PDF Summary:Clockwork, by Mike Michalowicz

For most small business owners, taking a four-week vacation is inconceivable. Overwhelmed with the hands-on work of running their company’s daily operations, many entrepreneurs feel too burned out to achieve work-life balance—let alone take a holiday. However, in Clockwork, entrepreneur Mike Michalowicz claims a four-week vacation is within reach for small business owners. He argues that entrepreneurs can avoid burnout, achieve work-life balance, and revitalize their businesses by committing to a hands-off approach. A hands-off entrepreneur serves as their business’s visionary while their employees handle daily operations.

In this guide, we’ll present Michalowicz’s steps for becoming a hands-off entrepreneur with a healthy work-life balance. You’ll learn how to build a motivating business framework, train your employees to be independent, and fix your company’s big-picture issues. Throughout this guide, we’ll compare the author’s ideas to those of other business experts, such as Gino Wickman, Jocko Willink, and Leif Babin. We’ll also supplement the author’s strategies with additional actionables, such as how to prevent your employees from burning out.

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Step 2: Finalize Your Mission Statement

Lastly, Michalowicz claims that you should commit to your mission and your newly-defined customers by forming a mission statement. A mission statement is easy to reference and remember, and it’ll continually motivate you and your employees. It should include both whom your mission specifically serves and how your mission serves them. For example: “Help Spanish-speaking senior citizens share their life stories with both their English-speaking and Spanish-speaking family members.”

(Shortform note: Michalowicz emphasizes the ways in which an effective mission statement motivates you and your employees to do their best work. In Start with Why, Simon Sinek adds that ensuring you and your team believe in your mission (and mission statement) is essential to effectively marketing your product or service to customers. He claims that when a mission motivates its employees, your messaging to customers comes across as genuine. This helps you find and keep customers who believe in your mission.)

Goal 2: Prioritize Essential Tasks

Another goal to help you build a motivating framework is to ensure every task your team undertakes moves your mission forward. Michalowicz recommends you prioritize tasks that directly support the mission, eliminate tasks that don’t, and make tasks more efficient. Here, we’ll explain two steps for accomplishing this.

Step 1: Identify the Critical Task

Michalowicz claims that there’s one critical task you must prioritize above the rest: the one that’s essential to achieving your business mission. Identifying the critical task has two main benefits:

• First, identifying a critical task helps you actualize your mission. Your critical task makes your mission come true. Without it, your mission fails.
• Second, identifying a critical task instead of a critical person helps you abandon the idea that your hands-on involvement is necessary. A hands-off entrepreneur accepts that their employees are capable of handling the critical task.

(Shortform note: It may feel challenging to relinquish the ego-boosting notion that you’re the person who’s responsible for the critical task. How can you trust your employees’ abilities to handle the critical task? In The Power of Vulnerability, Brené Brown argues that you can develop trusting relationships by being vulnerable. When you’re vulnerable, you express your genuine emotions to others, such as your admiration for them. Vulnerability deepens your relationships with others, which builds trust. For example, when one of your teammates inspires you (for instance, they expertly handle an angry customer), tell them, “You handled that situation better than I would’ve! Nice work.”)

To identify your critical task, make a list of your company’s most important tasks. Then, imagine you must eliminate all of these tasks except for one. The one you keep is your critical task. For example, the critical task behind Storyline is retelling Spanish-speaking seniors’ life stories in both English and Spanish.

How to Make an Ongoing Commitment to Your Critical Task

In The One Thing, entrepreneur Gary Keller argues that after identifying your critical task, you must make an ongoing commitment to it. Otherwise, less important tasks will steal your attention away from your “One Thing” and you’ll fail to achieve your company’s mission.

You can apply Keller’s advice about the One Thing to your business’s critical task. To commit to your critical task, first, you must deal with the discomfort of leaving other tasks unfinished. For example, as your business focuses on the critical task of retelling and translating senior citizens’ stories, accept that you may never achieve your hope of designing a highway billboard advertising your service.

Second, Keller advises that you must turn down other opportunities that arise that don’t contribute to your critical task. For instance, imagine someone from your local library asks if you want to host an event there for seniors. You’ll have to decide whether this directly supports your critical task or would distract you from it.

Step 2: Refine the Remaining Tasks

Next, Michalowicz advises you to ensure your company’s remaining tasks directly support the critical task (and, by extension, the company mission). By assigning your employees only essential tasks, you ensure they’ll be efficient, motivated, and independent. Tasks that strike your employees as “busy work” or feel tedious demotivate them and distract them from more mission-focused tasks.

To accomplish this, first, eliminate any tasks that don’t directly support the critical task. For example, imagine that historically, you’ve asked seniors to share several of their favorite recipes to include in their Storyline book. Eliminate this task, since it doesn’t directly support the critical task of retelling seniors’ life stories in English and Spanish.

(Shortform note: As you’re trying to build your employees’ motivation to effectively complete tasks, it may not be enough to just eliminate unnecessary tasks from their plates. It’s important to also justify to them the value behind the tasks you’re keeping. Some employees will feel most motivated to complete a task if they understand the purpose behind it and connect that purpose to their personal values. Any time you assign a new task, explain how it supports the mission and welcome employees’ questions about its purpose. Furthermore, get to know your employees—both their identities and their interests—so you can explain to them how tasks connect to their personal values.)

After eliminating unnecessary tasks, explore how to make the remaining tasks more efficient. For instance, imagine Storyline writers typically travel long distances to conduct in-person interviews with seniors to collect their stories. Make this task more efficient by switching to virtual interviews.

(Shortform note: Another way to make your company’s tasks more efficient is to reduce unnecessary collaboration. Some leaders schedule too many collaborative meetings, and this over-collaboration contributes to employee burnout. To cut unnecessary collaboration, eliminate recurring meetings that have been canceled in the past, whether it was due to low attendance or a more pressing meeting happening instead. To make the remaining meetings more efficient, begin every meeting by sharing a clear agenda. Any time the discussion strays from the agenda, refocus it by reminding your team of the agenda.)

Goal 3: Assign Your Team Tasks That Motivate Them

After consolidating your company’s tasks and making them more efficient, ensure your team is prepared and motivated to execute these tasks. The goal is to transfer all of the company’s tasks to your teammates so you’re later able to assume your new role of hands-off visionary. In this section, we’ll share two steps you can take to motivate your team by assigning them good-fit tasks.

Step 1: Match Your Team to Tasks That Motivate Them

First, Michalowicz argues that you should assign your teammates tasks that motivate them. Motivating tasks are ones that closely align with a person’s strengths. He claims people work efficiently, effectively, and independently when their job tasks align with their strengths.

How to Identify Your Employees’ Top Strengths

Michalowicz doesn’t provide guidance around how to identify your employees’ specific strengths so that you can more effectively match them to tasks. First, Break All the Rules by Gallup Press presents three categories of strengths to help you generate a list of your employees’ strong suits:

• Your employees’ motivations. For example, someone who’s generous is well-suited for an opportunity to share their expertise with others, such as mentoring new hires.

• Your employees’ reasoning skills. For example, someone who’s methodical in their reasoning is well-suited for tasks that involve thoroughly processing information, such as transcribing interviews.

• Your employees’ interpersonal skills. For example, someone who’s enthusiastic will do well in a role that involves greeting new clients.

Step 2: Hire People for the Remaining Tasks

According to Michalowicz, if there are any tasks you struggle to match to current employees, hire new people in a part-time or full-time capacity to complete those tasks. Specifically, hire people based on their strengths instead of their experience. It’s hard to teach people new strengths, but it’s possible to teach them skills that build their experience. When interviewing potential hires, avoid asking candidates to describe their past job experience (such as “receptionist”). Instead, ask them to share their work-related strengths (such as “dealing with frustrated customers”).

(Shortform note: Hiring someone for their strengths is arguably more risky than hiring someone for their experience, as the employee lacks an objective track record that proves their capabilities. To mitigate this risk, consider giving each new hire a trial period. In First, Break All the Rules, Gallup Press recommends that after you match an employee to a new role, you give them a set period of time to undergo training and try their new role. This trial period will allow you to see how quickly and effectively they’re able to acquire new, task-specific skills. If they or you determine their role is a poor fit for their strengths or they’re having trouble efficiently learning new skills, part ways or consider assigning them other tasks.)

Phase 2: Release Responsibility to Your Team

During the second phase of becoming a hands-off visionary, you transition out of your hands-on role and train your employees to master their new tasks. In this section, we’ll share three steps for releasing your responsibilities to your team.

Step 1: Inform Your Team About Your Plan

First, Michalowicz claims you should expect your colleagues will need support understanding the reason and purpose of your transition. Your team may be unfamiliar with a hands-off style of leadership. Use proactive, open communication to ease their transition. One way to accomplish this is to describe how your hands-off approach benefits them: It empowers them to attain valuable, hands-on job experience and enjoy autonomy in their roles.

(Shortform note: Your employees may worry that in your new hands-off role you’ll be less involved in their professional growth in the name of empowering them with extra autonomy. The authors of First, Break All the Rules recommend you stay involved in your employees’ growth by scheduling semi-annual meetings with each of them. During these meetings, ask your employees to reflect on their past progress and set goals for their future progress. These meetings also provide you with an opportunity to give your employees feedback that will further improve their skills and empower them.)

A second way to help your employees understand your new hands-off role is to schedule a weekly check-in. During this check-in, do the following: 1) Proactively communicate any upcoming steps of your transition; 2) shout out employees who contribute positively to the transition; and 3) welcome questions or concerns your teammates have about your transition.

Weathering the Ups and Downs of Team Development

You can also prepare your team for your transition by acknowledging that it’s normal for teams to pass through a turbulent stage of development on their way to achieving stability and success. Michalowicz’s suggestions for how to spend your weekly team check-ins align with experts’ advice on how to lead your team through periods of turbulence:

• Openly acknowledge challenges. Welcoming your team’s questions and concerns is one way to do this.

• Assign team members more responsibility. Proactively communicating the upcoming steps of your transition prepares your team for taking on new responsibilities.

• Offer praise. Acknowledging your employees for their positive contributions is one technique for this.

In addition to Michalowicz’s strategies for an effective weekly check-in, experts suggest making space for introverted team members to be heard. One strategy for encouraging quieter team members to contribute is providing your team with advance notice about which topics will be discussed in your weekly check-ins. This way, introverts will have time to prepare what they want to share.

Step 2: Develop an Efficient Training Process

Michalowicz’s next step in releasing hands-on responsibility for your business is to establish an efficient system for training employees to handle daily operations. Typically, entrepreneurs train employees by writing a manual and assigning employees to read it. The author claims that writing a manual is overly time-consuming.

(Shortform note: Although creating a written manual is a time-consuming effort, it may still be worth the effort: Research suggests that people comprehend and remember more when they read information versus when they acquire it through audio or videos. There are two main reasons for this. First, when you physically hold and flip through written content, your brain connects what you read with where it was on the page. This connection increases your retention of information. Second, people associate audio and video engagement with social media, so they tend to consume it in the same way they consume social media: quickly and with only surface-level engagement.)

To design a more efficient training system, the author recommends you save time by recording tasks while they happen in real-time. For computer-based tasks, use screen-recording software and voice narration to explain the steps of the task as you or an employee completes it. For other tasks, make a video of yourself or an employee completing it, and narrate its steps.

(Shortform note: How can you ensure your training videos are effective and engaging? First, at the beginning of each video, share exactly what the trainee will be learning. This step helps you clarify the topic of your video, making it more likely you’ll skip sharing unnecessary information. Second, focus your trainees’ attention and help them organize their knowledge by breaking long training videos into short, three-to-five-minute mini-videos. Each mini-video should have its own subtopic and goal.)

How to Assess Employees After They Undergo Training

An additional step in the training process that Michalowicz doesn’t mention is determining a way to assess if and how well your trainees learned the required content. Assessing their learning will allow you or the person training them to notice and correct any misunderstandings before they jeopardize their work. Assessing employees’ learning will also reveal any issues with the training, enabling you to improve it for the next trainee.

One model for assessing corporate training proposes you assess the following factors after an employee completes their training:

• Their emotions. Ask them to share what aspects of the training left them feeling prepared for their role and which aspects could’ve been better.

• Their takeaways. Ask them to share what aspects of the training felt most important.

• Their application. Three to six months after an employee completes their training, observe them to assess how well they apply their takeaways on the job.

• The company’s outcomes. When you have enough data on your company’s outcomes (such as your number of sales), compare these data to data from before you implemented the training. This comparison reveals whether the training had a positive, negative, or neutral impact on the quality of employees’ work.

Step 3: Gradually Increase Your Team’s Independence

Training your employees to handle daily operations significantly reduces your hands-on work. To further trim down your hands-on work, train your employees to also be responsible for decisions associated with daily tasks. According to Michalowicz, the best process for this step is a gradual one: Over time, increase your teammates’ ownership over task-related decisions until they’re responsible for all task-related decisions. A gradual process ensures your employees have ample time to adjust to their new responsibilities.

Follow these steps to gradually release responsibility to your team:

1) Have employees interview you. After your employees learn how to complete their assigned tasks via your training videos, they’ll likely still have questions. When they do, schedule a meeting and have them interview you to learn more about their role. This way, they ask the questions they most need the answers to.

2) Delegate decisions to employees. After an employee is independently completing their assigned task(s), assign them the decisions associated with that task. For example, assign the person who interviews senior citizens to decide what interview questions to ask. To empower each employee to be independent with decision-making, resist the urge to give input on their decisions.

3) Reflect with employees on their decisions. After an employee makes a decision, provide them with an opportunity to learn from any mistakes by reflecting with them on their decision’s outcomes.

Additional Insights From The Dichotomy of Leadership

This process of gradually increasing your team’s responsibilities, while supporting them to learn from their mistakes, aligns with the hands-off leadership approach Jocko Willink and Leif Babin present in The Dichotomy of Leadership. They argue that leaders must trust their teammates to have a high level of responsibility. Michalowicz’s process provides an example of this: He expects employees to take responsibility for their own learning (through interviewing you) and for their decision-making. Furthermore, Willink and Babin claim you should still oversee your employees’ responsibilities. One example of this is Michalowicz’s suggestion that you reflect with your employees on their decisions’ outcomes.

Willink and Babin provide additional insights on hands-off leadership, which you can apply to Michalowicz’s steps for gradually increasing your team’s responsibilities. First, Willink and Babin add that you can build a teammate’s independence and leadership by reminding them how their role supports the mission. This increases their motivation and sense of accountability. Therefore, when delegating decision-making responsibilities to your employees, clarify how those decisions support the mission.

Second, Willink and Babin argue that a hands-off leader must take responsibility for their team’s mistakes. It would be unfair to grant your teammates responsibility and then fully blame them for their mistakes. Therefore, when reflecting with your employee on their decision-making mistakes, take responsibility for any mistakes they made that resulted from your lack of direction.

Phase 3: Commit to Your Role as Hands-Off Visionary

Now that you’ve shed your hands-on work, in this final phase, you’ll step into your role of visionary, overseeing and improving your business’s framework. We’ll begin this section by exploring how to oversee your business and improve its systems. Then, we’ll describe how to enjoy your newfound work-life balance by taking a four-week vacation.

Step 1: Establish Metrics and Benchmarks

Part of your role as a hands-off visionary is to oversee your business. Michalowicz claims you should establish metrics that clearly indicate whether your business is meeting its goals. Metrics allow you to quickly notice early signs of issues in your business framework so you can address them before they develop into crises.

For example, imagine you need to establish a metric to measure Storyline customers’ satisfaction. You ask each Storyline customer to give your service a one-to-five-star rating after your company delivers their book. You establish your customer’s average star rating as your metric.

According to the author, each metric also needs a benchmark: a numeric cutoff that shows whether your metric indicates success. For example, a benchmark for the aforementioned metric could be an average star rating of 4.5 stars. If your metric stays above 4.5 stars, your customers are generally satisfied. If this metric ever dips below 4.5 stars, you can act fast to understand why and to fix any issues.

(Shortform note: Eric Ries, author of The Lean Startup, warns that some metrics look like they indicate success when in reality, your business is stagnant. For example, imagine your company website has a total of 50 page views one month and reaches a total of 100 page views the following month. While this increase looks like growth, your rate of increase (50 views per month) remains the same. Your business isn’t growing at all. To avoid selecting misleading metrics, Ries recommends you choose metrics that indicate your company’s growth rate instead of merely its growth. For example, picking a metric of page views per month instead of total page views will allow you to set benchmarks that indicate your business’s growth rate.)

Michalowicz offers three tips for establishing effective metrics and benchmarks:

Tip 1: Establish Five to Eight Metrics.

Michalowicz recommends aiming for five to eight metrics. You need at least five metrics to fully monitor all aspects of your business, but it’s overwhelming to keep your eyes on more than eight metrics.

(Shortform note: There’s no consensus among business experts about the optimal number of metrics. In The Ultimate Sales Machine, Chet Holmes argues you should keep a list of every possible metric that drives sales, from the number of inquiries you receive to the number of visitors to your store. That way, you can learn which efforts led to which sales numbers. In Traction, Gino Wickman argues for a middle ground, claiming that 12 metrics is the optimal number. This lack of consensus suggests you may need to experiment with different numbers of metrics to find the optimal number for your business size. For instance, a business with nine employees might have greater capacity to track metrics than one with only four.)

Tip 2: Set Achievable Benchmarks

Michalowicz’s second tip for establishing metrics is to make each metric’s benchmark achievable rather than ambitious. Its purpose is to indicate a problem, not indicate when your business exceeds expectations. For instance, an average star rating for user reviews between 4.5 and five is achievable, while an average rating between 4.9 and five is overly ambitious.

(Shortform note: In Measure What Matters, John Doerr offers the counterpoint that some of your benchmarks should be achievable, and others should be ambitious. He claims that striving for several ambitious benchmarks motivates you and your employees to challenge yourselves.)

Tip 3: Make Each Metric Easy to Spot

Finally, Michalowicz suggests you ensure each metric is easy to spot. That way, you don’t waste time digging through information to assess whether your business is operating smoothly. For instance, an average star rating for user reviews is an easy-to-spot metric: A single glance at this average rating tells you customers’ average satisfaction.

One way to ensure each metric is easy-to-spot is to involve your teammates in reporting metrics. After you’ve established your metrics, assign your teammates the responsibility of ensuring these metrics’ benchmarks remain easy to spot and up to date.

(Shortform note: How can you ensure your teammates regularly record easy-to-spot, up-to-date metrics? In Traction, Gino Wickman suggests you create a company “scorecard” that displays every important metric for your team to review at a weekly meeting. This scorecard should include both the benchmarks you’d like to achieve and the data reporting what you did achieve. Ensure each metric has one person who’s responsible for tracking it and updating the spreadsheet in advance of the meeting.)

Step 2: Oversee Metrics and Make Improvements

Now that you’ve determined your metrics, Michalowicz claims you should monitor them regularly and make improvements any time a metric fails to meet its benchmark. This way, you catch any issues before they evolve into crises. The author shares two moves for effectively monitoring your task metrics to improve operations.

Move 1: Probe

First, any time a metric falls below its benchmark, research why it changed before you try to fix it. This will prepare you to identify an appropriate fix. Talk to any employees responsible for that task, and examine any written records for clues. For example, if Storyline’s average customer rating drops below 4.5 stars, figure out which recent customers were dissatisfied. To understand why they were dissatisfied, talk to employees who worked with those customers, as well as the customers involved.

(Shortform note: When you ask your employees questions to better understand a change in a metric, refrain from automatically assigning blame. Blaming them might make them defensive, which could make it hard to learn from them why a metric changed. To avoid conveying blame, apply this principle of nonviolent communication: Instead of jumping into your interpretation of what happened, share your specific observations about the metric. Say, “I noticed your sales numbers have decreased by 30% in the past month.” Then, follow up your observation with a nonjudgmental question, such as “Do you have any ideas why your numbers dropped?”)

Move 2: Make One Shift at a Time

Once you discover the reason behind a metric’s change, make only one shift at a time to try to fix the problem. If you make more than one shift, you may accidentally cause a new problem by modifying an aspect of your business that was working smoothly to begin with. Alternatively, if you make more than one shift at a time, you may never learn which shift you made was responsible for the improvement.

Is the Role of Hands-Off Visionary a Job Meant for Two People?

Making one shift at a time as Michalowicz recommends here is a careful, methodical way to experiment with implementing improvements to your company. However, it’s also a time-consuming approach for just one person to handle, and it may not leave time for you to engage in other types of visionary work, such as expanding your business or seeking out partnerships.

In Traction, Gino Wickman provides another possibility for small business leadership that could circumvent the issue of a single leader’s limited time. He argues that in order to grow, a company needs two leaders: one person who’s a visionary and another (the “integrator”) who works closely with metrics. According to Wickman, the visionary’s unique role is to ​​shape the company’s culture, build partnerships, solve big-picture problems, and envision ways to expand the company. By contrast, the integrator’s unique role is to manage employees who handle daily operations, oversee metrics, and fix any problems that metrics reveal.

By separating the role of hands-off entrepreneur into these two roles, you could ensure that one person (the visionary) has the time to handle visionary planning while the other (the integrator) methodically fixes issues by making one shift at a time.

Step 3: Take a Four-Week Vacation

Now that you’ve made the transition from hands-on to hands-off, it’s time for your four-week vacation. According to Michalowicz, this vacation serves two purposes. First, your time away forces your employees to learn how to operate independently of your involvement. Four weeks is the typical duration of a business cycle: the time from when you attract customers to when you collect payments. Leaving your business in your employees’ hands for this duration pushes them to learn how to independently problem-solve throughout the cycle.

Second, on vacation, you’ll experience the benefits of a burnout-free lifestyle. Later, you’ll look back on your vacation as a reminder to continue maintaining a healthy work-life balance. The author claims you should plan to take a four-week vacation at least once a year.

Ways to Prevent Your Employees From Burning Out

While your four-week vacation helps prevent your burnout and accelerates your employees’ learning, it doesn’t necessarily prevent your employees from burning out. Taking on greater responsibility while you’re away may even contribute to their burnout.

Research reveals that when employees burn out, it’s usually not because they fail to meet their own needs—it’s because their workplace fails to prevent their burnout. Workplaces often overschedule their employees and neglect to provide them with support in managing their time. Therefore, it’s your role as the business owner to help prevent their burnout. Do this by supporting their work-life balance through the following actions:

• Offering flexible, paid time off

• Offering ample vacation days

• Providing access to programs that support mental wellness (such as therapy) and physical wellness (such as gym memberships)

• Providing on-site childcare

Some of these solutions (such as providing ample vacation days) may require you to occasionally shift to a more hands-on role to fill in for your employees. However, the benefits of supporting your employees’ work-life balance may make this compromise worth it: Employees with strong work-life balance are more productive when they’re working, are healthier, and enjoy their jobs more.

To ensure your vacation is a positive learning experience for your employees, Michalowicz argues that once you return, you should reflect with your team on their four weeks of independence. Doing so will accelerate their growth and inform you of any framework issues that need your attention. Ask your team to share with you which daily operations went smoothly and how they handled any unexpected problems. Finally, ask them what you could’ve done to better prepare them for their four weeks of independence.

(Shortform note: It might be challenging to elicit honest reflections from your teammates, as employees are often reluctant to share negative feedback with their bosses. Here are tips for ensuring your employees feel comfortable sharing their honest reflections: First, ask your employees to imagine what the optimal four weeks of independence would look like in the future. They may find this easier than critiquing the past (which could sound to them like they’re critiquing you). Second, provide opportunities for your teammates to share feedback anonymously, such as through an online form. That way, their fear of retaliation won’t hold them back from sharing honest feedback.)