Exclusive! Michel Leaves the Security of Brink’s
Brink’s is a name synonymous with security. Peter Michel is a name synonymous with Brink’s. Since 1988, the two have forged the industry’s most highly regarded nationwide alarm business—Brink’s Home Security Inc.
However, the beginning of this year marked the end of an era as Michel stepped down as the company’s president and CEO to pursue new frontiers. Suddenly, he is Irving, Texas’ most impressive free agent since the Rangers signed superstar slugger Alex Rodriguez.
Michel, a former naval officer with a background in governmental and corporate management, guided Brink’s Home Security from 66,000 customers, 22 markets and $26 million in revenues in 1987 to more than 700,000 customers, in excess of 100 markets and $258 million in revenues in 2001. During his reign, the company, a wholly owned subsidiary of The Pittston Co., posted an astonishing 13 consecutive years of record profits.
Although Michel just recently turned over the reins to new company President Bob Allen, a succession plan was put into motion more than three years ago. To smooth the transition even further, Michel is remaining on indefinitely as a consultant.
Michel—a civic-minded individual and avid swimmer who balances time between his professional life, family and humanitarian pursuits – -is meticulously studying the current security landscape before making his next move. But if it’s anything like his last one, an as-yet-unidentified company figures to be much better for it.
Security Sales & Integration recently spoke with Michel at length about the history and future of Brink’s, his own achievements and career plans, and the electronic security industry at large.
Exit Plan Was Hatched More Than 3 Years Ago
Security Sales & Integration: Why did you decide to leave Brink’s and can you describe how your exit was handled?
Peter Michel: About 3 1/2 years ago, we put a succession plan into place and brought in an executive vice president named Bob Allen, who has done a terrific job. In the spring of 2001, he was promoted to president. It then made no sense for the two of us to do the same job and it became obvious it was time for me to do something different.
I believe there are a number of areas in the homeland security area and I believed I could not look for a new challenge while running Brink’s. So, now is the time to do it. I am really looking carefully before I jump.
SS&I: Speaking of homeland security, can you tell me about your new appointment with the Security Industry Association (SIA)?
PM: I am the new chairman of the SIA Homeland Security Advisory Council. We will be putting out a series of notices primarily focused on federal legislation issues, but also on topics that will affect government and private companies. We are looking at identification, verification, security and risk-management processes and procedures.
SS&I: Keeping with the homeland security angle, how do you believe the events of Sept. 11 affected the security industry?
PM: The security industry has a new obligation, and a new opportunity. Most of the anti-terrorism work is going to be done by the private sector. I believe the level of training and professionalism has to go up dramatically and quickly.
Brink’s Built Success on Foundation of Service
SS&I: Let’s talk a little more specifically about Brink’s. To what do you attribute its unrivaled success?
PM: We created a culture of genuine concern for the customer. We considered ourselves to be partners with local law enforcement, and everybody who worked in the company looked at it as more than a job. It was a privilege and a calling because they were protecting people and property.
Each generation, we have upgraded and that steady investment and utilization of technology, particularly in the ongoing business, has enabled us each year to improve the quality of service provided to each individual customer, and to simultaneously reduce costs. The key has been to enable frontline employees and give them the tools necessary to provide the kind of service we all believe is appropriate.
SS&I: What attracted you to Brink’s in the first place and what was it like when you took the job?
PM: I found the challenge of Brink’s in the early stages to be quite compelling. I am a business guy and a change agent and it was a company that needed all of those things done. It was a very small company and was run very much like an early stage company.
I had a mental image of where I wanted it to be in the long-term and it guided each tactical step we made as we were always thinking about being a much larger operation. If you take that view, you are very careful not to put in equipment or processes that will limit you. You have to do what allows you to grow indefinitely.
Focus Placed on Organic Growth, Not Acquisitions
SS&I: Brink’s has bucked the acquisition trend, instead opting to build its own internal empire. What was the thinking behind this strategy?
PM: For the first half of the time I was with Brink’s, there was more demand than supply. But as the industry got much larger with bigger players, we began to have adequate supply to meet the customer demand.
We stuck to the conservative, committed relationship to customers that we created. We always looked at the properties that were available, but their quality was always the sticking point. We could acquire customers on our own and they were better customers who would stick with us. The other companies would have customers who did not feel any loyalty.
Key to Mass Marketing Is Choosing Right Customers
SS&I: What is your take on the current state of mass marketing and where does Brink’s fit in when compared to the ADTs and Protection Ones of the world?
PM: I have always made it a rule never to badmouth my competition because it hurts the industry, but Brink’s offers the best options out there. We could not provide equal quality if we went as large as ADT.
I believe zero-down systems are a terrible idea. We are trying to make security affordable, but people need to make a financial commitment to the system. Mass marketing itself is not bad, but the question is what the value proposition is and if you are providing the kind of service that is appropriate. Mass marketing is the best thing that ever happened to this business—it made it huge.
SS&I: How does Brink’s deal with false alarms?
PM: We really have been one of the leading companies in the whole false alarm area. We were instrumental in coming up with the proposed municipal ordinance, and we have been very supportive of the AIREF [Alarm Industry Research and Education Foundation] and the Model Cities program.
We have taken every chance we get to remind people that this industry exists because of our relationship with law enforcement; but it remains a huge challenge. We, as a company, have been extremely aware of how procedures, systems and education of customers can help.
SS&I: Brink’s has held its attrition to respectable and consistent rates. How has the company achieved this?
PM: Attrition rates are driven by perceived quality on the part of the customer and the type of customer you have in the first place. People with good credit ratings are good customers. We try to be selective. Care and communication with your customer base is where the rubber meets the road. We spend more money on customer relations and service activities than we do on our monitoring activities.
Industry Needs to Develop a Comprehensive Package
SS&I: Let’s take a broader look at the security industry. What level of market penetration can be achieved, who is going to achieve it and how?
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