Why Ignoring Culture Can Cost Your MSP More Than You Think
A toxic culture can quietly destroy profitability and growth.
It’s common for MSPs to focus on improving operations, new technologies, or increasing sales. Yet, one crucial factor often gets overlooked: company culture.
When employees feel undervalued or disconnected, it doesn’t just affect morale; it leads to unhappy clients, high turnover rates, and lost revenue. And you may not recognise these risks until it’s too late.
- "The link between culture and profitability is clear. We look after our people, those people look after our clients, and then our customers look after our business." - Darren Strong, Founder of Scalable.
In a recent episode of the Scale Up podcast, Darren Strong, founder of Scalable, and Morgan Aspinall, Product Manager at HaloPSA, discussed how company culture can make or break an MSP. Darren put it simply:
“If you look after your team, they will look after your customers, and your customers will look after the profitability of the business.”
This highlights that building a positive culture isn’t just about employee satisfaction – it’s essential for sustainable success.
In this blog, we’ll unpack their insights on why culture is critical for MSP success, how to build a supportive work environment, and how aligning team values with business goals can drive profitability.
Contents:
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Section 1: The Foundations of a Strong MSP Culture
Why Culture Matters for MSP Profitability
Employees are the frontline in client interactions, whether they’re answering service requests, fixing critical IT issues, or guiding clients through complex decisions. When employees are passionate and aligned with the company’s values, they provide better service, which directly boosts profitability.
Darren also emphasised that a strong culture attracts the right clients:
“People of a certain mindset will attract certain customers. If you can establish the right culture, you’re also likely to attract the right clients.”
Engaged employees who believe in the mission build stronger relationships with clients. These clients tend to stay loyal, refer others, and increase their spending.
Morgan added that culture isn’t just about making employees happy, it has real business benefits.
“It’s about shifting mindsets from merely having a job to being part of a journey.”
When employees feel invested in the company’s vision, their productivity and creativity flourish, leading to better service, higher client satisfaction, and ultimately, a healthier bottom line.
Defining a Good Culture: It Begins with Leadership
A strong company culture starts at the top. Darren pointed out, “Sometimes people try to develop a culture that isn’t aligned with the business.”
This misalignment can confuse employees and make them feel disconnected from the values their leaders promote.
For a culture to thrive, it needs to reflect the values and behaviours of its leaders. Morgan emphasised that a successful culture gives work meaning: “It’s about changing the mindset from just a job to being part of a journey.”
When employees feel they are part of something bigger, they become more engaged, motivated, and productive. This sense of ownership is essential for delivering outstanding service. Darren stressed that leaders must embody the company culture every day.
- "If the energy and passion of the leadership aren't present, it will be noticeable to your customers." - Darren Strong.
Leaders set the tone for how employees interact and behave, creating a positive ripple effect throughout the business.
Onboarding: Setting the Cultural Foundation from Day One
While leadership is crucial, onboarding is the first step in building a strong company culture. Darren emphasised that onboarding should go beyond just technical training.
- "Yes, we want them to be technical, but do they understand the journey? Do they know why we exist and why we do things a certain way?" - Darren Strong.
It’s important to communicate the “why” behind the business, not just the “how.”
By sharing the company’s mission and values from day one, you lay a solid foundation for cultural alignment. Darren believes onboarding should help employees connect with the larger vision and encourage them to ask questions like, “Why do we operate this way?”
Morgan added, “People want to understand why we have certain structures and processes.“
When employees know the purpose behind their daily tasks, they feel empowered and more loyal to the company. If they buy into the mission and values from the start, they are more likely to contribute positively to the culture.
Section 2: How Environment, Hiring, and Leadership Define Culture
The Role of the Physical Environment in Shaping Culture
While leadership and onboarding shape culture, the office environment plays a key role in reinforcing it. Morgan emphasised that office layout can greatly influence communication and culture.
- "Getting the right people physically next to each other is important. That communication is where the culture really comes from." Morgan Aspinall, Product Manager at HaloPSA
Darren shared an experience where sales and technical teams were separated by physical barriers. “We worked hard to remove that separation. When those teams collaborate, we take better care of our customers.” By breaking down these barriers, teams can work together more effectively, improving service delivery.
Open-plan offices or spaces that encourage interaction promote a collaborative culture. They allow for easy idea-sharing and problem-solving, leading to innovative solutions and quicker issue resolution. When team members feel connected, it strengthens the overall culture.
Promoting Internal Growth vs. External Hiring
One major challenge for MSPs is deciding whether to promote from within or hire externally for senior positions. Darren shared a past experience where his company brought in an external candidate for a senior technical role, only to discover he wasn’t a good fit. “We hired someone with all the certifications, but when it came to the basics, he struggled.”
This experience led Darren to advocate for promoting from within. “Companies often hire senior staff when they’re overwhelmed, but this can create misalignment with company culture.”
Promoting from within ensures that leaders already understand the company’s values, which boosts morale and engagement.
Morgan added that at Halo, they prioritise “attitude and aptitude” over just technical skills. “You can learn how an MSP operates, but you can’t teach motivation and drive.” By focusing on personal attributes and cultural fit, Halo has built a team aligned with the company’s mission, creating a more productive work environment.
Delegation: Empowering Employees for Growth
Many MSP owners find it challenging to delegate effectively, but this skill is essential for growth. Morgan pointed out, “If you’re too busy putting out fires, you’ll struggle to invest time in building your team.” Delegation allows leaders to focus on strategic priorities while giving employees the chance to take ownership of their work.
Darren highlighted the importance of intentional delegation.
- "Be clear about what you’re delegating and why. If you take tasks back when things go wrong, you’re not allowing people to grow." - Darren Strong
To delegate effectively, follow these steps:
- Demonstrate the Task
Show your employee how to complete the task. This helps them understand the process and set a standard for quality. - Guide the Employee
As they begin to take on the task, provide guidance and answer any questions. This support builds their confidence. - Allow Independent Performance
Let them perform the task on their own while being available for support if needed. This fosters independence. - Step Away
Once they’re comfortable, gradually step back. This empowers them to take full ownership of the task.
This structured approach not only builds skills and confidence but also clarifies expectations and responsibilities. By delegating effectively, leaders can focus on higher-level goals, reinforcing a culture of trust and autonomy within the team.
The Importance of Hiring for Attitude Over Skill
A key theme in Darren and Morgan’s discussion was the importance of hiring for cultural fit rather than just technical skills. While technical abilities are important for MSPs, Darren pointed out that cultural alignment is crucial for long-term success.
“We’ve hired qualified individuals before, but if they don’t fit in, it doesn’t work out.”
Morgan shared that at Halo, they focus on hiring graduates or those new to the workforce. “We hire for attitude and aptitude. Technical skills can be taught, but motivation cannot.”
This approach has helped build a cohesive and energetic team. New hires typically go through extensive training, ensuring they integrate well into the company culture within a year.
The takeaway is clear: prioritising attitude and a willingness to learn can be more valuable than hiring someone with extensive experience who doesn’t align with the company’s values.
The Risks of a Bad Culture
While the benefits of a positive culture are clear, Darren and Morgan also warned about the dangers of a negative culture. Darren described a “bad culture” as one that is fragmented and misaligned.
“It’s the complete opposite of what we’ve been discussing. You see fragmentation, with decisions made against different values.”
A negative culture can lead to disengaged employees, poor collaboration, and disconnected leadership. Companies with this kind of culture often face high turnover and low client satisfaction. When employees don’t connect with the company’s mission, they are less likely to go the extra mile for clients, which can result in poor service and lost business.
Key Takeaways: Building an Intentional Culture for Long-Term Success
In conclusion, the insights from Darren and Morgan highlight the importance of cultivating a strong, intentional culture for the success and profitability of any MSP. As Darren put it, “If we’re intentional about looking after our people, they will look after the customers, and the customers will look after the profitability of the business.”
By focusing on leadership, effective onboarding, a positive office environment, internal growth, and strategic hiring, MSPs can create a thriving culture that drives growth, productivity, and profitability. Encouraging delegation empowers employees to take ownership, boosting efficiency and reinforcing a culture of trust.
For any MSP looking to grow, culture isn’t just a “nice to have” – it’s a crucial foundation for long-term success. A strong, intentional culture aligns everyone, enhances service delivery, and supports overall growth and profitability.
Watch the full podcast here
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A guide to identifying & resolving the hidden costs of bad culture.
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