Michael Padilla-Pagan Pay
The global security industry is moving!
But is it moving in the right direction? Is it serving the customers’ needs or just lining conglomerate pockets? What is the role of the consumer in the developing security monopolies?
Mergers and acquisitions (M&A) is the talk of the town these days, especially in the security industry, where M&As are spreading like a virus while being celebrated as corporate visionaries and reformers.
The tug of war between Allied Universal and Gardaworld to acquire G4s is starting to heat up.
But is this consolidation right for the customers? Is it good for the market? G4S does not really have a stellar record, and many of its contracts have been mismanaged, poorly executed, or riddled with criminal oversights and negligence. Does this mean it is broken beyond repair? Or maybe an attractive buying option?
Make no mistake, reputation, customization, and local and regional knowledge is vital in the risk and security industry. After all, they are pitching to provide a duty of care to a customer's employees, protect that customer's brand, and also be an outsource provider to that customer to run part of their business and manage their operations, representing them to the world.
The customer must trust you! They must trust your commitment to their needs and your knowledge, experience, and industry practice. It is a game of numbers after all, but this is not at all what it is about. There are conflicting interests here, and the more we talk about them, the more awareness rises, then the more consumers become more knowledgeable in their choices.
Recently GardaWorld acquired WorldAware, a US Intel & Security Risk Management . GardaWorld owns Crisis24, serves 25% of fortune companies and is the largest privately owned security & cash services company in the world. In a posting I made on LinkedIn on Dec 6th, I mentioned that the crux of the matter remains that these big mergers do not benefit the end consumer, whether private or corporate.
To put it bluntly, they just create monopolies where a couple of players regulate the markers and always go for the wider profit margin and the highest revenue. In that process, they often ignore, neglect, or willingly overlook the particularities, the social and historical context, the local regulatory framework, and ultimately the needs of the client. Submerged in complicated corporate structures where accountability is often scarce, and efficiency is downplayed at best where they cannot meet the needs of today, especially in complicated local contexts. Are they often cheaper? Sure! Are they often the best? Not really! In the end, the responsibility stays with the customer and their choices to be served responsibly through tailored solutions or served in the same fashion as in a drive-through fast-food chain (always a bad idea when it comes to security and risk management). In the end, the customer should reflect and ask whether bigger is always better and whether they are willing to place the price above the quality.
Do you want to be treated as a client? Or as a valued partner? Are you looking for a mere service, or are you looking for comprehensive, efficient, tailored solutions based on a highly responsive and adaptive model? A more contextualized, cultural, and market-oriented approach is what you should be looking for.
Companies such as Allied Universal and Gardaworld and G4s lack an understanding of local and regional risks, how could they not? What they know is always second hand, thwarted by the media, and often misunderstood and misperceived. The situation on the ground, in many challenging places around the world, is far more complex than many of them realize. This is particularly true in frontier markets where multinationals use the same companies to assess risk without local knowledge or contacts. In these markets, personal relationships are everything because you cannot rely on institutions. The relationships between populations and their governments have also undergone some profound changes, leading to pronounced civil unrest in previously ‘safe’ markets. This is because societies today can impact country, political, regulatory, and even geopolitical risk.
All I am saying is for the customer to take a hard look at such profit-driven acquisitions, from which shareholders and financiers are profiting, but not the employees and the local communities, and this ultimately impacts the kind and quality of services they can offer.
How can you be a Risk & Security Consultancy when you lack the basic understanding and grassroots capacity to be able to see the events unfold even before the tiniest spark is visible?
The companies that stand best prepared to mitigate the risks to their operations are those that are continually monitoring and responding not only to events in current ‘risk hotspots’ but are also horizon-scanning for emerging issues in key markets and who are local or regional and live and operate in the area, that is who we are at Al Thuraya Consultancy, and this is what we do!