MSP Innovator Or Copycat?
By Peter Briden
To innovate or not to innovate, that is the question.
Long term success for any organization requires a culture of endless innovation. Without it, the organization will succumb to the creative destruction forces popularized by Joseph Schumpeter. However, not all innovation is created equally and there are times to innovate and times to be a copycat.
In my IT services company, there came a time in the late 1990's when we saw the IT business as we knew it coming to an end. It was the height of the Y2K era and we were up to our eyeballs in Y2K remediation work with a definitive hard stop. This was back before the managed services (MSP) world was even a twinkle in the eye and most providers made their living on professional services and break-fix support.
It seemed clear to us that after the big Y2K event all the work we were struggling to get done before deadline would instantly vanish and leave a vacuum in its place. We had to figure out a way to make living off of the break-fit work until the normal IT lifecycles passed. We forced ourselves to make time to think about what lies ahead and thoughtfully invest our profits into our future. We were in uncharted territory and had to make most of it up. Fortunately, we did enough of the right things at the right time to be early adopters of the MSP model. We made it up, we were innovators, and it gave us a unique message in the marketplace and a competitive advantage.
To be clear, this wasn't one grand vision, it was dozens of baby steps with as many failures as success. There was no clear path follow.
Today, I work with many IT services companies that are making the transition to the fixed-fee MSP model. This model is mature and there is a tremendous amount of information available on how to build a successful MSP practice. Making this transition today doesn't require innovation, it requires copying well defined best practices, methodically implementing them, and executing with discipline. Becoming a great MSP today is more about commitment and execution, and less about innovation.
But what about tomorrow? Schumpeter tells us someone will ultimately put us out of business and I say it might as well be us. The truly great businesses will be constantly innovating at the fringes of their industries looking to that next method or offering that will create more value to their customers. These businesses are as disciplined in their innovation processes as they are in their operational delivery. They constantly look to the horizon and invest time and resources into what is next. Jim Collins, in his book Great By Choice (a must read for any business owner or manager) has a great chapter — Fire Bullets, Then Cannonballs — that wonderfully describes the innovation process and mindset.
Innovation is extremely important, it provides an opportunity to create provide more value to the marketplace, have higher margins, and helps insure business relevance over time. Innovating when you should be copying wastes valuable time and resources. It is important to know the difference.