"BUILDING SECURITY"

Where They Started

After 19 years in operation this unarmed security was doing $3 million in annual revenue.  But their CEO wasn’t satisfied.  In mid 2002 she began looking for new ways of addressing several pressing issues – including falling client satisfaction and weak bottom-line results.  The firm faced inter-fiefdom personality clashes and large inefficiencies, and dealing with those issues left her little energy to focus on developing a growth strategy.

Tactics vs. Strategy

This CEO and a few of her senior staff knew they weren’t operating like a forward-thinking organization.  They understood that daily operations were leaving them drained.  Nearly everyone on the management team was frustrated by lack of growth.

The CEO was an active participant in a monthly peer group which included John Mattman, a former client of ours.  When she turned to this group for ideas on how to break through tactical gridlock, John put her in touch with The Vector Group.

Launching the Engagement

Our first meeting with this CEO was in October of 2002.  She outlined the issues her team was facing and was clearly frustrated that they weren’t moving in the direction she wanted to go.  We in turn outlined the basics of our growth process, InSight.  After discussing options, she decided to engage The Vector Group.

We began this engagement - as we do many - by running a Stakeholder Survey.  We interviewed the people who had the most direct impact on her bottom line, and prepared the data and a “state-of-the-stakeholders” report for her review. 

We agreed to present the data to her senior team at a management retreat, and that if the management team was not pleased with the directives The Vector Group proposed then her firm was under no obligation to go forward with their engagement.

Formulating a Cohesive Business Strategy

As a part of this new beginning this CEO made sure her key people understood her desire: to build the security division to $7-10M annual revenues and then find a buyer for the division.  She also made it clear that every employee would benefit from meeting this strategic goal.

During the course of the Stakeholder Survey it became clear that the company’s growth inhibitors could be broken down into four key issues:

• Limited alignment regarding the steps necessary for growth.
• Lack of clarity regarding “consequence and reward”.
• Limited prioritization skills balancing growth assignments against client satisfaction issues.  
• Limited understanding the real cost of employee and customer turnover. 

We offered four directives in the form of solutions:

• Connect actions to values.
• Allocate resources to author and share clear, concise expectations and rewards.
• Begin budgeting and forecasting.
• Run a cost analysis and share with management.

When we presented these results we proposed two-fold action: first simplify their project tracking, and then incorporate stakeholder information into all future growth initiatives.  An Action Plan was composed, and each task was authored by and assigned to an appropriate individual.  Hard, conservative dates were set for completing those initiatives. 

Executing a Revised Strategy

Regular meetings, face-to-face and phone follow-up ensured that their emerging culture of performance was consistently reinforced.  Accountability became the by-word of the management team and after a few months of steady improvement the best managers also saw a similar awareness and commitment to accountability trickling down to their frontline employees.  

Recruitment and proper training of new personnel, along with reinforcement of company policy became high priorities, and were very successful in reducing employee turnover. While these improvements were obvious to their clients, they also served to differentiate them from their competition.

Very Positive Results

Over the next year their revenues grew to unprecedented levels.  The Vector Group worked with this CEO to establish three specific metrics for measuring their success.  Growth was carefully monitored and programs were launched to share the rewards equitably across the company.  As change began to take root managers became aware that they had more time to manage - because their people were better trained and were operating more efficiently.  The company implemented a reward system based on individuals exceeding the management’s expectations.  This established a fundamental shift within the organization because everyone felt they were a vital and compensated part of the rebirth of the company. 

After twenty-four months of intense focus the company saw a 23% increase in revenue by and a 96% jump in bottom-line profitability.

Exit Strategy Complete

The company not only met her challenge, but in 2005 they sold the division for two-and-a-half times the national average.  The CEO - who was the majority shareholder - invested her financial gains into a much higher earning enterprise.  And its a win-win: her former employees are now a part of a thriving international company, and enjoy a broader spectrum of benefits and advancement opportunity.

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