What Simple Systems Are For | Mike Michalowicz

So that last distinction matters.

A simple phrase can be the first rung of a ladder, but it is not the entire ladder itself.

So "take your profit first" is a memorable enough phrase to interrupt an old habit.

It does not by itself, though, tell an owner whether the underlying problem is price, margin, staffing, unnecessary expense, or maybe a business model that never really worked in the first place.

The phrase itself can get someone to act.

The fuller system, however, is supposed to make the consequences of that action unavoidable, and it also helps to resolve an apparent contradiction between Mike's earlier and later books.

In The Toilet Paper Entrepreneur, published in two thousand and eight, Mike argues that nobody will care about a young company as much as its founder, and therefore, the founder alone bears responsibility for making sure everything is cared for and moving forward.

In his later book, Clockwork, though, he asks almost the opposite question: Can a business achieve the size, profitability, and impact its owner imagines without that owner doing all or maybe any of the work? In his book, All In, he adds the team to this progression.

The work everyone does is not merely to make the owner less necessary.

It is to recruit people who fit, create a place where they belong, and give them the conditions to contribute at a high level.

So if you read these just as simple slogans, the earlier and later points clearly conflict.

But read as a progression, responsibility ends up changing form.

The founder remains responsible, but responsibility no longer means personally doing or ensuring the delivery of every task.

It means designing a company in which the work, decisions, and knowledge no longer stop at the founder.

Keeping this in mind helped me make sense of something Mike then said to me about profit first.

You said a couple of things in there that were really sort of eye-opening to me or helpful m- mile markers in just thinking about, you know, uh, complex situations generally.

But one of them was that I think initially I heard from you that all things being equal, you are often going to, you being anyone out here, you're often going to be well-served by trying to get down to the core of whatever the issue is that you're deal- dealing with.

And yes, while there might be an edge over which you, you tip or a, a line over which you step and you do lose- Some nuance or detail that's important.

I think you said that that almost never happens, so we're probably well-served by trying to figure out what's at the core of this thing.

And forgive me for continuing with now a, a second point, but I felt like this was really important.

You said something like, "Profit First is the catalyst for finding-

Yeah

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the system," I think it was.

And I feel like that is really important framing because it feels like it, it shifted in my mind the idea of Profit First from being the framework itself to instead being more like a positive constraint, that, you know, there's a story that I've told on this podcast before of, I think it was JJ Abrams giving this TED Talk called The Mystery Box, and essentially what he says is, "Had ABC asked me for anything, a show about anything, I either wouldn't have produced something or it would not have been very good.