*Updated Jan. 2019: After initial publication and following a major acquisition in 2018, the company has grown to over $7 billion in revenue and more than 200,000 employees. Service areas increased to the U.K., and Central and Latin America.
Steve Jones, CEO at Allied Universal, has grown the security company from $12 million in revenue to over $5 billion, and acquired over 55 companies from 2011 to 2018. A true hiring and acquiring expert, he sat down with CEO.com to discuss how he’s worked tirelessly to build employee trust, retention, and a track for growth. He also champions the power of good ideas from sources inside and out, uses data to stay involved and aware as a CEO, and works to create a culture of intention and understanding across a company that currently has 160,000 employees and continues to grow.
Allied Universal has seen tremendous growth over the past few years. What do you see as opportunities for even more growth over the coming years?
Today, we’re at $5.6 billion, with about 160,000 employees. We have a five-year business plan, started last year, to increase the size of the business—our goal is to be a $10 billion business. The strategy is to grow organically, expanding with clients and organically by adding new service lines each year through our sales and business development teams. We also look to add more customers through additional strategic acquisitions—those could be in specific geographic markets, specific verticals, or even through highly creative opportunities that present themselves to us.
We want to be a one-stop shop, the total security solutions provider. That’s where we see an opportunity for growth, and also where I see the security industry as a whole heading. We believe our big opportunity is to combine security technology with security guard services—going to a customer and being able to help them manage their security spend against their security needs, from both a technology standpoint and a manned guarding standpoint.
The industry is changing dramatically. There are several large players—including us—and there are around 8,000 smaller security companies. The evolution I see in the industry is that combination of security, technology, and manned guarding. That complete security system is becoming more the norm.
Customers are looking for more innovative ways to cover their security needs, especially with cost of labor increasing. Unions are collectively bargaining agreements calling for pay increases, and minimum wage is going up.
Is the building on the tech side a pivot for Allied Universal? How do you go about turning the super tanker that is Allied Universal into a tech-focused company?
The good news is, we saw this coming years and years ago. We were way ahead of the curve. We currently have a smaller technology side to our business—it doesn’t have the national scale of our guarding company, but it’s one of the top 20 largest security systems in the country.
In 1999, the world saw the convergence of security cameras, card access systems, and guarding start to take place. And that really pushed forward after 9/11, when most companies around the country tried to figure out how they could harden their target and prevent potential terrorist activity from taking place in and around their property.
Technology has gotten easier, and cheaper. Now, everyone can go down to the hardware store, buy cameras, and there’s Ring, the doorbell camera system, that you can install in your house. We’ve come up with several SaaS-based products that offer our clients additional security services. We built our own security systems business where we could do design, integration, and service. Four years ago, we acquired a state-of-the-art remote video monitoring business that uses video analytics to manage and monitor video from a centralized location. We monitor video cameras for customers all over North America, and we can do it all around the world. If something transpires in customer video feeds, we notify our internal security or law enforcement.
Having hired such a large volume of people, what have you learned about hiring practices and retention that could be helpful to CEOs out there? What are some of the tenets you hold close?
We have to be highly proactive about how we target potential applicants. We look at it as, we’re really lucky to get the employees we do—the ones who are interested in coming to work for us. We’re in a highly transient industry, competing with all of the other entry-level jobs out there. We also compete with the fast food industry. So in many cases, our employees may not think of their positions (as security professionals/officers) as a career-driven opportunity. They think of it as a stepping stone to the next position. So we’ve had to do a ton of work in that respect. The unemployment rate is now under 4%, and the labor market is incredibly tight, so our battle currently is the battle for talent. We deal with it on a daily basis. People are our product. They’re the lifeblood of our organization.
We’ve had to re-approach how we hire people. We’ve had to go from being an organization with branch offices that take applications from walk-ins to creating a very robust recruiting capability. We created an external sales recruiting team who are going out and trying to sell applicants on why they should choose us to work for. We have two leaders for each half of the country who literally scour communities where we have branch offices to convey the message that Allied Universal is a great place to work. We tell them that it’s not just a transient job, and that 50% of our employees who start as security officers get promoted. We’ve got people who started out as security officers who are now in management positions—some of them, very senior management level positions.
When it comes to challenges, there do not seem to be enough qualified people around the country for us to hire, who can satisfy the requirements we have. As I talk to my peers in other industries who have a significant number of employees, they’re faced with similar challenges. Our employees have to pass a drug test, a background check, and in many cases, have to obtain a state license to operate as a security guard.
What are the things that work when you’re coming up with a sales pitch for these potential hires? You mentioned upward mobility. What else are they looking for—say, around flexibility or training?
People are looking for a clean, safe work environment that offers them activity. They want to be challenged, and sufficiently interested in what they’re doing for a job. They want flexibility, and to work for a company that has a good reputation and brand. We have thousands of jobs on different sites across the country that all have different responsibilities—some are highly physically active, others, you’ve got to have strong computer skills. Some are outdoors. In any case, employees want to be engaged in whatever way they can be.
We offer a host of perks and benefits to our employees—tuition reimbursement programs, child care reimbursement programs, retirement programs, and life insurance, beyond the standard medical, dental, and vision insurance that are more customary.
“People are our product. They’re the lifeblood of our organization.”
What do you see coming in the near future for the labor market that other leaders might not see yet? Anything else as far as a threat or opportunity that could be coming your way?
Allied Universal has partnered with a firm in Silicon Valley to create our own social media threat monitoring software-as-a-service so that we can help customers manage their brand, their reputation, and the safety of their employees. So if someone on social media is saying bad things about one of our customers, or trying to cause them harm, the next evolution of this SaaS is the ability to become predictive. To screen that information, take it to the customer, and then make decisions on what to do. If it’s a current employee causing trouble, that can be handled from an HR standpoint. If it’s a former employee, what happened? If it’s an upset customer, do we need to add additional security? Do we notify the police?
The evolution of this in the future is asking the question, “How do you use technology and the data that’s out there to analyze information, do threat analysis, and find predictive indicators on what we should do from a security standpoint?”
Speaking of data, what type of data do you need to do your job well? What are the main points that you look to for guidance?
This is where our relationship with Domo comes in. In the past, our business has been so labor-intensive. We’re scheduling 160,000 employees on a 24/7 scheduling basis. There are so many moving parts. 70% of all our cost is in labor alone. Being able to understand and know how we’re doing in managing that labor ahead of time allows us to predict where our potential earning streams are going to come in.
We can now bridge our payroll and scheduling systems pull out data on a daily basis—versus having to wait weeks to do so—to be able to know if someone can’t come in, if someone needs to work overtime, or if an account doesn’t have enough people. Having that information on my phone, desktop, or laptop at a moment’s notice on a day-to-day basis has truly changed our business. Our company-wide overview dashboard allows me to see how the company is doing overall. I can do a deep dive down to a regional level, and then communicate with regional presidents, who then do deep dives within their own regions.
How do you measure success for yourself as a CEO?
First and foremost, I need to know if the company is hitting its strategic objectives on a consistent and regular basis. But I also need to know what our customers are saying about our organization, and if we are developing opportunities for our people and future leaders.
Each year, we use an outside group to go and ask our customers about us, our industry, and our competitors. We try to get a full voice of the customer survey. We ask if we’re meeting our customers’ needs and wants from us and if we’re staying ahead of the game in what they’re looking for in a security services provider.
I think if we can do well at fulfilling those things, and drive the organization to the future that we’re trying to accomplish, I’ve accomplished my goal and the goals of my partners at Allied Universal.
“At the end of the day, an organization is only going to be as successful as its ability to get its employees to buy into what the organization wants to do. Allied Universal’s success is based on our ability to get our employees to believe in and execute our vision, day in and day out.”
When you have your vision in mind, how do you rally a team? What’s the most effective way you’ve found to get people behind the vision you’ve created?
You have to be bold and put it out in writing. And once it’s out in writing, you have to put it everywhere. Lay out your vision. We’ve laid out our vision throughout the organization—in branch offices on posters, on our internal company portals, on all of the communications put out. This way, it’s crystal clear what our vision and values are.
At the end of the day, an organization is only going to be as successful as its ability to get its employees to buy into what the organization wants to do. Allied Universal’s success is based on our ability to get our employees to believe in and execute our vision, day in and day out.
When we laid out our vision, I went around the country and visited all of our regional teams and branch teams. I spent 3-4 hours with each one of them, talking about the vision and why it’s important. Then, I’d hold a town hall and answer questions, to learn how employees felt about the vision and what was important to them. We filmed videos and sent out links to the videos to all employees so they could hear and feel what the vision would be like. I did the same trip a year later, and I’ll be doing the same thing this year—going to sit down with employees to make sure everyone understands where we are as an organization, how passionate we are about our vision, and making sure they buy in.
It’s not just messaging we disseminate on a poster, in a newsletter, or via an email. It’s all of those things plus broadening communication on a more personal level.
As you continue to grow, is it promoting leaders within the organization, or bringing them in from outside, or a mixture? What is better for the organization?
First and foremost we look to see if there is someone in the organization that can fill the position. We spend a lot of time, money, and energy in developing programs that will develop leaders we need for the organization going forward. We have a stated goal to double the size of the company, so that means the number of leaders we’ll need will double as well.
That said, we don’t fully possess the capability to fill all those positions from internally. In some cases, we do have to go outside. That can be good for certain positions, when you’re looking for a new perspective, a new capability, or to add something new to your culture. It’s a mixture.
If someone walks into your office with a new idea, how do you evaluate where to invest the organizations time and resources?
The company looks to invest the most time and resources in the ideas and solutions that meet evolving customer needs or challenges. That said, we’re very open-minded. As we listen to customers, employees, and we get feedback, there’s really no dumb idea. It doesn’t hurt to mention it, whatever it is. And the worst thing we can say is, “I’m not sure.” Having a conversation is always a good thing. There’s always a possibility that you’re going to find a gem that you can run with. I think our group feels empowered to share things we could do differently. To let someone brainstorm something costs you nothing.
I began my career in the industrial uniform industry. I was promoted quickly, and was running a sales region for one of the largest companies in that industry. There was a discussion around what other services we could start offering, and how we could do things differently. I literally said, “Why don’t we start renting shorts?” We were in Southern California, and our customers were asking for shorts all the time. No one supplied shorts. The person leading the discussion said, in front of the entire room, “That’s the dumbest idea I’ve ever heard.” And within two years, shorts were added to the offering. Our competitors did it first, then we did.
You’ve got to embrace ideas. And ideas today are probably going to leverage some sort of technology. You may hear 10 ideas that aren’t going to work, but there might be one that’s great. Our GSOC as a Service that features social media-based platforms came from an idea that was pitched to me by an internal leader and external party. Remote video monitoring was a new idea that most of our competitors passed on.
Who are some entrepreneurs you admire? Who should people be paying attention to?
It’s hard not to admire Jeff Bezos at Amazon. He continually reinvents the landscape and changes the game. You never know where he’s going next, and he clearly has this unbelievable vision. There’s also Jamie Dimon at JPMorgan. What I like about him is his passion for creating one of the strongest financial institutions in the world, if not the strongest. He’s transparent and straightforward in sharing what they’re going to do. He’s one of those celebrity CEOs but still makes time to go to events, get around the country, and engage in conversations. He’s trying to bring technology to a very traditional business model.