Scaling up your MSP with Verne Harnish
We are continuing the “MSP 2.0 bestseller” series in March, as well. No question, one of my all time personal favorite books is Mastering the Rockefeller Habits from Verne Harnish. It helped me to apply the paradigm of “work on your business instead of in your business”. For many Managed Services Provider leaders this book has been a foundation to building their businesses. He’s followed this with his new book Scaling Up - Mastering the Rockefeller Habits 2.0. I had a chat with him about the required steps for Managed Services Providers to stay on top of their business and to start Scaling Up!
Verne is straight to the point, so put on your seat belts and get your notepad open, this is going to be a high-paced trip!
Differentiate yourself from your competition and
become sales ready in 30 days
My take-aways from the video:
- Focus on marketing - start with a weekly meeting and make marketing a priority. The most successful tech companies always have a non-tech member in the team with a strong marketing focus. If you would like to excel with velocity, check the least obvious of the 4P (product, place, price, promotion) - the pricing. This is the most undervalued aspect but has the most impact on your differentiation and bottom line than the rest.
- Hyper Specialise - differentiate yourself by specializing in an industry, vertical, or specific problem and become the number one IT service firm in that specialty. It gives you the differentiation power while lowering your marketing expenses dramatically, and gives your clients a huge competitive advantage from working with you.
- Strategy also includes saying no - saying yes to every opportunity is great if you’re finding your place in the market; after that it’s going to hinder you in scaling up. Once you reach 3-5 years experience, you should have a firm scope of what you do and for whom, and how integral that focus of your expertise is to your and your clients’ success. Stick to that.
- Get into the Executive Suite - getting to the executive suite and being included in the client’s strategy is not an option anymore. Everything outside of that conversation is a commodity. If a service provider wants to be in the high margin arena, they have to take on a strategic role with their clients, period. Becoming a trusted advisor or a consultant is not difficult is you follow the next point.
- Leaders are readers - “read the freaking manual about business” not just technologic manuals. Or listen with Audible, read some Kindle, watch YouTube, whatever. Learn, learn, learn and make it a policy for your team too. Pick 40 books, get others to read some, report on the great ideas found in them and get implementing. Start checking out Verne’s reviews of the best business books every year on Fortune.com: 5 Best Business Books in 2015.
- Use Demand Driven Pricing - The hidden gem here is in Confessions of the Pricing Man: How Price Affects Everything by Hermann Simon. Demand-based pricing (or customer-based pricing) is a powerful shift, turning low and non-profit industries into revenue successes. In the US airline industry alone this shift brought $22 billion in increased revenue. The "all in one" pricing strategies were successful for MSPs in the past when execution was the bottleneck. Now, however, those who don’t accommodate the customer’s requirements and adopt some sort of customer-based pricing can suffer.
- Be agile working on your business - use sprints, agile methodologies (Scrum for example) like software developers do. Set your bi-weekly goals and work on them every single day. If you want to move faster you need a faster pulse. Use daily huddles and focus on the one or two things you’re going to do that day to close on your goal. For more advanced Service Providers, set goals for your clients - quarterly and monthly - and keep on top of them together in your weekly huddles.
- Have a peer coach - and hold yourself accountable. First have a quick chat with him/her and detail those things you commit to every single day. It has the effect of making you accountable, and choose wiser goals in your personal and corporate life. Verne has had his peer coach for years now! (We should organize something like that internally, come to think of it).
- Productize your services - product based companies are adding services and service companies try to productize their services. It’s the trend. Service providers who deliver defined, “tangible” products offer more choice to their clients and give a better buying experience. This is part of demand driven pricing - implement a service catalog with service bundles and balance your productized services with the customer's demand.
Verne is a generous teacher: check his site for all the goodies:
- Sign up for Verne’s weekly insights and join the 75,000+ business leaders every Thursday for a handful of easy to digest business ideas.
- Check out all the free goodies in the Scaling Up website. You can find many one pagers, templates resources to Scaling up your MSP.
- Grab his books in Amazon - Master the Rockefeller Habits, The Greatest Business Decisions of All time and Scaling up (with all the downloadable templates) and work on these ideas right away.
- Join in the movement and get the equivalent experience of 1000 books at the Scale Up Summit, May 24-25 in Atlanta. Meet other purposeful business leaders like yourself and get inspired!
Thanks to Verne for taking time to share his wisdom!
Execute your IT Strategy: interview with Gary Harpst
We are continuing the “MSP 2.0 bestseller” series in January, as well. The pick for this month is Gary Harpst - Six Disciplines of Excellence. Gary has been a part of the IT industry since being the founder of the well known ERP solution Solomon Software that was sold to Great Plains then to Microsoft. After the acquisition he shifted his focus to one question: how to help companies to execute their strategies. He has put together a very solid methodology in a program called “Six Disciplines” and written a book about this topic. This book is in my top 10 business books and has changed my way of thinking. I was privileged to meet him in person and have a long talk about these challenges.
Execution is one of the biggest issues of managing any type of company. As a vCIO or trusted advisor you not only need to have great insights and offer solid advice, you need to actually execute their IT strategy as well. If you’ve read “E-Myth” by Michael Gerber you’re familiar with this idea of working on your company. Gary put together the practice behind it - how you actually do it!
Listening to Gary and reading his books not only can teach you to be a better leader of your IT company, but make you a better service provider as well. It shows you practices and processes to reliably create rock-solid strategies, align your people to them and then execute flawlessly.
Read Gary’s books, check his blog, and learn the wisdom of someone who’s been there and done that!
Break Your IT Sales Barriers with Ian Altman
We are starting our "MSP 2.0 bestseller" monthly book review. We want to start strong, so the first book of this series is the new consultative selling holy bible, Same Side Selling. The co-author, Ian Altman, CEO of Grow My Revenue, is a sales visionary, bestselling author, Forbes contributor and keynote speaker.
While speaking with Ian it became clear he knows how to win the hardest battle IT managed services providers have ever faced: commoditization of the IT infrastructure services and the resulting price pressure, shrinking margins, and the lack of differentiation from competition.
One of our MSP 2.0 movement members suggested I read the book: Same Side Selling - A Radical Approach to Break Through Sales Barriers. He had told me that this is 100% aligned what we do in the Managed Services Platform IT Consultative Sales program. I read it and I was flattered. Most of what I’ve read on the subject involves large complex concepts, but this book was very simple, very practical and quite an eye opener. I think everybody who’s a little serious about MSP 2.0 should read his book.
You can read his articles each week on Forbes.com. If you do a search in business trends, he comes up #1. Business luminary Seth Godin recommends Ian’s latest bestselling book, Same Side Selling, as one of two must-read books on consultative sales. Ian is host of the Grow My Revenue Business Cast. He started, sold, and grew his companies worldwide to values of more than one billion dollars.
I had a chance to chat with Ian last week and he was able to carve out time with us for a quick interview. The fun part is that he knows the industry well, so we had a great chat. I am not going to try summarizing the interview, as I think it’s better to just hear him for yourself.
Thanks again to Ian. Check out his webcasts at his website: http://www.growmyrevenue.com