#34 - Don’t Be That Guy - The Utilization Lies We Tell Ourselves (Ryan Alter)

In this Don’t Be That Guy episode of the BMK Vision Podcast, Josh Peterson sits down with Ryan Alter for an executive-level conversation on a metric most MSPs either misuse or emotionally avoid: billable utilization. Not as a technician scorecard—but as a leadership signal that reveals whether the business is converting payroll into capacity with intention.

This is not a conversation about cracking the whip or inflating numbers. It’s about operational truth. Josh and Ryan walk through why utilization has remained broken in the MSP industry for decades, how bad time-entry discipline quietly corrupts financial decisions, and why utilization—when measured correctly—becomes one of the most honest indicators of execution discipline. The discussion connects directly to the operating and accountability framework behind the BMK Vision operating system, along with the broader financial visibility principles outlined in Strategies for Sustainable Growth for MSPs.

Is utilization actually a technician problem?

Short answer: no. Utilization is not a measure of effort—it’s a measure of how well leadership converts paid time into productive capacity.

Most MSPs treat utilization as a behavioral issue when it’s really a systems issue. Technicians don’t control demand, scheduling, ticket flow, or agreement mix. Dispatch does. Service leadership does. When utilization misses target, it’s rarely because technicians are unwilling—it’s because the organization hasn’t created a clean, enforceable execution environment.

• Utilization measures capacity conversion, not work ethic.
• Bad utilization data leads to bad staffing and pricing decisions.
• If leaders don’t trust the number, they stop managing by it.

The MSP problem this episode solves

Many MSP owners feel constantly busy and still financially uncertain. Revenue grows, headcount grows—but margin pressure and burnout quietly follow. Utilization sits at the center of that contradiction.

This episode addresses three recurring execution failures:

• Utilization denial: ignoring the metric because it feels confrontational.
• Math manipulation: redefining available hours to inflate results.
• Misplaced accountability: blaming technicians instead of fixing scheduling and flow.

The only utilization formula that survives scrutiny

Josh and Ryan strip utilization down to its only defensible definition:

Billable Utilization = Billable Hours ÷ Paid Hours in the Period

Not scheduled hours. Not “available” hours. Paid hours. The industry-standard 75% benchmark already accounts for PTO, holidays, meetings, and human reality. Adjusting the denominator again doesn’t create fairness—it creates fiction.

• The benchmark works because it’s comparable across MSPs.
• Redefining hours destroys decision-making integrity.
• Utilization must be boring, consistent, and trusted to be useful.

Why utilization is a leadership signal

Utilization reveals where execution breaks down before financial statements do. Low utilization points to demand planning or dispatch failure. Excessively high utilization points to understaffing, burnout risk, and quality erosion.

That’s why utilization belongs at the leadership table—not as a weapon, but as a diagnostic. When MSPs treat utilization as neutral data, it becomes one of the fastest ways to spot operational imbalance.

Simple systems beat complex dashboards

One of the most counterintuitive takeaways from the episode: some of the best utilization tracking Josh has seen lived in a simple spreadsheet. Updated monthly. Reviewed consistently. Trusted completely.

MSPs don’t fail at utilization because they lack tools—they fail because they lack conviction. If the data isn’t believed, no dashboard will fix that.

Episode highlights

• 00:02:10 – Why time-entry accuracy hasn’t improved in 20 years.
• 00:06:02 – The only utilization formula that actually works.
• 00:12:23 – Why utilization is a dispatch and leadership metric.
• 00:18:17 – Incentives that reinforce discipline without distortion.
• 00:36:24 – Why Excel often beats PSA dashboards.

About the guest: Ryan Alter

Ryan Alter is a former MSP owner and industry veteran with deep experience in service delivery, operational finance, and execution discipline. Having scaled and exited his own MSP, Ryan brings a grounded, operator-first perspective to conversations about metrics that actually matter.

Connect with Ryan on LinkedIn →

About the host

Josh Peterson is the CEO of Bering McKinley and host of the BMK Vision Podcast, where he helps MSP owners replace intuition with clarity, discipline, and execution.

Connect with Josh on LinkedIn →

Frequently asked questions

Why does utilization matter in a managed services model?
Because payroll is still your largest cost, and utilization reveals whether you are converting that cost into productive capacity.

Is 75% utilization mandatory?
No—but it’s a proven starting benchmark. What matters most is consistency and honesty in how it’s measured.

Should utilization be tied to compensation?
When done carefully and modestly, incentives can reinforce discipline without creating perverse behavior.

Why do MSPs struggle with time entry?
Because leadership treats it as optional or emotional instead of operationally non-negotiable.

How do I know if my utilization data is trustworthy?
If leadership uses it to make decisions—and technicians aren’t arguing about the math—it’s probably clean.

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