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ENTREPRENEURS FLOURISH IN THE ALARM INDUSTRY




Management scientists argue that one of the reasons for the long-term success of the Catholic church arises from its choice of its leader—the Pope. The cardi-nals often choose an elderly person, which limits the time he presides over this large organization.

There is usually a rotation from an “en-trepreneurial” to a “structural” Pope. An entrepreneurial Pope introduces innova-tions to the church, opens new markets, and introduces contemporary ideas. After his death, the cardinals choose a Pope who structures the changes and builds the bureaucracy to implement the new doc-trines that the previous Pope started.

The church teaches us four important lessons. First, it is important to invigorate an organization with fresh leadership after some time in order to avoid stagnation. Second, it is vital to choose an entrepre-neur to head the organization; however, an organization needs time to absorb and adjust to rapid changes. Then an organi-zation person needs to replace him. Third, it is important to appreciate the efforts that are required for entrepreneurship, and provide a leader with the “space” to im-plement his ideas.

At the same time, however, there is a fourth lesson: It is equally important to understand the limitations of entrepreneur-ship; an entrepreneur cannot head an or-ganization for too long, and cannot do eve-rything. An entrepreneur needs to concentrate on the activities where his/her comparative advantages exist—basically to break barriers and provide for rapid changes.

The alarm industry is fortunate to have entrepreneurs who have been instrumen-tal in “making a difference to their own businesses and the industry.” Such indi-viduals exist in the manufacturing, distribu-tion, dealership, monitoring, and response segments of the industry. They have de-veloped improved systems and made them more affordable.

Kolind Spawns Mass Marketing Seed at Brinks

It is important to note that entrepreneur-ship yields benefits which diffuse to the entire industry. There are few if any barri-ers to rapid imitation in marketing innova-tions which may predominate. Entrepre-neurs work hard at their ventures, and are able to switch course when new data suggest it. For example, mass marketing is practiced by many other firms in the alarm industry.

One person who has made a great mark on the industry is Peder Kolind, the father of mass marketing. As head of Brinks years ago, Kolind introduced alarm systems to the middle class, a trend that many firms in industry have since adopted.

Associates claim that Kolind, who started both Brinks Home Security and Westinghouse Security Systems, seldom slept and kept them going through the period he built these ventures. He was quick to make changes in plans when circumstances required it. At the same time he formed Brinks Home Security, he was involved in a similar venture with British Telecom. Kolind commuted on a regular basis between two continents. By 1996, Kolind had successfully initiated mass-marketing operations in England, France, Portugal, Spain, Sweden and Pakistan.

“The whole thing is very simple … you just need to find a company with a very recognized name that is not in the alarm business and identify metropolitan areas with high crime and large middle class. The rest is very simple,”” he says.

Hakim and Blackstone are profes-sors of economics at Temple University in Philadelphia.


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