Scaling up your MSP with Verne Harnish

Posted by Denes Purnhauser on Mar 31, 2016 9:52:21 AM

In vCIO, Sales, MSP best practices, MSP, MSP Marketing, MSP bestseller series

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!

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My take-aways from the video:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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. 
  7. 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.
  8. 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).
  9. 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:

  1. 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.
  2. Check out all the free goodies in the Scaling Up website. You can find many one pagers, templates resources to Scaling up your MSP.
  3. 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.
  4. 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! 

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