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Business Observer Friday, May 3, 2013 5 years ago

The A Team

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A security firm with fast-growth ambitions has refined a detailed system to help solve one of a business owner's biggest dilemmas: How to recruit and retain top employees.
by: Mark Gordon Managing Editor

The business lesson to always keep an open mind about where the next client will come from is an anthem for Steve Paley's entrepreneurial approach.

One example stems from a few years ago, when Paley, who founded a commercial and residential security firm in 2007, was selected for a jury in a murder trial. Taking in the trial in a Sarasota County courtroom, Paley noticed the prosecutors used sub-par video technology to display evidence.

So after the trial Paley spoke with both the prosecutors and defense attorneys about his company, Sarasota-based Rapid Security Solutions. His firm didn't do video analysis work like that at the time. But he told both attorneys that it could, and would, if it came ever came up. A short time later the state attorney's office, working a case in Sarasota of two murdered British tourists, asked Paley to examine a particular part of video evidence. That set in motion the formation of a side business, Trial Assist, to work with those unique clients.

Paley's mind is likewise wide open about the possibilities of Rapid Security Solutions. He's already shifted the business model of the firm once, soon after he founded it, from commercial security to a mix of homes and businesses. The company, which offers everything from video surveillance to home alarm systems, is currently split about 55% commercial, and 45% residential.

Now Paley aims to shift into fast-growth mode. He seeks to turn RSS into a statewide, and even Southeast, security and property protection conglomerate. The 30-employee firm has clients in Hillsborough, Lee, Manatee and Sarasota counties and the surrounding areas. It also has customers in Orlando and Palm Beach County.

“We are looking to further develop those markets and then expand in the state,” Paley says. “We want to own Florida.”

It's getting there. Annual revenues increased 55% in 2012, from $783,060 in 2011 to $1.2 million last year. Security Dealer & Integrator magazine, a trade publication, ranked the firm 23rd nationwide in its 2012 Fast 50 list of the industry's fastest-growing companies.

Paley projects even more sales growth in 2013, to at least $4 million. About half of that will come from two 2012 acquisitions: One of those is a Cape Coral-based residential security firm. The other is a gated-community security business in Boynton Beach.

Rapid Security Solutions, says Paley, also wants to raise up to $10 million in the short-term to fund more acquisitions. The firm will work with debt and/or equity partners, Paley says, to reach its next grand goal: to triple the size of the business, to at least $12 million in annual sales and 90 employees, within five years.

Behavioral hiring
The business model at RSS, says Paley, is people dependent, in that the company sells customer service and industry expertise, not proprietary products. “We get to understand what the client's pain point is and we build a system around it,” Paley says. “Anyone can get the equipment. We want to compete on the basis of our team.”

Paley is confident in that team. Still, he admits getting the staff pitch-perfect, what he calls his A-team, is his biggest keep-him-up-at-night worry about the future of RSS. “It's all about talent management,” says Paley. “We absolutely can't afford to make a mistake in hiring.”

The avoidance mistake method at RSS is to over-prepare. It starts with a phone interview, usually a 10-15 minute call to get a vibe about the candidate. If he or she isn't the type of person Paley or another executive could grab a beer with, the candidate is out.

The next step is a comprehensive online behavioral assessment test provided by the Devine Group, a Cincinnati-based human resources firm. The test looks at 33 personal behavior traits, and while it's not the only evaluation tool RSS uses, it's a key contributor in hiring. If the candidate passes that test, he or she will next face a few in-person interviews from the firm's top managers.

The interview and hiring process at RSS can take up to six months, says Paley. New hires, once they start, are then paired with mentors. All told, the process isn't quick, or cheap. But Paley says it's a worthwhile expense. “We want to find, get and keep 'A' players,” says Paley. “Not everyone can work at RSS.”

Once the employees get to work at RSS, the next step is to keep them, and help them get better. On the improvement side, Paley has invested about $50,000 over the past year on a Sandler Training sales advancement program. The Sandler program focuses on repetition of the techniques and long-term consulting. “It has fundamentally changed the way we sell,” says Paley, “and it has fundamentally changed the way we do business.”

'Killing it'
Paley has changed his business mindset several times over the past 30 years. An accountant, he began his career in his native Cleveland, when he worked for KPMG. He was assigned to companies in need of a turnaround, or were underperforming, and he relished the challenge. “I became very interested in how a business is run,” says Paley, “and less interested in the accounting side.”

Paley later ran a marine products website, and a few other companies, until he and business partner Shannon Logsdon, an RSS executive, came up with the idea for the security business. Logsdon previously worked for Envera, a security firm that focuses on high-tech video-aided protection of gated communities and homeowners associations. Envera was founded in Sarasota and has since relocated its corporate office to Boca Raton.

Envera founder Tom Swain says the firm is on a major growth spurt, just like RSS. It has 75 employees, up from five when it was founded in 2007, and there are currently 10 open positions. Sales at the firm have doubled over the past year, says Swain, though he declines to elaborate on specific figures. Verifier Capital, a Boca Raton-based equity firm that invests in security and burglar alarm companies, has an ownership stake in Envera, which stands for 'enter with verification.'

“We are killing it,” says Swain. “We are doing stuff a (human) gate guarding company just can't provide.”

The growth Swain and Paley see in the security and protection industry mirrors two national trends: One is a move to use more technology, like mobile and tablet apps to monitor what's happening at a home or business. The clarity and depth of security cameras has also improved significantly in recent years.

The second trend is more entities, from businesses to schools to hospitals, have invested in first-time or upgraded security. Paley says violent incidents, like the Connecticut school shooting or the Boston Marathon bombings, make security, especially with video, a bigger priority for many executives and officials.

Indeed, Global Industry Analysts, a market research firm, says the alarm monitoring services industry will surpass $43.4 billion worldwide by 2015 — partially from heightened fears of terrorism. That's up from around $20 billion in 2010. A separate report, from HighBeam Business, projects the number of households in the U.S. that use professional alarm systems could rise from 18% in 2010 to 30% by 2020.

Paley, however, says he has another source to detect the growth pattern: That would be the rising number of hedge funds and private equity companies that want to get into the industry. Even telecommunication and cable companies are pitching security services to current customers. But Paley says competition isn't a big worry.

“Our talent allows us to have a competitive advantage,” says Paley. “We are competitive because our people are better than their people.”

'Gut check'
Rapid Security Solutions President and CEO Steve Paley is an avid reader of business books and magazines.

But sometimes Paley skips the new stuff and heads for a classic: “Marketing Myopia.”

Written in 1960 by Harvard business school economist and professor Theodore Levitt, the article is considered a seminal work on marketing and long-term business strategy.

The gist: Companies need to serve customers' needs, not merely sell stuff or services. This way the business will grow, regardless of the industry it's in. Railroad executives, for example, should have focused on being in the transportation industry, not just train tracks and rail cars. But industry myopia, Levitt wrote, quickened its decline.

Paley wants to avoid that problem at Sarasota-based Rapid Security Solutions. So, in following Levitt, he tells his staff, and he works on the belief, that RSS is in the “piece-of-mind business.” Security systems are just what it sells. “From time to time I go back and reread that article to make sure I'm running my business properly,” says Paley. “I use it as a guide and a gut check.”

Detail Oriented
The goofy interview question has become a hiring process staple in recent years, though in some cases the queries serve a purpose past pure wackiness.

Google, for example, has purportedly asked candidates this hypothetical: A man pushed his car to a hotel and lost his fortune. What happened? (Answer: He played Monopoly.) That's one of several Google questions that venture galaxies away from the classic “where do you see yourself in five years?”

Steve Paley, president and CEO of Sarasota-based Rapid Security Solutions, doesn't necessarily do goofy, but he does ask potential technicians a tricky one. That question: “When you walk into your kitchen what's the first thing you notice?”

Paley, who has made the firm's hiring process a cornerstone of its growth strategy, seeks technicians with the ability to quickly focus on something out of place. That's the genesis of that inquiry.

“Attention to detail is very important,” at RSS Paley says. “Not everyone has that skill, so the answers can be very revealing.”

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