An economic crisis can be scary. But silent leadership can compound employees' fears. Savvy managed service providers (MSPs) like masterIT, ranked No. 6 on our MSPmentor 100 list, are working overtime to communicate with their employees during these stressful times.
Without sugar coating the financial meltdown, masterIT CEO J. Michael Drake sent a reassuring memo to his staff on Sept. 28. In it, Drake conceded that the US economy faces some real challenges. But he also provided considerable positive reinforcement to his staff, describing why masterIT remains well-positioned for growth.
Here's a look at portions of Drake's memo to team members:
We are living in unprecedented times. 20 years ago I spent three years of my career working for the Resolution Trust Corporation – the arm of the government that conserved the assets of failed Savings & Loans in the United States. What our country is dealing with today is 10x the magnitude. I know each of you are concerned about this crisis, what it means to your family, our company, our clients and the future.
First, some good news. In 2008, masterIT will double its monthly fixed-fee recurring revenue. That means we can better forecast the amount of revenue we can depend on. The Outlook Budget for 2009 is to almost double our current fixed-fee recurring revenue. We believe we are the right people, with the right solution, at the right time.
Interestingly, one of the questions for the MSPAlliance Certification exam asked about the percentage of managed services revenue we receive from contracts between 1 – 3 years. Ironically, the majority of our revenue comes from contracts 4 years in duration, with IT-as-a-Utility™, with professional services firms like money managers, insurance companies, accounting firms, i.e., clients that are not at great risk. Therefore, our revenue stream is predictable, at a growing rate, and we have a window that is 4 years into the future. ...
... Finally, America is at the beginning of recognizing the crisis that has been building in our economy for years. It took this nation a long time to get into this position, and it will take a long time to work out of it. Next to being a doctor or the utility, I passionately believe the service you provide our clients and the community ranks at the top of the list and is therefore, recession resistant. masterIT’s forecast is to grow at an increasing rate. Those of you who have been team members for any period of time can testify to the hard work and innovation many have brought. We are now at real lift off, so I want to encourage you and thank you for all of your hard work like the CBRE move and colo clean up just this weekend alone. So many other efforts by many others do not go un-noticed. As we tell every client, “with masterIT, it takes a village.”
Attached please find a very well written analogy of the crisis America faces. I used to travel to Europe every three months for business reviews. Without fail, every time I returned I was so proud to be an American because of this country’s unique ability to innovate its way into or out of a problem. It will happen again. masterIT is in a unique position to help itself and our clients now and for a long time to come.
Lessons for MSPsSo, what are the key lessons for other MSPs? Here are three quick thoughts worth nothing:
1. Don't hide from stressful discussions: It's not enough to verbally tell employees that your company is well-positioned to ride out the economic storm. If you do have positive story to tell -- with key facts and figures -- share the information in writing. But be careful not to overstate your business prospects. Drake sticks to facts and figures to keep his staff energized and upbeat.
2. Do put things in perspective: Drake effectively compares masterIT to "recession resistant" industries like the medical vertical ("doctors") and utilities. Notice he didn't say managed services are "recession proof." Instead, the words "recession resistant" provide a view that's upbeat but also responsible.
3. Do partner up: I removed a paragraph describing masterIT's unique market position and long-term strategy to compete with larger software companies. In it, though, Drake articulates how masterIT will work with an MSP platform provide to continue attracting business.
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