On Guard

SECURITY MANAGEMENT TODAY (SMT): Tony, you've established an excellent reputation in the industry not only as a managing director of one of the major security companies, but also in your capacity as chairman of the British Security Industry Association's (BSIA) Manned Services Section Committee. It can't have been easy to complete those missions in today's marketplace, so how have you been successful?
Tony O'Neill (TN): I can't say that it has been easy, Terry, but I feel that my success so far as Initial's concerned can be put down to four main reasons.

First, I have a real passion for people and their development in the working environment. I believe that Initial Security now employs some of the best officers and managers in the industry, having invested heavily in both recruitment and staff development.

Our managers must understand and demonstrate good man management, as their officers are the company's most valuable resource. They must also understand the critical nature of customer relationship management, specifically two-way communication. In addition, all officers have to be trained to meet their objectives which, following stringent introduction, are focused on meeting the needs of the customer.

Second, and this is borne out of a fundamental belief of mine, you must 'identify the need to do, and then excel at it'. In my business career I have always sought to identify the 'need to do' versus the 'nice to do'. Often, attention and investment can be diverted to pleasant things that are of little real benefit.

Similarly, in sales presentations to potential customers, they want to know that we understand their needs and problems, and that we can provide the solutions. They also want to know that we can look to the future, adapting and changing our service delivery as necessary. Many industry presentations fail to answer these most fundamental requirements.

Last, but not least, never accept the norm. Security company directors – indeed security practitioners of all kinds – should seek out new ways of doing things. They should always be ready to innovate. These are, and will remain, the keys to current and future success.

SMT: With the advent of the Security Industry Authority (SIA), many people see this as a last chance opportunity for the contract manned guarding sector to give itself a good name. Do you agree?
TN: In an industry sense, yes I do. However, I'd also add that there are a good many mixed perceptions regarding manned security. We all know of good and bad examples of the discipline. There are lots more examples of well-managed contracts than bad, but unfortunately the bad experiences are often remembered for a long time and can really label an industry.

The security sector has not been very good at communicating its commitment to professionalism. I very much hope that the SIA will enable us all to communicate more effectively, and to get the right message across to customers and the public at large.

Industry credibility is absolutely fundamental to our future, and the SIA's strategy will help to achieve this. If we're to meet the future demands of customers, and move successfully into the provision of softer police services, then we need to recruit, train and retain the high achievers.

SMT: Initial Security often goes down the acquisition trail. When buying-out another company, what qualities are you looking out for?
TN: That's simple. Strategic value, the quality of the company's portfolio and management team, its cultural fit with ourselves and, of course, its value.

SMT: As an industry, we have been slow in attempting to embrace the terms and conditions of the Working Time Directive and yet, arguably, it would enhance our reputation almost overnight. Why don't we force clients down this route much more than we already appear to do so?
TN: Our industry has been accused of indulging in Victorian practices. There's a culture of long hours and low wage rates. However, many in the industry do attempt to sell on improved shift patterns and competitive wages. There are equally many – albeit not enough – customers who appreciate the benefits of a well-trained core of staff, low officer turnover and therefore quality and consistency in their security. Not surprisingly, these are the same customers who offer realistic hours and wages.

Unfortunately, there are still potential clients out there who seek to drive prices down and, indeed, suppliers who offer those prices. When you consider that labour costs count for some 75-80% of the value of a contract then it comes as no surprise to learn that wages are often cut in order to secure a deal. Such a strategy just isn't sustainable.

I'll quote you an example of a recent loss. We established that our overhead and profit contribution was similar to that of our competitor. However, they won the business on the basis that they depressed wages over the life of what has to be a three-year contract. Where is the sustainability in that strategy? You could argue that we might have adopted the same stance, but I genuinely believe that transparency is critical to longevity.

We made it clear that the cost of the contract would have to increase to accommodate expected wage rises, and the client acknowledged that this was both sound and sensible. Yet they still opted for the lowest price. No doubt in 12 to 18 months' time when labour churns, they'll be seeking increases which will either be met – out of embarrassment – by their customer or the client will, more likely, cry "poor service" and go out to tender again. Where's the consistency in their security?

With the advent of regulation and licensing there's the potential for a recruitment crisis, with the convergence of a number of market-related issues. First, the regulated industry knowledge requirement – subject to its confirmation by the SIA – may not be attainable by all of those currently employed in the industry. A feature of low pay, perhaps? Second, communication and literary skills will exclude some individuals, given that competency will also be a feature of licensing. Third, you need to consider the intended Criminal Records Bureau checks, which will no doubt dismiss some individuals from employment due to their inappropriate criminal history.

Last of all is the possible reduction in number of hours for the working week. If thoughtfully applied, this would be both supported and welcomed by many. Neither the industry nor its customer base can afford to ignore the importance that wages and hours will have in the future, reflecting higher standards of security delivered by a better calibre and better trained personnel.

When you consider that labour costs count for some 75-80% of the value of a contract then it comes as no surprise to learn that wages are often cut in order to secure a deal. Such a strategy just isn’t sustainable

I believe that the future will prove to be about the quality of service delivered, the quality of personnel employed and the capacity to innovate. Security will no longer be about lowest price. Instead, the focus will be directed at best value.

SMT: What are your own views on vetting? Will it be necessary to operate to BS 7858 after licensing's well and truly in place?
TN: Vetting is – and will remain – fundamental after SIA licensing is in place. Licensing will not validate work history, attitudes or commitment, all of which are extremely important and key to the recruitment of the right calibre and quality of personnel.

SMT: What form do you think the SIA's Inspectorate will take? And what do you feel should happen to those contractors who fail such inspections?
TN: That's the sort of question you should really be asking the SIA. However, I hope that Molly Meacher and John Saunders' organisation will prove robust enough to effectively police our industry in a bid to attain the higher standards we all want to see realised.

I suggest an escalating reaction to contractors who fail inspections. For minor breaches, perhaps a 'correction' notice within a specific timeframe is warranted. For repeated or fundamental failures then perhaps a fine or even the withdrawal of an operating licence should perhaps be the way forward.

If you're talking about outright dishonesty or fraud then I'd have no hesitation. Revoke the licence, or remove those responsible for such misdemeanours immediately.

SMT: Can you give us some ideas which would help us to reduce the industry's appalling rate of staff churn, Tony?
TN: Security operatives need meaningful careers. They also need rewards commensurate with prevailing market conditions, and require reasonable-to-good working conditions and efficient management. Management that's fair, listens to their concerns and is responsive to them.

SMT: You've been with Initial quite a long time now, Tony. You're the Sir Alex Ferguson of the manned guarding industry. Are you still as enthusiastic as ever, or gradually being worn down?
TN: I haven't been in this job anywhere near as long as Sir Alex has been in his, but in our industry it certainly feels like it! I don't believe that I have either the appearance or temperament of Sir Alex, although I wouldn't say no to his income!

Hopefully, I do share Sir Alex's passion and desire to win. With my family originating from the north but growing up in the south, I would support another team with similar kit! My enthusiasm for the security market remains undimmed and, given that we're about to enter a period of change driven by economics and regulation that is unprecedented, at least in the UK, then I find this a most stimulating prospect.

Change will be challenging for many. If it's correctly managed by all parties involved in the process – not least the suppliers, the BSIA, SITO and the SIA – then we have a very real opportunity to create a vigorous, worthwhile and stimulating industry of attraction to those seeking tangible career opportunities.

SMT: When the SIA's fully up-to-speed with security officer licensing, will there be a need for the BSIA to operate a Manned Services Section Committee?
TN: Yes. Very much so. The SIA and the BSIA have two very different but nonetheless important roles to play. The SIA is of course tasked with industry regulation, of which much has been written. In the meantime, the BSIA will continue to need to represent its members and provide a voice for the industry.

If the Manned Services Section Committee didn't exist, who would provide a co-ordinated response and view to the BSIA Executive with regard to the Working Time Directive, for example, or on the potential effects of legislation still to come from Europe? The focus of the Committee might well change, but it will continue to be of great value.

The Manned Services Section is an integral component of the BSIA. I believe that the SIA will welcome a well co-ordinated and professional representative body to reflect upon industry issues and make representation. Indeed, the SIA has already indicated this both at its launch conference in April and in the intervening time between now and then.

SMT: Which security companies have caught your eye in the private sector while you have been at the helm with Initial?
TN: In the early stages of my entry into the world of security, there were a number of companies that impressed me as each had a particular aspect (or aspects) worthy of emulation. You could call it 'competitor analysis' if you like.

As we've raised our game at Initial these companies have diminished in number. I'd still feel uncomfortable about naming them, though, so I think it's time for some discretion.

SMT: Do you think that contract manned guarding will be the poor relation in the 'extended police family', particularly in light of all these other groups – such as Police Community Support Officers – being established?
TN: I'd hope not. However, I do recognise that, in order to gain acceptance into the 'extended police family', we as an industry must raise our own game. Licensing and regulation will certainly help that process.