David Johnson: I've heard a whole lot of people talk about servant leadership and they have no idea what it is. They're not serving anybody except themselves.
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Patrick Baldwin: Uncle Paul.
Paul Giannamore: Fat Pat.
Patrick Baldwin: In this interview, you're going to hear Fat Pat called out a few times. Thanks, Paul.
Paul Giannamore: And plain Pat.
Patrick Baldwin: David Johnson, who has been in pest control for a long time, lo and behold, finds himself in plumbing. From a plumbing perspective, I wanted to see the differences and similarities and get to know David a little bit. David is a great guy.
Paul Giannamore: David is a fantastic guy. He spent time at Terminix, many moons there, Rentokil, and B&G. Since deep in the heart of COVID in 2020, he bought a plumbing business. I thought it was interesting to have a discussion with David given the fact that he was in pest and now he's in plumbing. Of course, he wants to add pest control to his plumbing business. A good time with David in The Boardroom.
Patrick Baldwin: Let’s step into The Boardroom with David Johnson.
Paul Giannamore: Let's do this, Patrick.
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Paul Giannamore: David Johnson, kingpin of Pest Control in the South, welcome to The Boardroom Buzz. It’s good to have you here.
David Johnson: Good to be here. Thank you for having me.
Paul Giannamore: David, you and your relationship with pest control goes way back. How far back does it go?
David Johnson: In October 2002, I got a call from Brian Alexon, who's been on your show, asking me if I wanted to be in pest control. I was like, “Bug guy, I don't think so,” but I was open to a new opportunity. I was in Memphis at the time, I went to the throne of Terminix and met with Brian. I met with Wayne Golden as well who was over the commercial division at that time. It was an interview and they sound awesome.
They asked me if I go anywhere I wanted to go, where would I go. I looked at the map of where we're going to open up commercial branches and I pointed to Jackson and said, “I want to go to Florida.” They said, “Okay. We might be able to make that happen.” It was fifteen years with Terminix. It's a good ride. There were rough patches but it was a good ride. In Termninix, you see good managers, bad managers, good leaders, and bad leaders like anywhere else. I learned what not to be and what to be during Terminix so it grew me a lot as a leader.
Patrick Baldwin: Was that their expansion strategy during an interview, like, “David, where do you want to move to?” That's how they're going to grow the business.
David Johnson: What they were doing at the time is they were opening back up their commercial division, it was in 2000. They opened up in 2001. In 2002, they were still expanding it. They had a pin on Jacksonville, they wanted to open up their commercial business in Jacksonville so I saw that. I'm a huge Buffet fan so Florida is where I wanted. They never made a promise, they said, “We could send you there but this accident doesn't do well in the northeast,” so they kept me down south.
Patrick Baldwin: How did you get recruited then? Where were you coming from?
David Johnson: My dad had owned a business for years, I grew up working with him. When I was going to college, I still worked for him, and then his right-hand man quit so I took that position over and did that for twelve years. I expected to do it a little and we ended up being there for twelve years.
Patrick Baldwin: What was your dad's business? You said you worked for your dad but you didn't say any business.
David Johnson: He owned a vending and amusement company. He had vending machines and amusement machines everything from jukeboxes, pool tables, and, way back in the day, cigarette machines. It was all over North Mississippi, the Memphis area. When I got married and was in college, he asked me to come back and work for him. I went back to work for twelve years. It’s going to be a temporary gig and whenever he got ready to retire, I left him, and I put together a five-year plan of getting into Corporate America for me.
I ended up going with Home Depot, worked my way up through Home Depot, and got into management. Whenever GE changed, they came in and they hired Nardelli to run Home Depot and he came in and they changed a lot of stuff and put caps on salaries and things like that. I said, “I'm going to get out of here.” I hated retail. The hours and things were atrocious for me with a young family. I went to work for another company, Verizon, and stayed there for a year. Brian Alexon called me and interviewed me.
He sent me to Mark Froio. Mark Froio was my boss when I was first there. He's now with Anticimex. He went to Western for quite a while, was stereotypical, a little bit. He hired me. Where I first saw my first good leaders was that group of guys. There was another guy in that group called Dave Joels. He's trying to help Certus mop up what they got going on in Florida. He was the guy who taught me how to read a P&L and helped me how to look at a profile and understand the business. He did a lot for me. We still talk quite a bit.
Patrick Baldwin: Twenty years in the pest control industry and now you find yourself owning Citywide Plumbing. I can't connect the dots yet.
David Johnson: The path went from Terminix to Rentokil. I was with Rentokil for a couple of years and then B&G called. I went to B&G for a year. With the pandemic and everything, I found myself looking, and Mark knew I was looking and he said, “I got a lady and she got a position. Before you say no, talk to her.” I talked to her and it was a plumbing company. The guy wanted to retire and had been in it for 30 years. Because of the pandemic, he didn't want a ton for it. It was a good deal.
Service is service to me. Leadership is leadership. Was it Ken Blanchard talking about situational leadership? Every situation is different but you put the same things into it as long as you understand where you're at. It's been a fun ride. It's been a lot of big learning. Good thing is that I've got a good ops manager who works for me. He’s been a master plumber forever and a day. We're 85% commercial at least. It fluctuates but we do a lot of commercial business. What I did at Terminix was all commercial.
Patrick Baldwin: What was the scariest thing about taking the leap from an employee in past control to now business owner of a plumbing company? What was your number one fear?
David Johnson: The number one fear is always, “I’ll completely screw this up.” That's your first fear. I'm not a nervous guy. I don't look at the negatives. I look at the positives. The one thing that scared me is they had all their eggs in two baskets. They had two customers that were huge, they were probably 60% of his business, and that scared me. I immediately began trying to grow other customers to get more customers in that could diversify us a little bit.
In about a year, with one of the biggest customers, we had an issue. They were dirt cheap. The margin for them was killing us. We started denying some of their calls, the ones that are far out, and then they ended up not using us anymore. That was about $600,000 to $800,000 gone overnight. We had done a good job of bringing the new business and we've grown in spite of losing that amount of money. That was my biggest fear and it came to fruition. We had planned for it and we were working to fix it long before it happened.
Patrick Baldwin: All that commercial sales experience you had, do you find that you're selling to the same verticals or industries that you were in pest control now in plumbing?
David Johnson: We do quite a few hotels. We do a lot of nursing homes and a lot of retail, which is what Terminix did. We do a lot of restaurants. Those are what we did. I was in Orlando in my last 8 or 9 years and we sold SeaWorld. We sold a Disney resort. We sold Orange Lake, one of the biggest resorts in the nation, landmass-wise. We sold some big accounts and the Peabody. We did a lot of good in the hotel industry. That's where I was.
Patrick Baldwin: The Peabody.
David Johnson: They had one in Memphis, which is their famous one. They had a big one down on I-Drive in Orlando. They sold it a couple of years ago. It went to either a Marriott or Hilton property. That was 2,500 rooms, it’s huge. Commercial has always been my thing. I love the networking piece. I love getting with other vendors and creating those relationships.
I always train my guys to go find the people that are the movers and shakers in that industry that are going to the same customers that you're going after. Create a partnership. Don't get to the small guy, get the one who's in the industry and who can help you if you can help them, and then create that partnership. If you get enough of those, you don't ever have to work at getting leads, they just come.
Paul Giannamore: How does that work? You're talking about the movers and shakers that are in different industries but focusing on the same customer.
David Johnson: Same verticals. In Orlando, when I got there, they had two hotels for the most part. We're in the capital of hospitality and they weren't utilizing it all. The reputation they had in Orlando wasn't good. They had struggled for years. We came in with the intent to fix it and we did. Service-wise, we fixed it. I had a good service manager buddy who did a good job for me. We came in and focused and we rehired different techs and moved some out and moved some new ones in.
Central Florida Hotel Lodging Association was a huge deal in Orlando and we were able to get in there. I ended up serving on a couple of boards there and got with the Florida Restaurant Lodging Association and served on the state board in Florida for them. I tried to make a presence. I always taught my guys that you got to be seen. Not just be seen but you got to participate, you got to give. Those organizations are big, they always have their charities, they always have things that they're pushing for their industry, and you have to be there.
When we sponsored golf tournaments, we were always there selling. If they had a wine and dine, we were there serving whatever we had to do to get in there. I had a good group of sales guys that loved the industry and loved getting out there and getting involved. We did that with the hospitality industry, which was a boom for us. We sold SeaWorld and Peabody was built off of that organization. Later on, one of the chief engineers who had always wanted to start up a program for the engineers in the industry came to me and asked me if I would help him run it. I became the president of the Florida Engineers Council.
It went right after the chief engineers who were the guys who ultimately choose the pest control or worked with the pest control operators in most hotels. The way we created it, we had one vendor from each industry that wanted to go after that, and we brought in the good ones. We waited out and we all put our money in the pot and we would have mixers once a month and invite all the chief engineers in Orlando to a hotel. The hotel would sponsor it. They ain't putting money in, they just allowed us to have a room or allowed us to have some access.
We'd bring in a bunch of schmoozing hors d'oeuvres and these guys got to talk and we mingled through and created those relationships. The chief engineer walked up to you and says, “Let me ask you a question. Those are not my customer.” “Let me come out and look at it. Let me come see what you got.” You go out and you create those relationships and they blossom. You give first. If the first thing out of your mouth is, “Yeah, I can do your pest control,” and you start trying to sell them, it's not going to work out. They don't want to be sold. People like buying, they don't like to be sold. Put yourself out there and give and serve. Paul loves to talk about servant leadership.
Paul Giannamore: Everyone's a servant leader these days.
David Johnson: I've heard a whole lot of people talk about servant leadership and they have no idea what it is. They're not serving anybody except themselves. Leadership is about being a reliable steward of what you've been given. It's also about being principled, dependable, the same guy all the time, and being, for lack of a better word, merciful. I've been given mercy in my life and given second chances. To me, that's what a leader is, being that person that people can look to and say, “He’s going to be stable. He’s going to be there. He's going to be the same guy. I don’t have to worry about when I walk in that he's going to be Hitler today and Gandhi tomorrow.” That's where I come from.
One of the reasons I bought the plane and you asked me why I wanted, I didn't want to buy a company. I didn't want to be self-employed again. I watched my dad do it. Get up at 4:00 in the morning and go to work and come home at 5:00 in the afternoon. I wanted to be the boss I've never had or generally never had.
I wanted to be someone that people could come to and be able to bend over backward sometimes when they deserved it and help them bring them up. I've been able to do that with a couple of guys that have worked for me. I’ve been able to stoop down, pick them up, help them out, and give them a second chance. It feels good. It's why we do what we do. If you're not doing leadership to help others as well as lead some as they build a business, you're doing it for the wrong reasons.
Patrick Baldwin: You're talking about mercy and second chances. At the end of the day, there are times when you have to let an employee go. How do you balance a second chance with the decision, “This isn't going to work.”
Paul Giannamore: There's no third chance.
David Johnson: I have given a third chance and it's working out well. If you lie to me or steal from me, it's done. If you purposely lie to me and do something that is completely dishonest, it's a whole lack of character, then I'll cut ties and go. If you steal from me, we're done. One of the things my dad told me was to watch out for a man who is in trouble, he'll do whatever it takes to feed his family so be wary. He'll do whatever it takes to stay afloat. Be watching those guys. I don’t remember all of my lies. I can remember the truth but can't remember a lie. Those were two things that stuck in my head. For me, the ultimate thing that I give up is if I've given them a second chance and they do the same thing over again, they haven't learned, and they haven't taken that grace and done what they should with it.
Patrick Baldwin: You bought a business in 2020 that was at a discount, if you will, taking a downturn. You're going back and rebuilding culture. How are you doing that in instilling trust and building leadership and turning this around?
David Johnson: During the pandemic, it took a pretty big hit because we were mostly commercial and all those places were shut down.
Patrick Baldwin: No wonder you got a discount.
David Johnson: He was smarter than I was, he bolted. You take your opportunities where you get them. The business was doing well. We had one customer who was draining us as far as time and not giving us any margin. We made the choice to start pulling away from them and not expecting them to jerk it off underneath us that quickly. We were looking to build it some more. The customers got to be first and that wasn't what was there. We had to change.
I've got one guy left from my original and that was by design because I needed people who cared about the customer first and weren't looking at their pocketbook all the time and we've got that now. Everybody knows that if we do it, we own it, and we'll own it until it's done right, that's my big thing. During the pandemic, we had a hard freeze back at Christmas, and the South is not used to hard freezes. If you have a hard freeze, busted pipes everywhere.
My Christmas involved being on the phone all day long, taking calls, trying to schedule stuff out, and getting things done. We probably did 15 to 20 indigent or elderly people who couldn't afford it, which when I fixed it, left. Run in, fix it, get out, and go. That's part of what we do and we didn't charge anybody.
That was my guys. My guys would do that. I'd call and say, “You did five calls?” “Yeah. Only got charged two.” “Why?” he said, “They were old and couldn't afford it so I had to get out.” “No worries, let's go.” That's the culture we want to build. I've got guys calling me and saying, “This lady can't afford it. Do you mind if I go ahead and do it?” I said, “You're there, do it, and fix it. Let's go.” That's the people we want and that's how we want to do it.
Patrick Baldwin: That's awesome.
David Johnson: Don't get me wrong, I still want to make money, and I still like to eat. I like to eat.
Patrick Baldwin: There's only one fat person on this show.
Paul Giannamore: Only one Fat Pat.
David Johnson: Fat Dave doesn't sound good. There's got to be some charity in there somewhere. I've been given chances. I've been given that hand up. Terminix took a chance on me a long time ago. I'll never say anything bad about Terminix. Terminix was good to me. I still, to this day, always say I bleed green. They were good to me. Luckily, both of my exes are now married, Rentokil and Terminix.
Paul Giannamore: I didn't think about it that way, they are.
Patrick Baldwin: You talked about leadership. I don't mean to take away from working with your dad but you worked for some major corporations with Home Depot and Verizon but you said it wasn't till Terminix that you felt like you got leadership training. I'm curious why that is.
David Johnson: One of the things that I saw at Home Depot is there wasn't much time spent on the people in the stores. There was no time put into building leaders. They expected so much from you. My drive is I was always pushing. I wanted to be something better. I wanted to be something different. I had given myself a five-year window to get into a good leadership position within not just somebody else's manager but I wanted to be the leader of that organization. Home Depot didn't care. They sent you for some training and things like that if you qualified but it wasn't that great.
Verizon, back when they had their own stores, I ran two stores for them back in retail and I hated it. When Brian called, he called me at the right time because if it would've been another time, I may not have left. While I grew up with my dad, I didn't see that care for your customers and I didn't see that care for others as I saw with my dad. That's where I first saw it. I was in a position of leadership too. Terminix does a great job of training their branch managers before they are put in the field.
Paul Giannamore: In 2002, you lived in the Cantu era. It was the early-2000s and Katrina came in and became the CEO of ServiceMaster. In some ways, that was an interesting era over in Service Master Land because it was prior to CD&R coming in and taking the business private. What do you think happened at Terminix from the 2000 to 2010 era when it was private? What impacts do you think the actual going private transaction had, the leadership changes, and the cost-cutting? What was your feel?
David Johnson: On our side, whenever CD&R came in, at the ground level, we all felt like, “They're going to nickel and dime. They're going to cut and slice and dice.” Luckily, on the commercial set, we didn't see as much of that. During that time, they stopped the commercial division and took it back into the regular residential. I was a residential guy for about a year. Luckily, I got put back. I enjoyed commercial, I enjoyed the sales process, I enjoyed all that, and I had a good time doing that.
I got sent to Orlando, became training a branch manager, and trained all the new branch managers that came Central to Florida. It allowed me to be and continue to do what I enjoyed and that's where I learned a lot about B2B sales because there was so much down there to sell. You sit in front of presidents and vice presidents in some of these hotels changed. The things were pretty cool. Also, during that time, we had a commercial division. We didn't have a commercial division.
They then had another commercial division and then they put termite into commercial division. They took termite out of the commercial division. We started doing different routing systems and we started doing different things. For me, it was like the flavor of the month and then I knew CEO would come in, Katrina and Brackett. Chuck Fallon came in next. Was it Gillette after him?
Paul Giannamore: Fallon was the president of Terminix. Larry Pruitt was interim for a little bit either before or after Chuck. Chuck was in 2012-ish. I'm trying to remember. There are so many of them.
David Johnson: It was like a revolving door. It's like, “The president has come to see you.” “Which one?” Gillette came to our office whenever he got there and allowed all my guys to ask him questions and things and never heard back from any of the questions they asked him. It was like they were not invested. A year later, he was gone. Whenever Nick Varty came in, Nik Varty did some good things. The time Nick came in, I was gone.
Patrick Baldwin: I didn't hear Bill Derwin’s name in that sequence but that's okay.
David Johnson: Derwin, that's who I forgot. It was Derwin who came to my branch and said, “I'll get back to you guys next week. I'll have your answers.” I never heard from him. It was Derwin. Nick Varti was doing some good stuff. He made some bad hires. A few people came in and came out real quick. Overall, the people seemed to like him. No one had bad things to say about Varty. He at least captured the hearts of the people below him.
Rentokil can fix some of the things that have been habitual with Teminix and that the culture sometimes is a little bit harsh. They were brought up thinking if you're hard on your people, you're doing a good job, and that's not leadership. Rentokil came calling and Mark Froio put me in touch with Talos and said, “They got a place over at Rentokil.” He called me and we interviewed and went over there for two years in residential, that was neat.
Patrick Baldwin: Going back, Orlando was a unique market where you all of a sudden found yourself the president of a Chief Engineer Association or something, I don't even know. It sounds like you all made up a cool sales organization called an association. Good for you. You're in Atlanta and I'm thinking there might be some of these highly dense metro markets, Nashville, Atlanta, LA, New York, Chicago, and Dallas maybe. Could that association be replicated elsewhere? Does it exist elsewhere outside of Orlando?
David Johnson: Orlando was unique and even Miami. I was trying to teach other branch managers, “You need to find this.” We couldn't find one that was as successful as the Central Florida Hotel Lodge Association. It was a great organization run by a great guy. He did a good job building it up and all the hotels were involved, all the vendors were involved, everybody. It was a great team atmosphere for everybody to pull together.
There was with them for everybody. Everybody had something coming out of it. It was a unique situation. There's not one here in Georgia than Atlanta that I found that I can get involved in. There are apartment associations and things like that but they're different. That was a unicorn thing where it's one of those bright spots in Orlando. We created our own. It was still a glorified leads group that went after the chief engineers who made the decisions in that market.
I didn't come up with the idea, a chief engineer did, he just needed somebody on the vendor side to help him. He didn't want his name as the president, he wanted somebody else to do all the other stuff. Luckily, I had a guy who has ADHD really bad and he loved doing all the background stuff so I let him go. He would set all the vineyards up and I'd set all the vineyards up. It was a glorified hit. It worked well.
Patrick Baldwin: Why did someone with ADHD do a good job? How's that work?
David Johnson: He had more freaking energy than me. This guy was like Speedy Gonzalez, he was all over the place all the time.
Paul Giannamore: I have some ideas.
David Johnson: We'd be having a function and he would sit everybody in Orlando in two days. Everybody know we were having it because he would be at their doors saying, “Don't forget.” energy. Dennis was nuts.
Patrick Baldwin: He worked for you? He was a colleague, a peer?
David Johnson: He was called the filter dude in Orlando. He sold filters to all the hotels. Everybody bought filters from Dennis. It's a niche thing but he was that guy and everybody knew him and everybody liked him. He was an energizer bunny, going and going.
Patrick Baldwin: You mentioned how you hated retail. The upside of retail is you're usually in some climate-controlled environment as opposed to being in the field, it’s different there. There's some give and take here. I remember driving around with Lloyd Smigel years ago, truly Nolen's original training manager, and then rode from bug people to business people. He consulted for my original boss in pest control.
Lloyd's driving me around and he always talked about looking for the spark in someone's eye, that X factor if you will. Sometimes it would be in a restaurant and sometimes it'd be in retail. Have you found success with your background in retail now in service now for a couple of decades? Is that the right place to look for someone as you're recruiting now for Citywide Plumbing? Are you looking at retail? Where are you looking to get the right people?
David Johnson: I've never found it in retail. I've never found the work ethic that is going to take for a sales guy or technician in this industry. You got to pound the pavement within Terminex. I'm with you, Patrick, I'm a commission guy. You got to have someone who understands the way the commission works and how they can make more money and how you do right. You keep your cancellations down and you make money. I've found those guys generally are the ones you see doing service workouts in the field.
If you see a guy behind a gas station and got a smile on his face and hustling behind the counter, that, to me, can be an opportunity. The guy stocking shelves at Publix, I don't think so because they're inside with AC, work at their own little pace, don't get excited, and don't do much. If you've got a guy that's hustling, he's out doing what he needs to do and he's talking to people, that's what I look for. You can't train personality. You can't train work ethic. You can't train empathy. You can show them how to do it if it's ingrained into him. You can teach at pest control. Pest control is not hard.
Patrick Baldwin: When someone walks into the Home Depot and encounters one of the employees, they're almost order-taking. Someone came into the store with a need and you fill that need with something off the shelf. In the service field, you're going out looking to drum up a new business, going out, venturing out outside of a comfort zone, venturing through your town, and making connections.
Even a technician going to a house, a new house for you, you’re not familiar with, looking for new opportunities to sell them service or to fill their need. It always comes down to me back to that dang air conditioner. You have an air conditioner in the truck but they can be in a climate-controlled environment all day in a comfort zone where someone in the service field has to be uncomfortable to succeed.
David Johnson: You're on an island too. You're in a store, you've got a manager, and you can go ask a question. If you're a sales guy or if you're a technician, you're on an island all by yourself. That truck is out in the middle of a vast ocean of issues. If you don't have the integrity to do the right thing when you're not being watched, that can be a problem. You look back at Maslow's hierarchy of needs, you see the different levels of what people need.
Some people get to that safety and that's all they're going to do. From a job standpoint, that's all they're going to do. They get to that safety, “I'm done. I'm here. They can't fire me because they need me.” That's all they want to be. They don't ever get to that self-actualization point where they want to build something on their own or they want to be something better. Some people don't have that drive and you have to be careful of that.
Patrick Baldwin: I didn't know we were going to get some psychology lesson today, Paul. Look at this.
Paul Giannamore: It's interesting. I was reading one of Maslow's books that I hadn't consulted for many moons on the plane.
David Johnson: A few things stuck with me out of college, Kouzes, Posner, and Maslow, some of those things. Have you read Kouzes and Posner’s The Leadership Challenge, Paul?
Paul Giannamore: Yep.
David Johnson: That's it. That book said a lot to me. One of the things they said in that book is imagine if your organization was a charity. Would any of your employees volunteer to work for you? I was like, “That's a thoughtful statement if you got an organization where people would volunteer to come to work for you in their spare time, all things being equal.”
Patrick Baldwin: You're now three years into the plumbing, of all things, something I know very little about. What are your takeaways? Naturally, you've been in pest control for a long time now. We've talked a little bit about commercial sales but how different are the two business?
David Johnson: Ultimately, service is service. Mark Froio said to me, “You sell it, service it, and collect it.” It's pretty simple. That's what we do. The same thing here it’s just I have to rely on others for their knowledge because I am not a plumber. I have learned a lot in three years. I'm a whole lot more knowledgeable now than I was back away but I'm still not a plumber. I run the business. My ops manager is all over it. He cares about the customer and cares about the guys. He does a great job and he runs it.
My son was in the field for a year and he learned plumbing. He knows it more than I do and now he's in the office running the operation day to day. My daughter came in and she now runs the collections and the CSRs and that stuff. She does that piece. It's a work in progress. Both those guys are learning every day but they both care and they both wanted to build the business. My ultimate goal is to back out. I'm looking now in the pest control industry trying to get back in there.
I made the mistake of going to PestWorld and I fell back in love with pest control. I walked around the floor and saw many friends, I was like, “I got to get back in pest control.” If you go into his league trying to change stuff, you change stuff that doesn't need to be changed. I sat back for about 6 to 8 months and watched. I handled things that came down the pipe. Things that needed to be changed, you could see it.
Otherwise, I sat back and learned and went in the field and learned what we were doing, how we were doing it, and what the people were like. I quickly found out, “We got to change some people. They're not like-minded.” I've never been a guy to be scared of taking on something so it was like, “Let's do this now.” Plus, it was in the middle of a pandemic. Nobody else was hiring so I had to buy something to get a job.
Patrick Baldwin: On the technical side, on the licensing side, you could go on the pest control field right now and you could see, “You need to do this differently. You're doing that wrong. Your mix rate is off.” I bet you could nail it in your sleep. On the plumbing side, it’s de-risking yourself in that business as an owner by getting the training and getting licensing.
One of my close friends that's a deacon with me, an older gentleman here at church, owned a charter bus transportation company. They said, “The last thing you should ever do is get your commercial driver's license, get your CDL.” If that one driver calls in sick, you're going to find yourself on the bus instead of working on your business. For you, David, where do you sit as far as Citywide plumbing? Do you have the desire to go get that skill and the licensing or stay out of it?
David Johnson: It's like pest control, I've got to have a master plumber to run the business eventually, either myself or my son. My son knows more and he'll probably end up being the one getting it. If I don't, I'm held to the whims of my master plumber. I trust Dempsey, my master plumber. I trust him with everything I got. He’s a Great guy. I love him to death. I don't worry. In the future, somebody in the family will get their master's license and it'll probably be Devin. Devin understands it and knows it. Brianna has no desire to be out in the field looking at anything to do with plumbing. She loves it in the offices and she does a good job. She's sweet as she can be on the phone and everybody loves her. Those two are the best of both worlds.
Devin will end up getting his. He's already gotten his backflow stuff. Like pest control, if you don't have your operator's license, you're held at a disadvantage because if somebody leaves, you're struggling to get them. There are people out there who will let you get your license but you're at a disadvantage sometimes. I don't think it's about knowledge. You can learn the knowledge. It's going to get that test and do all the other stuff and you, eventually, will have to within the family.
Patrick Baldwin: Do you find it limits you?
David Johnson: At this point, no. I've got a guy who I know I can trust and I have no qualms at all about giving Dempsey the keys and going on a vacation.
Patrick Baldwin: Speaking of trust, your wife is involved in the business also.
David Johnson: Tammy is the guy who enforces everything I do. She's always been there. She's always been behind me. She's moved quite a few times with me and never complained.
Patrick Baldwin: She's listening, careful.
David Johnson: I love my wife to death. We've been married 35 years or something more around that. She does all our payables. She keeps me writing the checks. She keeps all that stuff straight. She's all over the fleet. She watches the trucks like a hawk. If their oil is not changed or if something's going on, she's on the phone with a technician saying, “Get that truck to the shop today.”
She has the pieces that she loves to do. She's in and out. She's always around. She's the Mama Bear, that’s what we always call her. She loves everybody and mothers everybody. She's always making sure that if you got a technician that's sick here or you got a problem at home, she's always checking. That's who she is.
Patrick Baldwin: I'm thinking of David getting into business, getting into plumbing, a business he doesn't know anything about a couple of years ago, and then convincing your wife, your daughter, and your son to join you. That's trust.
David Johnson: I don’t think they had a choice or not. Ask them. You show up to work tomorrow. You're busy. We're a close family. We've always been that way. My daughter had diabetes when she was 6. We've always rallied around watching out for her and making sure she's taken care of. Watching your 6-year-old give herself a shot puts everything in perspective. At 6 years old, you shouldn't be giving yourself shots for insulin every day. Some of those things breed closeness in a family and we've got that. We’re not perfect by any stretch of the imagination, trust me. On our Tuesday night business meetings, it gets raw sometimes but that's what families do.
Patrick Baldwin: What's a Tuesday night business meeting entail?
David Johnson: Going to the numbers, trying to show everybody, “Here's where we're at. Here's what we're doing.” It’s something we started recently. I hate to give you guys credit. One of the things you guys recovered one day is talking about do your people understand people in the right seats. I began looking and saying, “I need to teach these guys.” I need to let them know, “Here's where we're at. Here's what I'm looking at every day so you guys know.”
The ultimate goal for me is to back out and let them run it day to day and for me taking the money. It came out of one of your shows, I can't remember which one it was, it was talking about the right people in the right seats and things like that. That put me in a position of going, “I'm not doing that.” I've got the right people that I can trust where they need to be and I need to make sure that they understand the drivers behind what we do and how to get where we want to go. That's what that Tuesday night's about.
Patrick Baldwin: You're big on leadership. You've learned leadership. You live leadership. This will be the test. What does leadership look like for you now with Citywide? How are you intentional with it? Is it just a way of living?
David Johnson: Within this industry, it's hard to find plumbers. It's like searching for a needle in a haystack sometimes trying to find plumbers and trying to find good plumbers. One of the things I want to do is I want to make sure that everybody understands that we're a family. I know that's a cliche. It’s Probably one of the things Paul hates like servant leadership. It's one of those things where I truly care about everybody who works for me and that comes through in everything I do.
We can do something wrong. When we have a sit-down, it's still all about, “You're an adult. If I have to yell at you, I don't want you working for me. If I have to raise my voice to make you understand, we don't work together.” There have been times in my career, especially going into Orlando with Terminix, when I made a calculated decision to yell and to do some things. One of those was we walked in, it was the first month I was there, and we had 300 customers that we did not service.
To them, no big deal. I walked in with a stack of service tickets and I said, “This will never happen.” I threw it up against the wall, walked out, and slammed my office door. It was October and November so it was dark early. When they left, my light was on. I was standing in a hotel. When they came back the next morning, my light was still on. As far as they knew, I was there all night.
It was a concerted effort to make an impact. That's not me. I don't yell or scream but that day, I said, “I'm going to make an impact,” and we did. A couple of people left because they were going to work hard and other people realized, “I got to start doing my job.” I try to do it every day. I try to make sure everybody knows that they're part of a team and part of a family. I try to treat everybody as such.
Paul Giannamore: What are your plans now with the current business? You're a plumbing operation. David, you've been talking about adding pest control as an allied service to that. Are you going to build this into somewhat of an integrated services business or no?
David Johnson: Yes. That was the intention all along. The name of my company is Covenant Services. It's going to sound like servant leadership to you, Paul. It was one of those things where I made a promise to God I was going to be the manager that I'd never had for the most part. I wanted to run an organization that meant something. Covenant Services encompasses a lot of different stuff. Pest control is something I know and something I love. I still love that industry.
My son and daughter are about ready to take over a lot more of the responsibilities, what we're doing now, and actively working with the deal now. Hopefully, we can bring that to fruition, close bias, and we can have a pest control company as well. Working with a lot of different patients. I've also got a deal going with the supplier that wants to bring some of their stuff into the market. They're wanting me to run it. I don't know if I got the time to do that or not but I'm trying to help them put together something to see how it goes to market and what's the best way to do it. They got some good products.
Through B&G, I've got the contacts. A lot of good people overseas. When I was with B&G, I got to do some traveling over there and meet some great people and it still brings fruit today. We got to go to Lebanon, Saudi, and Jordan and those were great people over there. A lot of things going, a lot of things working. I want to grow the pest control piece and the plumbing piece, those are two. I may find something else I like too. Paul says, “If it doesn't bring a better margin, go get it.”
Paul Giannamore: That's the great conundrum. You want to own a customer relationship and sell a lot of different things to them but it is important to try to go upstream. Plumbing is a relatively high margin. These skilled trades are high-margin businesses. You don't have the same recurring nature as pest control so that would be a nice ballast for you so to speak.
David Johnson: That's the tough part. The last two weeks have been slow for us. Easter, Spring Break, and tax season are always slow. Luckily, this 2023, they all rolled in a two-week period. Hopefully, we'll have these two weeks and they'll be back. It's been busy this week so this is starting up this week. The lack of recurring revenue is the scariest part. Paul asked earlier which gave me pause and that was the biggest thing, not having that recurring.
Weeks when we're slow, I'm like, “All my customers are gone. They're not coming back.” You start worrying and be like, “Now there they are.” You make sure you have a good relationship, you respond quickly, you go after them, and you make them. I'm looking for something that will be recurring revenue that I know, “This month, I've got $100,000 dollars to go get. We're going to go get it and I'll have $100,000 in the bank.” That’s the appealing piece to pest control for me. I know how to do it, I've done it for years. Luckily, it's not rocket science because if it was, I would be qualified but it's an easy business.
The back side is the hardest part, get it all at the bottom line. My biggest outlook is to make sure that we are growing in the right direction. Part of the thing we want to do is we want to try to utilize our customers. I've got quite a few hotels that I can sell pest control to. A whole nother piece of what we're looking to do is to bring these two together and feed off one another. It's hard to get your technicians to have the same vision you have sometimes and Teminix did that.
We had TrueGreen, Merry Maids, and Furniture Medic. We had all these different places and we never came together as a corporation and sold these. We couldn't figure out what to do. We couldn't figure out how to do it. Everybody had their own little fiefdom and nobody wanted to share. It was always amazing to me to watch a manager because as a branch manager trainer, you train branch managers coming in. It was so hard for them to find someone who would be open with their books and open up the books and say, “Here's what we do.” They were all scared for their own jobs.
They come down to see me and be like, “I did this.” He never showed you the books. He ever showed you the P&L. He didn't want to show it to me. He didn't want me to see it. I was like, “How can he be a branch manager and not see the P&L and learn how we look at stuff?” The P&L for Terminix is a little different than some of the others I've seen. They have a cost of sale. Everything that's in that cost of sales is above that line. I was always amazed at how scared people were to share and to be open with people that were training. If you're going to fire me because somebody else is better than me, fire me. I'll go find something else.
Paul Giannamore: I remember Albert Cantu talking many years ago about us having a chat with him and he was telling me about how they took some True Green branch managers, put them over in Terminix shops, and vice versa. they tried to pilot this cross-sell situation where the True Green folks got to learn the pest control business and vice versa. Ultimately, we're going to cross-sell. It turned out there was an incentive issue there and there were a lot of things that precluded them.
David Johnson: If you think back in the mid-2000s with both Terminix and TrueGreen being billion-dollar revenue-plus businesses, that would've been a phenomenal opportunity to cross-sell across those customer bases and they could never pull it off to your point. It always astounded me. Why not have a sales manager that's set on both ranches and ran a sales team? You should take sales out of the branches and create a whole nother silo. Rentokil has silos. Your sales silo and service silo are run separately. Terminix has done a little bit of that now. they try to branch out a little bit. With that, have it sit between the two branches and the guy sells both.
On the residential side, you would teach your guys to go in and, when we had paper tickets, get into the file cabinet, look for old customers, and look for canceled customers. PC no TC was a catchphrase in Terminix. Look for those guys at pest control. Go do a free inspection and sell them. You always went after that stuff. You couldn't do the same thing with the sales guy that sat on both sides of the business. They never could pull it off. We tried it with Swisher too. One time, I was selling Swisher and communicated with Swisher. We sell their product and they sell ours and it never took off. Everybody had their own little fiefdoms.
Patrick Baldwin: David, you've listened to an episode or two. I appreciate you nerding out with us. Do you want to turn this around? Do you have any questions for me or Paul?
David Johnson: I've already asked Paul quite a few questions in the past. I don't want to make Paul's head too big but Paul is doing a lot for the industry. Some of the ones you guys have done in the past 2 or 3 months of you and Paul talking about the industry, the background, and getting pretty deep, that has spoken to me in a lot of ways. Moneyball, the plateaus, those are some of the best things I've listened to in a long time and that's whenever you guys said, “We want to go into other industries.” I said, “Stay on those things. Don't get off of that. I love that piece.” Now, I'm on the bus so it's a good idea.
Paul Giannamore: Those episodes, I shouldn't call them worthless. Fat Pat and I were chewing the fat as it were. I didn't think much of those. It was a function of him and I running around being quite busy and not having guests lined up and trying to record whenever we could. Patrick, we've heard from so many people saying, “These are some of the best episodes you guys have done,” which surprised me.
David Johnson: You've been looking at a lot of different companies so you've seen the great ones and you've seen the bad ones. It’s being able to come in and look at all those pieces for me. You're at Terminix and Rentokil, you're at the two biggest players in the nation. You forget that there are these small well-run companies out there who do it better than the big guys. I didn't realize that until I went to B&G and I was all over the US, all over the world looking at companies that were phenomenal.
They had their systems down, they had their training down, they were being creative, and I was like, “I sat in Terminix for fifteen years and missed a lot of this stuff.” It was amazing to me. Michelle Bayou spent a day with us and walked us through his whole facility and looked at them. They had motor scooters out in the cities. The guy was creative and he had a training facility there. It was state-of-the-art. They had a whole kitchen and they had all this stuff. I was like, “This is in Lebanon or Beirut. The only thing I know about Beirut is marine barracks.” That is a beautiful city. Beirut is beautiful.
I learned that if you get blinders on in this industry, you miss many creative people and many smart people that are out there doing it and doing it for the right reasons. What you brought out to me is seeing that there are a whole lot of great people in this industry and a whole lot of things you can learn from other people. It's been phenomenal for me.
I've met some other people through you guys too that have been good relationships that I've built. You guys are providing a service. This is where the leadership should be listening and should be coming in and hearing what you guys talk about because it gets into the meat of being a successful business. You can know how to kill bugs and go down like a rock. It woke me up on a couple of things and I was like, “Shoot. I got to back up here.”
Patrick Baldwin: I appreciate it, David. I wasn't fishing for that compliment. I was wondering if you had any questions for us. I want everyone to leave us an Apple review, that's all I want.
David Johnson: It'll be short. From what I heard, Paul, whenever you said the reason you do these great sessions is that Fat Pat didn't do his job.
Paul Giannamore: Fat Pat did not do his job.
Patrick Baldwin: That's all I heard. Thanks, David. Fat Pat is busy eating.
David Johnson: Patrick didn't have gas. He didn't do his job.
Paul Giannamore: David's got a way to drill down behind the surface, Patrick.
Patrick Baldwin: You've been too nice to not tell me but thanks, Paul. Now David is here to tell me.
Paul Giannamore: David, it's been fantastic to get you on the show. I've enjoyed getting to know you over the years and it's great to sit down with you here in The Boardroom.
David Johnson: I enjoyed it. I appreciate you guys having me on. Keep doing what you guys are doing. I’m learning a lot from you guys.
Paul Giannamore: We shall.
Patrick Baldwin: Thank you, David. I appreciate you.
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Patrick Baldwin: I didn't know what we were going to come up with David. We hit on things I didn't think we were going to get to but leadership and his previous experience with retail. Here's what I want to go out and start a whole association to make it a sales organization. That was genius. Let's go get all the chief engineers in Orlando to come and wine and dine and sell them all of our stuff.
Let me ask you, retail, you're always looking for great people there. You're in an office. As far as all the work that you see in field services, I can think about Jeff Phillips’ interview with Blue Chip Talk which touched on Enterprise Rent-A-Car where they targeted their employees for their workforce. Have you found other shortcuts to hiring technicians and salespeople for out in the field?
Paul Giannamore: No. Joe Wilson, over at PermTreat, used to always tell me stories many years ago about how he would poach people from grocery stores. He would do that. I don't remember if that were office folks or technicians themselves but he did a lot of that. His philosophy was always that you're out and about in the city in which you live and you frequent different places like the dry cleaner, grocery store, restaurants, and so on and so forth.
You get to know different people and if they're smiling, if they've got a good attitude, if they're willing to help, and if they've got great customer service type skills. That's what he would do. He would look also for people that had some longevity in their job. There's a guy I know who took somebody who was a hotel manager. They used the hotel quite a bit for meetings and different sorts of things. Over time, they got to know the guy and got a sense of his abilities and hospitality skills and said, “We can use him in pest control.” It's pretty common. Have you guys not done that down in Texas?
Patrick Baldwin: Yes. I know the quote, “Easy thing to do is to solicit resumes right online.” It’s like, “Here's a job opening, come put in your resumes.” What that doesn't show is I want to go out in the field and find someone because I could see them in that work environment and how they interact with people, smiling, their demeanor, and that they can hold a job. That means they're showing up on time, they're putting in the effort, and they're stable in that way. To me, that is the way to do it. It's hard to scale that. If you were doing it and you're teaching your people to do it, you'll go out and find the right people.
Paul Giannamore: That's exactly right.
Patrick Baldwin: That's what worked for us. I mentioned Lloyd Smigel in the interview with David. That resonates with me. That's something I picked up on Lloyd. Lloyd didn't tell me like this. He wasn't here sitting in the office telling me. He took me in the car, in his Hawaiian shirt, drove me out, and showed me what he meant. It was impactful. From recruiting and that spark in the eye, it means a lot when you get out in the field and you're teaching people that way and showing them and exemplifying it, like setting that example for them to follow.
For me, it always stuck with me. It wasn't reading it from a textbook. My first time holding a B&G can sprayer was with Mark, a former partner at Bugs. Imagine that I was in pest control for a while before that and doing management and doing sales and all this but never found myself in the field. This still sticks with me. Mark has also passed away. Mark was an Old Navy vet and then was a chief of police in a small town outside of Waco. He’s a smaller guy. He's like, “Go faster.” He gave me the B&G, we're doing this low-end apartment complex out of town, “Go faster.”
It wasn't until he ripped the B&G out of my hand nicely-is and showed me how fast we need to go to get this done on these empty units. That was like, “That's what fast means.” Once I saw it, it's like, “Oh crap.” He would crack the wood, like, “Faster.” He'd watched me slow down. Out in the field, it’s so much different. Those things I can remember years and years later. I can't remember what I read years ago. There are these people that have these impacts on me in the industry and I’m super grateful for it. Whether they're still here or not, I still have memories.
Paul Giannamore: Mark passed away from pancreatic cancer if I remember right.
Patrick Baldwin: Mark got pancreatic cancer.
Paul Giannamore: That's right. He was miraculously cured or healed.
Patrick Baldwin: That was in 2011. It was right after you did the appraisal for us. Within four months after, he came down with an early diagnosis of pancreatic cancer. Full recovery of that. When I said Mark was a smaller guy, Mark had previously been a roughly 5’4”, 350-pounder back in the day when he was the chief of police. Everything caught up to him. It's heart failure in the end.
David is making an impact. His dad had an impact on him. A lot of his early leaders had an impact. He's making an impact. I love how he even talked about teaching his guys to be charitable with their time and their trade, their skillset where they can go out and give back to their community for those that can't afford it. I love it.
Paul Giannamore: There's a lot to that.
Patrick Baldwin: Paul, thanks for letting us get David in The Boardroom. I'll see you.
Paul Giannamore: Sounds good, PB. See you.
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Dylan Seals: Thank you so much as always for supporting us at The Boardroom Buzz. We know your time is valuable and the fact that you spend 45 minutes or an hour with us means the world. All the media that we put out from Potomac is meant to honor and celebrate you, the service industry owner. As Paul would say, “Yee who toil in the pest control vineyards.”
As part of giving back, we have this podcast, but more than that, Paul and I have been working our tails off over at POTOMAC TV. We've spent a tremendous amount of time, energy, and resources to build out that platform to bring you market updates, to bring you visual breakdowns of the merger acquisition process, and to tell stories and present information in ways that, frankly, it's not possible for us to do on The Boardroom Buzz.
Adding the visual element takes it to the next level. I want to invite you to go to YouTube and find us, it's POTOMAC TV. Potomac.tv will get you there. Go there and subscribe. Check out some videos and leave some comments. Let us know what you like and let us know what you don't like. Let us know what you want to see more of and we'll see you over there.
