EP223 – Ask Stuart #18 - The Consequence of Not Stopping! And Taking Stock
with Ian Luckett & Stuart Warwick

IAN: In this episode of the IT Experts Podcast, we help you understand the consequence of not stopping and taking stock.

INTRO: Welcome to the IT Experts podcast, the only podcast to help MSPs scale to 1 million 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. Welcome Stuart. How are you doing today?

STUART: Hey Ian, back again.

IAN: Fantastic stuff today. Right. We've got a really great show for you today and as always, we have delved into our clients brains and what's going on in the brains of the MSPs, because we want to talk to you today about the consequences of not stopping and taking stock on what you're doing probably in your personal life as well as in your business life. But more importantly, in your MSP, because yes, we've heard all the cliches about, oh, new year, new me, and all this sort of thing. But one of the things that MSPs and most business owners don't do is actually put the brakes on, get out the car, fly to 30, 000 feet, have a little look down and what's going on and go, oh, that bit doesn't look right. This bit doesn't look right. And actually taking that time out to I guess strategically planned, isn't it? Isn't that what it is?

STUART: Yeah, completely, Ian. And we spend our life doing this with our clients, don't we?

IAN: I was just trying to think of some client examples, and Stuart's just said, Every one of them, every week, Ian. Yeah,

STUART: It is. And our reason for existence, our raison d'etre, is to get people to stop and take stock.

And it's easy to forget that's what we do. And hence why we wanted to do a podcast about it, because it's so powerful. But if you don't, there's consequences to be had for it. And actually, day to day, most people are fine. Yeah. When you don't stop, you don't look up, do you? It's like everybody today has got a phone, and you look on down any high street, and everyone's walking along with their head down, looking at their phone, because they don't bother to read a map anymore, or know where they're going, or they're typing the shopping list, or whatever it is they're up to and you see it all the time. People walk into each other, they nearly hit lampposts, or worse. In fact, people probably get run over. Because of it.

IAN: And when you, if you've ever thought, if you've ever heard the words come out of your mouth that say, do you know what? I never looked at it like that. I didn't, I've never thought about it like that. That's at a time when someone's got in your way and tripped you up or put a zebra crossing in your way and said, we'll just stop and think about it like this. I did it like this, or I did it like that, or this is how I approached, I don't know, sales and marketing, or your planning, or whatever it might be. And those are the moments when someone has caused you to stop and plan and stop. But we're, it's really exciting today because we're actually going to share with you a framework, aren't we?

STUART: We are. A framework that will really, again, does exactly what you said. It makes whoever hears it just sit back and go, Oh my goodness. You're so right. I do that all the time. And yes, if I keep doing it or when I have been doing it, that's exactly what's happened to me. Because you never like walking around with your head down, looking at your phone while walking down the high street, you're never more than two steps away from getting run over.

IAN: Absolutely. On this episode of the IT Experts Podcast, you've got some homework. If you haven't got in front of you already, you're remarkable because we know you don't like bits of paper get a bit of paper and a pen and Stuart will run through something with you in a little bit further. But what's the impact of not stopping? How does this kind of feel like? Because some people might be going, yeah, I do stop and we have a little thing and we have a weekly meeting, so everything's okay. But we're not just talking about having a weekly meeting to say, everything okay, team, are we? We're talking, we're going much deeper than that, aren't we?

STUART: Yeah, we are. The, I think at the micro level, yes, it's your daily huddle and stopping to have a chat with or a quality conversation, you should actually say about what's actually going on, on the front line so that we make sure that we do the right thing tomorrow and pick up on the right thing from yesterday. Handing the baton on and I think most MSPs have got a good rhythm of daily huddles or weekly check ins but are they having quality conversations at that point? That's the key. And are they aligned with the goals of the helpdesk or the project team or the finance team or whatever it is? And if those conversations aren't, there's a bit of a waste of doing it. But I think the important point is that if as business owners we don't stop and take stock about where we're headed, head down on our phone, is There's unintended or unseen consequences that come from it when suddenly a client says they're leaving when actually, if you'd bothered to get out of the detail and go and see them, you've maybe have anticipated it, whether you could have stopped it or not, but at least it wouldn't be a shock that they're off in three months or two months or one month. And that you might have had a year's kind of insight into fact, something's going on here. I need to be doing something about it. If you're not stopping and talking to your key employees or all of them, and suddenly you get a shock resignation, it's like, oh, why didn't I see that coming? Or why didn't I anticipate the fact that young people are moving on, they want to earn more money, they having babies, they haven't get moving house. If you're not anticipating their needs, and being able to, re-enroll them in the journey of your business so that they feel like they're being paid the right amount and they've been supported in their careers, then they're just suddenly going to tell you they're leaving and you're going, oh my goodness, I've just lost a really important member of staff. Now, that might be a good thing. Because they might be not that good. Or the fact that you have actually outgrown them and haven't got something for them and it allows you to refresh the people you've got it. But the thing I want to talk about today that we want to share is the momentum matrix. Yep, the momentum matrix is a way of looking at where you are spending your time and how you want to spend your time to strategically get the most out of your business, your people and your clients. So if you had a piece of paper in front of you and you drew a big cross so it's got four quadrants and on the top right hand corner there's a box we want to call performing and this is your happy place. This is where your business is performing fantastically, profits are up, revenues are up, staff are motivated, clients are happy. It's all pretty good. You're taking home the money you want to take home the business is feeling great. However, there are three other quadrants to this model, and the one below performing, so the bottom right quadrant, is what we call the black box.

IAN: Dun, sound effects come in...

STUART: And the black box is the box of denial. Now, this is the box that sits around us every day, every week, every month. And it's the stuff that's going on that we don't notice or we do notice, and we it's not that serious, so we ignore it, or it's going on and we don't ignore it because we can't see it, because we're not looking at our numbers, we're not talking to our staff, we're not talking to our customers. And its stuff that's going on that over time can start to impact your revenue. Customer satisfaction. Margin. Employee satisfaction. Employee retention and you put it down to this that and the other and you ignore it and you know you carry on doing what you've been doing anything yeah life's okay it was great but it's okay at the moment and I'm used to that kind of seesaw but then we got the bottom left quadrant the red box and the red box is chaos because eventually the stuff that we ignore the stuff that we put off eventually blows up on us you or it looms out of the darkness like a huge iceberg and crash, we smash into it. And the damage can be huge or at least it can be painful and a huge shock. And it can feel like we're lurching three or four steps back from the two that we might have made over the last few months, or one even. And that's when it just bang, smashes you in the face and you're like, oh my god, I've got to do something about it. You have no choice. It could be cash flow, it could be I'm losing 50% of my revenue because that's my biggest client, things like that. Breach and it's things that make you stop and immediately put into place some thinking and some planning. And survival, at worst it's survival. In many cases it's more of what we call the top left box, which is called renewal. And Renewal is this amazing place, even in the midst of chaos and crisis, that suddenly you get this, oh my God, head in my hands, what am I going to do? To, okay, I need to do something. What are my options? This looks like the best option, right? This is what we're going to do. And that renewal, because it makes you sit up and look at cause and effect, not just fixing the problem in front of you, and it makes you start to take responsibility for good. Do you know what? I don't like the direction I'm headed. I don't know what's going on. And that's when people get the kind of road to Damascus moment of oh.

IAN: Lightbulb moment. We've got to do something. We can't carry on with this.

STUART: We can't carry on with the same PSA or the same attitude to our staff or showing up the way I do or just never going into the office. I need to start being, a better leader. I need to be focused on my numbers and understand my profitability because we can't keep going on like this because the consequences aren't worth having. But it's a really energizing place. Even if you're having to dispel bad news. I've been involved in businesses over the years where we've, for the sake of the business and market conditions, 9-1-1, financial crisis, 2008 where we've had to look at the business and the marketplace and make decisions, make people redundant, restructure businesses for the health of the bigger picture. And it's transformational because as a leader, when you step up and you inject this energy around renewal, guys, we can't carry on the way we are. This is what we're going to do. You reframe the vision, you explain the challenge, the opportunity that the business faces, and you get clear about it by involving everyone in it as well you get clear about what the plan is to move the business forward from here and that's energizing for everybody because it means when you're in that black box of denial and then smashed in the face in the box of chaos employees are probably going we could see that happening. I knew this was going to happen. Do you know what? It's not a surprise when you look back. It's ugh, management had their head in the clouds. They didn't care. They were too arrogant. Whatever they are thinking, particularly in corporate organizations, and even in small businesses, when somebody leaves and everyone goes, ugh, about time you got rid of that person. Why didn't you tell me that they were, not pulling their weight and a bit toxic? It was like didn't ask. Didn't think I should say you're the boss. And it's oh, but when you look at yourself in the mirror, you realize you knew it was going on and you chose to ignore it by being too busy. And the momentum matrix is a great way of looking at it in these four quadrants. But how can you use this to your advantage? Because in the world of business and life, we are either moving forward or backwards. There's very little standing still, the old adage, you're either growing or dying. And so why take the long route through those boxes, round the edges of spending a long time in progress and then a long time in denial and then smashing into chaos after maybe a couple of years of being in denial where profits have been dropping, revenues have been dropping, slowly, death of a thousand cuts. What if you could engineer a way to move rapidly through denial and chaos and back into renewal or even just oscillate between renewal and performing? That's called business planning.

IAN: And that's the end of the show. No, we wouldn't. Sorry, I just had to do that. We shared this matrix last week with our clients and you could just see light bulbs going on going, oh my God, I've been banging my head against a brick wall And then I'm going, oh, it's all right now. It doesn't really matter. Then you go on holiday and you get a bit refreshed. And then within a week you realize that you actually still wash smashing between denial and chaos. And it only takes a light bulb moment to move into renewal. What in your view, Stuart, when we're moving from chaos to renewal, that's a, that is the lightbulb moment, the moment when we go enough is enough. What stops people moving into that renewal box. What is it fear? Is it...

STUART: Comfort zone. We talked about comfort zone a lot of time. I think it's a mix of fear So I'm scared of my numbers or I know there's a problem or I know that I'm vulnerable Yeah with those couple of clients, but if I don't go and see them the problem...

IAN: They're not going to leave

STUART: Yeah, they're not going to leave

IAN: Because I won't talk to them...

STUART: And it might be that you know those clients have been with you a long time. So actually if you don't fix it. But this is the thing we encounter. We encounter businesses that have been okay. And if you're okay with okay, that's okay. But then they're in, lurch into chaos. And, only last month we were onboarding somebody who'd dropped from literally 1.1 million to 500K. Yeah. Because they'd done exactly this. Yeah. They had a really great client for many years. Hey. Yeah. Great. Enjoy it while you can, but never de risk them. And so now, after many years and thinking maybe I could exit this, and I'm older, and my business is, fantastic. Suddenly, they're back starting again. Yeah. And realizing that they should have, in hindsight, de risked the business a long time ago, but they were comfortable. And they were enjoying the benefits of a very profitable or reasonably profitable business at that time.

IAN: It's quite interesting, isn't it? When you talk about that situation there, but many people that we've been talking to in the last couple of months all, they all want to exit, but no one's actually got a proper plan on how they're going to exit and what a good exit looks like and what do I need to do to get that exit? Yeah, 90% of MSPs. Want to sell their businesses at some point or another but when you talk to the M&A experts It's anything under a million is not worth anything over two million is only worth a couple You know of EBITDA or whatever, you know Whatever that might be and it then you suddenly get this realization and this panic that hang on a minute What how long of a runway have I got if I want to sell this and what do I need to do? And how long is it going to take to get those things? So we've jumped up into renewal and we want to stop you getting back down into denial now and have that utopic state you just talked about where we're just going to flick between performing and renewal all the time. How do we do that? What do we need to do to keep in that happy place?

STUART: There's no secret sauce here. There's got to be, Stuart, we can't just go out there and talk about it and not come up with something. No, we talked about it on this show before. It's that rhythm of review. But that structured rhythm of review from company level to department level to individual level linking KPIs to behaviors But that rhythm of review, that, that oscillation between renewal, reinvention or continuous improvement and pro and progress, so that we're avoiding the denial boxes and the chaos that can come from not being, looking up and being deliberate about where we're going, is the quality of the conversation. And the frequency of the conversation. And when we talk about quality, it's about not talking about what doesn't need talking about. Because if you've got clear company and departmental and even personal goals, what you want to focus on is not what is progressing. But where you've got friction, or difficulty, or road map. And if every week, daily, weekly, monthly meeting, at whatever level the organiser was focused on blockers, things that were getting in the way, okay, what can we do to solve it? Great, end of meeting. See you next week or see you tomorrow. Obviously the scale of the issues you're talking about are bigger, depending on How infrequent the meeting is. So daily huddles are literally one day to the next, quite tactical client stuff. But it means nothing gets left, nothing gets forgotten about. But when you're looking at, are we making progress? Mentally, emotionally and are we making physical progress as well in terms of actual KPIs and results? The two things are very different. It's not that feeling of progress and that confirmation of progress. And when you're constantly calibrating on a weekly, daily, weekly, monthly, quarterly basis, you can't really end up in denial for very long unless you choose to. Yeah. And you're measuring the wrong thing or you choose to allow yourselves not to talk about the stuff that isn't working.

IAN: I guess you've got the data there, haven't you, to get you out of denial. Because we were sharing our departmental plan framework last week with our clients on how to set different departmental goals and bring the vision from. What you want and your KPIs as a business leader all the way through to the people tapping the keyboards and departmental Accountabilities and that was really clear with the packs that we issued on the KPIs and what does measurement look like and what does unmeasured, what does when it's not measured look like and I was just actually you've just stolen a question Stuart But I'll repeat it because it was going to be you know what is a good quality conversation and where you've just explained the fact that, it's the things that normally unsaid or the things that are off rails or where the performance is low dig into That's what a good conversation looks isn't it?

STUART: Yeah, when you're calibrating kind of what with what it's recorded, data, formal versus informal, soft versus hard data. You can't really go wrong, recognizing what's working, recognizing what isn't working. And that's the way we avoid being in denial. Celebrating, people that challenge us in the team, that say that isn't working, mismatches, that always see the thing that isn't working that might catch us out is actually a thing to celebrate. Because that's a different way of thinking, group, one of the biggest dangers in a group is group thing. Yes, boss. Yes, you're right. Yeah, we'll do that. Yeah. Yeah. Okay, we'll go away. It doesn't, it doesn't feel right. Okay, we'll just keep doing it the way that he wants us to do it.

IAN: So I guess the key for the MSPs and for people listening to the podcast is to understand where you're spending your time in this momentum matrix, isn't it? And then making decisions and following through with consistency to help you stay above the line.

STUART: It comes back to the old adage of how, are you focused on the right things? Are you headed in the right direction? And do you feel that's correct? And does the data tell you that it's correct? Your revenue, your margins, your customer satisfaction, your utilization of engineering of engineer, both in cost and time, the noise of tickets, there is so much data available, but you don't need every KPI or piece of data that your PSA can spit out. No. You need a couple one, two maximum for each department. And you've only effectively got, help desk, operations, support, whatever you want to call it, projects finance, account management and sale separately. You could say marketing, but they're probably blended together in some respect. So you're looking at four departments as a minimum, simple as that, with a couple of key KPIs. And then that measure, results and success across the month or the year. And then you're looking at behaviors and tactical measures KPIs for each day or week, certainly on the support desk and on projects, was the project on time? Was it to budget? What did we learn from it?

IAN: Yeah.

STUART: You know that might be boring to do and I haven't got time to do I need to go to the next project, but that's where you become one of the best in terms of what you do and in your area.

IAN: Data.

STUART: And gut feel I think calibration as well, are we doing the right thing? Do we show up in the right way? Does that person show up in the right way every day? Do I trust that person or group of people? Because if you don't, it's like, where's the data to prove that, I can't trust them. So where your time goes, the margins of that department utilization, they're the things that are then, present, but they might seem invisible because you're not looking at them and you just go, oh, too difficult. I'll avoid it. I'll do something else. And then it blows up at some point.

IAN: Love it. Stuart, amazing insights there into that momentum matrix. Final thoughts for you on this one?

STUART: Stop. Take stock. And understand where you spend your time. And are you in denial? Because you'll know if you're in chaos. And think about how you could oscillate between renewal and performing that those results do mean that you are headed where you want to go. Because if you're not, if you're honest with yourself and you're not, do something about it. Get some help.

IAN: And this is actually, you've just hit the nail on the head there. You've got to be brutally honest and really critical with yourself about this because you can always sit here and go, yeah, we're alright. Do this on your own. Don't share it with anyone else. And be completely honest with you. And yeah, that's it. Find someone to help you. Great. Thanks ever so much, Stuart. Catch up in the next one.

STUART: Always great fun.

BOTH: See you soon.

OUTRO: Oh, but one last thing, just before you shoot off. And if you're curious about how this episode links with the ability to scale your MSP to a million or, or if you're already there, accelerate to five, then we want to invite you to come and take the MSP mastery quiz. And in just three minutes, you're going to get a 360 degree scan of your business where you can identify the one or two tactics that can help you find more time engaging along your people and help generate more leads in your MSP. It's really simple just click on the link in the show notes and if you have enjoyed this episode we'd love to get some feedback from you by means of a rating review on Spotify or iTunes or your podcast platform of choice. We really appreciate every single one of them. Now you can go and enjoy the rest of your day and we look forward to catching up and connecting with you soon. All the best.