Lessons from the recession
SCOTTSDALE, Ariz.—The economic recession took a toll on Safeguard Security, a family-owned, 50-year-old security company based here. Its annual revenues dropped from $34 million in 2008 to $29 million in 2010, company president John Jennings said.
However, he said he expects Safeguard’s revenues to rebound to $30 million by the end of this year, and said the downturn provided important lessons for his company.
“It’s been the hardest couple of years since I’ve been in business, but it’s been the most energizing, because we looked at where we can go,” Jennings said.
Jennings made those comments during an educational session he led at the Honeywell First Alert Professional Convention 2011, held here Nov. 10-12. Jennings’ session was titled “Good to Great! Prepare for Company Growth!”
During the session, Jennings peppered his talk with examples from Safeguard’s experience. For example, he said that in the summer of 2008, just as the recession was hitting, “I’m building a brand-new building. … I’m investing $3.5-to-$4 million in this new building at the worst possible time and I hadn’t even sold the old place.”
It was a sobering thought then, but Jennings said he now realizes that if he hadn’t taken advantage of building the company’s new facility at $46 per square foot when the price would subsequently climb to $70 per square foot, “I would not be where I am today.”
“The great companies survive and flourish in bad times,” he told a room packed with security company owners and other professionals.
Jennings told the group he applies the principles of a book by author Jim Collins, “Good to Great,” to his own company and urged them to do the same.
But he warned them: “Good-to-great transformations never happen in one fell swoop, no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment.”
Instead, he said, company leaders should “confront the brutal facts” and figure out what their company is best at, what drives its economic engine and what they’re passionate about. “Where they intersect is where you want to be,” Jennings said.
He said his company also started doing such things as “asking more questions than giving answers. … We asked staff, ‘What do you think?’ It improved our staff immensely. … We started to build trust. You can’t have a company without trust.”
And he said he came up with the idea last year to give customers a $50 loyalty credit for every year they’ve been with his company. “They’re telling their friends,” Jennings said.
He said such measures have helped Safeguard weather the bad economy, but added that the downturn isn’t over yet. In this “new economy,” he said, “flat is the new growth.”