How to be All In with Mike Michalowicz

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like Marketing Against the Grain. Today, we'll be breaking down how to go all in. To drop these value bombs, I have brought Mike Michalowicz into EO Fire Studios. Mike is the entrepreneur behind three multi-million dollar companies and is the author of Profit First, Clockwork, The Pumpkin Plan, Fix This Next, Get Different, My Money Buddies, and his newest book, All In. He is a former small business columnist for the Wall Street Journal and regularly travels the globe as an entrepreneurial advocate.

0:40In today's foundation, we'll talk about how disengagement among teams begins, how to avoid it. We'll talk about the actual percentages of A players in this world. We'll talk about retention and engagement strategies that your business should adopt right now, psychological ownership, and so much more. And a big thank you for sponsoring today's episode goes to Mike and our sponsors. Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Marketing Made Simple brings you practical tips to make your marketing easy and more importantly, make it work.

1:18A recent episode on whether vulnerability is a superpower in business is a must listen. Listen to Marketing Made Simple wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker, Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions. Mike, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:55What's up, Fire Nation? Yes. That's my what's up. I love it. I'm the winner already. And the thing I think that's key to successful success that very few people talk about is exercise. I don't care about anything else. If you are fundamentally not in a healthy stage, you can't perform your optimal level. And so many people are skipping on exercise and then wonder why they struggle in every other element of their life. Health comes first. You know, I talked to so many people. I can literally hear audibly because I'm such a, this is audio only. I can hear if they're healthy. I really can. Oh, really?

2:34Yeah. I can just tell. What's the determination? There's some tonality. There's diction. There's the cadence, the pace. There's just the lightness of their voice. Cause there's just like this free flowing energy and healthy people that does not exist in unhealthy people. Mike, you got it. I'm staring at your sexy avatar as you say that. I'm seeing health. Yeah. I mean, that is, dude, I'm the cold plunge every single day. Oh, wow. Me too. Infrared sauna, red light therapy. Oh, I do the traditional sauna. I love that. I do both. I do both. Infrared sauna and red light therapy. Dude, what's your cold plunge?

3:08What do you do? How many minutes? What temperature? Okay. So 50 degrees. I take it back. It's a cold shower. I have like one of those multi head showers, but specifically for cold. It's the circulation of water and the shock factor. I sauna maybe three to four times a week at about 160. It was a traditional sauna with the steam over the rocks. My gosh. Yeah. The sweat just pours off. Fantastic. I love it. I absolutely love it. Well, I do a real cold plunge at 41 degrees for five minutes in the tub, fully submerged up to my neck. I mean, I do dunk my head under for 20 seconds at the very ends, but not till the end.

3:50But yeah, it's insanity. Every time I do it, I'm like, I can't believe I'm doing this. but after I do it, there's, there is absolute correlation to happiness and cold plunging. I'm positive the dopamine release is so real. So I always say, man, if I'm ever hearing like, oh, so-and-so is just, they're, they're, they're unhappy. They're depressed. I'm like, get that person in a cold plunge seven days a week. I'm not saying it's going to have magical hearing properties, but it's going to help. But listen, I want to focus on other things because we have a lot to talk about. I'm one of the only people that I know that can say your name correctly, Mike Michalowicz, which is really impressive.

4:26And we're talking about a lot of things today. And one of those things is having a team that can stand the test of time, because that's incredibly difficult. I have a VA that's been with me for eight years, another one for nine, another one for eight years. It's been very helpful to build a really profitable and thriving business. So what have you found to be the most common reasons for disengagements among teams? The number one reason is the number one thing that business leaders are doing and they're setting a corporate mission and sharing it, which sounds like, don't you have to have that? And the answer is kind of.

5:04So I'll give a quick story to give context. I think it'll make sense. My second business was in computer crime investigation. And we did the Enron trial just to give context. We didn't, we're not the prosecution. We were the defense. So Kenneth lay Andrew fast out were clients of mine. Well, I sat in my office one particular day, spent a full day in there. I'm calculating numbers. I said, my gosh, I've got to figure it out. $10 million in revenue. We can actually achieve this. So I never had a business that achieved$10 million in revenue up to that point. So I came out of my office. I had 30 employees at the time we were brick and mortar.

5:35I called everyone in. I had it behind a sticky note. I put$10 million on the wall behind a sticky note and I played eye of the tiger. And I'm like, this is the big announcement. I finally figured it out. This is the year we achieved$10 million. We simply need to do X, Y, and Z and we're there. And then nothing. There was like total silence. I'm like, why is everyone jacked up? Patty, my assistant came to me and said, Mike, if we had 10 million, you get the bigger house, you get the new car, but why should we care? What about our dreams? When she said that, It's like, oh my gosh. The number one job of a leader of an organization is to know the individual visions of every colleague, not their work vision per se, but what they want to achieve in life.

6:17I want to learn to speak a new language. I want to buy a house one day. I want to get my first car, whatever it may be. Those are the priority for your team members. And therefore, you must make it the priority of your organization for them to achieve those. I'm not saying you buy that car. but you, I'm not even saying you can block and tackle for them, but you keep the dream in front of them. And when you care for their dream, they will care for your dream, which is the corporate mission. The corporate mission at the end of the day is the dream of the owner or the leaders of the organization.

6:46It's not the dream of the collective. You have to understand and master the collective dream. Fire Nation, master the collective dream. That could be a stamp that you have on your forehead that you look at every single day heading into work. Mike, you're an A-plus player, but the stats show that less than 10 % of the population is even an A player, but your research shows something totally different. Can you expound? Yeah. So this is funny, and it kind of drives me nuts, but I ask this now regularly at events. And when I was in Puerto Rico, I was down your way. I didn't bug you to say, hey, I'll come by because I couldn't.

7:27I was doing a speaking engagement. And it was an in and out type of trip, a couple of hundred folks. Um, and what was interesting is I asked this group, the same question I ask every entrepreneurial group or leadership group. I say, by show of hands, who here in this room right now, who's an A player? I'm like, don't be bashful. Just be integral and honest. Are you an A player? And every hand goes up. I said, thank you. Now keep your hands up with your hands up. What percentage of population is A players? Just shout it out. You hear 2%, 5, 10 % is usually gracious. And I'm like, okay, everyone's hands up right now.

7:57And yet we're saying 10 % of the world is A players. What is the anomaly here? Like, how can this be true? Is this like, is Puerto Rico the Mecca of A players? With John Dumas, yes, it is. I've been there for seven and a half years. I can vouch that Puerto Rico is not the Mecca of A players. Well, dude, it's got John Lee Dumas. It's got Bo Domus, Bo Arthur Domus. Of course it is.

8:24So then I tell the audience, I'm like, listen, I believe everyone here that said they're an A player is an A player. And this is true for every human being on the planet. Everyone is an A player in waiting. Everyone has A potential. Now, the thing is, it's not necessarily with your organization. It's not necessarily with the roles you have available. But every person can maximize their full potential when in the right position or opportunity. So I have a small business. We have 20 employees. Most of the folks are part-time. Tiny. I have potentially 20 positions here I could ever fill in my organization, at least currently.

8:57And yet there's 8 billion people or whatever in the population. For the vast majority of people, I'm not a fit. But when I see as a leader, everyone is an A player. It starts changing my perspective. Can I set up an environment for this person to flourish, to express their A-ness? And if not, anus? I sound like anus. That's funny. I will never say that again. It's recorded for the annals of history. Their anus. Oh, that's funny. That is good. Then I say, if they can't be an A with me, can they be an A elsewhere? And my job as a leader is to help them flourish elsewhere, to point them in a direction that could be of service to them.

9:33Everyone's an A player. Fire Nation, you heard some magicalness just there. I hope you chuckled. Hope you had a good time. Show your anus. I hope you took the value bombs that went around with that great little anus chuckle. And I want to talk about retention. I want to talk about engagement strategies that businesses should adopt, not tomorrow, but today. Yeah. If you want to retain the best, it's about first aligning their individual dreams, people's initial dreams with the corporate mission to walk arm in arms. The question, of course, is how do you do it? have a public discussion around this.

10:11Now, not everyone feels comfortable saying, oh, I dream one day of having a house. I'm going to tell everyone. So you may have to build into this. But one example we have to visualize this in our own office here, we have a tree. It's a barren tree. It covers the entire wall. There's not a single leaf on it. But what we do at the beginning of every quarter is people write down what their dreams are for the next 90 days and sometimes lifetime dreams. One person was to be diagnosed as cancer-free for a third consecutive year. Another person was to spend more time with her son. Well, as they achieve these, we fill out leaves and put on the tree and the tree blooms.

10:46That barren tree, we do it every year, is now already blooming leaves. And by the end of the year, like every other year, it's this huge maple tree. It's just covered with leaves. So one thing is to make people's dreams and visions for themselves public. Another part though for recruiting people and retaining people happens on the first day. The first day of employment is magical. Because what happens on that first day, John, is I can guarantee whoever works for you, in person or remote, at the end of that first day of work, they're going to go to someone else, a loved one, a friend, a family member, and they're going to say to that person, that family member is going to ask, how was your first day?

11:26And there's going to be a response. And I'll tell you, for most people, it's like, kind of sucked. I was bored. word um the guy said the word anus and i think you know like it's just it's confusing here's what we do and i invite every one listening to fire nation to do we have a welcome celebration instead of the retirement party the last day being the big celebration is the first day there's a basket waiting for you but it's not just generic stuff we give gifts that are relevant to you you'll have a mug that says welcome to the team john to your names on there so every time you're drinking out of it, you know how you're welcome.

12:01There's other gifts. But here's my favorite part. We also include one wrapped gift in there for that other person, the person who's going to ask, how was your first day? During the interview, we'll ask, like, you know, making a decision to work here is not made alone. Do you have a friend or someone else supporting you in this decision or at least cheering you on? Oh, yeah, my husband is, for example. Cordae came on and she said her husband supports her. And so that's wonderful. Does your husband have any hobbies or any interests. We're just curious about him. Oh yeah, he's a bourbon collector.

12:31Oh, that's interesting. But we make these notes. On Corday's first day, she got her basket. In there was a gift from Brian, her husband, which was a wrap box of bourbon. And when he asked, how was your first day? She said, it was really great. And she goes, it's kind of weird, but you got a gift. I got a gift. He opens, there's a letter. It says, Brian, we know no decision of this size is ever made independently. Thank you for being a supporter of Corday. We hope you enjoy this gift. He opens it and there's his bourbon. The next day, he is cheering her to go to work. He's like, you work for the best company ever.

13:06They're amazing. That's what we want. You have to win over the cheerleader at home and it's not the person you just hired. Fire Nation, wow. I mean, those were some value bombs. And though I can't promise you, Anus, when we get back from the break, I can promise you more value bombs. when we get back from thanking our sponsors. Starting your year off strong and accomplishing goals like increasing revenue and faster growth starts with the right selling tools. And for that, there's the all new Sales Hub from HubSpot. Sales Hub is an all-in-one platform thoughtfully built with the tools and insights you need to communicate on a personal level with every lead, prospect, and customer.

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14:21Head to hubspot.com slash sales to try it for free. Do you have a message inside that you know is meant to be shared with the world? Giving a TEDx talk is one of the most powerful ways to share your message with the world and Thought Leader can help you get there. Thought Leader is a speaker coaching company that has helped over 550 and counting coaches, speakers, entrepreneurs, authors, and experts land TEDx talks. Thought Leader is not affiliated with TED or TEDx, but they're able to get these results because their founder, Taylor Conroy, is a four-time TEDx speaker himself and past EO Fire guest.

14:54You might be thinking a TEDx talk sounds great, but where do you start? Taylor has put together a free training that's going to teach you how to land a TEDx talk in as little as 90 days. Join Taylor to learn exactly what TEDx organizers are looking for in their speakers, how to write a talk that goes viral once it goes online, and more. Visit thought-leader.com slash fire. Join Taylor for this free training and get your message out of your head, out of your heart, and out into the world where it belongs. That's thought-leader.com slash fire. Mike, we're back and we live in an era where remote work is increasingly common.

15:32Of course, a lot of this was pushed forward and spurred by COVID. So let's talk about how companies can build a sense of community and commitment amongst their employees, even if they are not swapping stories at the water fountain every single day. Yeah, yeah, it's necessary. We're losing the tactile experience. We don't get that social time anymore. And so one thing I encourage every business, if you have the means, even if your team is remote, have some frequency of actual physical time together. So we do retreats at our company. While we have 20 employees, only about 15 are local. A portion of those folks do come in regularly, but some choose to work remotely and others require it because they're away.

16:19So we will gather together physically. And there's something special about that exchange among people. When you have that personal experience, it sounds like a big investment. I think it's a big loss if you don't do it. And it's really about the social component. Yes, we do business activities so that we're growing and learning together, but we do a lot of social activities and we promote that. The second thing is to, in your business, when you're doing remote conversations, to invite in the social component. What happened at the water cooler was really the discussion around business. It was a catch-up on people's personal lives, which is the greatest way to form trust.

16:58So we're actually losing a fundamental layer of trust because we don't have the experience together. So when our team meets, we'll have random trivia questions that they ask of each other. Sometimes we have group meetings and we just talk about what's in the news today. We just have those dialogues intentionally not about business so we can have shared stories that we're discussing. At the end of the day, when you have trust because you have regular dialogues outside of business, it actually enhances how you perform in the business. Fire Nation, we want to talk now about psychological ownership.

17:35This is something that I haven't really thought about, Mike, much in the past. And you are pretty convinced it results in top performance and commitment from your team when you can get psychological ownership from them, in them, embedded. What does this mean? Yeah. So there are two forms of ownership. There's what's called legal or contractual ownership, and there's psychological ownership. but the feeling of owning something only comes from psychological ownership. So let me explain through some kind of remote stories and then we can apply it to business. But if you ever rented a car, and I know, John, you've rented cars, the way we treat a rental car is different than a car that we legally own.

18:16So you get out that DMZ of the Hertz rental car agency. And if you're like me, I punch it immediately. I want to see if I can make those wheels spin. I'll munch on those brakes. I drive it very differently, much more aggressively. I surely don't wash it before I return it. Heck no. The reason we have that behavior, it's called the compliance defiance behavior. When we're forced to comply, fill the tank with gas or you'll be penalized. No scratches, no dents, no dirty interior, you'll be penalized. If you're forced to comply, it's human nature to seek to defy. How can I get back at them? That's why we treat the car that way.

18:54We're disassociated with it. Plus we have these regimented responsibilities. Now that car you own, I have a pickup truck and I just recently did a long drive, a couple hundred miles. At the end of the drive, I literally padded it on the dashboard and said, good girl. I'm actually a little embarrassed. I'm a good girl. What am I doing? But I humanized it. Now here's the funny thing is I don't legally own that car. That car is owned by the bank. I'm making installments on it. So they legally own it. But I've achieved psychological ownership in that car and I don't in that rental car. So what's the difference?

19:29I don't own either one legally, but one I behave differently. There's three components that drive psychological ownership. And as a leader of an organization, when you deploy this with your colleagues, they will act like owners of your organization. And that's what we want. Here's the three components. First, the person has to have control over the object. And the object can be intangible. It could be an accounting system or something like that. or it could be a vehicle. It could be anything. But control means I decide when and where I'm going to park it. I decide when I'm going to drive it and who gets to use it.

20:01I have the authority over it. That gives me a sense of ownership. The second thing is personalization. I can put a bumper sticker on or hang something off their side view mirror, rear view mirror for that matter. And I could personalize the radio stations. The more I can make it my own, the more it feels that's my own. And the last thing is intimate knowledge. I know the vehicle inside now. I know every little button does and all the different functions. The more knowledge I have about the vehicle, the more I sense I own it. So when someone buys a new car, it's very common for them to sit inside the new car with the manual for 20 minutes or an hour just playing with all the buttons.

20:36You don't do that with the rental. It's psychological ownership. So with our employees, we have to do three things. Give people control over the outcome. Have them participate in cogeneration of what they want to achieve. Don't give them explicit direction, do this or die. Instead say, here's the outcome we're looking to achieve as an organization. What are your thoughts? You're now giving them control. Secondly, allow them to personalize it. How can they make it more of their own? One thing we did here with the accounting system, we don't call it the QuickBooks accounting system. It's Kelsey's accounting.

21:06That's what we call it. It's a little form of personalization. She's the one overseeing it. The last part is intimate knowledge. Give them the training and skills to understand it. The more you give, the more they'll have that sense of ownership. A couple of things. You're looking for them to say, this is mine or ours. That means a sense of psychological ownership. This is my accounting system, or this is our company. If they say this is the accounting system or your company, they don't feel connected and you got to fix that. There is one word of warning. Fiefdom can happen. If you give people too much authority, too much control, now they can blockade other people out.

21:40They put the reverse golden handcuff on you, the owner or leader of the organization. So have multiple people share ownership over something. Not just one person doing the accounting, have multiple people, it becomes what's called collective psychological ownership. And that's the ultimate because people won't build fiefdoms. Very powerful stuff, Fire Nation. I love that idea of the naming of it because that person is not going to want their accounting system to be a failure because their name's literally on it. Now, Mike, being a Mainer, I had to bring this one up. You dropped a cliffhanger in your book about your main trip and the lobster reanimation story.

22:18So give Fire Nation the details on that. So this was the low point of fatherhood. So this is a tip, John, for you, Kate, when raising Bo, don't do this, don't do this. So my son had turned four years old, was enjoying his first ever lobster in Maine, which is the lobster capital of the world. Booyah. Well, he has some bites, and then he starts playing with the shell. And you know how lobster served, at least in Maine, it's the whole lobster on the table. And so he starts playing with it like it's a little play toy. And I'm telling him, I'm like, Jake, stop playing with it. And we're in polite company here.

22:55Keeps doing it. I'm like, Jake, stop it. He does it again. I said, if you do it one more time, the lobster can be reanimated. It can come back to life. As I'm saying, this is a non-proud moment. I take a few forks and jam them together so it's a long stick. And I, unbeknownst to him, stick it into the back of the lobster. So there's this lobster kind of laying on the plate. I can picture this. Yeah. The two claws on the side and he's reaching for the face. And as he does it, I go, it leaps forward. He literally crudded his diapers or he was actually wearing underwear. So there was actually a little credit in his underwear.

23:33My wife screamed at me, not inside the restaurant. We had to walk outside and have a conversation. He will, he never ate lobster for another six years. It was a total disaster. That's my thoughts. Oh, man. What's the point of the story? The point of the story, I thought I had a way to stop someone from doing something. There is no correlation to business whatsoever. Just don't be an idiot. Mike, we talked about a lot of stuff today. A lot of stuff. It all centers around your new book, All In. So talk to us about this and why Fire Nation needs to add this to their reading list immediately and how they can do so most effectively.