Next Level Pros - #35: I paid Harvard $150k so that you don’t have to
Episode Date: September 18, 2023In this special episode of the Founder Podcast, Chris shares his experiences from the prestigious Owner's President's Management Program at Harvard. Discover what it's like to be part of t...his elite program that brings together successful business owners from around the world. Chris dives into the world of negotiations and reveals valuable insights that can benefit entrepreneurs and business leaders. Learn about the essential elements of business success: Select, Serve, Satisfy, Survive, and Thrive. Chris discusses the importance of understanding your customers and employees, serving them with excellence, and creating a culture of trust and transparency. Discover how negotiations can be a win-win situation, focusing on the long-term relationship rather than just the current deal. Chris shares real-life examples and practical advice that can help you navigate the world of business negotiations successfully. Stay tuned for more exciting episodes from the Founder Podcast! HIGHLIGHTS "I pay $50,000 a year to be a part of this program to attend here for three weeks." "You got to be very selective...You got to have an incredible hiring process in place." "The cost of doing a mistake is very high, but mistakes are forgiven and mistakes are okay." TIMESTAMPS 00:00: Harvard Business School 04:43: Strategies & Guarantees 09:37: Customer Service 14:10: Create A Unique Experience 18:41: Employee Satisfaction 22:52: Trust Building 27:03: Long Term Partnerships 🚀 Join my community - Founder Acceleration https://www.founderacceleration.com 🤯 Apply for our next Mastermind https://www.thefoundermastermind.com ⛳️ Golf with Chris https://www.golfwithchris.com 🎤 Watch my latest Podcast Apple - https://podcasts.apple.com/us/podcast/the-founder-podcast/id1687030281 Spotify - https://open.spotify.com/show/1e0cL2vI1JAtQrojSOA7D2?si=dc252f8540ee4b05 YouTube - https://www.youtube.com/@thefounderspodcast
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One of the downfalls of business is that we want to say, everybody's my customer.
If you want to pay me, you're my customer.
You need to get into the habit as a potential business owner, as an employee, as anything
in the habit and saying, no, no, you are not my customer.
You're not willing to do this.
That therefore doesn't fit in my metrics.
This is my buy box.
This is who we service.
This is what it is.
So I got to be very
selection. Now, one of the ways that you select is the way you position and price yourself in the
market. Yo, yo, yo, yo. What's up, everybody? Welcome to another episode of the Founder Podcast.
So today it's going to be a completely unique podcast. As you can see, I don't have my normal background
for those that are watching on YouTube or Spotify. Today, I'm joining you from Harvard
Business School. Here's my little drink, Harvard Business School, my little water,
my little name tag. Right now, I'm in the OPM program. That stands for Owners Presidents
Management Program. It's a very unique, maybe you guys have heard me talk
about it on other episodes. So essentially what it is, is it's owners from throughout the world.
Only about 25% of the owners here are from the United States. Owners from throughout the world
that are running really successful businesses. They get together. It's a three-year program.
We live together for three weeks. It's pretty crazy.
So this is my little living quarters. I'll actually just kind of describe to you the living
circumstances. But in order to get in, it's really competitive. There's thousands of applicants. And
so to get in, we have 168 total students that are part of our cohort. They start a cohort in the fall and a cohort in the
spring. We are OPM 62. They've been doing this for 31 years. It's absolutely phenomenal. We got
incredible people that are doing all kinds of crazy things. We've got one lady that owns 50
airports in South America. We have Will.i.am, who's a famous musician and founder of Beats. I got one of my roommates is a top five developer in Dubai. We got the largest tire manufacturer or the second largest tire manufacturer in the world. I mean, it's just crazy. I mean, the level of people that I've been able to connect with is absolutely phenomenal. This is year number two.
And so what I decided to do is actually share with you some of the incredible things that I am learning and developing here at OPM.
And I'm going to do a couple of special episodes regarding this.
So this is episode number one coming from Harvard and excited to share with you guys.
I got some of my notes, got my little remarkable put together notes on the iPhone.
Of course, scratch paper, all the good stuff that we've got this.
But as I promised, I'll tell you a little bit of our living situation.
So I have just kind of like a little hotel room.
It's got a bed, got a full bath.
This is year number two of three.
Our first year, we stayed in a little bit nicer.
They have three different dormitory areas here in the Harvard Business School program for OPM members.
And the way it works is you have a living group.
There's eight people in your living group.
Each of us live on the same hall.
So we go out in the hall.
It's kind of like a little hotel hall, eight rooms off of it.
At the end of the hall is an executive boardroom.
It's got a conference table, whiteboard, computers, printers, everything.
And then right by there is a small kitchen with a bunch of snacks, drinks.
And then there's a living room that's set up just to hang out, watch football, TV, and that type of stuff.
So it's an incredible setup.
They feed us every single day,
breakfast, lunch, and dinner. We have a lot of opportunities to go out and hang. We're in class
Monday through Saturday. So today is Saturday the 16th. And so today was day number six. Saturday
is a half day. Every other day we're getting up. We're meeting with our study groups at 7 a.m. We're
with them until four o'clock. A lot of times we have group activities afterwards in which we're
doing group coaching sessions, talking through things that are working in our business, things
that aren't. I mean, it's absolutely phenomenal. So I pay $50,000 a year to be a part of this
program, to attend here for three weeks. And I would absolutely say it's the best money that I've ever
spent. And if that's something that you would ever like to be a part of, you do have to have
somebody in the program that recommends you, writes a letter of recommendation. If you know
me or you'd like to get to know me and you want to be a part of this program, I'm more than happy
to endorse if, if you, if you are a good fit for it. Go ahead and message me on Instagram. If you're not following
me on Instagram, make sure you're doing that at Chris Lee QB, like quarterback, Chris Lee,
C-H-R-S-L-E-E QB. And that's a great way that we connect. Follow me, message me, DM me. And
I respond and run my own stuff. So not all the videos are put together by me personally, they're put together by my team, but I do manage my own Instagram account.
So with that being said, let's talk about just some of the incredible things. So we have classes
on strategy, finance, marketing, global markets. I mean, literally there's all kinds of stuff and,
and way that this, uh, the way it's structured is we do anywhere from three to four case studies a day. And these case studies are 15 page papers that are written by Harvard professors. They went and they studied this actual business, gave a background on them, what's going on with them, some of the challenges that they face, and then we have to make some decisions. And so every single day we get together and we preview these case studies after we've already
studied them ourselves, any exhibits and everything that go along with it. And then when we get
together in class, we split up in two groups, one of about 85 in each group. And we have a professor
that teaches based off of these principles. And then
we debate things over the case study and what we would do as business owners and what's the best
method. And it's interesting because sometimes the class will be very divided on what the best
way to handle a certain situation because everybody's got different backgrounds,
different industries. And so it's a very unique opportunity. And so what I'm going to focus on
from this podcast is just a few things in marketing, also negotiations, which is one
of my favorite classes. I love to negotiate, love just to understand that whole detail.
But let's talk about, so today we actually had an incredible marketing class by a professor. His name is Das Narandas.
He is originally from India.
This guy is super aggressive.
If you aren't prepared, he will annihilate you.
I mean, it is crazy.
And even if you are prepared and he decides to pick on you, he's going to try to make you look stupid.
And he keeps the whole class completely on their toes.
In fact, today we met together as
a whole group, 165 people. He had people on their edge of the seats, just diving in. We studied the
case study of this pest control company in which they go and they service high-end pest control
services with hospitals, hotels, restaurants. Their packages can start anywhere from like
$45,000 startup to an $8,000 monthly maintenance fee. They will charge anywhere between six and
10 times the market rate for their type of services. And because they do not believe
in pest control, they believe in pest elimination. And in their lives, some of
the incredible things is when you talk about, think about marketing, think about strategy,
think about guarantees. The one thing that made this, this company super unique was their
guarantee. They said, look, if you see bugs, if you're staying in a hotel room and you see a
cockroach or anything else, not only will we cover the cost
of that customer's stay that night, we'll give them a free stay in your hotel the next time
that they decide to come. And so it provides this incredible guarantee. They also will pay
fines in the event that there's health code issues at a restaurant. They will, if you decide to go with another service because Bugs Killer Company
wasn't up to speed for you, they will actually pay for six months of your service with another
company. They had this remarkable, remarkable guarantee. And because of it, it held their
employees to a super high level of excellence, knowing that if they weren't excellent,
if they didn't deliver this incredible extermination, that they were killers, not just
controllers. So they didn't just do pest control. They did pest elimination. And if their employees
didn't perform at that level, what they had to pay for non-performance was extreme. And so that in and of itself held their employees to a
super high level of performance. It's internal marketing from this standpoint. And the remarkable
thing is these guys do close to $40 million a year in this case study, and they only paid out
$2,000 a month in these guarantees. It's because once again, they held their employees to such high
standards and because of what they paid, they reduced the level of maintenance from these
customers. These weren't high maintenance customers. They expected greatness, they expected
excellence, but they also weren't unreasonable. The other incredible thing that Bugs Killers did was created buy-in.
And this is a principle for all business owners. With the more buy-in that you can create with your
customers, the more they're going to realize the value that you are bringing to the table.
And let me give you an example from this particular case. So what happened with Bugs
Killers is they would actually come in
at night and perform on a restaurant. They would come and do the extermination,
come in like full hazmat suits. They're spraying, they're killing, they're trapping.
They're doing like this full crazy, you know, once a month service in which they're doing.
But in preparation for that, what they required from their customers was a beautiful, neat, well-maintained
area. And if they did not have it, say if there was like towels underneath a cooktop or something
like that, they would literally gather the garbage, put it in the middle of the floor and put a note
that says, hey, we don't appreciate that you didn't keep this place clean. We need to clean.
This eliminates the bugs. This allows us to do our job.
And basically gives them the choice and says, like, because we value killing all your bugs or whatnot, we chose to do this.
And we left this so that you could realize.
Anyway, so they demand a lot from their customers.
I know too often in today's society, we just don't demand enough from our customers.
We're like, whatever the customer wants, enough from our, from our customers. We like whatever the customer
wants, I'm just going to give it. And I'm going to, I'm going to let them take advantage of me
and this, that, and the other, rather than creating a buy-in. So there, there was a legitimate buy-in
in which the cook would get out on his hands and knees and clean and dust and get things out.
And not only would he prepare it for it, but then he would realize, and this was
actually an incredible point made by Will.i.am today in our class, the cook would realize what
they could do in the future to prevent such a mess, right? And because understanding that this
is what we're going to have to do to prepare for, I might as well take better action. So in turn,
it created excellence within
the business that this pest control or this pest extermination company serviced. So you get better
service from the cook, better service from the employees or whatever. It's quite the remarkable
thing. And so Doss talked about four different S's when you're setting up a business. Number one is select. Number two is serve.
Number three is satisfy. And fourth is survive. And he says also and thrive. But he said four S's
sounds better than four S's and a T. So survive and thrive. So the four S's. So select who,
who is my end customer? Too often, one of the downfalls of business is that we want to say
everybody's my customer. If you want to pay me, you're my customer. You need to get into the
habit as a potential business owner, as an employee, as anything in the habit and saying,
no, no, you are not my customer. You're not willing to do this. Therefore, it doesn't fit
in my metrics. This is my buy box. This is who we service. This is what it is. So I got to be
very selection. Now, one of the ways that you select is the way you position and price yourself
in the market. So Bugs Killer in this particular case study positioned himself six to 10 times more expensive than the rest of the market.
But when you polled different customers or different people in the industry, they said,
there's bugs killers. He's number one. And then number two is like way down here. We're not just
talking about price charging. We're talking about value created and culture created within the market. And so you got to be very particular.
And here's the interesting thing. This is all has to do with your business and applies to your
customer. And your customer is twofold. One, your customer is your employee and two is your end
user, whoever's purchasing the product from you. So you got to be very selective in who is going to be servicing my customers. So you got to have an incredible
hiring process in place. You got to do different things to make sure you are selecting out from the
very beginning, who is going to be servicing my customer and who are they going to be servicing?
So this is the, this is the who, And let me just go on a quick side note.
It's remarkable what these guys did for their hiring process.
It would take them, in a new market, 400 candidates to get to one person hired.
400.
They would do personality tests.
They would do a lie detection system. I mean, they would interview personality tests. They would do a lie detection system.
Like,
I mean,
they would do,
they would interview their family.
This would all be done by a center central by their corporate headquarters
before they even put them in the branch and let them interview with,
with a manager.
And then on top of that,
once they were hired,
get this,
this is on freaking real,
a six month training program,
six months. on freaking real. A six month training program. Six months, who in their freaking right mind is training their employees? We're talking about killing bugs. These are the technicians to kill
bugs. It's like, see a bug, step on a bug, see a bug, spray a bug, see a bug, burn a bug, see a
bug, trap a bug. Can there be much more to that? Can there be much
more? Six months of which five months were spent in the classroom and a full month out shadowing,
running a route, doing these different things. And so what it did was on the same principle
that created buy-in from the customers where they had to do this work and this preparation and all these things in order to receive the service.
Same thing.
Same exact principle.
It creates the buy-in from the customer.
These guys would spend $15,000 on an employee before they could even potentially start to help towards revenue for the business.
That's how committed this guy was.
They call him bugs as a,
as a nickname was to their culture,
to what they were providing to excellence,
you know,
and I'm not saying that you have to go out and create,
but just understand that this methodology worked.
They understood who they selected those employees and did so and made
sure that this is going to be the right person. They showed that level of commitment. And in turn,
the employee was able to create this true buy-in into the culture, into the way, the service,
how things are done around here at Bugs Killers. The second one is, is serve. How are we going to serve? What,
what is that going to look like? And it's interesting when,
when you talk about like the difference between a four star and a five star
hotel, it's not the bed. Okay. It's,
it's not even necessarily the accommodations, right?
You get very similar accommodations, similar bed or whatnot.
It's the level of service for anybody that's ever stayed at a five-star hotel. When you show up and
you show up with kids and they have like a little gift waiting for the kids or, and then you're
like on a second day, they come and they deliver a stuffed animal to the room because they know
that you have a three-year-old there or whatever it may be. You know, my first experience ever,
which is five-star service was I was staying at a resort in Park City and it was for a conference. And I went, I left my room for a
couple hours to go to the conference and I came back and in my bathroom was just this little gift
bag. Could have cost no more than a dollar, a dollar 50. Inside it was a little travel toothpaste
and a handwritten note that said, Hey, it looks like
you're almost out of toothpaste. Please take this on us. We appreciate you staying with us. Boom.
How, how am I going to serve? How am I going to create those wow experiences for my customer that
separate me from my competition that allow me to charge six to 10 times, right? There's no such thing as a
commoditized business. Most people think that there's just commodity. Oh, I just sell solar
panels or I just sell pest control or I just sell wheat or I just sell hay or whatever it is,
right? The commodity, I can't really differentiate. The only thing I can differentiate is on price or
maybe a little bit of brand, whatever. No, you have the ability to serve.
And the question is how?
How are you going to differentiate?
And because of this, these guys spend $1.50 on an experience
and time and energy, and they showed that they care about me.
Now, all of a sudden, I'm willing to spend $200 to $300 more per night,
maybe even sometimes $500 to $300 more per night, maybe even sometimes 500 to a thousand dollars a night
in exchange for a dollar 50, but energy and time and a process that was actually thought about.
And so that's a question that we always have to ask is like, how am I serving my customers?
And what way can I better service my customers? Which way can we create incredible
buy-in? For example, with this bug killer case, they would come in with like seven technicians.
They would spend hours. They'd be on their hands and knees scrubbing. They made sure that there
was not a bug in the room. This wasn't pest control in which they're controlling them and
putting them in the different walls and scaring them out and just kind of keeping them there. No, they were eliminating the bugs.
It was that level of service, that level of excellence.
And in turn, that helped with the third S, which is satisfaction.
Not only satisfaction, but just getting people to like, wow, I've never had an experience like that.
Wow, man. Although
I had to do some work in preparation for this, I would pay every dime plus 10 in order to get
whatever service that I got, right? You got to be, are they, did you consciously think about
their satisfaction with the process that you created? And then last but not least, you've got to survive.
You've got to make sure that everything is in line,
that you continue to thrive, that you continue to deliver,
that you create this culture that is going to demand.
And that's one thing that he talks about with employees.
There's five things that you've got to think about when you're
talking about surviving and thriving. You got to think about how you hire, which you heard me talk
about that. How you train, which you heard me talk about. What am I doing? What am I doing to make
sure that my people have all the knowledge that I have downloaded to them? It's not just written
down, but it is trained. It's followed up on it. It's executed and there's testing and everything else that goes. How do you supervise? Now it's
interesting. They trained professionals. They got these people to a super high level of execution.
They hired only perfectionists. And in this particular case, they would send around like
a QA every once in a while,
they would check in, call the customer, go and see the account, make sure that they were delivered on.
Now, a lot of people think, oh, that's for QA, that's to make sure that we're delivering good
service or whatnot. But this was actually a little bit different. It was tied with their
compensations because perfectionists, the thing that they want to be is recognized. They want to
be recognized for the incredible work that they're doing. So then they had past reports and everybody's
striving for a hundred percent. Some of you guys that follow me on Facebook may have seen a little,
a little post that I did. Let me pull it up in which, in which I talked about, here we go. For those who are, it says,
great motto in business to live by,
mistakes are forgiven, liars are not.
So one of the things that these guys created was a culture of, hey, it's okay to make mistakes.
Mistakes are very costly.
The cost of doing a mistake is very high,
but mistakes are forgiven and mistakes are okay,
but they should not and will not be
repeated. Right. But if you lie and you cover up, that is not forgiven. Right. And so as business
owners, it's a challenge. We want to incentivize, we want to incentivize transparency of it. What's
actually going on? How am I servicing these customers? And am I better taken care of? Which goes along with how do I evaluate? And then ultimately, how do I compensate? Remember, people are compensated in more ways than just money, right? Time, energy, and money are the three ways. And how am I adding energy to this person's life through the culture that I'm creating? How am I giving back more time and creating more abundance in this person's life?
Are there ways that outside of compensation that I'm serving them the intangibles, right?
And so ultimately choose to be excellent.
So those were a few of the notes that came from that class today.
A couple other things actually. So
negotiations, um, we're going to talk about negotiations and then we'll save some of this
for the next episode. But, uh, we, we had the opportunity to do new negotiations. So the way
it works here is they give us the case, the situation, and then we're each assigned roles.
So in this, in this particular case, uh, a three-way negotiation. There were three potential
partners. They'd come, created a framework months earlier. Now that they were raising money,
they needed to finalize their operating agreement. It needed to finalize their salary, their equity
structure, different things. So we had to get together, three of us playing different roles.
Certain things were important to different individuals. Something that was important to me, wasn't necessarily
important to a potential partner, so on and so forth. So that was, that was the reference that,
that we did this particular case study. And then afterwards we talked about, okay,
what are the key principles, the key takeaways that we want to take from these negotiation. Okay. So one of, uh, there's in negotiations, we want the,
the number one thing is we have to maintain trust, uh, or we have to retain trust. And the,
these are the top destroyers of trust in negotiation, because ultimately the only way
you can get a deal done is if there is trust. So when, when negotiating, don't negotiate one sided,
this is on New Year's. And in this particular case, there was a guy named Michael. He couldn't
present this as this is my company, right? He was bringing on potential partners. It needed to be
done in a, in a very like, like what's in it, what's best for all of us. Treating and with this, making sure that you're
not treating other potential partners in the deal as lesser partners. They may not have equal equity,
but you definitely can't, you would destroy trust from there. Here's from my notes, negotiations,
so these are ways you destroy trust. Negotiations who don't seem to understand or acknowledge other parties' key issues, concerns, or fears. So one thing that I've learned in negotiations when you approach it, you need to be very transparent and you need to get transparency from the person you're negotiating exactly those things. What are my key issues? Okay. What are the things that are most important to me? What are my concerns and what are my fears? Because if I don't understand that, I don't
know how to overcome it. I don't know how to better serve them. Actually, this, this is a
story. You guys are going to love the story. It, um, uh, it, from my very first, uh, first year
here at my, at my cohort with negotiations, we were told this story and it has to do with an
orange. Okay. There was, there was two, two, uh, uh, a brother and a sister. We were told this story and it has to do with an orange. Okay. There was,
there was two, two, uh, uh, a brother and a sister. They were fighting over an orange and mom comes in
and sees that they're fighting over who gets the last orange and thinking, Hey, let's, let's just
split it. So she takes the orange cuts in half, gives one half to one and one hand to the other.
Okay. The brother immediately runs over to the garbage peels the orange
grabs the fruit throws the peel in the garbage starts eating the orange the sister runs the
kitchen peels the orange throws the fruit in the garbage takes the peel and starts making a cake
but then she was only able to make half of the the size of cake that she wanted what was the
moral of the story ultimately both could have gotten the whole of cake that she wanted. What was the moral of the story? Ultimately,
both could have gotten the whole thing of what they wanted. Had they been transparent and upfront
that this is what I want. Hey brother, I just need the, what I really want from this orange
is just the peel. I'm trying to make a cake. And this, and the brother could have told the sister,
Hey, all I need is the fruit. Had they
done that, they would have both gotten one of each, thus duplicating the orange. In life,
this is how negotiation works sometimes, is that you can actually grow the pie and get more of the
total if you're willing to give on a few things that are important to the others and they're willing to give on things that are important to you. And so understanding what the key issues,
what the desires are, what are the fears, what are the concerns? And if you can address those
upfront, it's very likely that you can get to standard negotiated terms that work well for
both of you. The other one is a thing that can destroy trust
is negotiators that haggle over everything.
Negotiators that just want to win on,
say there's four different things
that you're trying to negotiate
and you just want to haggle and win on every single thing.
If it's not important to you,
let them win in trade for something
that is more important to you.
Don't haggle on every single thing.
It's okay
to lose a little here if you can win somewhere else. And then last but not least, negotiators
who focus too narrowly on this negotiation rather than the future of the particular,
whatever it may be. And in this particular case, you are trying to create a partnership that's supposed to last
for forever, right?
Like you're hoping that until you die or exit 10 years from now or whatever it is.
So the worst thing that you could do is screw somebody in this upfront negotiation and they're
just going to hold it against you.
And then two months from down the road, you're going to have a board discussion and you're
going to be at each other's throats and you're going to be like this, that, and the other.
When you negotiate every single little thing and your only thought about what's happening
in the moment rather than thinking about the future relationship, not only does this apply
in negotiating partnerships, but this applies in business.
If I'm negotiating a real estate deal and this particular real estate
agent or client or person that owns a bunch of real estate, we're doing this one deal.
I got to think to myself, if we can come to a fair deal where both feel at win,
will this increase my likelihood to be able to continue to negotiate more deals with this
particular individual? And I can create more and more value outside of this one negotiation. This is an absolutely imperative thing that you have to
understand as a business owner, whether it's a small-term negotiation with an employee on their
employee contract, an equity split, a potential customer, someone that is a supplier of goods and services to your business. You got to think
outside of this particular situation. This is extremely hard for me because I love to haggle.
I love to negotiate. I'm the kind of guy that when I'm down in Mexico and the little kids come
up and they're trying to offer me chiclets for a dollar, I try to negotiate them down to 20 cents just for the game. I love it. But just so you know, this is the way I handle it. I get
them down to 20 cents and I usually give them $5 and tell them to keep the change. But for me,
it's, it's a game. And I got to realize, I got to remember that, that I have to get out of this
particular situation. It's gotta be a win. The more people that win, the more, and there's
potential to grow the whole pie. And here's the interesting thing is like, because in this
negotiation, there was four things that we were negotiating over and each subject was worth more
to one person out of the three than the other two. And so what we did is I came in and I used these tactics and we said, okay, well, how
can we maximize the value for everybody?
And the way that they had it broken down in like a scorecard or whatnot, my group scored
the highest on total score, total pie grown for the whole organization, more than anybody
out of the, so our group of three, more than the other 168.
And the reason
is because we focused on this. Now I wasn't the top scorer for my particular role and neither was,
you know, when someone else, but together we won greater because we understood we were building a
business. Okay. So remember that hopefully you guys have gained some knowledge. Hopefully you
gained some wisdom. Harvard is absolutely phenomenal. If you aren't subscribing to the Founder Podcast, please be sure to do so. Also, as just a little fun thing that we're going to dangle out here, I'm going to be launching a weekly mastermind in which we are going to get together as business owners that people that are potentially launching. And we're going to highlight one business owner and talk through the issues.
We're going to start doing this on a weekly basis. This product is going to be launched
here really soon. I'm excited. It's part of the founder project.
Anyways, really exciting things going on. Make it a great day until next time.