[Cover Story] Top 100

Companies featured in PCT’s annual Top 100 List share their best practices for success regardless of the economy. What follows is a link to this year’s list plus profiles of some of this year’s companies..

ABOUT THIS YEAR’S LIST PCT’s eighth annual Top 100 list names the industry’s 100 largest pest management firms by their 2008 revenue. This list was compiled by the staff of PCT. Certain companies are absent because they elected not to disclose their revenues or PCT was unable to discern their revenues through other means. The articles that accompany this list were written by Anne Nagro, Lisa Jo Lupo and the PCT magazine editorial staff. Nagro and Lupo are contributing writers to PCT. PCT made every effort to identify and contact companies that should be included in the list. If you know of a company that should be listed, contact Jodi Dorsch at jdorsch@giemedia.com. CLICK HERE to view this year's list. A few notes about this year’s list: The abbreviations on the list are as follows: *= estimated figure; n/a = no answer; % GPC = general pest control; % TC = termite control; % Other = T&O, fumigation, add-on services, etc.; % RES = residential; % COM = commercial; EMP = employees Companies in the Top 100 list earned $4,649,775,312 in 2008, which was an increase of about $173 million from 2007. There are 30 states and three Canadian provinces represented in this year’s list. California has the most firms on the list (15) and Florida has 14 firms. Revenues for the three Canadian firms on this list are reflected in U.S. dollars. Truly Nolen’s (#10) revenue for its U.S. operations is $89,300,00. Truly Nolen International’s revenues are about $20 million. While several companies on this list offer product distribution services, those revenues are not included here. HomeTeam Pest Defense, which was ranked #5 last year, is no longer on the list. It was purchased by Rollins, Inc., parent company of Orkin, in March 2008. Presto-X, ranked #22 last year, is no longer on the list because it was purchased by Ehrlich/Rentokil in August 2007. Moxie Pest Control, which was #64 on last year’s list, was sold to Terminix in the third quarter of 2008, so it is not on this year’s list. Although Crane Pest Control (#52) was purchased in January 2009 by Rollins, Inc., the firm is on this year’s list since it reflects 2008 revenues. On last year’s Top 100 list, Arizona Exterminating and Oliver Exterminating were listed separately. However, the parent company of Arizona Exterminating, Guarantee Floridian and Oliver Exterminating of Puerto Rico and The Dominican Republic, is Oliver Exterminating Corp. The company is now listed as Oliver Exterminating Corp. (#23). This year‘s list features a new piece of information about each company: the number of offices for each firm is now listed. Another new element of this list is the interactive map. Click on the map (right) to see information and live links to each of the Top 100’s Web sites.

 

 

 

 

 

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Lessons in Leadership

Top 100 firms share best practices
for succeeding in any market.

What makes a company successful? In uncertain econom-ic and hyper-competitive times, the answer has never been more salient. From capitalizing on new markets to corporate culture-building, best practices guide industry leaders. Here’s what some are doing to stay on top of their game.

Meeting the Need for green. Identify market opportunities like “green” pest management early, and own them, said professionals. “We were green before green was green,” said Randy Hulett, marketing manager for Hulett Environmental Services, which has offered environmentally sensitive pest control for more than 10 years, he said. The West Palm Beach firm changed its name to Hulett Environmental Services in the late 1980s, he said, and had to explain what this meant until consumers caught up.

Western Exterminator Company in Anaheim, Calif., began offering environmentally sensitive control programs years ago when it noticed changing consumer and regulatory attitudes toward pest-icide use. 
In March, Arrow Exterminators in Atlanta switched to the STEPS (Sustainability Through Environmental Practices and Solutions) Total Protection System. The single-service approach solves customers’ pest problems while leaving a “friendlier footprint,” said Chief Marketing Officer Cindy Mannes.

The Steritech Group, Charlotte, N.C., saw a market need for premium commercial service, rolling out its Zero Toler-ance Pest Prevention Service four years ago, said CEO Mark Jarvis. When combined with its EcoSensitive Pest Prevention system unveiled in the early 1990s, clients get “the best of both worlds.”

Training. Training. Training. No investment offers a better return than training, said Massey Services Vice President and Quality Assurance Director Adam Jones in Orlando, Fla. The more invested, the more returned in improved productivity, quality of service, customer rela-tionships and performance. Training has allowed Massey Services to be “as successful as we have (been),” he said.

“People are the most important part of the equation,” Jarvis said. Steritech recently overhauled its human resources platform to the point “we’re obsessive over people.”

When employees feel good about their abilities, “they look forward to coming to work on Monday,” said Hulett Environmental Services Marketing Director Greg Rice.

Now is the time to spend as much money as possible in training and development, said Jones. “The best-trained company, the best-trained people are going to get us through these hard times.”

 One bright spot: The economic meltdown has made hiring top per-formers from other industries possible, said Middleton Lawn & Pest Control Operations Vice President Jeff Buhler in Orlando. These professionals bring “unique skill sets” and different perspectives to sales and branch manager roles, and easily can be trained on the technical side of the business.

It’s easy to say a service organization is built on its people, said Bert Dodson, Jr., president, Dodson Brothers Exterminating, Lynchburg, Va. “Talk is cheap. Action is everything.”

Collective Culture. Leading pest management firms have a definable culture. Abell Pest Control employees rally around client-driven quality service, said Vice President Brett MacKillop in Etobicoke, Ontario. Everyone is expected to sell at Western Exterminator Co., said Katz.

Communication is king at Waltham Services in Waltham, Mass., said President Clarke Keenan. He works with employees on relation-ships and helps them find solutions to sometimes sticky internal and customer situations. Success depends on how you handle “the people side of the business,” he said.

Mutual respect is a tenet at Dodson Brothers Exterminating and has been for the last 65 years, said Dodson. “We are truly concern-ed about our team members, who are concerned about us.” The company provides good benefits, incentive programs and opportunities to advance in return for the commitment, dedication and honesty needed to run a successful operation.

The culture at Cook’s Pest Control, Decatur, Ala., reflects the values of the Cook family, which has always put investing in the business, employees and community first, said President Jim Aycock. “That has allowed us to be a very stable company.” From excellent benefits to “most impressive” branch facilities, employees know the company supports them and this influences how they do their jobs and interact with customers, he explained.

Employee Empowerment. Employees who participate in decision making take own-ership of the results, said professionals. It’s no wonder firms strive to empower their people.

At Middleton Lawn & Pest Control, branch, district and corporate leaders create the firm’s financial road map, and as a result, employees better understand how “anybody’s individual sphere of influence impacts the financial performance of the company,” said Buhler. “We’ve become a much more profitable company even in a year where retention and new sales have been challenging for everybody.”

Waltham Services takes a “bottom-up” approach to budgeting and planning, said Keenan. “It comes from the managers because they can take ownership of it better.”

 Because financial performance is tied to the “dozens and dozens” of decisions made across a company at the same time, Middleton forms small committees of employees from different functions to address specific problems. The four- to six-week assignments and resulting recognition “energizes people,” Buhler said.

“There’s a lot to be gained from brainstorm-ing and gathering knowledge from the field,” said MacKillop. Arrow Exterminators’ new STEPS initiative, for example, “started with employees,” said Mannes.

When employees pull in the same direction it’s a “tremendous boost to the potential growth of an organization,” said Katz.

Measuring to Manage. Daily measurement keeps a company on track. When an organization gets to a certain size, management can’t see everything that’s going on, and “You can’t manage what you don’t know,” said Massey Services’ Jones.

By evaluating lead performance and the activity of sales personnel, Massey Services knows how many calls an employee must make to gain the next sale. “If you don’t do that you’re not going to sustain yourself in this business climate,” said Jones.

 The firm also tracks account receivables. “Trying to collect money at 60 or 90 days is a very difficult prospect,” said Jones. The company follows strict operating procedures to keep receivables from getting strung out. “It’s cash in the bank that makes payroll,” he said.

Like Massey Services, Steritech has standard operating procedures for just about every job function. They allow the firm to provide consis-tent, quality service on every route across the country, said Jarvis. Added Jones, “You’ve got to know what constitutes good work.”

Perhaps the most important metric is profit, which is directly tied to productivity and pricing. “Charge the right price so you’re making money,” said Jones. Discounting service, unless successfully used to grow market share, only decreases profitability. He said termite market woes are due in part to price compression: Jobs once running $1,200 to $1,300 now go for $400 to $500. “More than ever, it’s important that you maintain profitability.”

High-Tech, High-Touch. Top 100 firms have embraced technology since their early days — even when a computer was the “size of a semi trailer,” laughed Hulett — and continue to do so. Steritech is “creative in how we use technology to measure performance” and head off potential problems, said Jarvis. Abell Pest Control developed proprietary software for handheld units, which allows customized service and reporting for national chain accounts and differentiates it from competitors, said MacKillop.

Hulett Environmental Services was an early Web site adopter and acquired the Bugs.com domain. Today its site provides Internet-savvy consumers reliable information and “connects people closer” to the Hulett brand, said Rice.
Firms are careful not to let technology replace the personal connection. Telephones at Hulett don’t rely on automated systems. “You will talk to people because we are a people business,” said Rice.

Creating value at every contact strengthens relationships, said Western Exterminator’s Katz. Before leaving a property, his technicians leave detailed messages on voice mail if customers aren’t home at the time of service. “If people forget you’re there, you really become very vulnerable,” he said.
To help employees make the biggest impact with customers, Middleton Lawn & Pest Control automated and outsourced low-touch, low-complexity tasks like auto payment and billing statements, said Buhler. Now employees can focus on improving performance where it really counts: Detailed, high-touch interactions with internal and external customers.

Change is Good. Firms do well when they stay “steady at the helm” and continuously improve the quality of service, said Waltham’s Keenan. They also must know how and when to adapt. “In a dynamic economy like we have today, we need to have dynamic leaders and dynamic decisions,” said Buhler. “We just can’t sit back and operate our business the way it’s always been operated.”

The author is a frequent contributor to PCT magazine. She can be reached at anagro@giemedia.com.

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Schendel Pest Services
This Kansas Pest Management Firm Declares “Freedom from the Recession”

Virtually no city has escaped the devastating effects of the recession. And Topeka, Kan., where 225 jobs were eliminated at the Goodyear Tire & Rubber plant and a decline in aerospace manufacturing has taken its toll on the state’s economy, is no exception. When your core cus-tomer base — homeowners with high-paying manufacturing jobs — is under significant eco-nomic pressure, how do you respond?

 If you’re Brent Boles, president of Schendel Pest Services, you visit all eight district offices in Kansas, Missouri, Oklahoma and Arizona with a simple message for your 115 co-workers. “We’re going to refuse to participate in the recession,” he said, asking each Schendel associate to sign a symbolic “Declaration of Freedom from the Recession.”

Speaking at the company’s annual meeting in mid-March, Boles said it’s no secret market conditions are tough, but everyone has a choice. You can give into the “recession reaper” or take steps to protect your company’s bottom line and grow your business, regardless of the state of the U.S. economy. Not surprisingly, Schendel Services, a $10.8 million family-owned business that has survived its fair share of recessions since opening its doors in 1947, chose the latter.

While admitting that “it’s tough out there,” Boles said don’t be fooled; recessions do discriminate against certain companies. They discriminate against companies that “fail to embrace change” and against individuals “who don’t or won’t accept that our world is different than it was just six months ago,” he said.

Recessions also discriminate against companies that don’t respond quickly enough to changes in the broader economy, something Schendel Services has been addressing since the early days of the downturn. “We’ve taken steps to stay ahead of this economy,” Boles said, including:

• Negotiating a new, lower cost health care plan.
• Developing a new banking relationship and restructuring its debt, a move which will save the company more than $100,000 during the next five years.
• Negotiating new vehicle, liability and worker’s compensation coverage, resulting in $124,000 in cost savings.

“Do you think our cus-tomers are doing these same things?” he asked. “We know they are.” As a result, Boles told his co-workers “we need to make sure they’re getting the value they paid for” when they signed on the dotted line with Schendel Services.

But cost cutting isn’t the only thing the company has done to pro-actively address the recent economic downturn. They’ve also invested aggressively in a range of sales and marketing initiatives designed to ensure they come out of the recession stronger than they went in, gobbling up market share in the process. “We’re not going to step back,” Boles said. “We think there are opportunities in the marketplace to gain customers.”

For instance, the company recently added a full-time director of marketing to its payroll. Michele Vance, a veteran consultant who has done work for such high-profile clients as H&R Block, Target and Best Buy joined Schendel in 2008 and her expertise is already paying dividends for the company, which has been a Copesan partner for more than 40 years. In addition to overseeing a redesign of the company’s Web site, www.schendelpest.com, Vance has worked closely with customers and staff to identify Schendel’s key competitive advantages as a way to drive sales in 2009.

“Every company has or had a competitive advantage. It’s your reason for existing,” she said. However, “the competitive advantage process is evolutionary,” Vance warned. “It will change over time as we improve on delivering what is most important to our customers and as we identify what sets us apart from the competition.”

The company also invested in a new referral program designed to grow its routes and expand its market footprint. Developed by Dennis Fox, president of The Client Development Institute, Reston, Va., the program makes it everyone’s job to sell, regardless of one’s title. “We’re cultivating a sales culture,” Boles said. (Editor’s note: A story outlining the program will appear in a future issue of PCT magazine.)

 Finally, Schendel Services invested $150,000 in state-of-the-art handheld devices designed to make its technicians more efficient and productive in the field, allowing service personnel to retrieve customer contact information, service and billing history, and inspection forms quickly and easily with the touch of a screen.

“We’re investing in the future,” Boles said, but those investments come at a price, and that price is a personal commitment from every staff member that in order “to prevent being person-ally and professionally affected by the recession,” Schendel employees commit to:

• WOWing customers by doing what I say, doing more than is expected and communicating everything I do.
• Asking my customers for referrals and refer-ences so that I can prevent my route from shrinking. I will continually look for sales opportunities.
• Protecting company assets by making good decisions and taking care of equipment, build-ings, vehicles, handhelds, etc.
• Working together as a team to ensure our clients are getting what they expect, and utilizing each other’s skills and knowledge to provide the best possible experience for all customers.
• Living the Schendel values. In closing, Boles said in addition to signing Schendel’s Declaration of Freedom from the Recession just like everybody else in the company, he will “work tirelessly to protect those who are working to protect Schendel Services. I will change and adapt to the challenges in front of Schendel. I will continue to communicate what is needed and what is expected on a more regular basis.”

 Finally, Boles said neither he nor other members of the management team have all the answers. For this reason, he said, “We’re going to make the decisions that are best for all of us, not for one of us. Are you with me?”

The enthusiastic response from those in attendance at the company’s annual meeting indicated they were. Only time will tell, however, if Schendel Services and its dedicated group of employees are able to sit out this country’s most serious economic crisis since the Great Depression and prosper in the years ahead.  — Dan Moreland

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Killingsworth Environmental
of the Carolinas
Aggressive Selling and World-Class Service

Tired of the “corporate fun and games” and ready for a career change, Yellow Pages salesman Mike Rogers accepted an employment offer from what was his largest customer — Killingsworth Pest Control of Florida. Fourteen years later, Rogers purchased the South Carolina branch of the business to become president of Killingsworth Environmental of the Carolinas in May 2007.

Since that time, Rogers and his wife, Debbie, have grown the Indian Trail, N.C.-based company to more than $7 million in annual revenues by focusing primarily on residential services, Rogers’ background of strategic sales and marketing, and incorporating “out-of-the-box” thinking and services.
These strategies, including cutting back on termite pre-treat services and adding lawn care, have enabled the company to weather the economy, and even grow its bottom line.

Killingsworth’s lawn care service, begun in 2008, had a bit of shaky start as the company put in place the right mix of people, Rogers said, “But it was really just a matter of getting the bugs worked out.”

The service was, in fact, in answer to custom-er requests, he added. “People up here want their grass to be green, too. We have always sprayed the yard for insects, and customers were asking if we could do fertilizer and weed killer as well.”

Primarily self-taught in pest control, Rogers feels his sales and marketing background has been a key driver of the company’s growth, because Killingsworth personnel don’t simply wait for the phone to ring, rather they tend to be aggressive in their sales efforts. But no matter how aggressive one is in attracting new custom-ers, it is the ongoing service that retains them. “Our motto is we strive for world-class customer service,” Rogers said. “And that, he said, is the real key to the company’s success. — Lisa Lupo

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Griggs & Browne
Service Selection Keeps
Company Top of Mind

 

 

With termite, pest control, home inspection and carpet and upholstery cleaning services, the secret to continued success for Griggs & Browne is its range of services and resulting repeat business. “Once we get customers, we never lose them,” said President Dan Griggs of the Providence, R.I.- based company. “It’s a constant repeat business.”

Of its 10,000 customers, about 75 percent are residential and a good percentage of its commercial base is residential property management companies. While some residential-focused companies have seen revenue decreases caused by the down economy, Griggs & Browne showed a slight, but positive, revenue increase of 1.4 percent from 2007 to 2008 and anticipates a 4 percent increase in 2009.

Because the company’s pest control service takes it into homes, it has found that crossing over to offer the additional services has proven to be effective and profitable. Its home inspection services were begun in the 80s by Griggs’ father Glenn, to whom Dan Griggs attributes the greatest growth of the company. “He is really the guy who built the company to where it is.” Dan is a third-generation owner, with his grandfather Dan Griggs having purchased the company in 1934 from founder Michael Browne. Dan Griggs (the grandson) brought carpet, tile and upholstery cleaning to the company. Starting with one truck in the 1990s, Griggs & Browne now has a fleet of trucks servicing residential and commercial customers.

 Having a variety of services to offer its customers, the company is now developing a bundled program to help generate business. Although not yet finalized, Griggs says he expects the program will include quarterly pest control, tri-annual termite service and annual or bi-annual carpet cleaning for a single monthly fee. “We’ll stagger the visits so that they’ll see us every month or almost every month,” he said. By doing so, Griggs & Browne will stay top of mind for its customers and provide ongoing value for the monthly fee. — Lisa Lupo

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Your Way Fumigation
Anticipating Growth Despite the Economy

The fumigation industry has been hit hard by the economy as many consider it to be a luxury, said Your Way Fumigation Co-Owner Pete Salange. While evidenced by the Murrieta, Calif., company’s 20 percent decrease in revenue from 2007 to 2008, Your Way Fumigation is anticipating a turn in 2009, projecting a 10 percent increase in revenue for the year.  Despite the revenue decline, though, the company has not had to shut any branches or have layoffs as have other California fumigators, Salange said, “so we have been able to stay ahead.” In fact, always one of the largest fumigation companies in the state, Salange believes his company, whose primary focus is tent fumigations of residential structures, may now be the largest.

 Your Way Fumigation gets a great deal of referral work along with service to its solid custom-er base, Salange said. “We have a client list of about 300 customers, which keeps us busy year round.”

As described on the company’s Web site, most of its tent fumigations are for drywood termites which generally encompass a three-day process: tenting the structure on the first day, aerating on the sec-ond, and certifying the structure as cleared for re-entry on the third. Salange attributes the company’s success to the hard work and dedication of its employees. “Hard work and perseverance,” he said. “It pays off.”

 Your Way Fumigation was founded by Bill Skyler in 1976, who sold the company in 2007 to Salange and Jose Manuel Aguilar, who were company managers at the time. The company provides fumigation services and heat treatments throughout most of the state of California. — Lisa Lupo

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Middleton Lawn & Pest Control
Organizational Changes, Shareholder Dispute Leave Company in Flux

 

 

It’s been a year of change – both in terms of leadership and operational restructuring – for Middleton Lawn & Pest Control, which reported that 2008 revenues were up 4.5% over 2007 year-end revenues. In a Dec. 2 shareholder release, Jack Ruff, CEO and president of Sunair Services (parent company of Middleton), noted that in 2008 the company had undertaken long-term growth initiatives that included Middleton combining its four regional districts previously located in Daytona, Orlando, Tampa and Southeast Florida and its corresponding five support locations into two regional centers, East and West, with three support offices. This consolidation and other efforts resulted in reduced operating expenses through the elimination of approximately 30 positions.

Jeff Buhler, vice president of operations, Middleton, told PCT this restructuring is part of the company’s efforts to increase retention of its pest control and termite customers. “Through centralizing the renewal process — doing it in one location as opposed to multiple locations — we are able to better hire for that profile and train with the leadership that has that skill set,” he said.

Also in 2008, Buhler said Middleton concentrated efforts on becoming a stronger direct selling organization “so that the responsibilities of generating new sales opportunities from current customers, as well as non-customers, is not just the responsibility of the frontline sales team, but an umbrella responsibility of the organization.”

Just what the future holds for Middleton remains uncertain. Since 2005, Sunair Services has been controlled by Coconut Palm Capital Investors II, Ltd., an affiliate of Royal Palm Capital Partners. Last year, a dissident shareholder group led by Michael Brauser, Michael Herman and Dru Schmitt,  attempted to take control of the company and replace the board by using the written consent of a majority of shareholders. The group claims that the company has not been managed in the best interests of all shareholders and that the fees paid to an affiliate of Coconut Palm are excessive as is the compensation paid to the current CEO and directors.

Last year, Massey Services attempted to purchase the company for $3 per share, plus the assumption of debt. In a Feb. 5 shareholder release, Sunair Services claimed that Brauser, one of the members of the dissident group, “favors a transaction with Massey Services, as opposed to other potential purchasers, because he would receive a $1 million consulting fee from Massey Services if the transaction closes.”

Harvey Massey, CEO of Massey Services and a minority stockholder in Sunair Services (9.6%), told PCT he’s found the acquisition process puzzling. Massey said he submitted a proposal on Dec. 5, 2008, but never heard anything directly from Sunair – all information about the company’s future was provided in a January press release. “After that, we met with our attorney and our folks and I said, ‘None of this stuff that is filtering out is making any sense to us.’ It should be very easy. When somebody wants to sell they say yes or no, or let’s discuss it,” Massey said. “So, I put our offer on the table. I decided to give them seven days to say yes or no, or we are walking. About four days later, we got some more information and I decided to withdraw our offer.”

On Jan. 14, 2009, Sunair announced in a shareholder release that it has retained investment banking firm Hyde Park Capital Partners to explore a range of strategic alternatives, including a possible sale of the company.
Harvey Massey believes Middleton remains a strong brand despite recent challenges and it would thrive under a stable leadership team at Massey Services. He attributes much of the company’s struggles to the fact that Ruff is the fourth person to lead Middleton in the last 16 months.  “Everyone comes in with a slightly differ-ent agenda, even though culturally they are from the same organization,” he said. “When you start making acquisitions you are inheriting different company cultures and different personalities and you’ve got to be damn good to make it work.”

Massey added that he believes acquiring Middleton makes sense because both companies share similarities in terms of company culture, service areas (primarily throughout Florida), and service mix (58 percent of Middleton’s revenues are from its lawn services, while lawn services comprise 22 percent of Massey’s revenues).

So, will Massey revisit the possibility of acquiring Sunair? “Anything’s a possibility,” Massey said. “Our plan is to be a player in this process, but we’ll follow the formal process all the way around. We have a number we think the business is worth and we will not go over that. If we wind up buying it I think it will be a great deal for us and a great deal for Middleton. If not, we will move on with life.”

Middleton Lawn & Pest Control executives would not comment on the Massey proposal.

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Senske Pest Control
Weathering the Seasons: From Killing Pests to Beautifying Houses

 When it’s winter in the Pacific Northwest, requests for residential pest control and lawn care services tend to slow and/or stop completely. While such companies based in the northern states have found various ways of maintaining business through these snowy months, Senske, of Kennewick, Wash., is one of the most unique. “We were looking for something to do in the winter that was productive,” said President Chris Senske. “So about 10 or 11 years ago, we started offering holiday lighting.”

The company bought into the Christmas Décor franchise organization, whose systems and packages enabled technicians to get up to speed very quickly, and the holidays have become a time of year that many at Senske’s now look forward to working. “It is a nice change from killing things to making somebody’s house pretty,” Senske said. “When that time of year comes around, everyone gets excited about it and wants to participate.” It is, in fact, a service that carries through the year, with Senske associates erecting lighting for events, such as weddings, or those who simply want year-round tree lights.

In all its services, the company’s primary focus is the residential market. Even with the economy, “we’re still focused on growth,” Senske said. “We’re particularly focused on residential and those commercial custom-ers that want to build long-term relationships.” Toward this end, he added, “we make sure we are giving our customers good value every time we service them.”
In addition, the company is doing some internal reorganization. “We’re just trying to get serious about management,” Senske said. “We’re getting rid of the fuzzy reporting lines.” This means increasing accountability of every employee, “including me,” he said, tracking and posting goals and status on a regular basis, and increasing training in a number of areas. “Part of the training process is sorting out the people who wan to get on board and those who don’t, so when the economy (improves), we want to be positioned to grow.”
Senske was founded in 1947 by Bill Senske, Chris Senske’s father; and his son, Ben, has recently joined the company to learn pest control and management. — Lisa Lupo

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What’s Next for Rentokil?

The new CEO of this perennial Top 100 company sets his sights on taking the company’s $220 million North American business to the next level.

When it comes to structural pest control Rentokil is an iconic worldwide brand, operating in 49 countries throughout the globe. Although relatively new in North America, the London-based company dramatically raised its U.S. profile in 2006 with the acquisition of J.C. Ehrlich Co., the industry’s largest privately held business with more than $100 million in annual sales.

Under the visionary leadership of Victor Hammel, a 38-year veteran of the industry, Rentokil expand-ed its U.S. footprint with the purchase of Presto-X-Company in 2007 and Watch All in 2008, along with more than a dozen other smaller acquisitions. With Hammel’s recent retirement from day-to-day operations, Rentokil is entering a new era in the company’s storied history. The man responsible for writing the next chapter of the Rentokil North America story is John Myers, a graduate of the University of Vermont, who formerly served as senior vice president of sales and marketing for Cintas, the leader in the corporate identity uniform industry.

While new to the pest control industry, Myers has extensive domestic and international business experience. During his eight years at Cintas, Myers held a range of leadership positions including vice president of business strategy, working directly with CEO Scott Farmer, where he was responsible for developing a new sales organization, rewards and compensation systems, and employee training programs. “Rentokil is very fortunate to have someone of John Myers’ caliber assume the company’s leadership,” Hammel said. “I have had the pleasure of working with John over the last several months and am extremely confident that he has the skills, integrity and vision to lead Rentokil to its next chapter in North America.”

PCT magazine recently caught up with Myers to learn about his future plans for Rentokil North America, as well as what it’s like to follow in the footsteps of Hammel, a third-generation PCO who continues to serve as vice chairman of the Professional Pest Management Alliance (PPMA) and is co-founder and president of PestSure, a captive insurance company owned and operated by pest man-agement professionals. Excerpts of the interview appear here, with the complete transcript appearing on line at www.pctonline.com.
 
PCT: Now that you’ve had four months to immerse yourself in the company, as well as become familiar with the pest management industry, what have you identified as Rentokil North America’s key corporate objectives for 2009?
Myers: As the CEO, I’m in the enviable position of having inherited four terrific organizations – Presto-X, Watch All, Rentokil and Ehrlich. Each of these organizations has a tremendous amount of pride in their organization. My goal is to meld these cultures into one that we can utilize company wide.  As a first step, we are going to focus on sharing the “best practices” among our organ-izations, so that we can learn from each other and execute the “best of the best” in strategy and tactics. One example is our leadership train-ing. To some extent, each of our organizations handles its own training. When we develop a common platform for our training, with a focus on hiring, training and development, we will have common practices and a “one company” approach to how we manage.

PCT: What prompted you to take this “best practices” approach to the business, making it one of your top priorities in the coming year?
Myers: It resulted from having an outsider’s view of the business.  As I traveled around the country and met with those people working at our Presto-X, Watch All, Rentokil and Ehrlich locations, I realized that we were all doing very similar things, but some of us had figured out a better way of doing certain things.

For example, I think our Presto-X folks do a really good job of servicing our high-dependency customers. It’s those types of observations that led me to say, “Let’s get our (management)team together and identify three or four key initiatives that we want to be great at, assess how we’re doing those things in each of our organizations, and then take the best of the best. If we can get the people who work with us all operating the same way, utilizing a common language and a common process, I think great things can occur.

PCT: You mentioned you traveled extensively upon joining the business last December. Can you give our readers some idea what that experience was like for you?
Myers: Usually the new guy comes in and the old guy is soon off on his new adventure and the new guy is standing around saying, “Wow, I have a lot to learn.” But Victor was very thoughtful about the transition process. We had three months of working together. He ran the business for three months while I learned the business for three months, so I wasn’t worried about administering the day-to-day operations of the company. I certainly knew it was in good hands.

We also had a decision to make about what to do during that 90-day period. We could spend a day at every branch office in the company or do a deep dive into four or five branches, spending more time at each. Ultimately, we decided to do the deep dive. So I spent time with Presto-X and Watch All; then I went to two different types of Rentokil locations – one was in Florida, which is an emerging market for us, and the other was in Toronto, which is one of the company’s more established markets. Then I spent a week at one of Ehrlich’s longtime offices in York, Pa.

I wasn’t sure about the 90-day training period when Victor first suggested it. My first reaction was I would not need that long to understand the business but I’ve got to tell you I was glad to have all 90 days. You never get another chance like that, so I really commend Victor on his insight into making sure I got the chance to understand all aspects of the business.

PCT: Didn’t such an arrangement require each of you to subjugate your egos to make it work?
Myers: Yes, that’s a good point, but I think it took more on Victor’s side than on mine. I have enough humility to know I can’t come in and immediately take a snapshot of the business like some consultant, identifying 10 things we were going to need to fix tomorrow. On Victor’s side, however, and I mean this respectfully, I liken it to putting your child up for adoption and then having that new person parent that child in front of you. We all have different parenting skills and styles, so one isn’t better than the other, just different. Victor was just great throughout the process. Rather than being defensive about some of the things I asked him about in analyzing the business, Victor just explained how he arrived at a particular decision. His level of humility was off the charts and that’s why I’m so excited to be able to tap into those instincts on an ongoing basis.

PCT: Now that you’ve had some time to better understand the business, how would you assess Rentokil North America’s performance in 2008?
Myers: We had a remarkably good year in 2008. Despite our disengagement from Copesan, we achieved 97.3% of our revenue goals. Additionally, we exceeded our profitability goals while maintaining our world-class service levels. Internally, we maintained a high level of colleague sat-isfaction, as measured by our annual Colleague Engagement Survey, which I am extremely proud to say, is one of the highest scores across Rentokil worldwide.

PCT: By all accounts, Rentokil North America and Copesan Services did a pretty good job of reaching their revenue goals in 2008. Given the inevitable disruption caused by the disengagement of the two organizations, as well as the current negative economic climate, what do you attribute that to?
Myers: There are probably three good answers to that question. Number one, it wasn’t easy. It took a lot of hard work. Second, I think it’s a testament to the professional way the disengagement was handled on both sides.  Once the surprise was over, we did it the right way. Third, I think it’s a testament to the strength of the value proposition that Rentokil North America has to offer. As a result, we were able to perform very well in the face of a very tough year. There also may be a fourth factor. I think we did a good job of making lemonade out of this situation. What I mean by that is sometimes you need these cataclysmic events to think differently about how you want to run your business and manage your business, and the disengagement gave us an opportunity to do that, turning lemons into lemonade.

PCT: Given the current business climate, what do you think are the primary opportunities and challenges facing the company?
Myers: If you consider our company’s history since 1928, we have experienced numerous recessions, wars, the Great Depression, natural disasters and national acts of terrorism. Our challenge during this current business climate remains the same as it was during those challenging times – demonstrate daily to the customer the “value-added” aspects of our service – the things we do above and beyond the basics of pest control, that are meaningful to running their business or caring for their home. 

From an operational standpoint, the challenge is to predict the depth and duration of the current downturn. Although we are a conservative organization, we are optimistic about the current market opportunities. So, for 2009, we will work to reduce our non-value added costs, and we will invest these savings into growing our business and improving the processes that impact how we service our customers. 

PCT: Given the economic uncertainty facing the country, how are you going to ensure Rentokil North America’s success in 2009?
Myers: Like many in the industry, I read The Wall Street Journal every day and there’s lots of bad news in there. That being said, from our perspective, most importantly we’re a good company. We’re not broken. In fact, we’re performing well, so I don’t feel any burning desire to fix 10 things right now. We’re not on fire; the boat is not sink-ing. Second, I think we’re a bit insulated by the industry we serve. Don’t get me wrong, homeowners are clearly cutting costs and there’s some pretty strong pricing pressure in the commercial market as our customers look to control their costs, but in the main both segments need our services.

PCT: Although it’s early in the season, what are you seeing across your residential and commercial segments in terms of business activity?
Myers: We’re not seeing any real changes this year compared to previous years. Don’t get me wrong, I think there’s more pricing pressure out there, but overall our business is good. Like every-one else, we have to do a better job of reselling the value of our services, but we’ve started out well. We’re also taking an aggressive approach to growing this business. We’ve hired a vice president of sales and marketing (Brian Bugara, a former Cintas executive) because we want to expand our sales and marketing efforts in 2009. We’ve also increased our budget for advertising and promotion because we think there’s an opportunity to grow the business even during these difficult times.

PCT: Does that mean you’re going to continue to pursue acquisitions in the coming year as well?
Myers: Acquiring a quality pest control company – at least for us – is very much a two-way street; it has to be a good fit for both the buyer and the seller. We could do more acquisitions, but we are very selective because we want to be satisfied, and we want the seller to be satisfied. Thanks in part to Victor’s 38 years of experience and his new role as chairman, I do not anticipate any slowdown in our acquisition activity in 2009.
 

A Word from Our Sponsor Editor’s note: The 2009 PCT Top 100 List was sponsored by Univar. Included in the magazine was the following letter from John Bolanos, vice president of Univar’s Professional Products & Services Division: Dear Pest Management Professional, Univar is proud to be the corporate sponsor of PCT’s Eighth Annual Top 100 List. Since its introduction nearly a decade ago, the list has become a must read for PMPs eager to learn how their company’s financial performance and business mix stacks up against their colleagues throughout North America. It’s an annual scorecard highlighting the business accomplishments of long-established companies as well as “up and coming” firms on the fast-track to success. And if you look closely at the data, you’ll discover that regardless of the state of the national economy or the relative health of the pest management industry, Top 100 companies virtually without exception have experienced year-over-year growth for much of the past decade. What’s their secret? The same qualities that have contributed to Univar’s success as a company throughout its 85-year history have also contributed to the success of PCT’s Top 100 companies. Univar‘s six key corporate attributes — dependability, expertise, initiative, partnership, strength and support— separate the ordinary service provider from the extraordinary service provider. These are characteristics that are essential to Univar’s long-term success and it’s why we’ve made them a central part of our corporate culture, as reflected in the words of PMPs featured on the following pages. These traits are a fundamental part of our culture and do far more than simply allow us to deliver product at a fair price. When we demonstrate these characteristics, we allow you to Succeed Without WorrySM. We’re dedicated to making your success our biggest priority, so give us a call. Whether you’re a Top 100 company, a longtime family business or new to the pest management industry, we’re ready to deliver! Sincerely, John P. Bolanos Vice President Univar USA Professional Products & Services Austin, Texas