How Advanced Gets Ahead (SSI Executive Interview)
To swipe Disneyland's slogan, when it comes to security integration North Little Rock, Ark.-based Advanced Cabling Systems just may be the happiest place on Earth. Placing a familial atmosphere above all else lies at the heart of a business that has enjoyed double-digit growth since its inception 20 years ago. See how ACS balances amusement and awesomeness. By Scott Goldfine
Next time you're at your place of work take a moment to cruise around the offices and common areas, and ask yourself did you encounter some of your best friends? Are you eager to take on each business day because it means you will be spending collaborative time with associates who you have a keen kinship? Do your professional and social interactions and activities often involve the same people? Most employees dream of such an environment and while companies often preach teamwork and camaraderie, sledom does it rise above superficiality - and rarely does it exist organically to define a corporate culture. Achieving that elusive characteristic necessitates advanced leadership.
"Advanced only hires people who we would want to hang out with after 5 p.m. We are a true family in the sense that we are more than coworkers, we are friends," says Michael Kennedy, president of Advanced Cabling Systems (ACS). "From the day Advanced was established, the mindset was to work hard and have fun doing so. We believe we don't have to be your stereotypical corporate type company to be successful. Employees feel a sense of home and connection to their coworkers because we show support in both their personal and professional lives."
How well is that approach working out for the North Little Rock, Ark.-based systems integrator? As the firm celebrates its 20th year in 2017, it also marks a history of 22% average growth during that span — including the recession. Since the turn of this decade alone, helped along by four modest acquisitions, Advanced Cabling has more than doubled its revenues to a projected $31 million for 2017.
Including its headquarters, ACS’ 178-strong staff supports the needs of 6,000 commercial customers through five Mid-South locations, with customers spanning 20 states. Initially founded as an offshoot for an electrical contractor, the company had a mere three employees and $200,000 annual revenues. The business offers access control, A/V, fire, infant protection, intrusion, paging/intercom, structured cabling and video surveillance systems to business, education, gaming, government, healthcare and military clientele.
To get the inside line on Advanced’s integration celebration, Security Sales & Integration joined in on the party with Kennedy and ACS Senior Vice President David Roberts, both of whom have been with the integrator since 1999. Among
other things, they explain why they don’t believe in sales commissions.
Advanced Cabling had steady growth around 22% annually, even during the recession. How did the business maintain its success during that daunting time?
MICHEAL KENNEDY: It’s a combination of several things. First and foremost, when we saw it coming, we gathered our group together. We have a pretty lean and core group of guys. We said we’re not taking the recession as an excuse. We’re going to put our head down and work harder, coupled with a bit smarter. And it really worked out. We were blessed to be able to diversify the business a bit, not only with different vertical markets, but also into some adjacent
technologies. So if maybe the structured cabling side of the house was down a bit during that time, we really ramped up the audio/video side of our house.
We also found in our markets, which is the central U.S. and especially Arkansas and Oklahoma, even though from a recession standpoint a lot of businesses were downsizing, they were actually ramping up security because maybe they had less people working and so they had a bigger building that was less populated. There were some concerns and fears among our customers about safety for their employees. Even though their spend was less from a human capital side, they were actually spending more money on security and access control during that downturn.
Surely Advanced Cabling streamlined some things, improved efficiencies, maybe implemented new tools, practices or software. Can you expand on how the business evolved?
KENNEDY: As I touched on, when a lot of companies were going out of business or laying off key employees we took a different approach and said this is a perfect time for us to gain market share. Instead of cutting those ancillary services
or corporate overhead kind of positions, we invested. We created an engineering department. We ramped up the CAD department. As other companies were getting leaner, cutting corners and trying to hold onto their business or maintain their business, we flipped it. That was a huge turning point in our business.
DAVID ROBERTS: We have always operated, from a corporate overhead standpoint, pretty leanly in the big picture. We have far less salaried and overhead employees than we do field technicians, and that’s always been a big driver for us. Other companies staff up when they have big jobs, lay people off, then rehire them, and operate like your standard construction-type company. We’ve always vowed not to do that. We make sure we have plenty of work for all our people and that it is somewhere they can come and make a career.
That was really put to the test in the time of the recession when everybody kind of went into protection mode and started putting up the fence to protect what they had, and getting real lean. But we approached it that if we could find the right people we would figure out how to keep them, and we have. Not only have we kept them, we continue to grow with them.
With that, we did have to get smarter and more efficient with simple things like parking our company vehicles for a little while during that time because gas prices were skyrocketing. So it was kind of a counterbalance. At the same time, we invested in technology and made sure every one of our employees had smartphones and tablets so they could be more efficient, so when they were in their vehicles and on customer sites, we could get them the information they needed to go to the next site without having to come back to the office. We spent a considerable amount of money investing in those things.
We’re about to deploy an overall software package for our entire organization to continue to streamline not only our ticket routing and dispatch software but job costing, project management software, accounting, just everything under one software package. We’ve been vetting that since last year to be sure we make the right decision. We’re super excited about it.
I truly believe we’re the very best at what we do and the very best technology integrator in our region. But we continue to try to find ways to improve instead of just resting at the top and saying we made it, and now we can sit up here and just enjoy it. We continue to look for ways to improve.
This year is looking very nice for your business, with quoting activity up 25%. To what do you attribute that?
KENNEDY: It’s a combination of things with maybe some political reasons in play too. A lot of companies are not only retrofitting their existing facilities but we’ve also seen a lot of new growth in new construction, much more so than we have in the past couple of years. I serve on an advisory board for Honeywell, and it’s great to hear that for every vertical market and geographical area across the U.S. growth seems pretty strong. It’s pretty strong in healthcare, high-rise commercial construction and a lot of government work and school work. It seems across the board everybody is singing the same tune right now.
We talked before about the hardship to find low-voltage technicians and the need for more formalized and wide-spread training, but beyond that what are some other top-of-mind challenges operationally for Advanced Cabling?
ROBERTS: Because there’s not a standardized training process there are no obstacles to get into our business. We’ve seen the past 10 years that not only the structured cabling side but also the physical security side of the business has
become pretty saturated. So one of the biggest challenges is having consultative meetings with clients and explaining to them why they should choose you instead of one of many competitors that can also, at least from a presentation
standpoint, do what we do as a company.
Getting in front of those people and explaining the technologies, explaining the serviceability and really convincing them why we are the best fit to partner with them has been one of the challenges we face. In addition, what you touched on in not only finding good people but trying to retain them when you do find them. We put a lot of focus on that, and the same thing with clients. We look for those clients that are going to be long-term partners. One of the things we say is, “It’s more than a project, it’s a partnership.” Client and employee retention both are huge for us.
Speaking of long-term relationships, you just celebrated the company's 20th anniversary. Do you still have any original customers?
ROBERTS: We do, Arkansas Children's Hospital was one of our very first clients when we started in 1997. And we only did structured cabling for them, voice and data cabling. We have five people that report to their site every day, and we do many technologies for them now.
It's got to be rewarding to have some of those clients so long, to grow with them, help them change and build those relationships.
ROBERTS: That's exactly right. It's been a lot of fun, rewarding and neat to watch the evolution, not only of our own company and us as individuals, but also as their companies continue to grow and their people continue to grow. People's lives change. People get married and have children. And the companies grow. It's fulfilling.
KENNEDY: To dovetail off that, this buisness used to be predicated on codes and standards and selling certain widgets from certain manufacturers. When we started the company our shift was a bit different in that we decided we’re not selling a product. We’re here to help you solve a problem. And so let’s listen to what your pain points are and what your issues are, and not talk about product XYZ and why we need to force this product on you. Let’s see if we have some solutions that will fit in there, regardless of the product brand.
It’s about, “We’re Advanced Cabling. We’re here to help make your job easier. Let’s see how we can figure out a solution for your issues on a daily basis.” That’s been a huge differentiator for us as an integrator, as opposed to your standard integrator that goes in and says, “Use us. We represent product XYZ. It’s the best because it’s got all the bells and whistles.” It’s more about us, as the contractor and installation company, we stand behind it and service it.
Campuses are among your leading vertical markets. Can you tell me why educational institutions are so appealing and also any inherent challenges?
KENNEDY: We do so many different technologies in-house, whether it’s structured cabling, access control, security, intercom, mass notification, and we like working with those kinds of clients because all those systems play directly into their facilities.
As for challenges, sometimes those guys are handcuffed with the bid process and some incumbent vendors or legacy products they may want to change out but don’t have the funding. We do a ton of work in K-12 and higher ed. It runs the gamut from fiber-optic cabling to fire alarm installs to cameras to access. It plays in beautifully with the things we do as a company being the things they need on a daily basis.
ROBERTS: The only thing I would add is the audio/video piece. Every classroom, whether it’s K-12 or higher ed, will have some level of audio/video system in it. That being a service we offer and a component to our business has really helped with those partnerships. Whether that’s a football stadium or smartboards in K-12 classrooms, or auditoriums in the higher academic arena, that has played well for us.
Let's move to healthcare, same questions.
ROBERTS: As with education, healthcare facilities have every technology we offer under one roof. So whether it’s structured cabling, we also do nurse call, we do intercom paging systems; they also have audio/video systems, and, obviously, physical security systems. We’re a Hugs dealer, so we do infant protection. We do fire alarm, which is regulated by the Joint Commission [JCAHO] in most cases. Because they have stringent policies and reporting they have to do, it’s helped us in that arena to continue to build on those partnerships.
Let's talk customer service, customer care. Everyone says their service is what differentiates them. They take care of the customer. Everyone says that but in reality few consistently execute or maintain it. At Advanced Cabling, what are the checks and balances?
ROBERTS: Before you can have good customer care you have to take care of your people in-house. If you treat your people right and take care of them, then they’re happy to be here and will in turn take care of your clients. I’m not going to say we have the best customer service representatives or best customer care people. I think we truly have the best people. A portion of that is the customer and client care.
We really tout and talk big about our culture. As part of that, it’s not only the fun environment we’ve created here but also allowing opportunities for people to grow professionally — having the best benefits package, not only in our industry but what we feel is the best across most industries. I think it transcends not only customer care as we focus on making sure our people internally are happy.
KENNEDY: There are a couple of specific things we do that a lot of people think are odd but I love. My personal cellphone number and email address are on our website. I love to get calls from customers, good or bad. If I don’t know it’s
broke, I can’t fix it. We have a pretty aggressive 24/7 on-call plan. If you call with any issue you’re going to get a technician. If that technician doesn’t call you back in 15 minutes, you’re going to get David. If David’s in the shower and doesn’t call you back in 15 minutes, it’s going to ring my phone. With one phone call or email you could get right to the top. I preach and love that accountability.
To David’s point, customer care is such an intangible that we try to turn it into a tangible. We offer our people $0 deductible healthcare and up to 6% dollar-for-dollar match on 401k, and really take care of those guys from a financial standpoint. But we also take care of them by doing all kinds of fun events, whether it’s recycling our scrap wire and going on a float trip, or whether it’s a whole family picnic. We do lots of different things every month to keep those guys engaged because we spend more time with them than with our families. We don’t get it right every time, but we try to err on the side of the employee. In the long run, that serves you well.
Do you ever have to walk away from business due to unrealistic customer demands or because they're stuck on a certain product you don't service?
ROBERTS: We focus on providing the client exactly what they need for the application they’re going to use it for, but if those needs or in some cases wants don’t align with either the manufacturers or technologies we align ourselves with, then absolutely we’ve walked away from opportunities. A huge mistake people make is doing a job just to do a job, when maybe it’s not the right fit.
We don’t employ any commissioned salespeople at all. In fact, we don’t have any commissioned employees at all. The reason, even though it’s very different in our industry from most of our competitors, is because we don’t want our team selling something to a client or potential client just to try to make some money for themselves, and it not be exactly what they need.
Reputation is everything and you have to make sure it is impeccable. If you’re not comfortable or don’t have the skillset, or don’t represent the manufacturer, or don’t have the certifications needed to truly do a job the way it should be done, and give that client 100% complete satisfaction, then you’re not only doing the client a disservice but also yourself. So as painful as it is, we have walked away from jobs.
If you're not commissioning salespeople, how do you motivate thme to take on new offerings into the marketplace?
ROBERTS: We have dedicated salespeople that focus on new installs, and then we have dedicated salespeople that focus on service, and then we have dedicated salespeople that focus on recurring revenue. That might be different than some people do it, but they all have their own focus. They do have the opportunity to cross-sell and partner with each other. We made the decision a long time ago that we were not going to have commissioned salespeople simply because we wanted our sales team to have a good working relationship with our operations team. We didn’t want salespeople to sell something and then move on to the next sale just to grow their personal check.
As for motivation, obviously we all recognize that sales is a lifestyle job, and people who sell want freedom and flexibility and that’s part of it. It goes back to the culture. You pay people a fair salary for the job they’re doing and reward
them, offer incentives and give them opportunities to be flexible with their time. It seems simple, but treat them like grownups and the way they would want to be treated. Fostering that positive culture and allowing those people to grow keeps them motivated.
It’s also a challenge too when we spend a lot of time bidding jobs, putting jobs together, and working with engineers. We try to engage all those team members to help with that design process. If you have a person who’s focused strictly on a commission structure, they’re not going to want to work on some of those things that are long lead cycles. We’ve just got it set up where it works differently. People love being here.
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