During a meeting yesterday with EUS Networks — a solutions provider in New York — company co-founder Jeronimo Romero described how he launched the business with a partner back in 2001. When I asked him who actually runs day-to-day operations and who manages sales, Romero’s answer surprised me. Here’s why.
Neither Romero nor his business partner actually run the business. Instead, they hired a chief operating officer (COO) to oversee the day-to-day operations.
The reason: Romero and his business partner believe they are best equipped to drive customer engagements and sales. “Our customers like dealing with the company owners,” says Romero. “So we both stay out in front of our customers and do business development.”
At a time when so many MSPs express a need to find and hire sales help, EUS Networks solved the dilemma by looking inside — to the company founders — and offloading day-to-day management responsibilities to a COO.
I wonder: Are other MSPs following suit? Should they?
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It can be a huge challenge for a CEO to try and manage both. So if you have to pick one, sales does make the most sense, for a few reasons:
#1 the CEO should have more passion, more commitment to what you do than anyone else in the organization. This is powerful in the sales pitch.
#2 Most MSPs work with SMBs. It’s likely that with a SMB you will be selling to the CEO or CFO. Who beter to give recommendations on what kind of IT they need for their business than another CEO! It lends credibility to your advice.
#3 We have found in our research that most SMBs still want an IT provider who is local and provides a personal relationship (sorry Dell!). The presence of the CEO can wipe away some of the anxiety of “outsourcing” your IT. You’re not shipping it off to some unknown entity – you are entrusting your IT with Dave and his team.
We have a business development team, but our CEO is still an integral part of our sales strategy.
Rebecca Everding
http://www.motherG.com
Rebecca,
I agree: It’s a huge challenge for small business CEOs to handle day to day operations AND the sales/biz development. A small miracle: I happen to be in business with one of those CEOs who manages to do both. And I’m lucky.
-jp
This is my eventual goal as well. Great to see they’ve done it. Real entrepeneurs love the challenge and telling their story And that’s out meeting new clients not in the office staring at your PSA.
Gerson
http://www.degasystems.com
Gerson: I think you’re onto something. When we launched Nine Lives Media Inc. (MSPmentor’s parent), Amy Katz (my business partner) and I made the strategic decision to stay on the road during the recession. Get in front of people and the results are startling…
We are in the process of doing just that. Training staff to do the things I used to do so that I can focus on pushing our company forward.
Documenting processes has been invaluable. We have our COO in place, she does a great job running the day to day. We estimate by the end of January 2010 I’ll be 100% focused on Marketing and R&D.
The costs of hiring the staff to cover your existing duties and training are a huge and the work is hard.
It’s the same as when I started this business 16 years ago. It feels like a gamble, it’s like betting on yourself all over again. But I love the ride.
-Chris Chase
Chris: The documentation seems to be the hard part for me. We’ve been hiring bloggers recently and I find that a lot of my knowledge is in my head rather than documented somewhere. So, the documentation process has started here.
Let us know how your own efforts are going. I’d welcome the opportunity to speak with you and your COO in 2010 when you’re fully focused on marketing and R&D.
-jp
Joe, we’re often asked at VirtualAdministrator.com, “What is the most important tool an IT business owner can have?” Usually the argument focuses on RMM versus PSA. But I firmly believe that the most important tool any IT business owner can have is a mirror.
Some folks are better at sales. Some are great technicians, and some are great ops managers. A successful CEO will ultimately count on the mirror to expose his or her weaknesses and either address them through training or through finding someone who does a better job than they do in those areas.
Let’s face it – most IT companies are started by engineer or “technician” types. They start out with hard work and genuine excitement, and develop their own “success habits”. Those habits usually get them to a level where they have more work than they have time – then, they need to figure out how to delegate. The problem is, they can’t delegate what exists only in their head. So as Chris says, above, process, workflow, all that stuff that tends to bore IT techs, are absolutely crucial to the next step.
So in many cases, hiring a COO is the right move, not so much because the sales portion of the business is the best place for the owner, but because it’s where he or she is the least exposed. For me, the ultimate ball game is replacing every one of my functions with people who are better than I am, so that in the end, I am left able to sit around and respond to inciteful industry blogs all day.
Not there yet, but maybe soon
.
Hey Rich: Belated thanks for keeping the focus on people rather than tech talk. Figuring out how to delegate has been our biggest challenge at Nine Lives Media Inc. But we’re making progress with new contributors, etc.
In short: No.
Hire a sales person.
This type of a question is typically asked by someone that isn’t successful – yet. Wait till you have a bunch of employees and managers underneath you that you have to manage, lead, motivate and mentor as they grow your company – how are you going to do that and get on a sales call at the same time?
-Vlad
Hi All,
I don’t know if I agree or disagree with the CEO selling and here is why: In my experience the key to sales success has nothing to do with the person’s role in a company, but rather their ability to manage successful sales campaigns and a formal sales process coupled with an undying urge to close business and the ability to empathize with our prospects/customers.
These attributes exist in some CEO’s but not all, and it is important for all of us to realize our specific value to our respective organizations.
Rarely the key to sales success is not the metrics that we are all used to tracking(attention to detail, interest, capable writter/speaker. etc), but rather a specific personality type. Attributes like urgency, empathy, drive, and believe it or not ego (coming from a career sales professional), all come into account when making up a successful sales person.
Sometimes that’s the CEO and sometimes it’s not, but to add to Rich’s point, it’s not so much about the actual person or role but aligning our skill set to the functions of the company.
Sean E. McDonald
LabTech Software
When you look at the big picture, sales is truly the single most important element to an MSP’s success. Having good, technically well rounded engineers helps, but typically plays a larger role in client retention than it does on the sales front end. After all, the average small business owner wouldn’t know a good technician from a bad one if their life’s depended on it.
Technical staff, RMM & MSP tools, process and infrastructure are all extremely important to supporting & maintaining your customers POST selling them a Managed Service contract. In order to get anyone to support you first have to tackle the sales game. For some MSP business owners, sales comes naturally. Personally, I have always felt that if you can wrap your mind around the sales game you should run with it as there’s nobody better to represent your company! In the end however, you can’t do both. Each role requires your full attention and 100% of your focus.
Mike Byrne
PacketTrap Networks
Mike: Always good to hear from you. I agree that in most cases, the business owner is perfectly positioned to lead sales because of his/her passion for customer success.
But there’s that old paradox: Many MSPs were started by techs who aren’t sales/marketing pros. Or is that a stereotype we need to end?