The number of installing and monitoring security systems providers qualifying as household brand names can be counted on one hand, with a couple of fingers left over. Protection 1 is one of them. That alone would have made it major news in 2010 when the business was acquired and taken private by an affiliate of Chicago-based equity firm GTCR in a reported $828 million transaction. The fact the deal also placed Tim Whall, one of the industry's most respected and successful CEOs, at P1's helm made it monumental.
Whall's 28-year security industry career includes leadership positions with SecurityLink, ADT, Honeywell Security Monitoring and Stanley Convergent Security Solutions. The energetic, shrewd and savvy executive has been instrumental in some of the industry's highest profile transactions. Besides P1 these include SecurityLink, where Whall transformed negative revenues to $80 million in earnings in just six months and which later sold to Tyco for $1 billion, and HSM, where he improved annual revenue by at least 17% for three straight years and which sold to StanleyWorks for $545 million.
Launched in 1988 by utility firm PacifiCorp., Protection One established headquarters in Southern California. In 1991, the business was acquired by an investor group that included John Mack and taken public in 1994. Focused primarily on the residential market, an aggressive strategy that included several acquisitions and a marketing blitz fueled exponential growth in revenues and geography. By the end of the 1990s, P1 was the nation's second-largest home security firm. However, the onset of the new millennium saw regulatory, financial and questionable business practice issues waylay the operation.
In 2001, Richard Ginsburg, then just 32, came in as CEO aiming to restore P1's luster. He was largely successful, leading one of the biggest operating restructurings in alarm industry history. It was under his watch in 2007 that Integrated Alarm Services Group (IASG) and its family of companies, including Criticom Int'l, was acquired. Although the recession subsequently took its toll, Ginsburg's efforts helped make P1 attractive to GTCR and Whall.
Today, Romeoville, Ill.-based P1 is America's No. 2 electronic security company with more than 65 branch locations and 2,500 employees providing installation, maintenance and monitoring services to in excess of 1 million single- and multifamily residential and commercial customers. Through its CMS division, P1 is also the nation's largest wholesale monitoring provider.
During the latter part of 2010 and first half of 2011, Whall spent the bulk of his time transitioning P1 to bring it in line with his vision. Central to his strategy is transforming the company from primarily residential security into a commercial power, with particular strength in national accounts. As has been his hallmark, Whall also has P1 focused on unrivaled customer service and lowering attrition. Recent initiatives include eliminating automated phone attendants and the Tech Tracker service, which electronically alerts clients when a technician is en route and includes his/her photo.
In an exclusive and in-depth interview, SSI picks Whall's brain to learn more about P1's direction and gain management insights from one of the industry's most accomplished executives.
What did P1's previous leadership get right and where did they fail? Did you see opportunity where they didn't?
Tim Whall: The previous team deservedly got a lot of kudos for taking a company that was having financial trouble, getting it stabilized, and moving it forward. There was a culture of customer care and wanting to do right by the customer when we got here that was very positive. I really didn't see anything as a failure. But it was a little surprising to see the lack of industry participation by P1 in the associations and groups.
As far as opportunities we see that they did not, the previous management saw and started down the paths we thought were good areas to go and grow with, similar to where Brink's was going. They're both predominantly residential moving toward commercial and into the national accounts space, and P1 was definitely on that path. Their acquisition of PSI [Protection Service Industries, included in 2007 acquisition of IASG] was clearly an indication of their interest to be a bigger player in the commercial market and starting a national accounts program.
Those are great spots to take advantage of and so it was mostly about what we could do to really accelerate the growth in those areas. After a management team has been in place for a while, someone new takes a look at the same issue and might have a slightly different solution or a different way to attack a problem that the business has been trying to solve. I think we just took a more aggressive approach to what we thought was the opportunity there and put a few more resources to it.
What is your process for zeroing in on opportunities, and developing and executing go-to-market success?
Whall: The process for both is pretty much the same. You review the business and its entirety across each of the departments or divisions. You then benchmark it against what you know will be a successful performance, putting your pluses down where you think you're a leader and checking it against the industry average.
If you need improvement, you're circling that area and asking, "What can I do to get this up to at least the industry average, if not best in class in this particular area?" Whether that's servicing the customer or cost efficiencies, it doesn't really matter. You take a look at the template of the organization and measure it against what you know others have done or what the best in class is, and you spend a good deal of time measuring yourself.
Once you decide the area you want to focus on, you've got to be really clear about what you're going to do. So you define the problem and then you've got to be able to measure it, and how you measure it is key. Then you determine the steps for improvement. It's important to only put a few steps in place and focus on what you're going to do to move that needle upward. I don't believe in putting a 10-, 12- or 15-step program in place. It's better to keep it to two, three or four steps in terms of what you're going to do to drive this and to get right with it.
Once you identify, measure and make it a priority inside the organization, how do you communicate where you're going? You picked your two or three things you're going to do to move this needle, but how are you going to close the loop by showing if you're getting what you want out of these changes? If you do it right, you won't have to reset the deck.