EP160 - Ask Stuart #9 - What Should the People Structure of My MSP Look Like with Stuart Warwick & Ian Luckett

INTRO

In this episode of the IT Experts Podcast, we ask Stuart, what should the people structure of my MSP look like.

Welcome to the IT Experts Podcast, the only podcast to help MSPs scale to 1,000,000 and if already there get to 5 and go fast. At the end of the day, isn't it all about building a business that works for you rather than you for it? I hope you enjoy the show.

IAN

So, good morning, good afternoon, good evening. Welcome to the IT Experts podcast. Today we've touched on another key subject about growing and scaling your MSP and we've got Stuart on the show again answering the question what should my people structure of my MSP look like. So good afternoon, Stuart, how are you today?

STUART

Hello, Ian. I'm fantastic. Thank you very much. A little bit croaky, but I am all good.

IAN

We've dragged you out from your sick bed to record for the nation and the world in actual fact, this really important subject and there's no rest for the wicked as they say. So yeah, well, well done. I know you’re a little bit under the weather today, but look we got a really important subject. We want to talk about just before we close this year out. As you know, you know and many know the ability to ground scale and MSP rolls down three things. Knowing your data, really good information, your ability to build and grow a great team, and the third one is around having a you know, a flow of leads are generating sales and marketing engine that's going to help to replenish those wonderful referrals we like.

But we get asked this quite a lot and as many MSPs start off in quite a flat structure, and the fact that they, you know, they never went to Business School and understood kind of what should the optimal structure look like today, we're going to be talking about what should that what should that look like and we hear lots of kind of frustrations, don't we and a few pain points in this, in the channel. So Stuart, what's your kind of view on why is this such a key question and why is it such a challenge and an issue for MSPs?

STUART

Well, it's always a challenge because it involves people and in most businesses and particularly MSP or in most MSP, you know people are the most probably the most expensive resource within the business. Certainly as you get bigger and also people are people and they're complex and getting a large number or even a small number of aligned and working in the same fashion towards the same goal takes effort and the tipping point is, as you gain that that scale as you gain that scale and as a result we find so many MSPs are frustrated because in the early days, obviously it's all about what they do, you know, and they they hire an admin or a or a level one engineer or a body of some sort that works inside them and it's easy when it's two of you in the game or three of you in the game, you know when you can work in one office and basically see each other and hear each other. It's easy to be on the on the same page. However, you know hybrid working now you know working from home in the last few years is you know is here to stay. Not everyone is in the office. Some businesses are run virtually. And also once you get past 3-4 five people sat around a set of desks. It starts to get difficult and what we find is that many our MSP business owners are going you know. Why can't I get what I want out of my team? Have I got the right people? Why do I have to come up with all the ideas? Why do I have to be in the middle of everything to make it happen? And this isn't isolated to just the small growing MSP, you know we come across those that are two-third million and they've got, you know, complex people issues that are keeping them stuck and plateaued and not growing.

IAN

So this is quite a difficult thing to master because you know, many MSPs, they just grow and they just build other technicians, don't they? And before you know it, you've got all these technicians with different skill sets. And some of the times we sort of see it where they just kind of do a bit of a pick and mix, don't they? And they enjoy the things that they like to do and they don't enjoy, they don't do the things they don't enjoy doing. And then the business owner ends up with this challenge of, well, who do I recruit next? What you know, how am I going to get, you know, my business, that's got to here. How am I going to get it to that, you know, profitable £1,000,000 or even beyond there and they have this dilemma, don't they, Stuart? Just on, like, well, okay, who’s the next hire.

STUART

Yeah, you're absolutely right. And the reason you're considering hiring more people is that. You're trying to structure the business so that it works for you rather than you for it, and you know you and I talk about this all the time, because if you're building a business beyond effectively a lifestyle business where you are at the centre of that business and I'm very happy to be, it's about structuring it such that you know you're you're installing leverage and capacity and our focus is with the people side of and MSPs. How do we amplify the capacity to remove you from the doing so that you can lead the business if you wish to or focus on the areas that you love doing. You know we've got clients that just love selling, they're out networking, they're out talking to new prospects. They're brilliant at it, we got other clients that really hate selling, they're comfortable in front of someone that wants to talk to them, but they'd rather be kind of behind the scenes, you know, not purely in the technical. But you know, it's not an area that they're particularly pleased with and they'd rather hire account managers and sale people, so everyone's different.

But if you're going to be the owner of a business that that truly works for you and is scalable and ultimately salable, but ultimately you know the key is scaling it around you is people are going to be needed and have you got the right people in the right roles with the right skills that fit your organization and basically you like and can work with.

IAN

Just touching on that point, you just mentioned there about sailable. I was talking to someone the other day and they said that if you the valuation of your MSP when someone wants to come and have a look at it will be dramatically affected if. You are needed to run that business. You know we talk about owner not needed. We talk about building a business that works for you rather than you for it, but when someone comes along and wants to buy that business if you're apparently there's like 7 key questions or sort of something so this particular owner said no, no, no, I'm not needed in the business. It runs without me. But he asked these seven questions and he goes, it does run with you. You know, we need you in the business to run the business. So therefore, I'm going to take, you know, 90 Grand Times 7 or whatever the whatever the number. What he says so all of a sudden it turned into 650 grand off his valuation because he needed to recruit an MD. And it was like, God, this guy never ever thought about it like that. So having these teams that are leveraged, having these teams that are operating SOPs operating, you know, the way that the business runs without having to have you in it all the time. He's not only going to help you sell it if that's what it is, what you want to do. But it's also going to what it's going to mean that you're going to get a valuation you might not even get a valuation if you're that stuck in the middle of it.

STUART

Yeah, exactly. And the reason it sometimes hits being in the difficult box is that you know, the MSP owner has hired people before, you know it's work. Sometimes it hasn't worked other times. They're conscious that that perhaps people they've got in certain roles, they need to move from one role to another, or they'd be better off doing something else than what they're doing right now. But they don't want to have the difficult conversation, you know, so as a result, they kind of avoid it. They hope that the person will pick up on it, which they won't because it's not explicitly talked about. The other thing is that the kind of there's a fear that they might get it wrong, hiring new people, bringing more expensive people in. Maybe people with more experience than you and what if you get it wrong? What if you waste that money. What if you get, you know what will be the impact of that and so you end up kind of making do the sad thing about it is that you know, we speak to many MSPs that have been kind of stuck. Plateaued for, like, just a few years too many before they go do. You know what? I need to deal with this. I need to grip it. If they only had that opportunity to grip it, you know, step out, step out of their comfort zone or step out beyond their fear and actually grasp the need to structure the business around them, then they'll probably be in a different place to where they are right now. But hey, you know better start today than never.

IAN

And I think that's the thing, isn't it? Is where do I start with all this sort of stuff? You've just told me about how I've built the business and where we've got it need where we need to be. But where do we, where do we need to move forwards and what are the first steps and how do we, you know? One of our methodologies within the framework is how do we connect and align those people so that they understand what's going on so that they're working all together, aren't they? So we've got some as usual, we have got some great tips for you here. So what's the first one that we that we're going to talk about the minutes start.

STUART

You touched on, you know, aligning everybody. And we've done podcasts about that before. It's around ignite strategy, but the first thing here around planning your people thing is it's the P word. It's planning out what that structure needs to look like in the future. It's not just looking at the structure you've got now and tinkering with it. It's saying, okay, if I'm going to remove myself or I'm going to get myself into this particular role and it doesn't have to be the MD role, but it might be for many. It is the leader of the business. What is it? How does the business need to look, you know, do I need somebody in finance? Do I need somebody in sales admin doing the quotes and the procurement? Am I going to, do I need an account manager to support me to take on some of those, you know, B&C level clients so that I can focus on the A clients and what sort of technical structure do I need? Do I need to hire a support manager or need a service delivery manager? Do we need additional level threes or level ones or apprentices coming in because you know you look at your run rate to date your speed of growth to date and say, well if I if I carry on at that or if you're doing the right things and could see yourself accelerating, you know going from maybe half a new client a month, you know 6A year you know to one or 1 1/2 new clients a month who and what are you going to need to support that? Because unless you've got a plan, you're just going to literally be reacting from one month to the next thing you know in terms of your hiring plan or when someone leaves, you'll be on the back foot just trying to fill that hole.

IAN

Yeah, you just react as you say, just react to what's going on right now rather than plan to, you know, overcome any peaks and troughs, cause most MSPs do have kind of peaks and troughs and they naturally within their client base, whether they're busy at Christmas, whether they're busy at the summer, whether they're busy, you know, in the new year what, whatever it might be. And I think planning that in a way to kind of help flatline those is an really important thing.

STUART

Yeah, and many wait until they're literally at breaking point and go ohh, I need somebody and it's at least, let it even if you got lucky, it's eight weeks before you hire someone and it's another eight weeks before they've, you know they're any good because, you know, they got to settle in, get to know the ropes before they're actually, you know, functioning. So, if you're planning to grow, you need to be planning to hire alongside. Obviously the automation and the efficiencies that you're building into through your systems. But it's likely that you will need a core structure of at least an operations person overseeing your operational team. Somebody looking after finance for you and somebody looking after account management and sales with you overseeing it. You know that's a very classic, simple structure. But you know, the second key principle is understanding what you've got.

IAN

Yep.

STUART

You know who have. You got what roles are they in, what are their skills to that, well, what are their behaviours. You know what we find many times that that many, many MSPs are pulling up with staff and their levels of performance or commitment just because they feel grateful to have those people in in situ because they're known. But actually deep down they're a bit like, you know what, this person isn't pulling their weight. But I'm too fearful or too busy to do anything about it. What's that costing your business? And that's right under your nose. So taking a look at who's doing what, in what role we call it a rag analysis, don't we?

IAN

Yep, and that this is a bit where you just you know as you sort of said, when you're assuming that you're kind of moving along and things are working, but are those people really happy, engaged and aligned with where you want the business to go when we run the genius model which helps you get into flow and what you want to do, you know, not every, Senior tech will make a great SDM. Not every junior tech is going to want to go and do project work. Some of them are just going to want to sit there and just work through tickets during the day. And, you know, do a little bit of you know, hardware and a bit of build and things like that, but so it's really important that we understand, what not what people want to do, because this isn't a pick and mix. You've got the roles, you've got the structure, but it's what they're good at and what helps them get into flow. I think there's a I think it's a bit of a differentiation. We probably need to clear up. There is this about getting people who've got the right skills for the right job rather than asking everybody what do they want to do because that's going to enter a very, very, very different result. Isn't it?

STUART

Yeah, it is. It is. But, but it does touch on what we've spoken about before around motivation and retention is by understanding who you've got in each role, how they're performing in your view, and also in their view cause it might be different of what they think, but also understanding that aspiration, you know, are they quite happy just to turn up and do the job and they're at that point in their life where they're not thinking about, you know, huge growths. Salaries. Lots of change, learning, loads of new things. They're just, you know, a solid meme team member or you've got people that are really ambitious and want to get on with stuff and are highly motivated.

So understand, being each individual and where they sit in your team and are you happy for them to sit where they are. And does that align with where you're going next and that future organizational structure then a they get excited because you're talking to them about you know what's going on in the future. So they feel secure, but also in most cases. Kind of excited about what, what the future might hold because you're showing them, you know, the future. It helps with retention, but it also opens up the fact the conversation. Yeah, that leads you then to be able to identify what the gaps are. And this is the third principle, you know, recruiting in the gaps. And Oregon, developing existing team members into those gaps because you've understood where they want to go, what they're interested in. So once you understand what the future looks like for you and this is perhaps the hardest piece for MSPs because they don't know where to start, how do I know what the future is going to look like? But just taking some time to think, okay, if I was going to be less busy or I was going to get more out of my team on a day-to-day basis because I know. I've got all this work with my clients, who or what do I need in my business to help me do more without me doing more, you will start to go ohh. Right. Well, I need someone to help me with or procurement or the OR the end of the month books or tickets aren't getting addressed fast enough. Well, is it a performance issue or is it a capacity issue? And then you start to be able to identify what you're, what you're likely to be needing, then you align. Who you've got? With that structure of what you think you need, can people step up and then you can recruit in the gaps. But the thing that is the biggest piece of, I suppose, poison or friction in this whole people game is putting up with mediocrity. If you aren't managing all people and you are putting up with people. You know, treading water, not doing the things you want them to do because you're too busy to tackle them. Or perhaps you're not sure how to have difficult conversations and you it feels like conflicts. So you kind of avoid it. That is poisonous and it is also a source of huge friction in terms of your ability to grow either now or in the future. So, tackling performance either at behavioral level or performance level, skills level is key as part of this equation to developing your people structure so that you can scale confidently. Does that make sense?

IAN

Yeah, it does. And you know what, it give us some, you know, give us some ideas or some examples of where over the years you've seen mediocrity cause you know the conversations that we have. You could be going well, hang on a minute. That doesn't quite sound right, but to the business owner, that might sound well, it's always done it like that. That's always quite good like that. Yeah, but that's not kind of like the standard that we want to help grow. How does how does mediocrity and, I guess, laziness. You know not performing well. How does that, how can that sometimes show up in an MSP?

STUART

Yeah, easy. Well, it's characters that don't reflect necessarily the values of your business. Okay, So what does that mean? That means that if you've got an ethic of teamwork or taking responsibility, you know, taking response means well. Owning it. So until it's fixed or fixed. First time and all. All your technicians or other members of staff reflecting the behaviours that that are important to you and how you do business and I think that's the key one where people you know might leave a client and say ohh no I'll have to call you back tomorrow cause. It's 5:00. I'm going home now. It's like, okay, that is their finish time. But actually if one of our values is, you know customers first or whatever value that, that sounds like it's like. You know, I'll finish with this client when it's done. Because I'm committed to what we do here at the at this MSP and I think you know in your gut, if somebody is not on brand, if we say it. You know is isn't fully in the team and it's kind of on the edge of the team and if and if you were playing football or rugby, it's like when the team has a huddle or they're kind of last to come into the huddle. They're the quietest, that they're not engaging now. I'm not talking introvert versus extrovert, that's different. That's just different personality styles. But it's just, how they show up in in how they execute in the.

IAN

Yeah. And you might always say, is this sickness lightness. And as you as you said, you know, you're in a meeting and everyone's all getting excited about the year end or the year ahead or whatever it might be. And they're sitting there just not really involved in it. And if you don't know, they might be one of these team players who just want to sit there and just and just, you know, inverted commas do tackle all day. And that's absolutely fine if you know that, that's their happy place and that's what they want to do. But really understanding, you know. Who needs to raise their standards and then have that difficult conversation, we did a podcast on this with Julie recently to, you know, have that have that the art of having a difficult conversation and that will be a good link we'll put that in the show notes. And that will help you understand how that how to deal with that mediocrity.

STUART

Yeah, and it will show up in the KPIs and we've talked about KPIs before. And you know, if we talk technical team, you know KPIs can be you know number of first time fixes you know just digging into. That, that, that statistic as to you know why certain people can get things fixed first time and others you know seem to have tickets that are lingering and ongoing, you know that either shows a skills, a skills problem which needs training, or it's an attitude issue, you know, or communication issue that that, that team members got that they they're not being able to, you know, resolve the clients issue in Montville sweep.

IAN

Stuart, thanks ever so much for sharing with us today those four key principles about helping the get your structure in place. Any final words for MSPs out there? What they need to do, particularly as we're kind of turning the timer recording and turning the year to make 2024 a different, better, more efficient, more productive? More automated year ahead, anything?

STUART

Yeah. Well, the end of the calendar year is one of those natural points at which we kind of look back and look for. But don't we, you know, if we ignore the old New Year resolutions, which 95% of which you know never succeed beyond, yeah, the end of January, the first week of February. It is, it is just using that opportunity to step back during this quieter period and think have I got the right people in the right roles doing the right thing. It's a classic question. But you know, given how hard I work in the business, how hard do I want to work next year? You know, have I got my holidays put in the calendar 1st so that I can get away and leave my team to run the business and take 567. You know we've got one client that that has mandated 50-50 days holiday year that he has to take with his business partner. Why can't that be you?

IAN

Design the business that you want. And then work out how you get it at the end of it. Thanks very much for that, Stuart. And just before we just before we sign off, you know, if you're curious around how to get started with some of this, this business growth and whether or not you got the ability to get to 1,000,000 or if not, if you already there, get to live, we'll put a link in the show notes to the MSP Mastery quiz and in just three minutes you'll get 360° scan of your MSP to identify the one or two tactics that could help you find more time get engaged, align your people and generate more leads in your business. So that's us signing off. Thanks again Stuart for your time. Like I know that you have been a bit under the weather, but we look forward to you bouncing back into the office anytime real soon. Wishing all of you a happy and prosperous New Year and 2024 already, although I think we probably get a couple more episodes in before we do that and I'll catch up and see.

STUART

Fantastic. Thanks Ian.

IAN

Cheers.

OUTRO

So, I hope you enjoyed the show. If you did, I'd love it if you could leave a rating and review on your favorite podcast platform. If you want to learn more about how to take your MSP to a million, or if you're already there, go faster, then come and join Stuart Warwick and myself in the Scale with Confidence Facebook group, the link is in the show notes. You can enjoy the rest of your day and I look forward to connecting with you soon.