John Myers, CEO of $1.5B Rentokil North America - The Boardroom Buzz - Episode 30

it was interesting i came back from the uk as an expat i was with the head of hr talking about my assignment he said hey we're trying to figure out what it should be but i have a question for you i said what and he said you have a daughter right john and i said yeah she's very young he said okay well let's assume she's graduating from college right now would you want her to come work for us our company and i said no and he said so why are you here [Music] paul yes sir i really appreciate you getting john myers on the bus i don't know a lot about rena kill i think outside of brandon higher in a couple interactions around town here john was a great guest i'm very happy that he spent hours and hours and hours with us and i think patrick we are going to have to kind of parachute into this interview if we start at the beginning this would be the longest buzz on record so he was very generous with his time had a lot of cool and interesting tales and patrick i saw you taking notes over there you were definitely hearing some things for the first time it looked like i learned a lot and had a great time john thanks for uh coming under the buzz let's step into the boardroom with john myers let's do this john thanks for being with us today here on the boardroom buzz you know one of the the things that i really wanted to talk to you about is is john myers the person and john meyer is the manager i mean how the heck did you get to where you are today running up a north american business kind of pushing 1.5 billion in revenue well thanks for asking that question for me it's always been less about career planning and more about opportunistic action taking part of that starts with you have to have a family structure that says yeah let's do that and so my wife and i we moved nine times in 20 years something like that a bunch of places in the u.s plus almost a five-year stint in england the reason i bring that up is when there's an opportunity that fits your career interests and you say yes it's going to just make you a better businessman and maybe even a better person because you have to adapt yourself to new surroundings where did you get your start though you grew up in connecticut so what was the first stop on your train so when i graduated from uh college i got a sales job sales guys are used to hearing a fair amount of no's trying to get yeses and i think it was a perfect setup for me paul to understand that i wasn't just selling a thing i was selling ideas trying to change minds and you know when you're in a leadership role you're always trying to read the room understand whether the strategy matches up with what you think it does so you gotta be pretty good listener and then eventually you have to sell it through the organization so that the strategy becomes the organization strategy rather than just mine what happened next they said hey seems like you're pretty decent sales guy in ohio let's see if a connecticut kid can live in new orleans and sell to southerners there you go i was kicked out of my first customer on day two on the job told never to come back ever thank goodness i had a really good boss who made a couple phone calls to that customer and said hey i think there's more to this kid than you give him a chance to to be but because of that you learn that there's a different style of communicating and there's a different style of decision making in in the south there's the the no and if you grew up in new england you're used to the straightforward in your face no and i was get the hell out of there and i didn't get that straightforward in your face no i got the polite no the southern no and i was taking that as a maybe on my going away party that same customer gave me a uh a card and on the card he had put it on the ground and stepped on it so his footprint was there and inside he said you know day one we started with my boot up your uh blank today i really will miss you uh that kind of thing and then they came to me and they said hey we'd like you to run a manufacturing facility so i'm a sales guy going in to run a manufacturing facility in atlanta 24 hours a day seven days a week three different unions totally unprepared to be a great production guy because you know how do i know that other than from the customer's perspective of quality and productivity and and the like but had a great boss who was willing to teach me and i was smart enough to go down on the shop floor early on and talk to the front line uh shift supervisors who'd been doing this job for 20 years and really did know and say look clearly i'm here not to get in your way your job is to help me know what you need to do your job better the best word that comes out of that is you develop humility so how old were you john when you took over the manufacturing facility let's see i was 29. just always was willing to learn and as a result did really well there matter of fact my company was bought and sold and so this was supposed to be a second to understand manufacturing and sales so i could be a general manager and when the company that i was working for was bought by someone else i had to go hey you know this is not like a career here right i don't plan on being a plant forever that was never the same yeah but we want you to go to san antonio and actually be the plant manager so not the number two be the number one and i said well i'm not sure i really want to do that and they i learned another really important lesson they said there's a big difference from being number two uh of a facility to being the guy so as much as i knew manufacturing at the point i didn't know how to be the leader of a facility and so went to san antonio to be a plant manager you learned the plight no from the southerners you ignored your wife's polite now every time you asked her to marry you you worked in atlanta and now you're down in san antonio running a plan what kind of widgets was this company making i meant to tell you the story so when i graduated i had one job offer so i i said yes to that one uh just so you know yeah same here did you take a few days to think about it so it made it look like you were in high demand i i tried to negotiate around the edges but there wasn't much uh there it was a packaging company it was called american camp company oh american can yeah i walked in and i was a management trainee and they said we have two openings one in the dog food division and one in the beer division which one would you like i know which one you took and in those days american can was the big one and they were competing if i remember with chrome conceal that was kind of the it was almost kind of like what new core is to the steel industry they were very kind of nimble fast-moving yep competitor american can family-owned why i know that i have no idea you know philadelphia you spent some time in philly i think and uh they were in philly so i spent 16 years in the beer and soft drink can division and tremendous amount of learnings associated with that as you might imagine but it's three or four of us making you know a commodity uh selling to the largest bottlers in the world so a commodity with really strong buying power and so you're calling on the entire bush or pepsi or coke or coors or miller you get the idea so a very different business environment to where i am today of course where there's 19 000 depending on who's counting pest control providers and there's no widget right there's no commodity product to grab onto the interlude for you between the manufacturing business and the pest control business was centos yeah there was a couple other steps in between after san antonio i went to st louis and i was the national account guy selling beer cans to anheuser-busch my only account okay as you might imagine if you want an account anheuser-busch was the account to have so learned a lot about negotiating multi-year deals with large capital spends to justify so we'd build a factory and that kind of thing for him ended up working very closely with the president of american national can and he asked me if i want to go to england just north of london another one of those wow this is a going to be a real cool venture but you know you don't just say yes to that one as you might imagine paul you you do have to have a family conference on that and we had two little girls that were they were probably like six and three so really easy to move at that age you know if mommy daddy are happy they're gonna be happy and i was head of sales and marketing for the uk managing a sales organization over there once again big transition do you trust your instincts on how you made business decisions in the us is it the same in the uk or is it quote unquote different do people think differently i think the answer is they think differently but the business decision making processes and i know you do a fair amount of uh international work paul are very very similar so trust your instincts right you know the buying motives or the um value proposition you're trying to create is exactly the same even though there might be some nuances to culture i think that's right you know i do stuff all over the place and i think it's largely the mindset's the same it's just kind of the cultural nuances around the edge and how certain things happen like if you're in one country and you're used to doing it one way like you talked about the southerners with the the polite no in certain areas of europe you get to play you know and in other areas of europe you get the middle finger and asia is different so you learn that i guess you already had some good prerequisites going to the uk you spoke english already so that was a leg up from patrick here still trying to learn it so i'm speaking to you southern you are that polite clearly very resilient patrick um he takes a lot of beatings on the buzz that's for sure yeah i appreciate it so you were talking about how you know cintas so it bounced around a little bit it was interesting i came back from the uk as an ex-pat i was with the head of hr talking about my assignment he said hey we're trying to figure out what it should be but i have a question for you i said what and he said you have a daughter right john and i said yeah she's very young he said okay well let's assume she's graduating from college right now would you want her to come work for us our company and i said no and he said so why are you here very interesting question yeah i mean and you know of course i've been there 16 17 something years been thinking these were these steps to a career path to do x and he reset the expectations and he said hey i think you can do more outside of our company than you can do inside of our company which was a great great piece of recommendation for me i didn't act on it very well i took the next job that was offered to me sort of like the rebound girlfriend if you will and so there was a little place in my my resume that i won't get into the name of the company but uh really great boss but they had great expansion plans and i was going to lead those expansion plans and but they had no money to do any of the expansion plans so that was just a bad mistake on my part there was a lesson there and and the lesson i share with people that are looking for jobs all the time is this lesson i went for the money and the title never do that go to work for a really good boss and a really good company and don't worry about the job and the title the job and the title thing works out every time if you pick the right boss to go work for with the right company and i got it totally out of whack it was interesting i went to cintas and i interviewed with bob kohlhepp who was the ceo at the time he and i had a just a great set of interviews i came home said i want to work for these guys these folks get stuff done they have a bias towards action and then went to work for him and my wife said um what's the job and i said yeah i'm director of business development and she said what's that and i said well not a hundred percent sure okay and give me a few weeks and i'll tell you how much you're getting paid and i said i'm not exactly sure either okay um i'm getting an offer letter honey don't worry but i i already said yes i'm working for this amazing company and this incredible boss that means every time i meet with him i'm gonna have to bring my a game i just can't show up and and think i'm just gonna slide it'll be really good for my mental side of the business and my development side of the business capabilities so let me ask you john was it the centos interview that made you say what you just said a few minutes ago which is to choose the right boss and the right firm over the title and the money or had you known that before that it was the latter i think i'd gotten quote unquote lucky paul when i got a promotion i interviewed with my boss and he was a great guy and developer of talent and and so that was that was fine boom boom boom then i did the interim between american national can and centos he was so good at what he does i'm not saying he was like chummy he was just really bright really driven with a record of taking a company from x to public company so that was when i learned that lesson and i think about that all the time and when i talk to kids that are looking for jobs out of college i say seriously these are the two things this other thing now don't go into i don't know medical sales if you if you hate blood or something i don't know but pick these two things and the rest will just work out so how long did you spend at centos before you ended up over at renikil right around eight years like a lot of people i used to get my fair share of calls my boss bob cole have gotten promoted and there was a shuffle and corn ferry called and i took the call and they described uh renikill i had done a little work on rent-a-kill seeing what they were doing back in my business development days which was trying to figure out what other businesses cintas should get into because they were known as the uniform people and they had an incredibly good hygiene uh services business they described a 200 million dollar business in north america in an industry that was probably at the time six billion run by a european group based in the uk where they were very very dominant they had aspirations to make north america big the thought of being able to kind of come in early days with reniki hill and take something that was roughly 200 million and do something with it was very appealing so once again good company then i met the guy i was going to work for and i said wow this is he's really good really really good by the way not andy ransom because it was alan brown it was alan brown and a guy named andy hobart they were very bright they gave me the job which was good we could talk about the rest but the rest is history so you leave centos you take a job for run a kill north america and it wasn't really until if i'm getting my dates right it was early 2006 reniko closes the early transaction and i think at the time it was from an operational perspective it was largely viewed as almost a reverse merger because now ehrlich was effectively reneking north america and was vic camel at the helm at the time i think vixx stuck around right so fix running it and if i remember you you came on board and there was kind of a transitionary period where vic handed it off to you and i think vic still to this very day remains very very close to your organization he's kind of an outside advisor correct those that own companies and sell them really do care about what happens to their company heart and soul went into that so vic said he would stay on for three years and make sure the transition went well i came in when vic's three years was up and then every week for a year maybe two years we had lunch together vic hamill you know knew more about this business than anywhere close that i knew but he also has strong opinions so we would have these debates about these things that i was doing you know part of the reason to change was it's just time to change you know yellow pages are moving this way and digital sourcing is moving this way and then vic and i would argue about whether that's the right thing or whether every truck should have a local telephone number on the side of the truck so they knew you were from shamokin or wilkes-barre or allentown or something and i was thinking you know we really needed 1 800 numbers so we could track the calls and all those changed things but we had this tremendous amount of debates about strategy and tactics lo and behold he's 12 years later still helping me out sometimes he doesn't take my call anymore on the first ring because he's got grandchildren and you know other stuff to do but yeah when i think about running kill north america in general i mean it is a an extremely important part of run the kill initial the entire organization you know not only is it core to the business and pest it's also fastest growing and our largest market segment i don't know if you and i ever talked about this actually when alan brown was around i reached out to renikill in the uk and as a matter of fact i sat down and had a cup of coffee with ellen i was late 20s early 30s decided i was going to raise some money and buy rent-a-kill north america so i reached out to alan brown he was kind enough to amuse himself by having a cup of coffee with me he sent me to your current boss mr andy hansen who sent me a letter saying paul um i guess this is probably around 2008 2009. said running kill north america is core to our business that's pest control and that's what we're growing and it's particularly in north america and will not be divesting it but if you come across anything we want to buy definitely track us down so that was kind of my first dealing and at the time he shared the same title that you had at cintas he was the director of business development a former deal attorney right and so one of the things that's always interested me is that when reniko first bought ehrlich there was a lot of smoke in the market about you know who the hell is renikil and it's a british firm and the redcoats are coming and all of a sudden they're going to turn this thing into some sort of a european nightmare but that's really not what happened in a lot of ways renukal north america has remained a distinctly american business especially with you at the helm here and all of your senior managers for the most part can you talk to us a little bit about what it's like being the head of a north american business kind of tethered with the uk company a couple things that come to mind right away the first thing is i love working for andy ransom but he's in london and i'm not and it's a five hour time change so there's sort of a separation that has to occur it's a really a great setup for me first and foremost the second thing is because north america is really important to the global business we do get our fair share of expats to come over for you know two to three years to learn another part of the business another way of doing business and then they go back so we get these little two to three year bursts of infusion which i think is really important you know a lot of companies are talking about diversity in their leadership team and and of course we are as well we're trying to diversify the way we look today which is like most you know companies which is mostly white men and but the benefit of getting diversity is diversity of thought and when you have diversity thought you get really better decision making so when we get several folks that come over you know for two to three years assignments it's amazing the quality of decision making we have so they come over to learn the right way how to do things that was me not eugene [Laughter] i get to have fun with these guys come on so okay brits you guys come over learn the right way to do things okay i think by personality andy realizes he can't dictate tactical execution of the strategy so that's good that means he's not in my kitchen saying where are you with i don't know the pricing strategy that we agreed to do x or the compensation strategy of y or marketing strategy of z what he does insist on and i think it's it's it's what i insist with my folks is let's decide on the strategy okay let's debate the heck out of it but once we've agreed on the strategy let's then implement the strategy what he won't allow is me to just say yeah yeah yeah while the whole time thinking yeah i'm never doing that okay by the way i don't do that either because i don't have time for that debate only to be chasing people to see if they're doing what we said we would do and then the other part andy's just amazing at is he realizes that some of the things that we're trying to fix have been in place for 15 years so he's not looking for them to be done in 15 months even let alone 15 minutes you know and so when i was a brand new in my job i thought an assignment was you had to fix this right away and through a lot of conversations and uh eventually some courage on my part i would say andy i think if we go really fast we're just going to blow this company up so i want to do this in a three-step process and by the way if i said three steps over five years he started laughing but if he if i said look i don't want to do it during the busy season because of x y and z so i want to lay the groundwork during march and april then we'll come back in october and do these last two pieces and then we'll button it up in january and uh he's pragmatic enough to know that what he didn't want to do is blow up the business he just wanted to make incremental improvement in the base business and then as i got experience i was more confident in my ability a to to recognize that you should have that sort of criteria for and cadence for uh solving problems of course after you've been in the job a little bit you're always a little bit smarter right yeah well especially the way that rent-a-kill north america has grown right so you came on board slightly less than 200 million in revenue and now you're going to be pushing 1.5 billion in revenue how many employees are now under your it's right around it's right around 9 000. you know it's funny uh you know you start thinking of that type of math then you really understand that if you want to implement things consistently with 9 000 employees you can't just be winging it and you can't have this super top-down approach right and it's funny every once in a while uh someone will say to me hey we've really got to communicate this strategy and the tactics better and i said absolutely i don't think i've done as good a job as as i need to so i'm going to do this five-point plan but if you're all expecting every 9 000 employees to hear my voice and act on it and not be dependent on hearing your voice on the same strategy we're in big trouble because um you know my voice just isn't relevant to our frontline colleagues and by the way of the 9 000 i would say three quarters are front-line colleagues doing work out there in a vehicle right or answering a phone or selling something you know one of the things and this is the last question i'll have for a little bit i'll let patrick get some stuff and um how the hell do you run a business with 9 000 employees i mean it really i feel like you know when when i deal with our clients that go from like 10 employees to 100 i mean the increase in complexity in an organization between 10 employees and 100 is you know 60-fold 50-fold but when you're talking about almost 10 000 employees i mean what is your you know in 2020. so forget covered in all this and what's a day in the normal life of john myers like nowadays running such a large business um long time ago we started talking about this concept of success versus excellence and uh it's a little bit of a nuance but it's important to describe because it it describes what i work on the success describes your results okay excellence describes your methods for achieving those results and as the company gets bigger it's got to be the methods you use to achieve results so that drives what i work on now you know like anybody else i get pulled into some meeting about audit internal audit or or you know yeah because you safety safety is a little different because that's part of our culture but but you get the idea there's some stuff that just keeps the wheels going right and then there's the stuff that uh is really important to um you know what we work on and we talk a lot about the methodology for being successful one of the things that we um talk about a lot is hiring training and development of people and if you get those three three things right in our business not the factory floor where you have a widget maker and the guy that has the best widget maker wins but the company the where it's about the people that are are the in effect your your mechanism for the service delivery if you get hiring training and development right you're going to be you're going to be amazingly successful and so i would say three quarters of my week day month is spent on those three things either in meetings that support those efforts or in the field to see what's really going on with those efforts so pre-covet i used to spend a lot of time in the field you know road routes yeah probably six times a year uh made sales calls five times a year talk to customers ten times a year actually you know even though those numbers are adding up to a lot not as much as i like because those are my the days i have the most fun right and so you find out if the things that you said you were going to do i have been trained in and people understand the why we're doing this not just because i'm the boss and i told you to thing and all the other elements associated with being successful in the space um so that's sort of my normal week day year in those categories paul you know you talking actually makes me think about something i know the last time we you and i saw each other was february pre-covered but i think in a normal year we'd see each other in the field three or four times on deal related stuff and i feel like almost every time i would see you irrespective of where we were in the country you were like hey i'm gonna be showing up to dinner a little bit late because i'm gonna go spend some time with a customer so i can never figure out if that is a kind of a it's a polite no paul to plan no but i think this guy was really out there spending time with customers i didn't know if that was a kind of a a leave over so to speak from your prior career of being a biz dev guy or if you looked at it literally from from a ceo's perspective and and thought to yourself i really got to be out there with these customers i got to understand what they think about our organization what they think about our competitors what they think about our people i guess what was that like why do you get out there and spend time with these customers i think you're hitting both points by the way one because i was sales and marketing guy for so many years i'm not afraid to do it you you like the thrill of the hunt i do and and you know you and i've talked about uh some of the acquisitions that we've wanted to make and um you've seen me go into and this sounds negative but uh hopefully it's not into sell mode about why i think our value proposition is better than the other options they have and you know selling shouldn't be considered a negative it's a it's you know a way of imparting value and information but um so not afraid to do it but it's interesting andy rants and i were talking about this recently we're fear of failure guys okay we worry about having the wrong answer or even when we have the right answer failure to implement well so we spend a lot of time with anxiety about those things and the best way not the only way but the best way i've found to do it to take away some of the anxiety is to get close enough to it that you can say all right the customer actually does when i said that they went boom boom boom or they gave me the blank stare and i go all right that was one of those things that sounded really good in the board room but ain't working and the other thing i'll tell you when i ride with the uh we call them specialists but you know the industry calls them technicians but when i ride with one of our specialists by the way you know my guys are really smart they don't put me with bad guys right they're gonna put me with you know their best guys and immediately the first 30 minutes you know how's it going good how long you had this truck year you know like one word answers right but eventually after seven hours no one can do that and they tell you everything yeah all the warts all the things that make them happy and you say hey i noticed you're you're not using the handheld yeah that doesn't work they'll just tell you that right as a result you you know you make decisions you say wow that was way too complicated what do we think you know 30 hours of training that guy's not going to do 30 hours of training on that so it's both paul fearless to go out there and hear the bad news and interested in hearing it so that we just do better yeah that makes perfect sense patrick i i'm commandeering a lot of questions i know you got something for john i've got a few i wonder staying with ride-alongs they've cherry-picked it sounds like hey you're going to the best spot the best ride with the best specialist do you ever just play more of the undercover boss show up and next thing you know you're riding in a truck unannounced no you know why it's not fair to the colleague you know if he's not ready if it terrifies him if he goes home and he thinks my career is over because i was a doofus you know i don't want any of those things and interestingly patrick i'm old enough to remember jack welsh right and you know he used to talk about the top 20 in the middle 70 and the bottom 10. and i want to see the top 20 and if they're getting it i mean if they really are getting it then there's hope for the middle 70 you know that i can make sure they're getting it if i go to the top 20 and they're not getting it we're toast right you got problems yep so yeah i don't do any surprise stuff i i wonder if i you could hire me out to do some ride alongs with the microphones and put put me in the trucks i know i'll get some crazy stories yeah i think we could do that i always hear crazy stories you said at m a you're you go into sales mode for lack of a better term and so you're i guess explaining to the potential seller hey why why choose run a kill and i wonder what are those differentiated capabilities like what what makes reniko attractive compared to some of the others out there so in no particular order but there is a little bit of a benefit that i can say about the fact that i've been there 12 years and so there's continuity of thought and process and my boss has been involved in for 12 years so you're not going to get flipped upside down routinely about we've changed all our strategies the second thing is we're in growth mode so if you want to be part of an organization where we're creating jobs then this is a great place every one of our jobs internally is posted for people to apply we only have really two requirements one you talk to your boss before you apply for another job i mean it's only fair the other thing is you got to be good at your current job we're just not going to move garbage around so you know if you're not having a good year or you haven't had a couple good years then you know have a couple good years before you apply for a job so career progression is very much available and sometimes it might even be lateral but you know they always want to live in phoenix or redding pennsylvania or or whatever and so every job's posted and we're really happy to have people move around are you looking for that from people that are flexible and where they move i think i'm a dinosaur on that i don't think people move anymore you know whereas back in the day the corporate life was every two and a half years you moving company came and company paid for it and you just picked up the kids and they went to a new school and i think that doesn't happen as much i would say 10 of our jobs that we feel are filled outside of market for one reason or another you know someone's been living in the cold and they want to live in the warm or they've got a sick parent maybe and they want to be closer to them and help out we just had one of our best guys move from richmond virginia to west texas but he's got an ailing father and by the way you know the job was posting and he was good at what he did and the like but no patrick i think those days are over the other thing i should tell you and forget specialists and somebody that has to be local now you know to do their job about five years ago i decided i wanted to hire the best talent in north america to work for me regardless of where they lived so i you know and i grew up in that era where you had hallway conversations literally right you bump into someone and you say oh patrick really good to see you because i've been wanting to talk to you about x y and z i could tell if you were having a good day or a bad day and all those things that allow you to be better at your job but what i found was we were limiting our search capabilities to those that were in that geography so my head of hr lives in dc my head of marketing lives in nashville my head is sales and marketing lives in memphis the coo lives in anaheim always said now is if you've got a travel job then you've got to be willing to travel okay so you know don't hopefully don't pick place where you can't get where you need to go because then that's probably going to affect your capabilities every once well i have to remind the west coast guy that you know sorry it's an 8 a.m east coast call brother you know you know well you know you don't want it to be five in the morning you know move to kansas city or something i don't know yeah well you're always getting up at four and five to get on those uk calls matter of fact i was on one this morning by the way i did sidetrack you into hr i did ask you about the salesman john myers making the pitch for torenica yeah so um those three especially are important and then the last thing probably not the last thing but one of the most important things that we try to impart is a willingness to hear about better ways to do things we have bought more companies that have solved problems that we've been in search of a solution for and been excited that when we hear them that how they did that and have taken those ideas and made them the north american solution could you give us an example i remember when we bought stereotech was dating myself a little bit but about five years ago stereotype was a really good company with really good specialists and i thought we had really good specialists and we got our two training directors together that train newly hired specialists and then ongoing training and their training program was different from ours and we took about five of their elements and about five of our elements and it became the new 10 and it was just better when you bring that much diversity of thought into your organization you're just going to get better ideas now patrick the tricky part is it would be much more efficient for me just to go hey let me tell you we're 1.5 billion you're 50 you know 15 million whatever whatever 5 million 50 million whatever this is how the big boys do it okay i think that would be super efficient and very ineffective so we're really careful to make sure that we're not going in too fast and saying x y z and i just could keep going the in-car telematics for safety for example we've wanted those we tried them and didn't work someone else now has a different method for doing it they seem to have a way to get accident rates down we're not just going to say well we tried it doesn't work we're going to look at their data and see did they solve a problem maybe the technology's moved on since we did that last so lots and lots of examples but it does take humility it does take a little bit of really good listening skills as you might imagine you know john i i've got a couple of thoughts i guess in regard to the question that patrick raised about some some things that differentiate renikyo and i'm talking about running kill north america here vis-a-vis the other players rather than reniko globally because i i do deal with you know running kill all over the world but when i think about renault north america i think the point that you raised and you and i talked about this over dinner in february where i said i can't believe you've been around as long as you have john that means something it means something in an organization and i and patrick i've talked about this on the buzz before it makes a difference if i do a deal right now with a firm to know that i am going to see john a year from now and bruce a year from now and alex a year from now all these guys that have been around for a long long time and have institutional knowledge and there's continuity and discussions because that gives me trust and faith that the same people are going to be around you know and and john this isn't for you to say but i'm going to say it because everyone in this industry knows i don't mince words i mean one of the main issues i've had with service master is that i do a deal today i don't know if i have a disagreement if those some people are going to be around but i know you know at least historically john myers and john wilson at rollins and all these guys have proved to me that if i got a problem a year from now i can likely call john's cell phone number and he's going to pick it up and say what's the problem let's talk this through so to me that's an important thing you know a couple of the other things is when i think about the capabilities of renikel north america's m a team it was rough starting it used to be back in the day when it was alex and i doing everything he is by far one of the best in the industry i agree yep over the years you guys have continued to augment those capabilities your team is now extremely effective and efficient you know kyle's done a great job we got bruce gelting your general counsel's out on the scene all these guys are working together in kind of a very tightly choreographed process and it makes me think about with regard to running kill north america i typically don't have to worry about deal execution risk i've got a team that i mean hell alex started when i was six maybe 07 was 05. bruce has been around for longer than that so guys that i've dealt with for a long period of time and i guess the other thing that i will say is i've never had a indemnification claim with renikill i think in your long history of deals you maybe have had one out of 150 plus deals right so your team has always been reasonable and that's not to disclude others i mean you know rollins for example has always been reasonable can you explain that i'm not familiar with indemnification claims in a deal structure situation patrick you know when you sell a business these sellers are indemnifying the buyer in case something pops up out of the woodwork like for example you've got a bad environmental issue or you sold a software program that you don't have title to or there can be a variety of things that kind of go wrong most of the time in my experience they're inadvertent and not intentional they're boo-boos like hey i didn't know that was a problem and somebody whether it's a government regulatory agency or a third party now sues run a kill right and says hey run a kill like uh you've got this environmental issue but it's not running kills issue it was historically related to the company prior to ownership so basically an indemnification situation is you know rent-a-kill or any of these guys would get sued they'd go back to the sellers ironical does a great job from a dd perspective to kind of mitigate those types of things and they do raise them i mean you know renekel has i've been involved in situations where john meyer's guys have raised this hey paul this is a potential issue that could result in an indemnification claim let's have these discussions about it now as opposed to when the deal's done and everyone's pissed off so you know john i again you know your team has really done a fantastic job over the years and i have nothing but respect for those guys you know i want to bring up some potentially uncomfortable situations that we can talk about a little bit so john after the all good transaction i remember in the southeast there was a lot of smoke and hot air blown around the southeast about how you know rent-a-kill did the all-good deal and axed a lot of heads and you know i constantly deal with and i know you deal with this kind of stuff too and all acquirers do when you're sitting down with a seller the seller's worried about his people and the people are worried about losing their jobs but you're in the service business and it's done by people so you need to keep all the people and so you end up with you know you feel like you're chasing your tails trying to explain this but back to all good there was a lot of smoke that blew around some years ago when you did that deal that hey reniko axed a lot of folks i wasn't involved in that transaction i don't even really know any of the details but anything that you heard on the street or anything that you can can talk about and i know i'm kind of getting you out of left field here but i wanted to ask you not left field at all we you know all good was a great acquisition for us but even the best ones you look at and you go we could have done that better and this one was an interesting one and i i think i'll preface it by saying chuck tindall still works for us mike tyndall still works for us until recently perry tyndall used to work for us he just decided to retire so as clunky as this might have been the people that took a large amount of money from the sale of their their business so you know they don't have to work for me if they could find another place to work still work for us but it was interesting i think it was a combination of good strategy with average to below average execution okay so when we bought all good there was overlap of leadership teams and what we wanted to do is follow our structure which is we think an operations manager which is the person that manages specialists should have ex specialists to one manager and then an ops manager would work for a we call them district managers but like a branch manager and we think that a branch manager can manage you know up to four ops managers so we took that model where we had overlap of ehrlich managers and we also had our ambiance business in atlanta and then we had all good and we started to build out the structure and we never move quickly on that because there's stuff you don't know you know operating systems and branding strategy and all that kind of stuff but we were getting feedback from the the all good leadership team that the uncertainty of their future role was becoming debilitating which is pretty unusual because usually people are saying all right tell me the story and then i'm going to win the job because i think i'm the best in that role and the feedback we were getting was they wanted to move faster they wanted to know what their job was so we did this restructuring before we built the level of trust that um you need for people that trust you that this is all going to be in their best interest okay so with that in mind it didn't go as well as we should have now the good news is that as i said chuck mike perry agreed with what we were doing so there wasn't a strategy thing it was the execution of the strategy i don't know you know whether it's personality or uh you know the famous nurturer nature thing i take criticism pretty well as i said i'm always in a space where i'm worried about failure we have this thing called positive discontent i actually stole it from syntas so give them credit but positive discontent basically says even when you win you're taking another look at how you won and you're saying that was a little clunky even though we got what we wanted we all know about that right we brought something to close we're like oh right that was amazing but then in our back of our minds we're going yeah next time i'm not doing it like that we did an all-nighter we did whatever the stuff was that you did so all i could tell you is it's learning grow type mode with us and we'll own it wish uh wish all good had gone better but from an acquisition business case performance growth happiness of colleagues that did stay with us it's been a super super win i guess when i think through it between mcs and vda and then all the other deals i've ever done it's been hundreds and hundreds of millions of dollars of transactions with rent-a-kill over the years and i'm trying to think personally of one bad client experience i had and i just can't think of any and you know i know you and i talked about the brandon hire episode which we wanted to do brandon because he's a very small business up there near artie's in vermont and just a great story you know this is a kid that really didn't want to be part of a big company he really didn't he's like paul i'm not going to stick around for more than three months next thing you know he's trying to figure out how to move up in the organization so i think that's a that's a great success story and there's a lot of them i agree and patrick you were kind of delving in on to what's the value proposition but i'm going to flip it the other way people ask me all the time one of the town hall questions they say to me so tell me about the next big deal and of course you know i say i can't because it's confidential and dot dot dot i always say to them this is how we think about acquisitions they have to be for sale okay it's okay that you talk to someone that's not for sale but until they're ready to sell there's no sense asking for the business it's sort of like if you're walking on a beach and every time you walk in the beach you look at the white house that you've always wanted you can go up to the door right and say i want to buy your house and the guy says it's not for sale and you say well i'll make you an offer you can't refuse and blah blah blah right that whole thing but it's okay that you talk to the guy that owns the white house before he's ready to sell so that when he's ready to sell you're at the doorstep and you're saying that now let's talk seriously the second part is and i always say to him but this is the most important part gotta be a culture fit with the business you are and i always tell people that the fact that they're not a culture fit is not a criticism on you or them you know i talked about hiring training development before but i've made lots and lots of hiring mistakes but it's never been because they couldn't do the job okay an accountant can add down and across a sales guy i wouldn't have hired him if i hadn't seen that they can sell it's because they weren't a culture fit right and if you hire someone that's not a culture fit you just agree to have a divorce at some point but if you buy a whole company you know 40 technicians and 10 managers and blah blah and they're not a culture how do you do you can't just fire them so the reason why our deals typically work out paul is they fit the way we're thinking about things and then when they do you'll see paul we've stretched really really far on some deals you know you brought up mcs and uh vdci and vda and you know and solitude we weren't quite sure about that but we were sure about the people in there in fact i think at the time with vda you were pretty sure you weren't gonna do the deal in the beginning good memory you were like yeah i don't know if i want to get into this whole you know vector municipal thing and if i remember it was uh guys from across the atlantic thought maybe this is the time to do this it was that and one of our top guys a guy named dave fisher was passionate about it and we all learned this lesson right if you have someone in your organization that you trust and is passionate about something you know and you know it's not going to blow up the company you're really smart to listen to those folks right and talk about a guy who's kind of like a true north for the business right he's a guy that's been around for 30 what five years i i hate to do that to him because it probably allows someone to figure out his age but uh now you take one look at him you know he's old [Laughter] sorry dave and you know great example of so let's say he was with the company 35 years let's say 23 years when i showed up and i show up in the room and i'm asking him questions about how we're running the business and why and yet 12 years later he's adapted to a new way of thinking and doing things says so much about him he was a bellwether for a lot of what was inside ehrlich and presto x and western and and the like that we're the you know the keystones i guess of our business just a very kind of lovable guy honest as a day is long smart guy and he's really been in the trenches over the years i really have a lot of respect for david fisher let me ask you patrick i promise this will be the last question i asked that's what you said last time mm-hmm i'm still here you know i know i i like to i ask a lot of questions so they're good they're good one of the things that you and i never talked about and i'm i'm curious as to how you would even think about this having all the experience that you've had up to this point in life now running this really large pest control business if if i had to parachute and drop you in as ceo of a five million dollar business now you run a five million dollar pest control business let's say that your your goal was to actually you know create a good life for your family grow an asset build a great place to work what are some things that you would do and and i'm not taking this from the standpoint of like what do acquirers look in regard to targets to make an acquisition how how would you think about that business from uh you know from the ceo's perspective if you're running the 5 million dollar shop um i bet you don't think about that often i don't and and i do know that i'd have to think differently and by the way i'm not so sure it's that big a leap because you know i came from a family where we did the stuff okay you know my mom said she wanted a pine tree planted in the back my dad you know had three boys we got shovels and we started digging holes and putting you know put the tree in we didn't call some guy to do it and even now if i go to the photocopying machine and it's out of toner i'm like opening the cabinet you know more inclined to put the toner in but the thing that i found when we were running the smaller business and is i felt like i had to be the smartest guy in the room on all things and that's a dangerous place to be so i was writing the brochure i'm an incredible brochure writer okay not okay i didn't know that yeah okay and um and then you know i would be the guy picking out the truck you know that we would use and the colors and all those types of things and as we've gotten bigger i've been careful to ensure that i have some folks that are experts that are looking for my opinion rather than dependent on my expertise now i think i would love it because i'm inclined to you know change the copier and load the truck and want to be out in the field and want to kill stuff and and the like but it would be an important transition for me to remember how to you know be more hands-on on on the stuff that you have to be a hands-on when you're five million dollar business i guess one of the most important things about growing the firm is a division of labor and that coordinating mechanism right and having those different kind of baskets of expertise and now you're surrounded by all sorts of subject matter you know you talk about rick bilderbach right what like maybe 10 people at the firm actually know that guy but he's he's extreme he's fundamentally important to your organization he's a real specialist right yeah yeah and so i guess you're running a small five million dollar business you're you're wearing a lot of different hats um what else what else pops into your mind i'd probably be the i'll sell it you do the work guy okay and and then i'd be the guy that follows up to make sure that you know they're giving us five stars because we just nailed it the other thing is on one hand this business is super hard to run because it's a decentralized service model so going back to my factory remember i could walk out on the production floor and i would say bob why is that guard not on that machine that's a safety violation you're going to get hurt and then i walk over to mary and i say mary why are you running out of spec here for the past hour let's shut this piece of equipment down and change out the tool or whatever that thing is and what our five million dollar companies have to do that out there by the way 1 million 2 million all the way you know is they have to provide these training mechanisms to allow people to do the right thing when no one's around so incredibly hard to do and incredibly successful when you figured out how to do it so how do you do it hiring training development right you hire the right people and you train them in the how to do it as well as the why to do it and then you give them a constant feedback loop about what's going well what isn't when you do that you win because we're all using the same vehicles whether they're colorado's the tacomas and we're all got dng sprayers and we're all using i don't know termidor or whatever and so there's the differentiators aren't in those elements differentiators are in the front line technicians and the csrs that are taking calls from customers and sales reps that are identifying need that's why it gets harder i think for the five guy to go to 10 and the 10 to go to 15 and 20 because those leaps mean instead of i don't know 20 people servicing accounts you now have 80. yeah and my dad used to talk about the knucklehead factor you know let's say one percent of your population just at any one time decides to do something goofy right and by the way that means 99 are doing it perfect right they're really you know doing their best but as you get bigger and bigger you get that you get some knucklehead moves and so then you've got to really tighten how do you train you know first of all how do you hire train and develop those people so they're it's not one percent it's 0.1 or something like that do you remember jim guyer he used to work for vic yeah at erlich when i first met vic and jim i guess i don't know how long ago this was but this is going back at least 10 years and this may even have been before your time i don't remember we were at reading turmoil down in philly having a bite and vic was talking about you know growing ehrlich and outside of um you know what they did with the people and all that one of the the smartest moves that they made is very early on figuring out the way to get to 10 million revenue inside reading the small middle of the nowhere kind of we need to get to just significant scale in this very finite area before we start and he said one of the best decisions that we made is really just focus focus a lot of our efforts in a very very small area to own market share what kind of thoughts go into your mind about when you think about density and market share and running your business is that something discussions you have with your managers look um route density does three things for us first of all i think it's better for the customer if i'm in a zip code all i do is work this zip code and there's a problem then i'm in that zip code it's it's really easy for me to have a problem or there's an extra service or someone's got whatever and so rather than you know remember my atlanta story if you're on the north side of atlanta you have to get down to the southeast side of atlanta that could be a real challenge but if you could zip code yourself these guys only work these zip codes and never leave it that's really good the second thing is our specialists make more money if they do more revenue in the same amount of time so the way to do that is not to take an hour job and to do it in 40 minutes because if you do an hour job and you do it in 40 minutes you're coming back because you didn't kill all the pests someone's going to call up and say hey i've got blank well no no kidding you did you know if you did the whole job you wouldn't have to come back the way to solve that is through route density so you have less time in front of the windshield more time in front of the customer and when they have less time in the windshield then their billable hours go up in the same amount of time that they work in a day and then finally we make more money because revenue per hour in a labor business is really important so there's a metric that we use called time on job and we know out of an eight-hour day how much was billable hours versus non-billable hours and every time you can do a little bit better in that portion of the total eight hours you know you're just going to make more revenue and on that revenue you're paying off the vehicles faster you're you're covering the the labor pieces dot dot so we spend you know a ton of time thinking about that and there's two ways to solve it well maybe four ways now that i think about it one is you could make acquisitions right paul yep so you've got low route density you buy a company that increases your route density then you distribute the territories accordingly so people aren't just spider webbing all over the place the other thing is you look at low route density markets and put a sales rep in there and you spend some marketing to build up the territories you can do a little bit on price increases okay so more revenue per hour helps you to be able to support some of the other spends you want to make on marketing and the like and then finally the one that we all know but we sometimes forget is one percent improvement in customer retention is one percent organic growth right yep so 100 and by the way the most profitable organic growth you can have you've already paid the commission the specialist already knows where it is the equipment's already installed you know just hold on to the accounts you have and you you just become just better and when you do that mrs smith asks mr miller next door who should i use and guess what happens you got the account um yeah one last thing a route density uh every once a while we laugh paul because you know we have we talk about marketing and sector focus and things and every once in a while we say you know what's the best next new customer the one next to the one we just serviced so exactly no you might not like i don't know pizza parlors but if it's right next to the school you just did you know might be the right answer to that question in some markets so one of the things that i do appreciate about renikil i think in general is running kill has been in my mind one of the most transparent pest control industries with regard to wall street as well as the city and not only do you folks publish a lot you have a lot of presentations not that the other ones don't but i always felt like renikil was very transparent and i know i hadn't been in the industry for very long and you didn't work for alan brown very long nice old man and i i will give him credit for the fact that i was a young kid in the uk and one of the things that in the brief conversation that i had coffee with him we discussed his kpi dashboard things that he looked at as the ceo of renikil now radical was a very very different business in the early 2000s than it is today it wasn't a pest control business for the most part it was everything else with us 35 pest control now it's majority pest control but i always like to have conversations and i know that you and i have had these discussions in the past but for our listeners can you talk maybe about kind of three or four things that you use from a maybe a performance indicator perspective as you manage the business whether it's on a monthly or weekly or a quarterly basis how do you what sort of qualitative and quantitative data do you like to have in your hands to understand how you're running your business every once in a while we'll be in a long discussion about something this and this is comical to me but we still do it and we'll go time out what problem are we trying to solve here because we've morphed into i don't know opinions and beliefs and stuff right so we now have a set of rules okay here it is why are we doing this why are we doing it now amongst all the other stuff that we could be working on why are we doing it now by the way good companies i think probably ask the first questions great companies asked that the first one and the second one i just said and then really really really good companies asked this third question which is are we resourced to successfully deliver this solution at this moment in time or are we just thinking the regular suspects are going to you know do a like a little bit more we're all just going to do a little bit more right and right easy to get into that trap right because if you're creative and you're dynamic and you have a bias towards action then you start thinking about you know solutions without the why and so as soon as you've answered the why then the kpis become evident about you know what you should track so if let me give you an example if you look at your specialist slash technician retention rates and you decide that they're not very high you could say it's because we're not paying enough right they're quitting for other jobs you could say that now most of us know that people don't quit for other jobs for a small amount of money they typically quit their boss right so when we start working let's say if we're going to work on um specialist retention we would start looking at why are they leaving us in the first place is it about money is it because their first day at the job was just horrible it was like their boss didn't even know they were coming did we get them trained up to our standards within a reasonable amount of time and why is that important well if you're doing a job and you feel like you're not doing it well it's not very satisfying it's not very engaging right if that was our example then we would then be looking at metrics to measure whether we're having an influence on those metrics so where are we in quartiles let's say against pay and the zip codes and the markets that we're working against what percentage of our specialists are within their training standards so if they're supposed to be chapter one after one chapter two after two you get the idea what percentage are on schedule hey it's my spanish control right if i'm saying that you know a manager should only manage you know nine people and a guy's got 16 what how's that likely to turn out so i'm sort of giving you maybe not the level of detail you want on kpis but the point is we then decide if this is the solution how does how do we measure success how will we know that we're doing the right thing and when you do that great things happen and when you don't you're sort of on to the next adventure and you said hey how did that thing ever work out over there you know right first off get the relevant data and then understand the cause and effect behind it exactly right got it all right patrick uh i am uh effectively done turn your microphone off step away i'm kidding so that kpis it sounds like you've made the reference twice this fear of failure or this anxiety and i don't know if there's certain kpis that bring red flags and haunt you at night i wonder what what with 9 000 employees really what kind of things can keep you up at night i mean i worry about two or three things all the time a safety issue i'll give you an example um we drove 150 million miles last year oh wow okay you guys would have gotten to the moon and back basically i don't know that step but that's a whole lot right yeah i worry about driving safety and because car accidents kill and i worry about our colleagues one of the things that we say one of our values is we value long lasting relationships with our colleagues and customers and embedded in there is an obligation that they are going to return home safe to their families so every day i see every accident report in north america every day and some of them are the dog bit me on the ankle and some of them i got stung by a bee in my ear and some of them are i got in a car accident or i fell off a ladder or i did you know twist my ankle in the backyard you know dot dot dot so i think about safety a lot and i think that's why when you brought up safety meetings maybe you know bureaucratic in my business it's it's really an incredible tool to tell the guys that are doing a lot of work that you care about and if i hear we have lots of slips trips and falls i'm immediately wondering is our shoe program correct so we give all of our colleagues free shoes and they're supposed to be special shoes that reduce the chances of slips trips and falls of course in this covert world i'm thinking about ppe a lot right are they within the right masks and are we doing the right stuff so first and foremost is um safety i do think about wage an hour a fair amount because it's hard to be in compliance on wage an hour in a distributed model sometimes yep so you know on the factory floor i would walk the floor and i'd say hey bob have you been on your break and he'd say no and i'd say hey you know time to take a break brother but out there in the field our folks are pretty dedicated to the task at hand they're a little bit behind because when they were at you know x y z location it took longer and now they're trying to play ketchup and you know and they have this feeling of ownership right well in the united states now you can pretty much have you can have one specialist who's in five different wage and hour kind of jurisdictions in one day literally right i mean across the state line go to california and go into a couple different counties and you're in a very very yeah and you know one of the things paul um to that and patrick is we are absolutely dedicated to doing it the right way the legal way as a result i'm always worried about whether we're doing it the legal way you know absolutely legal with 9 000 employees so we work a lot on that and then maybe it's the fear of failure thing but i'm always rethinking our strategy you know it's like spinning in my head why aren't we selling a little more of that and you know why did this customer not take our price increase when you know i think we're providing world-class service i will tell you though i sleep well at night i'm not one of those that wakes up 2 30 in the morning i can't sleep because it's just you know poof one of my previous uh colleagues a guy named scott cook who is a head of hr and a real helper to make me better as a manager said we got to work on your ability to compartmentalize things and put them into boxes and then after they're in the box let it go for a little bit and as soon as i started doing that it is a release it is a i think we got that right i'm not letting it go but i can check that box and say i don't have to look at that for two weeks a month whatever a week whatever rather than spin spin spin until you're you know you can't sleep at night and you're not fun to be around and all those types of things yeah john with the resources you have at your fingertips and the size company you have i i'm asking you from a town hall transparent answer perspective here if you will going back to safety is there something you could give to our listeners as they're running their businesses on a much much smaller budget what are just some things that they should be doing proactively to keep their employees safe we want our technician specialists to back into the parking spot and if you watch fedex you watch ups if they can't do a pull through they're backing in and the reason being is at that moment they know what's behind them afterwards they don't know what's behind them and it sounds like a little thing and and we require all of our acquired companies to back into space and of course it eliminates fender benders and all that kind of thing and heaven help you if you ran over a little kid or you know it just i don't think you come back from that kind of stuff but the symbolism of we want you to act in safe ways then pervades throughout the whole organization that they care about me they're not trying to hurt me they're trying to help me if you will by the way when we don't enforce the back-end policy and you just walk by it and they know that's a policy let's say i just walk right by it they go i guess it's not for real you know he saw that he didn't say anything i remember learning that lesson early on in the factory setting where safety you know is a big deal there's osha requirements in addition to the fact that someone could really get hurt and you could never walk by a safety issue if you frame it and i care about you issue not i'm trying to avoid i know higher medical bills or whatever it's amazing what happens patrick i appreciate that yeah the the backing in that's that is a reminder and a great great tip in pr we have to back in not from a safety perspective i kid you not there's signs like so we can pull out quickly in case there's a gunfight in the in the in the parking lot at the walgreens i kid you not i'll take a picture of it patrick i promise you i promise the two of you i'm going to take a picture of it later on today when i leave here it's in case there's some sort of an altercation by the way uh every time i back into the spot my wife goes really really we're back i said safety first honey what can i tell you [Laughter] so a couple of these brands have been mentioned down there in pr paul you've got oliver right yeah and presto x of my neck of the woods here in texas ehrlich western stereotech anderson and then just rent-a-kill umbrella over that can you speak to the thoughts on keeping these large platforms separate like what's what are your thoughts on brand equity john thought he would avoid one day where there's some person on the planet that didn't ask him this question right john no no i and look it's the obvious question right so at centos if we bought a company on friday on monday it was rebranded i mean you know their paychecks uniforms signs trucks we're like all over it a little bit different 100 commercial so explaining to commercial customers it's no longer blank it's blank a little bit easier and by the way centos has a really good brand name so it's it's a bit of an up it could be considered an upgrade okay sure so when i came to renikill 12 years ago i was predisposed to say why are you doing this multi-brand thing there's three or four reasons why we're where we are first of all about 70 of this business is residential in in the u.s so whatever brand you pick has to resonate with the residential customer so that's first and foremost on top of that it has to be a brand that will allow you to hold your business not lose it so if i was to convert from all good to i don't know xyz and a year later someone's saying now they used to be called all good what are they called now gosh darn it what and they you know they're they're like googling it or something okay and they come up with you know orkin as a result and we lose business that would be crazy so that's the first two the second thing is these brands that we're talking about have been in the marketplace for 80 years i mean if you're in marketing you dream of brand equity right matter of fact when we bought western the west coast western some people call it the best western i was on a plane and i don't know how you guys are when you're playing i'm typically not talking to my seat mate much i'm just you know yeah especially if it's my wife yeah you're a big player i hope she's not even in your zip code you're in trouble if that's the case she's on the other side of the ocean now she doesn't even know this podcast exists so i'm safe [Laughter] four or five minutes before we land lax guy said so what are you in town for i said oh you know we i work with a company called western and he said oh the little man with the hammer which is the logo on the vehicle with you know getting ready they hit the the rat with the hammer and you go oh my gosh you know just like that fast so patrick that's the challenge if i had a magic wand under 30 million dollars or something and i could just spend it and go all right let's get all these brands supported under a master brand that would help me to grow the business faster i would do it in a minute because today's digital world is it's hard to support multiple brands through google and the like so what we've done is decide to go to regional brands you're in dallas i believe if we bought a company in dallas it would be transitioned if it was a hundred percent commercial it would be transitioned probably 12 to 18 months to presto x if it was residential it'd probably take three years to transition it and then there's always exceptions to the rule so for example all good in north atlanta is amazing and active in south atlanta is amazing and i look at it and i say remember what i said so what problem am i trying to solve and they're growing you know high double digit growth high teen double digit growth and uh you go well what am i going to get from doing that so as a result sometimes i feel like i'm treading water in the deep end patrick about this branding thing and then i look at it and i go what problem am i trying to solve is this the problem i need to solve today and i look at it and i say really important problem but not today some other day yeah got it i didn't mean to bring it up i don't know no no no a scar that gets picked you know every time the guy sits down especially with with sellers right i mean that's always one of the first questions yeah do you just introduce yourself i'm john myers and we are he should record himself doing it and then just like have him do it right now let's do it right now there you go you can just use this now those guys can just give him the clip all right you mentioned jack welch earlier and if i remember i he was big on being number one in a sector and you're number three and i just i love the underdog story although number three i mean you're pushing 1.5 billion this year it's it's a big underdog i'm sure you're shooting for that number two number one spot what what's that strategy look like a couple of things come to mind jack welsh of course a lot of the stuff that he put together was meant to be considered as a common denominator a way of thinking 20 80 20 70 10 and the like i think they went wrong when someone was at 11 okay and sorry nine percent and he you know he said hey you gotta find one of your 70s and jam them into the the ten so that you know we're rigid to that i'm i'm not really sure that he ever thought it should be that rigid i think on your number one or you should be out also is very sector specific so if you have an eight billion dollar marketplace maybe it's closer to nine now depending on whose data you use and you're the third largest pest control company in north america and you basically have 10 market share is that a good place to be i think it's pretty oh no i think it's really good i think it's great i'm just i'm thinking in terms of competition i didn't mean to no no you did it anyway he's saying he's doing a shabby job patrick no not trouble i'm in texas so i got time to hide but patrick now like what you're shooting for you want to be better than three i'm sure and so competitor then then so first of all i didn't take it as a shot at all because i think it's an amazingly good place to be a marketplace that's probably growing you know forget covet for a minute but four to a half to five and a half percent every year dot dot dot and um we've got a 10 market share and we're the third largest so then the question is how do you grow profitably in that because just going really fast to say hey i want to be two and then i want to be one doesn't match up with the things that we want to do for our business which is grow profitably and fast and chaotically typically means not very profitably and talk about culture you know pain points that could be one of the things so i get that question just as often as i get the question about branding we're going to be methodical about organic growth rates to be more than the industry rates and then we're going to match it up with selective acquisitions so if we can grow 12 to 14 between the two of those let's say every year then you know i don't know when we'll be at number two or or one but i think the shareholders will be really happy during that time period paul will be happy with any more acquisitions you do all right paul we're going to have to take our vitamins based on upon how active paul's made us uh over the past uh three months oh my goodness i gotta take my vitamins after last week on the road if you know what i mean john [Laughter] one of my last questions i was gonna go back to when you talked about strategy and i was gonna ask you how or can terminax and run a kill north america miss the boat on residential mosquitoes or how all of you guys are so far behind because i feel like when i look at orkan when i look at terminox and when i look at running kill now granted you guys buy businesses that do mosquito and i get all that but i feel like would you agree with me that the big three are essentially behind a lot of the smaller players in mosquito control services at least on the residential side in north america or would you disagree with that i'm gonna just talk for ourselves we're we're behind okay i think the lawn care companies that beat us to the punch and some regional you know medium to large regional players have beat us to the punch and we're not getting our fair share and it infuriates me because we already own the customer yet and by the way mosquitoes is a form of pest control right so we own them as the pest control provider and we've got a lawn care company killing mosquito you know that drives me crazy arguably disease control from a more from a greater extent than just general pest right the other place that i'm really frustrated this is the uh stuff that keeps me up frustrated question patrick i do have one more to add to the list i don't think we're doing a good job at tick control either you know anybody that's had disease transmitted by a tick vector will tell you that's more likely than west nile slash the like and once again that's pest control in our customers yards we should be taking care of that better and we haven't broken that code but yes i agree with you 100 we're leaving a lot of opportunity to be fulfilled on the table you spoke about early career bringing your a game every day and speaking to your yourself to your red and kill employees uh even to me i just want to hear like what what does that mean how do you get yourself in the mindset to be successful every day first of all i work for a boss that is very very bright and very good people person kind of understands how people are thinking as you're talking he's kind of locked into not only what you're saying but how you're saying it and so he helps to make sure i'm on my a-game the other thing patrick is this job is a lonely job with the people reporting to you you know you gotta have your a-game every day and you've got to hold your emotions in check and i i don't mean robotic because we're all all allowed to blow up once in a while and you know then go apologize later right but that helps me to be prepared and then the final one is i don't want to fail i want to win so i do my homework and as a result i'm usually in a pretty good spot and then the last thing i would just tell you is i have changed my mind more often in meetings i go in thinking you know i was going to say red and blue i won't do that black and white and someone has told me you know i said it's definitely black and and then with facts they've allowed me to change my mind and so when you create that kind of environment even when you didn't bring your a game you're smart enough to hear a better answer and then you react accordingly i appreciate that working with paul i have to bring my a game every day i bet oh yeah or else i don't know what people would do [Laughter] john you've really built an incredible organization and run at home north america and obviously i know it wasn't you single-handedly the way that you've done that is really build a fantastic team around you there's a lot of people at your organization that i care very deeply for on a personal level i appreciate you coming out and talking to us today you're very genuine and very candid i'm so happy you stopped in today to chat with us well thank you for that i've kind of warned you um sales guys like to talk but there's some items in here that you heard that i'm really passionate about and it's taken me a while to be able to get my understanding of how this all fits together and and so what you heard is what i believe and it's not very well scripted but usually works as a result yeah thank you absolutely john it was just great visit with you i really appreciate your time and definitely going to have you thank you any time take care everybody [Music] well paul thanks for getting john on the border and buzz again he's been at renikill 12 years in that longevity that y'all spoke about and he also had previous experience at centos for eight years i think it was i think that's right what does that do i mean he steps in day one he already has route based service business experience what does that do for him as a ceo you're talking about the longevity or coming from cintas i guess both now he's got 20 years of route-based service business that's kind of a rock star isn't it yeah he's been around for a while you know look i think he learned a lot at cintas listen to him talk about syntas reminding me of yarl talking about securitas and loomis right the certain aspects of their model that he was able to bring to reniki north america and i think you know bringing in an experienced leader from another organization they can apply things that they learn that was very specific to you know their past employers but yeah john's been around i mean i joked in the interview and last time i saw him in february he and i were talking about the fact that i was surprised that he's still around because you know it's it's not uncommon for chief executives to head off to other businesses i think in pest control though it's been relatively stable right you look at the rollins guys they've been around forever and ever and ever it's it's really the anomaly and pest control has been terminex or service master and look you know brett just took over it's my high hope as i always say i need a strong terminux in this industry we all need a strong terminics and just as i had high hopes for nick i have high hopes for brett and i wish him the best of luck there with that organization with renikil i don't know if you can speak to this but you really talked about how they spend their time or john did on uncovering things during due diligence are there things that you've witnessed were rent-a-kills just handling due diligence differently or they think about it differently so my experience coming out of bulge bracket investment banking prior to getting into pest control i was dealing with extremely large transactions so when i came into pest control it was new for me you know i'm dealing with lower middle market deals and i was very surprised at the lack of dd that was conducted in pest control acquisitions vis-a-vis everything that i had done historically around the globe but you know over time when i think about reniko versus oregon versus terminix versus you know anti-cemex for example as the m a market has continued to heat up in recent years all of these players had to get more sophisticated i mean back in the day it was largely alex nye at running kill north america running the acquisition program he had some subject matter experts that he pulled on but for the most part it was him doing everything from the front end valuation submitting the you know the approval memo the investment committee going out conducting dd executing the deal it didn't take radical long to bring pwc on to execute a lot of their buy-side diligence at least financial accounting diligence and all of the players have gotten more and more sophisticated over the years i think arena kill north america they are an m a machine and they have a very choreographed process i think some other acquirers are continuing to to learn how to do that but i think that that is a very effective capability that reticle north america has built now does it matter to a seller out there no not so much i think around the edges it's helpful but that's not something that you would use to choose rent-a-kill versus any other acquirer necessarily it's more about the process that reniko's built to help itself and they have done a great job with that cool i don't know much about rent-a-kill as you can right i guess what i know about running kills from meeting with john myers and seeing the presto x truck here in the neighborhood but yeah not literally the neighborhood the the area well they're very thin down in texas right i mean so texas is a tough market for all acquirers it's a market that running kills thin and obviously anti-semex isn't there at all rollins and servicemaster have have a decent footprint but texas has largely been dominated by private businesses and it's a market that has yet to consolidate my mind and i i think that'll happen at some point in the future yeah you know i've talked to you and bobby about this for years right didn't i tell you many years ago that texas hasn't really been an extremely consolidating market at some point in the future it will be which will will lift valuations in that market we haven't really gotten there yet well let's do it everyone listening now in texas just call paul yeah no no i mean my limitations of presto x have literally been we had a couple clients that needed some commodity fume and they were actually had developed a relationship where we could call on them and sub out some commodity fume that was really it good good people there so you've said in the past 80 percent of sellers choose the highest bid and if money and terms were equal i just want to know how would you describe burning kill in comparison to other current strategic buyers and just maybe asking that another way as an outsider looking in how would you describe renikilt culture there's a lot there in that question that's what i do so first off sellers have a differing degree of consideration when they're selling their business some people are extremely hell-bent on investigating the acquirers and i'm fine with that and i like that because it's 100 their decision and not just an auction process and the highest price so i think rent-a-kill you know from a cultural perspective is very interesting in north america because it really is an amalgamation of a lot of different businesses if you think about it 15 years ago that business was doing less than 100 million in revenue prior to buying erlich i mean for so long they were doing 25 million in revenue year in and year out in north america so they buy erlang they buy western they buy a variety of i mean the list goes on there's hundreds of the deals that they have done to build that business and when we interviewed brandon heyer one of the things that really interested me is there a consistent culture across running kill north america or do each of the individual businesses retain their own culture and i think what we heard from brandon is that they really did a good job in allowing his business kind of retain its own unique culture but layered on kind of ironical north america type policies procedures so my gut tells me we're going to kill somewhat of a hybrid in a lot of ways renikil is similar to anti-semex in that radical has done a great job acquiring quality platform businesses allowing them to run somewhat standalone but still taking some key people like some of the deals that i've worked in they've taken some key individuals within the platforms that they've acquired and allowed them to ascend the throne to kind of greater regional or even national type positions so when i look at companies like renikil and anti-c-max i start to think about the fact that i think both of them provide a lot of upward mobility for sellers people okay that makes sense thank you yeah i mean look at the other thing i'll say patrick is you know john talked a lot about remote working it's 20 20 now everyone's remote working for example rollins is not a company that really is interested having a 20 million dollar business and let's make this up in illinois and the cfo of that business lives in wyoming right they are very kind of focused on having everyone there in that business versus you know rent-a-kill anti-c-max and others have kind of been a lot more flexible finding the best talent irrespective of where they are in the world that is interesting in the the contrast makes sense i think you've said like commanded control of rollins haven't you yes i have yeah so it sounds like brand equity right they've rent-a-kills retain those names based on i guess regions or localities what's your thought is that the way the future or you know others are doing that you know i never ever ever get hung up on this whole brand issue everyone always talks about it sellers always have questions about it to me pest control's a local business and i don't know if john said it on this interview but we've talked about it quite a bit i think it's slightly frustrating for him to have 150 brands in north america right but on the other side of that equation is do you really care right i mean does it really matter pest control is so local i mean like you take western was largely a residential business out in california with randikel north america using ehrlich as a residential brand i can't even spell ehrlich right i mean i got to use spell check i got to actually go to google and like type in earlier to make sure i'm spelling it right i can't even spell it yeah so it's going to get you wrong does it make sense for rena kill to rebrand western in california a business has been around since i think 1913 to ehrlich it makes no sense doing that i don't think and i think anti-c-max has realized it i think to a large degree rollins in you know rollins has this portfolio of independent brands you've got home team and crane and northwest and the list goes on the same thing with terminix there was a huge push over the years to harmonize the brand right let's buy everything and call it terminex well starting in around 2015 and accelerating into 2017 and 2018 they've decided to buy standalone brands gregory for example mcleod these types of businesses just leaving them as the local brand that they're known of in the market so i think in episode seven with mike giblin and certis they were talking about doing a brand equity study but really it might not be no i mean when i think about what giblin was talking about certain has bought a lot of small businesses right so you go into the seattle market you buy a two million dollar player and a four million dollar player and a five million dollar player and you jam them all together it makes sense to have a consistent brand there but when anti-semitics or service master rollins or randiko goes out and buys a 25 million dollar business when somebody goes out and buys mike rogers killingsworth in charlotte metro that's been there for years very very well known it doesn't make sense to change that name j.p mchale it doesn't make sense to change that name these are businesses that have been around for a long time have a lot of brand equity in the market and are of size and at that point in time you do what you learned from scott stevenson yesterday you got a business like modern doing about 20 million in revenue you do seven or eight acquisitions and you boom plug them right into modern change their name and grow it that way gotcha shifting away from just reticle specifically but some of the takeaways i heard john said one percent of customer retention is one percent in organic growth i have not personally thought about customer retention that way it's we tend to think about sales of an unsexy industry like sales is actually cool and flashy customer retention doesn't get our attention we don't incentivize for we're not celebrating it when we save a customer so i didn't know if you're focusing on with your clients improving customer retention or when you're taking them through the process of customer retention is a big deal i think that's a great point that you picked up on from a mathematical perspective on the surface saving one percent of the customer base from a retention perspective is equal to one percentage point in new sales so that's fact he's a 100 right on that but because i always like to look at cause and effect in the impact on the bottom line i mean one we have spent many many years over here and i know i'm a pain in a lot of my clients asses because i think if you know any potomac clients you'll know that i tend to use everyone's business as a living laboratory and years ago i had a client who was very sophisticated with the use of technology and had a business with let's call it around 10 000 customers or so it was largely a residential kind of general pest business didn't do a whole lot of one-times so it was a pretty homogeneous customer base which was good for testing and so i wanted to understand far more than top-line impact on that customer retention has on a business i was interested in what the bottom line impact is and so one of the theories that i had is you know and i know this is common sense to a lot of folks but i wanted to really understand why is that a older customers is more profitable obviously than a newer customer and so i think if you think about it kind of logically you're running your business you get a new residential pest control customer that customer probably has some problems so it's more expensive to do the clean out but then once they stick around with the business for longer than 18 months the technician builds a relationship the technician knows shortcuts to the home they know the hot spots of the house they know where there's issues and so you kind of build this knowledge of kind of a service history with that customer now one of the things that we didn't know and we didn't know until we tested it was i had the hypothesis that newer customers are more of a pain in the ass than older customers so one of the things that we did is we tracked every single customer that came into that business and we tracked their duration we also tied the customers phone numbers and emails and texts and all that sort of stuff to the phone system which allowed us to track how many incoming calls for each unique discrete customer and the duration of those calls and so the question was where does this pest control company spend most of its service time as far as calling and as it turned out approximately 70 to 80 percent of phone time with the office was spent on the phone with new customers because new customers there's a lot they don't understand they might not this might be the first time they had a pest control service they might have switched a provider to you so they're just trying to understand how everything operates they've got a lot of questions older customers that you've been servicing for years hey patrick's guys come out i've known jim forever he services i don't even need to see him we noticed the customers that have been around for a while are more inclined to text or email hey patrick the answer back can you you know send jim out i'm around thursday and friday right yeah the new customer though calls up oh i got these you were just out here a month ago why are these ants here why are they back well because we're not completely eliminating pests they come back that's why you have a service and that's why we've got your back we're going to send somebody out and you know 10 minutes of phone time wasted older customers are more inclined to send emails about changing credit cards and so on and so forth so it's just you get that working relationship with the customer and they become less and less expensive or inversely more and more profitable to service over time it's an important factor and you know tim mulroney and i were talking just the other day like how do we measure customer retention and i think that's an entirely separate episode on customer retention measurements but let's do it okay so rule of thumb the span of control john actually said the numbers there are nine specialists or technicians and for every nine technicians there's an ops manager and then there's four ops managers or service managers underneath a district or a branch manager and i thought you know things could really get out of whack you might have too little or too many direct reports in the organization i thought they scaled a 1.5 billion dollar pest control company based off that 149 number i thought that's a good takeaway for me when you're a pest control operator and you you listen to something like the boardroom buzz for example and i think everyone wants to hear like what's the best way to advertise what's the best way to market what's the best way to hire people all these kind of tactical things that fit into a bundle of of things that you have to deal with as a manager but some very very big things that allow businesses to scale very very rapidly is having the appropriate organizational design and having the appropriate incentive structures because if you set that up right on the front end i think in a lot of ways you can almost set it and forget it and i know that's not right but it covers all sorts of manners of sins if you have that stuff set up right you know it's been a few days since we've interviewed john myers and so i did my research he was big on safety but the figure that stood out to me was 150 million miles a year i just think that's incredible and i can see why safety is such a number one concern i've always thought the potential likelihood of something catastrophic happening is on the road and not necessarily in mrs jones backyard you know i could think of one actual pest control claim in my time in the industry and it was relatively minor you know just had to do with some fish no biggie and i just think of like the fatalities the accidents just you know mike rogers spoke about it that's kind of was a big impetus for for them selling killings worth so yeah i mean look we were a week away from a deal a couple years ago with it was a 40 million dollar transaction with rent-a-kill and um there was a road fatality and one of the technicians the technician didn't die but there was an accident and a motorcyclist died in a fatality a week before the closing so of course you've got all sorts of potential liability issues and blah blah blah blah but i mean look you got so many people on the road i mean i i don't know if this is still the case but there was at least one year when rollins was ford's largest customer they bought more ford vehicles than any other entity on the planet right wow yeah so pest control companies put a lot of people in a lot of vehicles driving a lot of miles and so you know the road is of course a very very big issue for all of us mike rogers spoke about doing 60 000 miles a week or two and a half trips around the earth paul have you ever looked at like revenue per mile we've never looked at revenue per mile you know i've got this big dashboard here of metrics that go kind of up and down the p l and um that one's not on there there's a lot of them on this list that i would like to be able to utilize but i can't because a lot of companies just don't have those records so i don't know you know if you take 10 pest control companies out there maybe one of them would be able to tell you how many miles their technicians have driven now the debt is there i mean they've got odometers people got wax cards you can you can calculate all that but it's getting down in the minutia is kind of um a pain in the rump to collect but i like it patrick it's a good idea okay kind of explore revenue per mile yeah very cool all right so john spoke about being out in the field being on the front lines riding along with those technicians and very nice uh no surprises from john myers um but if an owner's considering selling in the next year or two i'm thinking maybe they shouldn't be out in the field maybe they don't need to get back into the business they don't need to be the face of their company now john you know i don't see brenda kill being sold anytime soon what recommendation would you have of an owner that hears this episode thinks hey i need to be on the field now but i'm selling in a couple years maybe i shouldn't i think one of their most important jobs these ceos is to get out in the field and talk to customers i think it's important to show up at a customer's operation and talk to them i think it's a very very important aspect of it and that's why you know i was curious when i asked john the question is it him being the sales guy wanting to get out there and kind of get his get his sales on or was it him actually going out and trying to talk to customers understand you know what the organization is doing right wrong because i think you know a lot of owners they started in the field right and over time you build an organization and i can think of just a lot of guys who haven't gone out and you know they'll talk to customers when they call in or whatever but they're not proactive at out in the field they're not taking ride longs with technicians at random intervals a lot of them have managers that do that but we've heard you know yarl talk about it we've heard john myers talk about it these ceos that run these billion dollar organizations do get out in the field and they do do ride-alongs i mean look the core of your business is creating value for the customer unless you get out there and talk to the customer it's really hard to understand and formulate strategy around creating value if you're not getting that direct feedback so i think those are great discussions i think that's a great point patrick yeah that question came up in my head it's like hey what john does that what what about other ceos all right so paul this might be the most selfish thing i've ever said to you or on the show i'm glad andy ransom said no back in 2008 [Laughter] oh patrick you had to bring up the i know what you're going at you're going out my my attempt to buy rent-a-kill north america hey you could have made it happen i believe in you yeah that was back in 2007 2008 i was young what was i late twenties at the time i decided you know i just come out of private equity i'm doing deals in pest control renekal north america does maybe 200 million in revenue this is a business i can buy it was the financial crisis i thought you know what i got some mezdet lined up some sub debt some preferred equity common equity i had the whole capital structure built out i valued that business i was ready to go at it sent a letter to alan brown proposing the acquisition i i went over to london and he was kind enough to sit down and kind of giggle at me you know looking i'm a young kid and trying to buy running kill north america he kicked off the letter to andy who who returned a letter to me with his own commentary yes that's very true patrick well at least it was a polite no it was very yeah very polite but do you know why i'm glad they said no i have no idea because now we have the boardroom bus and there you go we wouldn't i guess we wouldn't have had the boardroom buzz had i owned running kill north america that's right you'd be paul g driving the diamond studded rolls royce quite frankly patrick we would have never met because i don't think we met until 2010. oh right i would about run a kill north america in 2008 there you go i mean i was really selfish thinking about porter and buzz but that's right we wouldn't have this friendship all right man paul thanks again for getting john myers on the buzz it was great and i learned a lot even just chatting with you today yeah patrick it was you know john myers is a great guy he's always full of interesting stories you know for years i always wondered working with john he's such a nice and friendly guy you know the max we go to meetings and john shows up the max is like i just want to sit on his lap and drink hot chocolate and listen to his stories um now he's a fierce leader for sure you don't run a business like that for as long as you have but you know he um he's very warm and endearing so i'm glad that he stopped in today's chat with us i've heard that the reniki m a team has come to take a look into the mix well they're definitely yeah those are stories for other uh okay for other episodes all right lady paul have a great week thanks again thank you patrick talk bye-bye [Music] this episode has been edited and mixed by dylan seals of [Music] hdaudiopost.com you

Channel: Potomac Pest Control Group

Views: 22

Rating: 5 out of 5

Keywords: rentokil, rentokil north america, Rentokil pest control, john myers, andy ransom, how much is my pest control business worth, key performanced indicators, pest control, pest control acquisitions, pest control business, pest control business benchmarks, pest control business brokers, pest control business valuation, pest control company valuation, pest control mergers, pest control podcast, rentokil acquisitions, pct top 100, route density, employee retention

Id: gpDqFmouuUE

Length: 118min 12sec (7092 seconds)

Published: Thu Nov 19 2020