Every business starts from zero. The growth path to a second-stage organization is different. Sometimes we leapfrog, sometimes we have a 100-mile march with pitfalls and setbacks.
When a critical mass of staff, clients, and revenue is achieved, entrepreneurs and organizations shift from survival to growth engines. That shift brings a whole new slew of problems that midsized MSPs face as they grow. Here are the three most common ones I see.
Issue No. 1: Leadership Struggles
Everyone loves a promotion. Rewarding those great team members with leadership responsibilities, opportunities, and compensation is a default way to say “thank you” from entrepreneurs. We tend to promote those “go-getter” engineers into management positions.
Then the issues start. Frustrated customers, team members, and business owners rise up over weeks and months.
Technical talent does not translate into management and/or leadership capabilities. As you start to promote people to mid-level management, take time to document the systems and processes needed for those leaders to succeed. Remember how the learning cycle functions:
- I do, you watch.
- I do, you help.
- You do, I help.
- You do, I watch.
Don’t expect your team to go from zero to hero in a month. It takes time to grow a business and build organizational maturity.
Issue No. 2: Communication Challenges
As MSP teams expand, new personalities and backgrounds enter the fray. The same happens with customers and industry types.
A routine conversation that occurs in the second-stage is, “Why did this misunderstanding occur?”
Dr. Larry Little shared that two common communication myths occur across the globe:
- Everyone sees the world as I see it.
- Everyone views me the way I see myself.
Ian Richardson
Falling victim to these myths causes most misunderstandings and misalignments. Given the same set of data, four different people can easily come to four different conclusions.
Root out the instinct to make assumptions and invest in communication training to counteract this issue.
Issue No. 3: Failure to Build a Sales Process
Sales is the No. 1 problem that comes across my desk. MSP owners expect to hire a sales professional, have them build the entire process and playbook, and develop pipeline and deals in three months from a blank sheet of paper and barren wasteland of marketing. Then, $100,000 later, they wonder what happened.
After 20 years in business, I know one universal truth: Great sales reps are horrible process builders.
Take the time to build the playbook to support your rep. Invest the same amount of time into them as you do engineers for onboarding, training, and coaching. Don’t expect immediate results and stop hunting for a unicorn sales professional.
Roughly 80% of the North America MSP market never breaks $2 million in revenue while 75% of them are under 10% profitability. By reaching the second stage, you’re ahead of the game by leaps and bounds. Anticipate these issues and plan for them.
Always forward.
Nationally recognized as a leader in managed services, Ian Richardson is founder and principal consultant of Fox & Crow Group LLC and managing partner of Richardson & Richardson Consulting. When not working with fellow entrepreneurs, Richardson enjoys time with his wife/business partner Carrie, as well as their three children and dog. Look for them around the country in #pennythevan! Learn more fascinating facts about Richardson at channelWise.
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