ASIS 2016: P1 and ADT Exhibiting Together in Perfect Harmony

ORLANDO, Fla. – Security systems installation and monitoring firm Protection 1 unveiled its “The Power to Do More for You” campaign at the show, its first exhibiting appearance with ADT since the announcement of the leading providers’ integration in May. P1 highlighted its infrastructure and products, including the launch of a cybersecurity offering, and demonstrated its eSuite 2.0 account management tools, network managed services, and remote video services.

SSI huddled with Industry Hall of Famer and P1/ADT CEO Tim Whall, P1 Chief Revenue Officer Jamie Haenggi and P1 Vice President Integrated Solutions Ken Schafenberg to get the scoop on the integration and updates on the business in general.

So what’s going on with the big transition and integration of the businesses?
Jamie Haenggi: As Tim [Whall] likes to say, “Bringing them together is going to take a minute.” How we’re really seeing things is you’ve got a great service organization, Protection 1, that we built up really focused on commercial. Six years ago, Protection 1 was primarily a residential business, and now it’s really grown substantially in the commercial and national account space. ADT’s origins are in the commercial space, but it’s grown into this national and mass residential organization. The opportunity to bring the footprint of the two organizations together and their strengths, we really consider it a building or blending of the best of both worlds together.

What has been the biggest challenge, and where are you in the process of really being one?
Haenggi: We’ve got a ways to go. I think the first 90 days has been Tim getting the executive team in place, looking at the organization, how he’ll structure the organization. We did a shift on the ADT side, moving away from business units to more functional areas. And now all of his teams are putting their teams in place. So really the first 90-120 days has been around organizational structure and alignment. Don Young on the IT side has been working fast and furiously to really align what systems are on either side of the house, and how we align those systems. We introduced a new COO role to the organization, and a new member to Tim’s executive team, Jim DeVries, so he’s also been really focused on the customer delivery. Now we call it a “race of two worlds.” Don is on the race to see how we bring two infrastructures together from an IT perspective, and Jim and the rest of the organization is on a race to see how we ensure we elevate the customer service delivery platform to be what we call P1 standard.

Things like answering our calls in a couple of rings, with a live person, without the transfer. How do we ensure same-day delivery? All the mechanisms that we feel are foundational to the customer experience and that we believe drove the significant attrition improvements at Protection 1 is what we want to build and deliver on the Protection 1 side. Then as we bring those two organizations together, we’ll start really melding the customer experience. Protection 1 will still stay the lead brand on our commercial and national account side. So our national account customers will continue to see Protection 1. I think it’s pretty clear at the booth this year it’s a Protection 1 brand. But then we’ll be merging and integrating with the footprint of ADT.

The ASG Security component; where did that go?
Haenggi: We really folded ASG into P1, moved it all the Protection 1 platforms, all the monitoring functions are in the Protection 1 monitoring functions. Those branches have been operating for the past year as Protection 1 branches. ASG has been fully assimilated into the Protection 1 platform.

Looking at the commercial systems business, how has the merger affected that?
Ken Schafenberg: Essentially not at all at this stage. Our managed services division and our integrated systems group, we handle commercial and enterprise customers, which ADT has not been in the commercial small business for a little while, so we’re mainly taking care of business as normal with our customers. We don’t expect that the ADT integration and merger will affect us. At some point, we’re looking forward to having an additional geographic footprint of the branches, so that we can expand our capabilities geographically.
Haenggi: One of the interesting things that Ken and his group does and is getting so much more attention today in the space is cyber threats and attacks, and how you put the infrastructure in place to ensure you’re protecting that network. There are many big-profile customers that that organization goes in and really deploys the network to ensure that the managed services is fully protected from outside hacks. You need to go back a couple of years to Target’s hack being through the HVAC system, so understanding we’re in a new world and your security provider has to be able to understand new threats outside of physical and electronic security.

[To Tim Whall who just joined the meeting]We’re talking about the elephant in the room, integration, the new face in the market.
Tim Whall: The base thing is you’ve got to get the team all squared away. See if the strategy is different. How do we see it five years from now versus where it’s been going? It’s so big. There are so many ramifications in all the decisions. You’ve really got to be able to think it through. With ADT there’s so many little groups. Custom Homes gets these leads, but how do we define what a custom home is? What’s the ramifications of what that does to leads to the reps?

Then of course, the integration, those are very stressful. How do you put two things together into one? Then the IT systems, I don’t care what company you buy, the IT systems are always a point of contention no matter where you are. We need it to do this, this, and this, and how reliable is it? How robust is it? What are the capabilities we have on it? Then how are you going to impact the customers? You can’t just rush into this thing. It can get real cloudy. You can see we’ve worked hard at this show. A lot of these accounts were some version of Tyco or ADT in the past that are now P1 buyers. What does that mean? You’ve got to spend more time and measure the place to cut once to make sure you really do understand it, and pick where you’re going. Eventually, we’ll get through the integration piece and be one footprint going forward.

Now it’s just getting it out into the market and letting the market tell us how they’re reacting to the offering. There’s no shortage of things to do, people to meet, and making sure you understand all what everybody does in all these departments and how their jobs impact everybody else. We could just really be known as a perfect provider with this brand. People are looking at us. What are you doing and how are you going to market? Kind of sit off to the side and do what you do. People are very interested in what ADT does. The positive of that is everybody will take a meeting with us. There aren’t any security people who won’t take a meeting with ADT. You don’t have to give them 15 minutes of why. That’s very positive. The flipside of that is everybody wants to meet with you. OK, we only have X amount of meetings we can do. The industry
is moving quick, got a lot of new entrants and competition, so we’ve got to stay on top of it. But I am lucky to have my job and feel blessed to have the challenge.

Did you ever envision this level of integration would happen; that our industry would see these brands coming together as such a huge force in the market?
Whall: Could I see ADT buying P1? Sure. ADT is the behemoth. I could have seen that, but did I see this one going the other way? No. No, I did not see that. All you have to do is look around your family and you get an affirmation. Talk to your brothers. Seriously, you’re running that, bro? You’re kidding me? Who thought of that? No, I hadn’t thought of it. Certainly ADT and P1 coming together made a lot of sense, again, getting back to the old ADT, which was full service. I think that’s a natural fit. I think it’s different when you decide to bring in a different management team. It’s no different than when Security Link years ago bought National Guardian. And the folks at National Guardian were like what? Security Link, a tiny, small, regional player with seven offices and National Guardian was 10 times the size, and a nationwide outfit. Culturally that takes a minute to get used to.

What’s nice about ADT and P1 is such a heavy focus on the commercial security space and the national buyers, so it seems more additive as opposed to just straight competition, you know, between and the P1 and ADT brands. I think we do get the benefit of that, and it seems more complementary.
Haenggi: One of the things that’s been refreshing is Tim has been on this journey across the country, hitting a lot of the town hall meetings, bringing in large branches and introducing some of the vision of where he’s headed. I think Tim would say what you see is very similar people you see at Protection 1. They care about the customer. They want to deliver a great experience. When you have a CEO up there who can talk about products and technologies being installed with the technicians, when you have a technician coming up saying it’s an honor to work for you, sir, the frontline people can relate because of his background and experience, and the fact that he cares about the customer. That ability to rally is what I think has been so successful. At Protection 1 as an organization we rallied around one thing: the customer. It breaks down silos among organizations. If we’re all just fighting about taking care of the customer, that’s a good fight to have.

From a management standpoint, it aligns us very strongly. There’s no fiefdoms, no kingdoms,  we have a mission, a vision, and we’re headed to define ourselves around delivering something special to our customers. Whether that is our national account customer, all the way down to a residential customer, we want to be defined in the category, and we want to define the category as excellent customer service.

Is the market going to see much new branding in terms of any of the vehicles or things in the field?
Haenggi: As we said, the Protection 1 brand will stay in market for the foreseeable future, whether that’s 18, 24 or 36 months, we’ll see both brands out there. You’ll see things like at ASIS this year, where we’ve got Protection 1 and ADT right next to it; you’ll start seeing that merge out there. As we start consolidating some of the footprints and putting ADT and Protection 1 in branches together, you’ll see more of that until we really integrate. There will be some cross-branding going on. But ADT will be the lead brand in the marketplace when you think residential and small business, and Protection 1 will continue to be the lead brand in the national account, commercial side.

You said there wasn’t a tremendous amount of repetition between the two businesses. Was there much streamlining done?
Whall: It’s mostly if you’re looking at three facets of business, you’ve got the corporate office, call centers and the branch offices. Corporate needs to serve the two others. The branch needs to feel confidence in the call center. The center needs to feel confidence in the branch. If you create that, where corporate is seen as the server and we’re here to assist both, as opposed to tell you what to do, you can create a bit of a cultural energy inside the group. In terms of the call centers, they’re also big. The idea that you could bring the two together, that can’t happen for us. Every call center we have would like to have more people to do the job they do. So it’s not really anything there. Corporate will be the biggest difference as you look at two presidents, two CFOs, two COOs, all those positions, so it’s probably the most stressful.

When I go out to the centers and tell them nobody here gets to act like you’re stressed on this. P1 centers have too much work. You [ADT] have too much work. Nobody’s going anywhere. We have more work and we just need to do it better. Here’s how. You don’t get to say I’m stressed because of the merger. It can’t happen. I go to an ADT branch and say if you’re an ADT branch that doesn’t have a neighboring P1 branch you don’t get to say you’re stressed about this. There’s no stress for you. You just are the branch. Now, for you branches that are in the same neighborhood, you’re having stress. All I ask is try not to worry about it until there’s something to worry about. That’s easier to say than do. But here’s something I’ll tell you, if you’re someone who can produce in any of those jobs, you will be offered another job. Will it be the one you want? I can’t tell you that. Will we ask you to move or take a lesser role? I can’t tell you, but again, if you’ve been doing a great job, you’re going to be offered a job.

That’s the reality of bringing these two companies together. You have to have a lot of conversations with people about here’s what we can do for you. Here’s what it will look like. We’re going to treat you fairly and tell them their options. You build the trust with the people; you can kind of earn the right to have those conversations if honesty and transparency is part of it. Otherwise it’s kind of like well, I heard what he said, but it sounds like corporate speak to me, because you haven’t developed that trust. You don’t have any time in the relationship. You haven’t invested.

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