Beaton track

“Group 4 Falck confirms merger deal with Securicor Security”. That was the lead News headline grabbing the attention of Security Management Today readers last March, when it was confirmed that these giants of the UK security sector would become one. We all knew that Security Industry Authority (SIA) regulation would lead to consolidation in the marketplace, but surely it would be The Big Boys gobbling up the smaller regional concerns? How wrong can you be.

Now that the merger has been rubber-stamped and shares placed on both the London and Copenhagen Stock Exchanges, it’s clear that the deal will have far-reaching implications for contract security provision on home shores. Group 4 Securicor is now the largest UK security company, and by some distance. With that mantle comes a huge degree of responsibility. The need to be seen to be whiter than white, uphold first class professional standards at all times and take an active lead in the industry’s ongoing development.

9/11: a strategic response

Judging by his calm, considered and thought-provoking responses to my array of often tough questions, it’s clearly a challenge that 52-year-old David Beaton is more than willing – and able – to accept. Not surprising, really, when you discover that this is a man who saw active service in the first Gulf War campaign and then had to deal with the media maelstrom in the wake of 9/11.

Beaton, you see, had accepted the post of managing director at Argenbright no more than a couple of days before Al-Qaeda penetrated the heart of corporate America.

“To head up the USA’s major airport security operation sounded like a great opportunity,” states Beaton. “When group chief executive Nick Buckles approached me to take on the role I jumped at the chance. The buzz of working in the States really appealed. Then my first port of call was in Washington, where TV interviews were held by NBC reporters for Good Morning America. ‘So tell us, Mr Beaton. How is it that your company allowed these terrorists to slip the net’?” A tricky start to a new role.

Immediately, the US Government took away half of Argenbright’s business Stateside. In other words, the entire airport screening operation across 43 airports. With the political battle fought and lost in seemingly double-quick time, Beaton spent much of his initial tenure ‘managing down’ the reputational damages engendered by that fateful September morning.

“At the airports, the wheelchair pushers and the Sky Cap customer services representatives weren’t economically viable without the screening operation,” adds Beaton. “With the guts of the business taken away from us, we were left with substantial overheads spread across an operation that just wasn’t hitting the financial targets.”

Over an 18-month period, in fact, Securicor handed over no less than $200 million worth of business to the US Transportation and Security Administration. A body blow, naturally, but for Beaton softened somewhat by his dual role as regional managing director for the Americas. “We added the Canadian cash services division to the Americas region,” he continues, “and decided to move the regional office from Atlanta to Toronto and then manage the business in Canada, the Caribbean, central America and what was left of the main American business from that location.”

One thing Beaton learned from his American adventure was the management of change.

“It’s often a necessity,” comments Beaton. “You can manage stress and major change if you adopt the right attitude. Teamwork is extremely important. You need a sense of humour. As a manager you must offer leadership, and even if the stress is getting to you that must never be apparent to your security team members. An aura of confidence should remain at all times.”

The management of change

Beaton will surely need all of those requisite qualities now as he begins to guide Group 4 Securicor’s UK manned security business through a merger phase that will take anything up to 18 months to complete.

Beaton’s assured attitude towards his immediate role stems from the fact that he wasn’t surprised the deal was concluded. “Pre-merger, Securicor’s key objective was to become one of the Top 3 players in the global security market. It would be nice to think that sustained organic growth could be the driver, but the reality of the situation would never mirror such a desire,” suggests the well-spoken, Chelsea-born professional.

It was clear that some kind of large acquisition or merger would be needed if Securicor was going to mount a serious global challenge to Securitas. Adds Beaton: “When you looked around as to where the best fit would be strategically for Securicor as was, it was easy to see a number of synergies between ourselves and Group 4 in respect of complementary geographic and service coverage. The synergistic benefits were there.”

All well and good, but meshing two different businesses is never an easy task. Let’s not forget that when Falck came along Group 4’s culture was subsequently driven by its Danish hq, and it’s well known how much the Scandinavian view of security provision differs from our own. That said, in Beaton’s experience the similarities in the two businesses are already beginning to outweigh any differences. “We’re two more or less equal-sized guarding concerns so far as the UK market’s concerned,” stresses Beaton. “We’re both successful companies, and perceive ourselves to be the providers of a quality security service. There’s a loyal customer base there upon which we can build.”

The only tangible difference between the two outfits in Beaton’s eyes centres on management style. He comments: “Given that Group 4’s hq was overseas the operational management tended to be more devolved than for ourselves.”

Surely there has to be some kind of fall-out from the merger? Isn’t reduced turnover a possibility? Figures quoted in some industry circles suggest that the combined business might lose something in the region of 20% in turnover, equating to lost revenues of around the £70 million mark.

As a manager you must offer leadership, and even if the stress is getting to you that must never be apparent to your security team members. An aura of confidence should remain at all times

“I’ve not seen those figures, but I’d be very surprised if they turned out to be true,” retorts Beaton. However, he’s cogniscent of the fact that some customers might want to jump ship because they were happy with their existing arrangement provided by either Securicor or Group 4. “Existing clients have nothing to worry about, though, as the merger will bring a good deal of added value to the security service.”

Strategies for added value

Speaking of a value-added security service, as the ‘new’ guarding contractor on the block, Group 4 Securicor could potentially steer its corporate ship in one of two ways. Down the cost-competitiveness channel, or along the value-added tributary. It must be said that adoption of the former strategy by too many security companies and clients is largely to blame for much of the guarding sector’s ills. Interestingly, David Beaton is of the opinion that you don’t necessarily have to accept one or the other route as your basic premise.

“Value will be added to the business by the merger alone,” he points out. “That process is going to offer us cost advantages, and an improved competitiveness that didn’t exist prior to the joining of the two concerns.”

For Beaton, one of the ways in which he intends to add value to Group 4 Securicor’s service is to graft on a systemic approach to clients’ security needs. “The security officer is one element of that as part of the overall security solution. The client will either receive better security for the same or a slightly increased price, or less security for a reduced price. That’s the basic value proposition from which we can’t escape.”

Tellingly, Beaton then points out that, in his world, the efficiency of any contracted security function depends largely on the extent to which the security company is involved in devising protection provisions on site. “That’s where the true value of security delivery starts from,” he suggests. “Inevitably, in the real marketplace it tends to be the larger customer that’s more predisposed towards a systemic approach. The mindset change we must look to oversee is from security being seen as little more than a necessary overhead to a purchase that’s a genuine investment.”

There’s a rider to all this, however. “For all their good points, it’s also the larger clients who are very often unwilling to disclose their cost of insecurity. Without that base point, there can’t possibly be a move towards genuine planning and risk sharing with the contractor.”

Learning from the military

By his own admission, the young Beaton’s initial career path was largely driven by what he wanted to be and do rather than any pressure brought to bear by his parents.

“My mother and father instilled in me a ‘healthy respect’ for people who are experts in their chosen field, and can demonstrate their knowledge,” suggests Beaton. “They wanted me to develop a challenging mind.”

During those formative years, Beaton nurtured his train of thought at Ryden Secondary School in Walton-on-Thames, where history, mathematics and the sciences became firm favourites. Then, in 1970, it was off to the Royal Military College of Science in Shrivenham (now Cranfield-run, of course) and a three-year degree course in civil engineering.

A stint in the Army followed. “I joined The Royal Engineers,” says Beaton, “but it wasn’t really a conscious decision. It was more a case of not being able to decide what to do in the longer term, and the belief that a few years in the forces would be beneficial for whatever lay ahead of me.”

There was no military background or history in Beaton’s family, so the chance to ‘join up’ offered the perfect challenge. He completed early tours as a troop commander in Northern Ireland, Gibraltar, Africa, Cyprus and Canada. Beaton eventually became a squadron commander based in Germany before returning to Shrivenham in the early 1980s for a two-year stint at the Army Staff College.

A transfer to the Ministry of Defence Secretariat soon followed, and a posting as staff officer. This is the time when Beaton first familiarised himself with longer term logistic policy drafting.

On returning to the Army Staff College as an instructor, Beaton found himself on the cusp of the Iraqi invasion in Kuwait. “At that point, I was offered the command of an active assault engineer regiment,” he comments with obvious pride. “It was a relatively new unit tasked with minefield and obstacle breaching, both of which would turn out to be important features of Desert Storm”. During the conflict, Beaton was in sole command of combat engineer support for Fourth Armoured Brigade.

“My primary memory of the Iraqi conflict is in two parts,” claims Beaton. “First of all, the intensive planning and preparation for the war, much of which took place in Germany. Then the war itself was extremely intense. Frightening on occasions. Most tank battles are.” At one stage, Beaton’s unit was embroiled in 14 battle group attacks in the space of just four days.

One wonders what sort of skills Beaton believes he acquired during this traumatic time. “It was always a team effort in the Army,” he declares, “which is an ethic that translates into many facets of business life. The need to adopt a strategic and tactical view was also important. What you must always bear in mind as a leader and manager is the need to visualise the bigger picture as well as a more detailed one.” Attributes one and all that are eminently deployable in his current role.

We have mapped out a well-planned programme for meshing the Securicor and Group 4 businesses, with designated management teams overseeing the process. We don't want to detract from delivering on our business promises to clients at any stage

A taste of the corporate life

Beaton’s first taste of management in the corporate sector came upon his return from the Gulf in 1992, when he decided to join forces with a Westminster-based management consultancy by the name of Temple-Smith Hilliard. Initially, he was approached by one of the company partners with a view to a role devising corporate strategy for clients (and concentrating on risks and opportunities).

“During my time at Army Staff College I’d been responsible for the development of a strategic study package,” says Beaton. “An element of that involved country risk assessment. The macro assessment of risk, if you like. The consultancy had an interest in advising its clients on macro level risk assessment from a commercial point of view, so there was a neat tie-up there.” Quite so.

A year-and-a-half later, Beaton became aware from ex-military chums working in other parts of the private sector that Securicor Security was setting up an embryonic company to tackle what became the custodial business. An ex-Brigadier and old Army colleague was then managing director of the non-trading company. Beaton takes up the story in typical Army speak.

“Securicor wanted someone with strong project management experience who could put the tender together and make it happen on the ground. My first task was to win and then project manage the prisoner escorting function within the M25 area.”

That initial contract landed Securicor no less than £20 million of business per annum, and sealed the move towards a trading company.

From those humble beginnings, Beaton attained full project director status inside a year, by which time the company had just formed a joint venture guarding operation in South Africa. “A South African para-state had its own internal guarding and security workforces,” explains Beaton. “Our component would fulfil the security role for ports, harbours and railways. In other words, the entire transport infrastructure.”

Beaton became managing director of that Johannesburg-based operation, but it was a time of huge political upheaval and it became increasingly difficult for Beaton and his colleagues to make the venture work. “After 12 months’ of struggle I recommended we close down the operation and withdraw strategically.” Which is exactly what happened.

In 1998, Securicor’s Justice Services division was encountering some difficulties, and Beaton was asked to become its managing director. He was an instrumental figure in helping to secure an electronic monitoring (tagging) contract for prisoners – at that point in time the largest of its kind on offer in the UK.

“It was a pretty satisfying period really,” states Beaton. “From that point on, the business really did start to grow quite nicely.”

Squaring two circles: the future Beaton officially began life as Group 4 Securicor’s managing director in the UK on Tuesday 20 July, the official ratification date for the merger. His initial work has been focused squarely on preserving the existing mutual relationships enjoyed by both Securicor Security and Group 4 with their respective customer bases.

Beaton is adamant the company will be assuming a leading role in “thought development” within the security community. “We must be seen to do so,” he stresses.

That wider industry will also see the introduction of security officer licensing in the not-too-distant future. How might Beaton reconcile integration with regulation, then? “The fact that licensing is happening will be a challenge, but it will not be any the greater because of the integration process.”

Beaton has been given the freedom to select his own management team, which directly reflects the new company’s philosophy of dividing the country into four geographic regions and four sector-specific areas (namely retail, patrol and response, special events and aviation, rail and maritime).

Interestingly, three of those regional heads hail from Group 4. “Original Group 4 employees have taken on many of the operational roles at the senior level,” adds Beaton, “while Securicor staff tend to dominate the functional side of things” (by which he alludes to Human Resources, finance, IT and marketing). The mix seemingly makes for a rather good balance.

Going forward, in Beaton’s opinion it’s how security companies and clients behave in the real world that will turn the industry into a widely-recognised profession, not what they say. Absolutely right. And as an avid amateur cosmologist, Beaton might well have the answer. We’ll just have to wait and see.