Building Company Resilience to Thrive in Uncertain Times
MSP operations don’t exist in a vacuum, and the interconnectedness of businesses with everyday life is more apparent today than ever. Natural disasters, geopolitical events, and even, as we all know too well, worldwide pandemics are beyond our control and there’s no way to stop them. This is why, amongst all your other priorities, you must find a way to prioritize your company resilience.
Businesses that survive — and even thrive — during challenging times are resilient enough to withstand the current challenge thrown their way and then pivot toward new ways of conducting business as circumstances dictate. Think of the doctors who shifted to telehealth visits and retail operations that moved to contact-free delivery of goods as the pandemic hit in 2020. Or, for MSPs during that time, helping your own business and your clients secure and optimize remote workforces at a staggering scale.
Building a resilient MSP business means being built to withstand difficult circumstances and being agile and able to adapt to changing circumstances — a concept we’ll help you and your team get more familiar with in this article.
Understanding company resilience and its importance
Business resiliency, by definition, is an organization’s ability to maintain business continuity in response to various crises or disruptions. Cyberattacks, natural disasters, and global pandemics are obvious examples, but less obvious examples include extreme supply chain disruptions and regional broadband outages would be other examples.
Resilient companies are ready for these events with a clear, effective course of action in place that allows them to react to the situation at hand. Companies without a plan in place, or those that adopt a “wait-and-see” mentality, will likely struggle to react to and overcome these same obstacles. These companies will be struggling to maintain continuity while the resilient companies have moved past them, and on to capitalizing on the opportunity at hand.
Building a resilient business requires protecting a company’s assets — including employees, data, equipment, and other IT infrastructure — from the damage caused by these unexpected, uncontrollable events. This requires an in-depth understanding of all the moving parts within an organization. Assessing workflows, procedures, and personnel enables companies to put a plan in place to keep all those moving parts functioning as they should in the wake of a disruptive event.
This is where you can steer your clients toward resiliency by improving their IT processes and infrastructure — all of which is critical to maintaining business continuity.
Traits of a resilient company
The most critical, and typically overlooked, aspect of a business resiliency program is the human element. Your team is your most important asset and will require the most education and training to respond to potentially catastrophic events — both internally and on behalf of your clients.
So, it’s no surprise that the key traits of a resilient company or culture center on a common theme: people.
Strong and competent leadership
Resiliency within your MSP organization flows top down. Your leaders and managers need to embody resiliency and adaptation for the rest to follow suit. In a time of crisis, employees will look to the leadership in the business for calm and steady decision making. And during those difficult times, leaders will need their employees to stay committed and maintain communication. These behaviors must be instilled well in advance of any crisis event.
One way leaders build employee commitment is by building employee engagement. Good leaders do this by supporting their teams and helping their team members be successful. Without support from senior leaders, employees may disengage and show up with a “I’m just here for the paycheck” mentality. This mentality will not lead to dedicated employees when it is most needed, making it much harder for them to respond with urgency during chaotic times.
Communication is also key to creating a culture of company resilience. Employees should always feel they have access to senior leaders and mid-level managers within the company and those leaders are truly willing to listen to them. This may mean adopting a “doors-always-open” policy in an office setting or, in a digital workplace, setting up a forum, page, or chat on your company intranet where employees have direct access to senior management and decision-makers. Or, it may be as simple as leaders communicating to the team that they are open to emails or chat messages, and then responding in a reasonable time back to the employee when a message is received.
Transparent communication and collaboration
Transparency must apply to much more than management. Encourage clear and open communication across all internal teams. The way you communicate among your team can be an extremely powerful tool that strengthens your business resilience.
Encouraging an environment of judgment-free, open communication sets the stage for critical conversations about core values, ethics, process improvements, product and service offerings — everything.
Honest, transparent discussions — both within your MSP and when communicating with clients — facilitate innovation, trust, and collaboration, all pillars of a strong culture.
Collaboration goes hand in hand with communication. You may think they’re one and the same, but there are subtle differences teams need to understand and improve upon to implement successful resiliency programs.
The way a team collaborates refers to more than how they share information or project documents. It’s about how the team works together. This involves clearly defining roles and responsibilities both within and across teams. And it includes accountability and follow-through amongst those collaborating. Apply this collaborative spirit to how you work with your clients’ teams as well. After all, you are a de facto extension of their IT staff. Establishing a culture of collaboration is key.
Dedicate time to discuss what’s working, what isn’t, and what you can do to make your and your clients’ teams’ workflows more seamless and effective.
Stable work environments
Work environments of all types can bring a significant number of emotional challenges, like stress and work-life imbalance. MSPs are no different, with the volume of internal and client tickets and the frequent surprises that often arise during inopportune times, such as nights and weekends.
Traditionally, employees could go to work from 9 to 5 and leave everything at the office when they head home. With the rise in remote and hybrid work, the lines between our work and personal lives can easily blur, contributing to teams and leaders too burnt out to overcome when times of chaos arise.
It falls on leadership to create a more stable, emotionally resilient work environment. Some steps you can take include:
- Setting reasonable expectations for productivity.
- Giving employees outlets for social gathering and their unique interests. This may mean implementing workshops or helping employees form groups focused on common interests.
- Making sure that employees, including leaders, are taking time off from the business to recharge and that they are not working during that time off.
- Providing your team with the tools and resources they need to succeed.
- Leading with compassion and empathy. Empathetic leaders listen to their employees and look for ways to help their employees.
Ultimately, whatever steps you take should be about creating an environment in which teams feel supported and valued.
Willingness to adapt and innovate
Resilient companies are constantly looking for ways to innovate and adapt in a changing business world. They are open to pivots toward new technologies and processes and have forward-thinking teams that harness their creativity to navigate obstacles.
For an MSP, that might mean:
- Proactively focusing on automating key functions to build efficiency.
- Staying up to date on the cyber threat landscape, especially in remote settings, through education and training to best secure your MSP and your clients.
- Keeping apprised of industry trends to identify areas for improvement within your organization and pinpoint opportunities to outpace the competition.
A key part of this focus on innovation is to drive improvements in productivity and profitability. Teams that can increase profitability and their cash reserves better position themselves to weather stormy times — and take advantage of the opportunities they present.
One way to drive additional efficiency, and profit, is to standardize throughout your MSP. Discover how to optimize your MSP business for profitability with our eBook, What I Wish I Knew When I Started Managed Services: Standardization.
Types of business resilience
True company resilience entails perseverance in several key areas of your organization’s performance. Each resiliency subset requires its own considerations and management techniques. Let’s examine each in more detail.
Operational resilience refers to your day-to-day operations standing up against the impact of unforeseen events. This takes into consideration your production capacity, supply chains, product or service delivery, and more.
For example, you may need to scale your backup and disaster recovery services in the wake of a natural disaster to keep service delivery consistent and undisrupted during periods of significant and unexpected change. And all this needs to occur without sacrificing service quality or customer service.
Operational resilience needs to include a comprehensive Business Continuity Plan. Part of this plan being successful in the event of an actual event is that your employees, including but not limited to your leaders, need to be thoroughly trained on the plan and their roles in it. Additionally, your plan should be regularly tested and updated, as your business and systems change.
Business forecasts typically include short- and long-term outlooks. Part of remaining financially resilient is balancing for both and adjusting as economic conditions dictate. The oft-focused aspect of a crisis is on the economic challenges that businesses will have to overcome but often overlooked are the opportunities that the crisis will present. MSPs should prepare for both.
Liquidity is a crucial factor to consider here. Having cash reserves on hand should help you offset sudden dips in revenue, sudden raises in hard costs, and customers who are unable to pay their bills, even if temporarily. Reserves won’t solve economic challenges, but they will buy time during a challenge.
Analyzing your financial health carefully and planning for any “worst-case scenarios” will help you weather the balance sheet challenges that plague many businesses during a tough time. And, make sure that your service offerings are priced in a way that allows for maximum profits, which helps drive cash flow.
For some assistance on looking at the financial health of your business, use our MSP financial health and early warning score calculator. This will help show your financial risk in the event of a downturn.
For more information on financial best practices upon the advent of an external crisis, in this case, specifically a recession, read our resource, The Rapid Recovery Planning Workbook.
Your team and organization must also be resilient for your business resiliency program to succeed.
Resilient teams are quick to reskill or upskill employees as circumstances demand and constantly seek the best talent. For example, does your team have redundancy with certifications and skills to handle technical problems your clients may encounter? Or, do you have critical capabilities tied up in one, or a limited number, of key employees? What if those employees are not available during a time of extreme need?
This flexibility must also carry over to your processes. Delegate new procedures, workflows, and responsibilities according to what is best for the team and your customers. Create and constantly update internal documentation to track process implementation and improvements so that new employees can be trained in those processes as well.
It is also important to create plans for the succession of key team members. Whether due to a crisis or just staffing turnover, key team members will need to be replaced. New people must be able to come in and “hit the ground running” on current and future products. Team members and upper-level managers should pass on institutional knowledge and train their backups or replacements for key duties to maintain continuity. In addition to internal succession planning, strategic outsourcing is one example of how MSPs can uplevel their collective skill set and services, without taking on added overhead and it also helps dissipate risk.
Your tools and infrastructure must be just as flexible as your people. It may cost more upfront, but investing in the best available tools and following best practices for IT asset management will pay off down the road, especially in times of chaos when business operations may need to pivot quickly.
Some areas where you should focus significant investment are:
- Small- and large-scale IT projects (i.e., software implementation, hardware installation, or database management)
- Business continuity and disaster recovery (BCDR)
- Regulatory compliance
- Measures to avoid service disruption or downtime (hardware maintenance and optimization)
Practice what you preach. Organizations with reputational resilience ensure their actions back up their words. If you and your team are not holding each other accountable, your customers surely will.
In today’s digital age, brands are closer to their customers than ever. One wrong move can cause a reputational nightmare for your business. This is especially important for a service-driven industry like MSPs. You can’t have potential clients doubting your ability to protect their networks and assets based on something negative, and potentially untrue or at least unfair, they saw online or heard from a former client.
One way to build reputational resilience is to document your core values, train your employees in them, and make them known to your current and potential clients. And once you do, make sure you stick to them, if you don’t they will become meaningless. This type of resilience requires deep self-knowledge of your team and business. Clearly stating, and living true to, your core values should give your team a beacon to follow, especially in times of chaos where company resilience might be necessary to maintain your sterling reputation.
Common company resilience myths
Companies may understand what business resilience is and take steps to improve their own, but how can they be sure they’re making the right moves? Watching out for these common company resilience myths is a good start:
- Business resilience is only for natural disasters. Emergency preparedness is important but only a small part of business resilience. As we learned during the COVID-19 pandemic, business resilience planning applies to other events, including cyberattacks, the loss of proprietary information with departing employees, or service disruptions.
- Testing your plan isn’t necessary. Simply having a resilience or business continuity plan isn’t enough. Improve its efficacy by regularly testing the plan and making the necessary adjustments. Collect feedback from your team after each test to see what worked, what didn’t, and what improvements you can make for next time.
- Business insurance will cover your losses. Business insurance policies can be complex. Your policy may contain exclusions that provide you with far less coverage than you think you have and in the event of natural disasters or cyberattacks, you may still be left to cover a significant portion of the damages yourself. Your insurance also will likely not fully account for intangible damages that are hard to quantify, like hits to your brand reputation. Make sure you review your policy in advance of needing it so that you have the right coverage in place.
- Your staff can handle it. Many teams believe their staff will suddenly “step up to the plate” when a crisis arises, whatever the crisis is. While some employees might, this likely isn’t true across the board. And holding this belief can be dangerous and leave your team unprepared as your staff will revert to the level of their training in times of crisis. Make sure they receive the training and education they need on a regular interval, not just when they are new, so that they have the knowledge (and confidence) needed in a crisis.
- Resilience planning is only for big companies. Another dangerous misconception is that only large-scale businesses need a business resilience plan. Every business needs one. If you don’t have a plan, now is the time to adopt one.
But where do small-to mid-sized businesses like MSPs start?
How MSPs can build and improve company resilience
If this guide is your introduction to company resilience, have no fear. MSPs who are starting from “ground zero” and want to implement a business resiliency program can take the following steps:
- Shift your perspective. Look at resilience as an opportunity. Use it as a strategy and build it into every tool or process you develop. Accept the fact that crises and disruptions are unavoidable and prepare for them. Reframe them as opportunities to overtake competitors in your industry and adopt a more proactive approach.
- Track resilience progress. Traditional business metrics may be outdated and “miss the mark” regarding resiliency. Focus on numbers like your recovery rates, speed of mobilization, and system downtime. Each business’s metrics may look different, but the main goal is to prioritize short-term performance while still considering long-term growth.
- Internalize resilience. Make resilience part of your internal structure. Build concepts like “plug-and-play” processes and redundancy of key business processes into your company culture. Cultivate proactive imagination and adaptation to navigate obstacles and potentially hatch new business opportunities.
- Balance long-term resilience with short-term efficiency. Developing and testing a company resilience plan takes time, effort, and resources. Leaders must understand that there’s an inherent trade-off here. You may sacrifice short-term efficiency initially as you get your resiliency measures in place, but over time, these initiatives will benefit both the short and long term.
Creating a business resilience plan
Global health crises and environmental disasters aren’t the only events that require company resilience.
Economic events like recessions are also cause for concern in the global marketplace. The specific effects of a recession on MSPs include the following:
- Your revenue will likely drop (up to 30% in the first two to three quarters) as customers begin to cut expenses, shrink their workforces, and in some cases, go out of business.
- Support requests due to the recession may rise.
- Companies may fire their IT team and look to MSPs as replacements, creating new opportunities at companies that didn’t previously outsource.
- Some other MSPs may go out of business, leaving their customers as opportunities for you to grow.
So how do you avoid the adverse effects of a recession and position yourself to capitalize on the opportunities? Savvy MSPs prepare by doing the following:
- Take urgent, defensive action to grow recurring revenue, cut costs, and maintain a positive bottom line.
- Build up enough cash to cover six months’ recurring expenses.
- Stay as liquid as possible to capitalize on opportunities the recession creates.
For more information on how to build back up from sudden events like recessions, be sure to reference our MSP Rapid Recovery Planning Guide.
A healthy bottom line and readiness to capitalize on new opportunities ultimately come down to your ability to cut costs and maximize profitability. ConnectWise can help set your MSP up for success with our suite of business management solutions, designed to help you increase efficiency and streamline operations. Experience our solutions first hand by watching an on-demand demo today, and take the next step toward company resilience.