for me go hand in hand.
42:06
SPEAKER_01: If you're if you're like going downhill, you need good governance to keep the thing in control.
42:13
SPEAKER_01: Otherwise, it can lose control, it can go off the track if as a you know to use an analogy of a train.
42:20
SPEAKER_01: Um and so you you have to become your own governor, if that makes sense.
42:25
SPEAKER_01: Um no one's gonna govern you and the way that you interpret your your model of the world as it relates to your business.
42:32
SPEAKER_01: Um what what have you discovered, or do you have any views on that of governance in terms of your own uh execution or capabilities and bandwidth?
42:41
SPEAKER_02: Yeah, so when it comes to governance, what I realized back to that superhero syndrome, this propensity for me to insert myself.
42:49
SPEAKER_02: And uh we're a very small company, we have 14 employees.
42:53
SPEAKER_02: What I realized is that when I would uh make a suggestion, it was taken as gospel.
42:59
SPEAKER_02: Like, oh, Mike said, therefore we must do.
43:02
SPEAKER_02: So what happens, I started impeding progress our team was making.
43:06
SPEAKER_02: You know, we do have someone here who's the president, she runs the organization and so forth.
43:10
SPEAKER_02: I, as the owner, was overriding her unintentionally.
43:13
SPEAKER_02: The governance I put in was actually going on vacation, remove physically removing myself from the business, which was not easy.
43:21
SPEAKER_02: Um, I write about this in one of my books, but I I started implementing these concepts of four-week vacations.
43:26
SPEAKER_02: The idea of this is if I can remove myself from the business for four consecutive weeks without any connection, um, my team has to run the business.
43:35
SPEAKER_02: Because usually in a four-week cycle, everything that the business will experience happens in these monthly cycles.
43:41
SPEAKER_02: Uh, you know, clients will come on board, employees may be hired or terminated, or or what have you.
43:47
SPEAKER_02: So if I could remove myself from the business for that much time, uh, there couldn't be any dependency on me, and I couldn't intercept or interject myself.
43:58
SPEAKER_02: What I used to say is I'm taking 40 vacation.
44:00
SPEAKER_02: And then I came to realize the business is getting a four-week vacation from me in my absence.
44:06
SPEAKER_02: That's become a great tool.
44:08
SPEAKER_02: As I remove myself, I actually don't have enough awareness of the day-to-day that's happening here that I can insert myself in any productive way, and therefore I don't.
44:18
SPEAKER_02: So by removing myself, I actually have to put a governor in place where now I can stay in my lane.
44:23
SPEAKER_02: And my my lane for my business is two things.
44:35
SPEAKER_02: Secondly, is that be the spokesperson for the organization.
44:38
SPEAKER_02: So you know what we're doing now or being on stage.
44:41
SPEAKER_02: But that's the two things that uh brings me enjoy and I'm capable of.
44:45
SPEAKER_02: I've been able to protect myself from inserting myself and harming the business just because I now remove myself from the business so frequently.
44:53
SPEAKER_01: Yeah, it's really great.
44:54
SPEAKER_01: I just I also um I can't remember where I read it, but it goes like this it's like uh tell your team what why they need to do something and what they need to do, but don't tell them how.
45:04
SPEAKER_01: Let them figure that stuff out.
45:06
SPEAKER_02: And you know, and it is true.
45:07
SPEAKER_02: I love that because it's true for us.
45:08
SPEAKER_02: Like we don't you know, you know, as as entrepreneurs, we're constantly innovating and doing things.
45:13
SPEAKER_02: We just figure it out.
45:14
SPEAKER_02: Say, here's the outcome we want.
45:16
SPEAKER_02: I want to achieve X.
45:17
SPEAKER_02: I'll find a way to get there.
45:19
SPEAKER_02: Our colleagues, we need to do the same thing.
45:21
SPEAKER_02: Assign outcomes, not tasks.
45:23
SPEAKER_02: I found it as an example, it's far better to tell my colleague um not to invoice and follow this process.
45:31
SPEAKER_02: Instead, it's been better to say it's important that we build timely and accurately.
45:36
SPEAKER_02: And if they agree to the outcome that we build timely, therefore we get paid on time, and accurately our customers are are being treated fairly, their job is to find a way to get there.
45:46
SPEAKER_02: Now, this being said, we we have best practices, don't reinvent the wheel every time.
45:49
SPEAKER_02: So we introduce a best practice.
45:51
SPEAKER_02: But anytime that employee has a question or sees an opportunity to prove it, it's their responsibility to find a way as long as they're achieving the outcome we want.
45:59
SPEAKER_01: Yeah, I could uh you know, I actually took I I'm gonna use actually now frame this thing called calling it the power of the four-week vacation.
46:06
SPEAKER_01: How do you know when your business is has reached a point where it's it's successfully running on its own?
46:12
SPEAKER_01: You know, I love this idea of the DAO, right?
46:14
SPEAKER_01: The distributed autonomous organization or unit.
46:17
SPEAKER_01: Um, and uh, you know, especially now with everybody working from home during the pandemic and things like that, it's distributed and it certainly now has to be autonomous.
46:24
SPEAKER_01: And so in November last year I took four weeks off and literally didn't do a thing.
46:30
SPEAKER_01: Like when maybe to two meetings.
46:32
SPEAKER_01: Otherwise, I was on the beach.
46:34
SPEAKER_01: I love it.
46:35
SPEAKER_01: Yeah, uh yeah, and so it was bloody nerve-wracking though, because I was waiting for the phone call.
46:40
SPEAKER_01: You know, the the call that says it's all gone to park.
46:44
SPEAKER_01: Yeah, it's on fire.
46:45
SPEAKER_01: Yeah, it's all burning, right?
46:46
SPEAKER_01: This one thing you can't let go is that phone call.
46:49
SPEAKER_01: Um and it never came.
46:50
SPEAKER_01: And you know what?
46:51
SPEAKER_01: We had our second but second best month of revenue in in our uh in the in this current fiscal year.
46:58
SPEAKER_01: And that was without me doing a thing.
47:00
SPEAKER_01: And so that's when I that's when I recognized that well, number one, the team knows why they need to do something and what they need to do.
47:08
SPEAKER_01: But the how is they've they've figured that stuff out on their own.
47:11
SPEAKER_01: And it was I was fascinated to see the feedback because to your point, you you actually think you're adding value, but actually you're not, you're actually standing in the way of uh somebody else's growth, right?
47:21
SPEAKER_01: And that's so important for us as leaders.
47:23
SPEAKER_01: Um, and uh, I mean it was fascinating.
47:25
SPEAKER_01: I was like, oh my gosh, they've changed this thing, then they introduced that, and then they did it, and I didn't do a thing.
47:30
SPEAKER_01: So it was fas like I I'm I'm your like your case study to say this four week power, the power of the four-week vacation is is legit.
47:38
SPEAKER_01: Do that, and then also you can see what's broken.
47:43
SPEAKER_02: That's the best thing.
47:44
SPEAKER_02: When you come back and something's not working, that's the thing that needs to be worked on.
47:48
SPEAKER_02: That's the next thing that needs to be systematized or improved or abandoned.
47:52
SPEAKER_02: You know, so I I've been doing so I want to do clockwork my book on the concept of this fortification um and how to get there.
48:00
SPEAKER_02: So the beautiful thing about being an author is the accountability is really high.
48:05
SPEAKER_02: Like every reader of that book says, Well, how's your fortifications going?
48:08
SPEAKER_02: So I have to do it.
48:10
SPEAKER_02: I'm I'm about to take my I'm on the precipice of taking my next fortification, which will be my fifth in a row.
48:16
SPEAKER_02: Uh over five years.
48:18
SPEAKER_02: I take every year I take a fortification.
48:20
SPEAKER_02: And um what's interesting to your point is when I returned back from my very first one, I was waiting for I thought the business wouldn't even be here.
48:27
SPEAKER_02: I thought everyone would just run away.
48:29
SPEAKER_02: It was here, uh, the revenue continued, and I I met with my colleagues and said, How badly do you need me back?
48:36
SPEAKER_02: Like on a 10 scale one to 10, 10, you need me immediately to stop talking, start working a one, and you never want to see me again.
48:44
SPEAKER_02: And I said, Mike, we give you a 1.1.
48:47
SPEAKER_02: The point one is because we do like you and we love to see you, but we got this, but we've never felt so empowered.
48:53
SPEAKER_02: Now, here's the the coolest thing that came out of it all my colleagues now are taking forage vacations.
48:59
SPEAKER_02: Because here's what happened when I went on a forage vacation, I was able to delegate work out and put in redundancies in that other people handled it.
49:09
SPEAKER_02: But our president, her name is Kelsey, took on a large portion of it.
49:13
SPEAKER_02: Well, now what if Kelsey uh retires or gets sick or goes to a different company?
49:18
SPEAKER_02: We're back in trouble again.
49:19
SPEAKER_02: So Kelsey's like, everyone needs to take forgiveness.
49:22
SPEAKER_02: So she did it.
49:23
SPEAKER_02: And when she took a forge vacation, um, it disseminated more work and we start putting in more redundancy.
49:28
SPEAKER_02: She just mandated at the beginning of last year everyone takes a forge education because it's the business getting education from that person, removing dependency, spreading out redundancy.
49:37
SPEAKER_02: And now we have a business that um isn't dependent on any one person.
49:42
SPEAKER_02: That's the power of this giving the business education from us.
49:46
SPEAKER_01: Yeah, and it's actually the first goal you should look to achieve, in my view.
49:51
SPEAKER_02: It's get yeah, I the sooner you do it, the better.
49:53
SPEAKER_02: And I'll tell you for most entrepreneurs, when I say I think that owners should start with themselves, because we we are that superhero.
50:00
SPEAKER_02: Most entrepreneurs I present this idea to, they're like, no way.
50:03
SPEAKER_02: I can't leave for four hours.
50:04
SPEAKER_02: You can say four weeks, or they try to play games with it.
50:07
SPEAKER_02: They they say, Well, I'll go away for a week, but they do a I call it the cram and scramble.
50:12
SPEAKER_02: They cram as much work up to the second before they leave.
50:15
SPEAKER_02: They leave, but they're kind of tentatively connected.
50:17
SPEAKER_02: When they return, they scramble to recover.
50:19
SPEAKER_02: Well, that's not a building efficiency, that's just playing time games.
50:22
SPEAKER_02: Other people don't go on vacation, they go on work occasion, which is the stupidest term ever.
50:27
SPEAKER_02: Like there's a vacation or there's work, there's a work occasion.
50:30
SPEAKER_02: I understand the integration and so forth, but you gotta remove yourself completely.
50:35
SPEAKER_02: See, you know, being on through some kind of a biblical cord, some digital biblical cord where you're still working, doesn't let the business start flourishing without you.
50:43
SPEAKER_02: You have to remove yourself.
50:45
SPEAKER_01: Yeah.
50:45
SPEAKER_01: Uh Mike, I'm just cognizant of time.
50:48
SPEAKER_01: Um, I obviously I'd like to get you back here.
50:50
SPEAKER_01: I mean, we only just scratched the surface, uh, surface of so much I wanted to get into with you.
50:54
SPEAKER_01: I want to talk about this idea of distractions, which I know you've got a strong view of.
50:58
SPEAKER_01: Oh, I'd love to talk about that.
50:59
SPEAKER_01: Uh, I want to talk about the clockwork method.
51:01
SPEAKER_01: I want to talk about this idea of the toilet paper entrepreneur.
51:04
SPEAKER_01: I want to talk about your you know, the fact that you've sold several multi-million dollar businesses.
51:08
SPEAKER_01: So I'd love to get you back.
51:10
SPEAKER_01: Um and then, yeah, let's hit it again.
51:12
SPEAKER_01: So um I'm going to end uh Mike.
51:15
SPEAKER_01: I always do this with all my guests, but your last question for today is why do you do what you do?
51:22
SPEAKER_01: Like what gets you out of bed in the morning?
51:24
SPEAKER_02: It's so clear to me.
51:25
SPEAKER_02: Actually, it's on the wall here.
51:26
SPEAKER_02: You won't be able to see it totally because it's blocked by that light thing.
51:32
SPEAKER_01: Okay, good.
51:32
SPEAKER_02: Behind it is eradicate entrepreneur poverty on that wall.
51:36
SPEAKER_02: Every morning I see I come in, I see that.
51:38
SPEAKER_02: Um, and that is my life's purpose.
51:41
SPEAKER_02: That gap I was talking about between what the world thinks entrepreneurship is and the reality.
51:46
SPEAKER_02: We want financial freedom and personal freedom.
51:48
SPEAKER_02: We don't have either.
51:49
SPEAKER_02: We're financially struggling and personally struggling.
51:51
SPEAKER_02: That gap is what I call entrepreneur poverty.
51:54
SPEAKER_02: And uh when I lost everything, it woken me to how what a big problem that is.
51:58
SPEAKER_02: And I've I've devoted my life to solving it.
52:01
SPEAKER_02: And I don't I don't know what happened in my lifetime, but I hope to leave behind artifacts and elements and teachings that we can ultimately eradicate entrepreneurial poverty.
52:10
SPEAKER_01: Well, your why is very closely aligned with mine, just by the way, um, in the sense of like the why of this show was is the same idea is to is to help entrepreneurs succeed through information sharing at scale.
52:22
SPEAKER_01: And the why and why, the context for that was I when I I was lucky in my first business, I write about it in my book, um, and uh I sold that one.
52:30
SPEAKER_01: I was just young, I just got lucky, the stars aligned, and whatever.
52:33
SPEAKER_01: I sold that.
52:34
SPEAKER_01: And then my next business really failed, and I lost everything.
52:37
SPEAKER_01: And like it wasn't it it wasn't like it wasn't just the fact that I was broke after having money, it was the fact that I was spiritually broken, my like internal world, like my faith in myself, my belief in myself, all of that was just total poverty.
52:53
SPEAKER_01: Like I was in the wilderness, right?
52:55
SPEAKER_01: Um, and uh and to get back to where you have momentum is the I can't put it into words, like that transformational journey that that one has to go on.
53:07
SPEAKER_01: I believe like you have to go there once to figure out because like you find meaning and purpose, and it's exactly what you've just described.
53:15
SPEAKER_01: Um, but once you figure that out, you you you really become a monster, like you become unstoppable.
53:22
SPEAKER_02: I agree.
53:23
SPEAKER_02: I agree.
53:23
SPEAKER_02: The the traumas we experience in life can can be our greatest assets if we leverage them, if we recognize them for the the burning and yearning it puts in us to solve those problems going forward for ourselves and for others.
53:38
SPEAKER_01: Yeah, absolutely.
53:38
SPEAKER_01: Mike Mikhailovich, thanks for being on the show.
53:40
SPEAKER_01: We'll get you back.
53:42
SPEAKER_01: Thanks for listening to the MapRound show, guys.
53:45
SPEAKER_01: Don't forget, you can catch me on all social media platforms for the latest updates, news, and a show history.
53:53
SPEAKER_01: So if you've been catching us on the podcast, please head on over to our YouTube channel and pound that subscribe button.
53:59
SPEAKER_01: It would be great to catch the video version there.
54:02
SPEAKER_01: And if you want a free copy of my number one Amazon best-selling book, You're in a game for free right now today.
54:09
SPEAKER_01: You can grab that on mathroundshow.com forward slash ebook.
54:16
SPEAKER_01: Ever wanted to become a best-selling author?
54:19
SPEAKER_01: Well, I'm in the influence business and I work with business owners and CEOs and business leaders to help them scale their influence.
54:26
SPEAKER_01: And we do this as a team by helping you to become a best-selling author, sought-after speaker, and industry influencer in only 30 days.
54:34
SPEAKER_01: My team and I have developed a system that delivers a best-selling book and a launch campaign 300% faster and a 50% less cost than anyone else in North America.
54:44
SPEAKER_01: This system is incredibly efficient.
54:46
SPEAKER_01: One of my clients, haiku, went from a 2% share of voice globally to an 11% share of voice globally in only 7 days.
54:54
SPEAKER_01: If you'd like more information, head on over to showworksmedia.com for more.
54:58
SPEAKER_01: That is showworkswithinx.com.
55:05
SPEAKER_01: Ever wanted to become a best-selling author?
55:08
SPEAKER_01: Well, I'm in the influence business and I work with business owners and CEOs and business leaders to help them scale their influence.
55:15
SPEAKER_01: And we do this as a team by helping you to become a best-selling author, sought-after speaker, and industry influencer in only 30 days.
55:22
SPEAKER_01: My team and I have developed a system that delivers a best-selling book and a launch campaign 300% faster and a 50% less cost than anyone else in North America.
55:33
SPEAKER_01: This system is incredibly efficient.
55:35
SPEAKER_01: One of my clients, haiku, went from a 2% share of voice globally to an 11% share of voice globally in only 7 days.
55:42
SPEAKER_01: If you'd like more information, head on over to showworksmedia.com for more.
55:47
SPEAKER_01: That is showworkswithinx.com.