BBBK: Excellence Is a Race of Its Own

First of all, this professor is one I absolutely adore — probably also one of the professors our whole HBS cohort agrees is among the very best:

Das Narayandas

One of the most respected professors at Harvard Business School (HBS), and head of Executive Education. His research covers B2B marketing, customer relationship management, brand strategy and more. He often brings his research into the classroom, combining theory with real cases. His classes constantly make you step into other people's shoes, coming at a problem from the angles of customers, managers and shareholders — he's "a teacher who can make complicated problems simple."

Every one of Das's classes gets me thinking hard:

• How do you become a company that creates unique value?

• How do you find the courage to be the most expensive product?

• How do you execute perfectly on the ground? Strategy is all very well, but it only counts if you actually do it!

• How do you close the loop on every tactic?

After every class of his, I come away with a pile of ideas I want to make happen, and I feel grateful to have work to do. I always can't wait to see my team. Case SummaryPest CONTROL vs Pest ILLUMINATIONCompany backgroundBugs Burger Bug Killers (BBBK), headquartered in Miami, had 1985 revenue of US$33 million (equivalent to US$93.2 million in 2023), 600 employees and annual growth of 20%. It had 15,000 customers, mostly hotels, hospitals and restaurants. Founder Alvin “Bugs” Burger was famous for his "zero pests" promise.Industry backgroundThe US had more than 9,000 pest control companies with total revenue of US$2.2 billion, most of them small, family-run and dependent on residential customers. Large rivals included Orkin (US$213 million in sales) and Terminix (US$160 million). Insurance premiums had soared, and service levels across the industry were generally poor.Founder's storyBugs came from a family of exterminators and entered the business after leaving the army; because the industry was rife with corner-cutting and unethical practices, he struck out on his own. He and his wife Sandee started with US$1,200 and zero customers. From early on he made the promise: "100% pest elimination, or your money back."Service guaranteeAn exclusive "Unconditional Guarantee." If pests were found at a customer's site, BBBK would not only refund the fees but also pay any fines, compensate for damage to reputation, and even pay for a year of service from another company. If a restaurant guest saw a cockroach, their meal was free and they got a gift certificate too.Core practicesThe Service Specialists were "Michelangelos," put through 6 months of rigorous training costing US$15,000 per person, well paid, with turnover below 3% (industry average 60%). A service visit took 3–5 hours (rivals: just 30 minutes), and chemicals accounted for 12% of costs (rivals: about 5%). Customers had to sign a sanitation agreement or BBBK would refuse service. A "Red Dot Program" pushed customers on hygiene. Prices were extremely high (4–10 times rivals'): for example, the initial clean-out of Florida's Diplomat hotel cost US$45,000, with a monthly fee of US$7,200.HistoryIn the 1970s it expanded from Florida across the US, winning customers through public relations and a "knightly" image. Clients included five-star hotels and restaurant chains.ChallengesCompetitors copied the "zero pests" slogan. High prices led to customer losses (US$2 million in contracts lost per year). Expanding too fast created management problems. Bugs's own energy, and the succession question. Insurance costs rising sharply.

Class notes

1. Build a brand out of the commodity.We're not the "better" one — we're the one beyond comparison!We are NOT the better one, we are THE ONE!Risk of Failure is very high. For our customers, it's not about choosing the relatively good option — they have to choose "the best" — something Arcus42 needs to think about 🤔

2. Excellence vs Mediocrity

PEST EliminationExcellence

PEST ControlA business of MediocrityNot committed enoughWhen a team pursues excellence, it doesn't spend time making excuses for itself, and won't say "nobody can do it" — because doing what others can't is exactly what we're after.How many times your people spending time justifying themselves？ —— That’s your problem！ Because you are establishing a business of mediocrity A wake-up call!

3. Play a different game -- your game!This case is not about how you are significant better than others but how you are distinguish different from other people —— you need to play a DIFFERENT GAME

What is the result? —— BBK can charge 10 times When you're not competing on the same field as everyone else, you're usually not caught in a price war.

4. This models are simple, it is about DISCIPLINE❗️The logic is simple — it's all in the execution!There is NO 99% excellenceThis is NOT about strategy, you can show your competitor but they can still not copyThis is about EXECUTION!!"Perfect execution & mediocre strategy" can beat "perfect strategy & mediocre execution"

5. MAKE your customer CO-PRODUCERS，DON‘T spoil your customers Make customers part of your production process! Just as BBK required customers to sign a "sanitation agreement"Can you mange a spoiled child —— NoThe Customer need to appreciate your workget them involved in the production processThe most memorable example was the Japanese meal where they let us help make the food — when customers take part, they value it more and like it more.Take Harvard, for example: People read the cases for HBS — it's telling you that if you don't read the case, the one who loses out is you.OTHERWISE — PenaltyWhat am I doing with my customers that increase my possibility to performance well —— That’s the low hugging fruit！—— What can you do together with your customers to raise the overall odds of success? Start doing it now! This is the low-hanging fruit!Make your customer a hero by making your customer involved❗️Managing your customers

6. Your want the excellence in your perspective NOT the customers perspective Customers not cooperating? It's not the customer who needs to be excellent — it's you! So you have to find ways to make it easier for customers to cooperate. —— Make it easier for your customers

7. Customer profitability Managing customers is managing profitCustomer Management is also profit management

4s ModelSELECT (choose your customers)The best time to say NO in a relationship is IN THE BEGINNINGWHO do we want to work with

Every customer need to be served in an unique way.

Every customer need to be served in an unique way.SERVE (serve your customers)HOW do you want to serve?

SATISFY (satisfy your customers)Do something that they care about

SURVIVE (level up)And THRIVEWhat in it for me？

8. When the Guarantee is involve, why take the riskSo that — the Whole Team knowsI promise EXCELLENCE, you need to deliver ExcellenceThis is a service industry, 99% is a failureFailure is allowed but failure is not allowed repeatedlyInternal management and message

SERVICE PROFIT CHAINEMPLOYEES — Employee Management SystemHiring400:1 acceptance rateLie DetectionTalk to the familyTrainingHR Budget &15k / employeeTraining for 5 months！Do what is importantShow that you are doing what your employees are doingLEAD BY EXAMPLEThis is excellent executionMentoringFair Evaluationmaking failure expensiveCompensationwhen the employees lose the customers, do not worry, you are protectedPay below market —— how？Intrinsic : High Performance Culture — place that people want to work inExtrinsic : Money $$

Service Excellence

Quality of service provider🟰 Quality of service Provided

Core ➡️ Service excellence

CUSTOMERCustomer Satisfied

👇LOYALTYRevenue increaseCost decrease

👇COSTUMER PROFITABILITY！！

9. A classroom moment I lovedWhen being asked：are you ok with me making fun of your industry? if yes tell me and i can tell people otherwiseHis answer : I’ll wait till the third classThat answer is neither weak nor combative. I love it!

10. The following storySold the business —— Failed!Do it again himself? —— Failed again!

This is a model lead from the front! —— If this is model strongly dependent on the leader, i love it , but is it sustainable?