After a high-profile loss, who speaks for the industry?

Post-Eli Lilly heist, questions remain about damage control
Thursday, April 22, 2010

YARMOUTH, Maine—The Eli Lilly drug warehouse robbery was the biggest drug heist in history, a loss of $75 million in prescription antidepressants and antipsychotics. Regardless of what happened—details, including how the thieves managed to circumvent the security system, are still being investigated—the real question remains, what can the industry learn from any loss, from possible negative media coverage, and who—if anyone—should become the face and voice of the industry to a public who may be asking, “What good is security when the bad guys get around it to the tune of $75 million?”

CSAA president Ed Bonifas said the industry should not try and manage public perception after a loss, but should, instead persevere and do what it can to learn from the facts. “I think that there is an expectation that the enemy in the case of security systems is not a predictable entity, and people spend money to mitigate their risk. But you can not eliminate risk when you’ve got a knowing, thinking enemy,” Bonifas said. “I don’t think the world is saying ‘alarm systems are no good, therefore we shouldn’t use them.’ I think we just need to keep doing what we do … I think the whole industry needs to study and learn from the facts when the real facts come out.”

ESA president Mike Miller thought the industry needed to stay involved in their communities, stay informed, and use this as an opportunity to learn. “So whose job is it to be the voice to the consumer and let them know that security is still valuable? That’s a valid question, especially because there will always be successful burglaries, due to many reasons—in-house, out-house, communications, design, whatever,” Miller said. “From a technical standpoint, every company that has experienced a break-in will need to go through their processes and procedures and see what else they need to add on to protect it, but that’s obviously after the fact. It certainly is an opportunity to talk to your own clients and say, ‘What do we need to do to add more protection to your home or business?’ Sometimes these kinds of experiences are also opportunities to review: ‘What do I need to improve?’”

Bonifas agreed it was perhaps time for an improvement, perhaps driven by the industry’s ultimate middle-men: the insurance companies. “In the end it is the insurance company’s job to assess what the risk is and how much protection there should be. They end up paying the bill for whatever is taken,” Bonifas said. “The insurance companies are the ultimate judges of how much protection a building should have. The owners always want to spend less, the installers always want to install more, and so where does one find balance? Balance should be found in the insurance company’s willingness to pay for the losses … I think that in recent years insurance companies have sort of lost the institutional knowledge of how to underwrite a building, and I think it’s time to get back to high-quality, UL systems when there’s high risk.”

Miller recommended dealers become familiar with the Rutgers School of Criminal Justice study done in cooperation with the Alarm Industry Research and Educational Foundation (AIREF) and the city of Newark, N.J. The study shows that security systems have a demonstrable effect on decreasing crime.

Miller said there are a couple problems with trying to provide a reassuring voice to the end user after any loss, however. One is that after an incident like the Eli Lilly heist—a case in which all the facts are not yet, and may never be, known—people are looking for someone to blame. “Even though the alarm system didn’t cause the loss, it’s better sometimes not saying anything,” Miller said, at least until all the facts are known. Another consideration is cost. “In terms of marketing ourselves, it would cost a mint to go out there and speak on our own behalf. The high-end companies that market a lot certainly help. On a different level, we have AICC, but that’s not really on a consumer level. You have SIAC that speaks for all of the associations to the municipalities and police and fire commissioners. But do we have somebody that’s our spokesman? No. Probably the closest thing we have is Merlin Guilbeau—he’s been on a TV a number of times. We’ve talked about it before, but it would just cost a huge amount of bucks.”