When Alun John made a conscious decision to enter ‘the security business’ back in 1982, that business was a fledgling one to say the very least. In truth, it was almost an ‘unknown’. Intruder alarms were the centre of attention, while the now ubiquitous behemoth that is the CCTV sector was but a specialist niche discipline (with many of the early cameras developed solely for coal mines and underwater monitoring of North Sea oil operations rather than pure security). How times have changed…
A physics graduate of the University of East Anglia, John joined Norbain Electronics Ltd as a product manager for camera tubes. Then part of a team of four, he describes the start-up venture as being designed specifically to address the emerging security market.
“At first, we established ourselves as an RCA distributor,” explains John with an obvious fondness for the times. “We tried our hardest to persuade intruder alarm installers to tap into CCTV, but the security market didn’t really take off until the late 1980s. That was mainly down to the fact that the UK had finally cottoned-on to video multiplexing techniques in a big way.”
Many other sectors invoked very high standards and demands, it seemed, but security didn’t have the equivalent. “It still doesn’t in some areas,” asserts John with admirable honesty.
Having helped to grow the business in what was an era of great change, John was finally promoted to the Board of the (by then) USM-quoted concern in 1988. Through until 1994, he had served as sales and marketing director of the newly-formed Norbain plc. The company duly embarked on a series of disposals of diverse businesses in electronic components distribution and computer maintenance and supply, helping to turn what was a loss-maker into a smaller but (crucially) profitable outfit that then set its sights on a series of acquisitions. The end result is Norbain as we know it today – the market-leading CCTV distributor in the UK and Europe.
“Right from the beginning, our mission was to be the best, not the biggest,” asserts John during our lengthy meeting at Norbain’s Winnersh Triangle headquarters in Wokingham. “There has always been an internal desire for us to be seen as the customers’ first port of call. We’ve instigated shared IT front ends with our suppliers such that we can extend the working day. Orders may be taken up until 7.00 pm, and they’ll be sorted and shipped for a delivery anywhere in the UK by 9.00 am the following morning.”
By now in impassioned mood, John continues: “Unfortunately, there has nearly always been a tendency for the intruder industry to stick a sign over the door saying: ‘We’ll do it cheaper’. Price shouldn’t be the main driver. That’s why, as a company, we have spent a good deal of time and money on acquisitions that enabled us to put the right logistics in place, and genuinely offer value for money to our clients.”
The end result of that tireless effort is there for all to see. Today, with annual revenues in excess of GB pound 120 million, Norbain SD employs over 290 staff at its Berkshire headquarters and numerous outlying centres (located in Warrington, Blackpool, Preston and Oldham, the latter two serving as Premier Service Centre and main Warehouse respectively).
Products from major suppliers including BPT, Baxall, Bewator, Bosch Security Systems, Dedicated Micros, Dallmeier, Dennard, Derwent, JVC, Panasonic, Pelco and Sony make up its GB pound 13 million stock, all held on the basis of guaranteed next day delivery and 98% availability. These products are sold into some 77 countries across five continents. John and his team, one suspects, must be doing something right.
Borrowing from the Japanese
During the early days at Norbain, John travelled to Asia and the Far East on a “reconnaissance mission”. In Japan, he found that quality was embedded in every task conducted within the business environment.
“The customer service was second to none,” John tells me. “We bought a good deal of product there but, and more importantly perhaps, we needed to emulate their service standards. At the time, the UK security industry needed a benchmark. For us, the Japanese model was it. Asia was most certainly an early pioneer of the very best service techniques.”
John then recites a fascinating maxim that he learned in Japan. “The Japanese believe that the Customer is King. They also believe that the Customer’s Customer is Emperor. As a distributor, our direct client is the installer, but of course their customer is the end user. In other words, the end user is Emperor. End users rightly demand the very best output from their systems installations, but for this state of affairs to be realised the procurement chain must be right at all levels.”
On that matter, the softly-spoken, sharp-suited John firmly believes that the industry – more specifically its manufacturer, distributor and installer base – has often failed to impart the right messages to end users in relation to the benefits of systems they specify. “Yes, CCTV systems and intruder alarms may be used to ‘catch’ thieves, but they can do so much more these days,” he urges. “Our own magazine Security Matters often contains end user Case Studies where CCTV, in particular, has been procured for a variety of reasons.”
As a company, Norbain is heavily involved in the retail arena. Here, security managers and loss prevention professionals were some of the earliest adopters of CCTV – and, according to John, “they remain far advanced on the technology curve”. In retail, for example, CCTV is often specified to serve as a broad management tool. That occurrence can only increase, suggests John, with the advent of content analytics, as store managers are able to deploy CCTV for monitoring customer footfall and, thanks to the latest software, all till areas.
Recalls John: “On a recent project of ours, one of the supermarkets with whom we work was finding that lots of customers browsed at lunchtime, but they didn’t buy anything. There were perhaps too many till operators on duty to serve the need. The same shoppers would then come back in the evening and purchase their goods. Thus the store altered its staffing arrangements to suit.”
CCTV: still a grudge purchase?
It has been John’s experience that buyers of CCTV and intruder products no longer view this as a grudge purchase, particularly in the wake of 9/11.
“CCTV is now de facto in the business world. If CCTV isn’t used, companies are liable to fall foul of the Health and Safety rules, if nothing else. Nonetheless, the industry has perhaps presented the business case for CCTV rather badly. We need to rectify this on the supply side. Today’s security sector is IT rich, largely professional and serving a blue chip customer list, but we have a long way to go yet.”
Isn’t the major problem still one of perception? “You’re absolutely right,” responds John. “As an industry, security is all-too-often portrayed as having a low skills base, but in the real world this isn’t true at all.”
It seemed like an opportune moment to ask about IP solutions. “Cast your mind back to 1997. People were saying that we would be listening to music over our mobile telephones via a continually streaming network, but that just isn’t true. In fact, what we do is download our music from the network first, and then play it. This makes sense for IP in CCTV as well. The information is being downloaded to a DVR before being viewed in order to save on capacity and increase speed.”
He continues: “Then look at the rise of the iPod, which is threatening to make CDs redundant. There’s a pattern here. However, it’s an interesting fact that most companies still use non-IP networks for telephony, so we must be careful when interpreting fledgling trends.”
Although broadly in favour of IP developments, John insists: “At the end of the day we should first and foremost be looking to define what works for the end user within their budget and timeframe. The industry must match the corporate need by whatever means are best suited to the task. For many, that has meant the transition or conversion from analogue to digital. There is now a proliferation of hybrid systems in the end user ‘marketplace’, with analogue camera images being passed through digital recorders. For me, that is an IP-style application even though it’s not networked.” An interesting theory.
Tellingly, John would never countenance video streaming over Norbain’s own company network, mainly due to the huge number of transactions the company conducts online (no fewer than 4,024 CCTV products are currently listed at www.norbain.co.uk, 1,746 access control systems and 508 intruder product solutions). He remains to be convinced that the World Wide Web will ever be a medium for security system buying in bulk.
“Some of the business may transfer to the online medium,” he says, “but purchasing systems without first taking account of how host buildings will be wired is very dangerous. That’s one of the reasons why I cannot see the traditional procurement process changing that drastically.”
The period spanning 1994-1996 witnessed strong organic growth in Norbain’s distribution business, and the start-up of a new French subsidiary. However, all was not well. “A number of misfortunes hit the group in rapid succession,” sighs John. “There was the acquisition of a loss-making commodity intruder alarm wholesaler, while some of the management changes in France led to severe losses.”
In May 1997, John was appointed as group managing director with specific responsibility for the distribution businesses in the UK, South Africa and Portugal. He wasted no time in leaving his mark. Rapid changes were made to the overall group structure. The head office was closed, realising annual savings amounting to something over GB pound 1 million. Revealing a ruthless streak, John disposed of the loss-making intruder alarm wholesaler in July 1997, and the French subsidiary the following November. The plan worked. Results announced a mere 12 months later showed that all remaining Norbain businesses were profitable. A joint purchasing agreement with ADI – the biggest US distributor of security products – was subsequently negotiated, thereby creating the largest global procurer of CCTV systems.
Never one to rest on their laurels, John and long-time colleague Dermot Grace led a management buy-out (MBO) of Norbain plc in September 1999, subsequently removing the business from its London Stock Exchange quote. The deal was backed by PPM Ventures, the private equity arm of Prudential plc, and the Group deliberately restructured into separate manufacturing and distribution businesses (enhancing its growth prospects still further).
Bringing the story up-to-date, the manufacturing business was sold to its incumbent management team last October. The distribution division then became the subject of another MBO last January (replacing majority shareholder PPM Capital with Close Brothers Private Equity).
Looking back, John has every right to feel immensely proud of the strategy he and Grace devised. Between December 1999 and December this year, the enterprise value of the business has increased from GB pound 52 million to GB pound 128 million.
For the time being, John’s primary role remains as chief executive of Upperpoint Holdings (Norbain SD being a wholly-owned subsidiary of Upperpoint Distribution, itself part of the Upperpoint Group of Companies), although just now he is acting managing director at Norbain.
Formerly Norbain managing director, Grace – a founding member of The Company of Security Professionals, and a member of the Institute of Directors – has transferred to commercial director at Upperpoint working on export channels for a number of European countries. “We want to establish an even better focus on the business,” explains John in bold terms, “by examining both the sectors we target and how we do so. There’s a definite desire to take as much extraneous cost as possible out of the procurement chain. In this way, we can bring capital costs down for the end user. We absolutely must do that.”
Looking to a bright future
Not surprisingly for a man who lists The Financial Times and The Economist among his preferred reading material, 55-year-old John is fully aware that the security marketplace is changing – and fast. Aside from IP and networks, there’s much talk of integrated systems. The response? “We are going to need to form high-tech teams,” says John, who envisages handing over to a new, full-time managing director at some point within the next 12 months.
“Our ambition remains to be the best,” continues John. “The company the customer most wants to buy from. At present our growth is double digit, and obviously we’d like to continue that trend. It can become something of a self-perpetuating cycle.”
You learn something of John’s management style when you discover that he’s fully in favour of members of the team participating in the wider industry at every opportunity. Take Paul Wong, divisional director of branded products and technical services. He joined Norbain back in 2001, bringing with him over 20 years’ practical experience within the CCTV and access control sectors. In his ‘day job’, Wong is responsible for Norbain’s branded product managers and business development managers (as well as being tasked with overseeing the company’s technical support group). These two functions between them are responsible for the full product life-cycle, from defining new systems through to bringing them to market and then selling them.
Additional to this role, for the past seven years Wong has sat on both the CCTV Section and the CCTV Technical Committee of the BSIA (which he chaired for over 4 years). He also served as chairman of the Electronic Security Section (CCTV) and UK CCTV expert for the British Standard Institute (BSI) for a period of 12 months. All with John’s blessing. That’s empowerment writ large.
With May now upon us, John is massively enthused by some of the product emerging of late (much of which will be on display at IFSEC 2006), in particular the latest DVRs.
At this point in our discussion, however, he returns to the subject of IP surveillance. It’s obviously niggling him. “PC platforms aren’t always reliable,” opines John. “Large, open networks offer access to many individuals, not all of whom will be welcome. How is that to be managed? I don’t think this issue has really been addressed.” Nail hit firmly on head.
