During a visit to the alarm panel manufacturer’s headquarters, the SSI Industry Hall of Famer talks turning points, tactics, technology and more.
View original article from SSI here, written by Scott Goldfine: http://www.securitysales.com/business/ceo-rick-britton-dmp/
Sure there are more products with more advanced features, more sales and success, more facility square feet, and more employees (including many original hires still onboard, albeit with more gray hairs), but the principles on which Digital Monitoring Products was founded more than 40 years ago and its home base of Springfield, Mo., remain unchanged. DMP has become one of the electronic security industry’s most successful and enduring independent suppliers all the while treating both personnel like extended family, delivering intrusion alarm control panels and keypads that are as attractive and easy to work with as they are innovative, and acting as both manufacturer and distributor so as to cultivate intimate, long-term dealer customer relationships.
DMP CEO Rick Britton was born into the security industry as son of Atlas Security Service and Alarm Control Center founder Marvin Britton. Rick began working as a teenager to learn the business as an installer and service technician. In 1973, he assumed the position of installation manager at Atlas and went on to help the company develop its own product that allowed traditional direct wire systems to be computer-automated. In 1975, DMP was formed as a research and development branch of Atlas, and 16 years later Rick purchased the firm from his father.
In 2006, based on his reputation for business integrity, success and innovation, Rick Britton was elected into the SSI Industry Hall of Fame. During a recent visit to the company’s ever-expanding offices, factory and shipping facility in Springfield, Security Sales & Integration toured the operation and spent time with Britton to discuss DMP’s current challenges and strategies, and how dealers can thrive in today’s marketplace.
Looking back at DMP’s history, was there a key turning point that sticks out in your mind that really made you realize the full opportunity potential?
Rick Britton: One of the key turning points in the late 1990s was getting everybody in the company knowing where we are, what makes money, what costs money, how we’re doing. We adopted an open-book management style where everybody in the company sees income, expense, balance sheet, and what is needed to be done to turn a profit. In that way everybody becomes a businessman. Everybody needs to know how we’re doing and how can we do better. Then you have everybody looking at cost-cutting measures. Then you have everybody looking at how much money are we sitting on here by having too much of this inventory, and not enough of that inventory?
Our history has been looking and seeing what’s going on in the computer industry, in the communications industry and bringing it into the alarm industry. Rick Britton
That was an exciting time for our engineers who said this is really neat knowing where we contribute. It helped them to say, “I’m going to spend two months on this and it’s not going to actually develop that much business; let’s spend our time over here and do these things that have better potential.” It makes you feel part of the family. You’re going to be on the inside, knowing what’s going on. That was a real key turning point, turning it into a real business and not just we come here and build stuff.
The other things have probably been key people that came at a certain time. Whenever we got a particular salesman or VP of sales he was well known in the industry, had a lot of contacts. That really helped. Then we got this key person in engineering, it’s the different people that have come and made big changes in the organization.
Shifting to present day, we talked offline a bit about DMP’s challenge in finding the right people and especially those with computer programming skills. Could you expand on that conversation?
Britton: Most of it is just finding the right people, getting good salespeople, getting good trainers and all of the different parts. This is an interesting part of the business that you have to have somebody that’s good at plastics, you have to have somebody that’s good on marketing, you have to have somebody good on electronics, somebody good in distribution. We are the distributor, we sell direct to every one of our customers. So we have so many disciplines. Who would have thought when you were going to design a panel that you have to have a really good plastics designer, and somebody has to know how you can ship it and get it there on time, without getting broken? So lots of people with high skill sets to get them all here in southwest Missouri. That’s a challenge.
What about on the technology side?
Britton: Our history has been looking and seeing what’s going on in the computer industry, in the communications industry and bringing it into the alarm industry. We’ve always had several people that are continually watching, learning and wanting to bring things over as quickly as possible. It’s a challenge sometimes, but I think being small and such a lean group of folks that we could have five people sitting in here quickly and decide we could do a doorbell, the video doorbell. Use this part, use this part, use this part. Everybody that’s working on it is right here in the same area. If there’s a technical challenge you can immediately talk to that person rather than having developers scattered all over the world.
Our biggest challenge is getting it down quick enough. We have so many different ideas. OK, let’s do this, let’s do that. There’s a lot of good ideas that are swirling around in here. We have a lot of people that are continually looking at those industries and wanting to find the newest part, and how can we make it apply in the alarm industry.
We also spoke offline about expansion opportunities on the residential side. What are some of DMP’s hurdles or challenges there?
Britton: Developing a name for it in that I don’t think anybody in the industry thinks DMP for high-volume residential; high-end commercial is what they think of DMP. Most of the time, whenever we talk to somebody that we’ve got this panel that will do all of this: “Yeah, but DMP is so expensive.” They don’t even know what the price is. The place in the market, in their mind, is that we are high price, high end, high capability, that there’s no way you could bring all that down into the residential market.
As a dealer who’s not a customer, what are the top three reasons you would recommend I switch over to DMP?
Britton: First, whenever you get it, it’s going to work. Every single piece you get, whenever you carry it out to the installation it’s going to work. You don’t have to take two. You don’t have to call in and try to find out what’s wrong with this one. Our quality is going to be whenever you get it, it’s going to work. The second thing would be every part we make works with every other product. If you start out with the smallest unit, and then somebody outgrows it, they’re not going to have to change any other pieces. The small panel is going to work with the keypad like the big panel. The way it is going to operate is going to be the same too. We are very consistent in the way you do anything on any of our products. It all works the same. If you need to train, once you train your guys on one they’re going to know all of it. The third thing I would say is it’s going to be innovative state-of-the-art. It’s going to look good, and you’re not going to be thinking I wish I had that other new thing. So quality, our uniform operation, and it looks good and works good.
An additional element would be our overall support. We’ve never gone through distribution because we wanted that direct, close connection. We want to get dealers’ ideas all the time. Often when we bring customers into our facility, we want to know what would you like to be put into the product? In our mission statement, DMP delivers customer-driven products. From the very beginning, we started out with, “We want everything we do customer-driven.” We are going to find out how do you want our tech support to work, how you want our keypad to work, how you want our shipping to work. We want to find out from them, and so every venue we can come up with and can be talking to customers is how we really try to run the business.
When we build a panel we’re probably going to build it for 10 years before we bring out the next one that’s going to replace it. During that 10 years, once a year, maybe twice a year, we’ll bring out new features for it. We’re continually bringing out software updates. You can get the new one with all those or you can download that code off our website, put it in a panel that’s already installed someplace, and add those features to it. Usually in our industry when you bought a Model 1407 it was going to be the 1407 and do exactly that for its life. New features were the 1408 of the product line. We continually bring out updated feature sets for the life of that hardware.
When you come up with one of these innovations, about how long does it take to get to market? I imagine it’s had to speed up the the past few years; how are you managing that?
Britton: It takes about one year to do a panel from the time we decide we’ve got to do a new panel to when you can get it to market. That has kind of stayed the same. It’s a much bigger effort now because we will have a meeting about what does it look like on a keypad, what is it going to look like on a tablet? What about when it’s on the website? And how about when you’re going to download software? You’ve got your access control software and all of these interfaces into other companies that have customized their software. One change now has a dozen places you have to consider the impact on all those. So in a way you’re implementing them faster but it’s probably taking you longer to decide all the things it has to do before you start working on it. You can speed up with new software tools but it takes a lot of thinking about all the different places, and working on the graphics keypad compared to the alphanumeric keypad. It’s probably more design time now and faster implementation.
What about incorporating the intrusion solution into building automation and other security solutions in the commercial space? How is integration into a single unified platform impacting what you do?
Britton: The impact of that is mostly on the protocols and getting our protocols to the different people doing the other systems, or getting their protocols. We integrate with 25 or 30 different other companies. So there’s a lot of paperwork or electronic documents going back and forth that people want to have these things they want if we do an update. OK, these people want to take advantage of it; these people don’t think it’s important and won’t make their changes. One of the things we’ve always done is not only make a keypad we make today able to work on our panel we built in 1981, but we try to keep all the protocols with the different vendors the same. We try never to break an interface with somebody else’s product just because we want to update something. We’ll try to keep that version working for them also. There’s a lot of coordination with all the external partners too.
How much are those changes driven by end users, particularly in markets DMP is prominent in like banking, versus the dealer?
Britton: A lot. We make a point in our banking, government, those large users, to go straight to them. We don’t sell to them, but we go to them for how do you want it to work. We design a lot of our products to fit this bank and the banking industry, and then we always sell through a dealer but we do lots of end-user communication. They love to have those opportunities to go directly to the manufacturer and say, “Could you make it do this and this?” And of course when you get into a room where there’s 10 bankers and the security director of each one, one will say, “I want it to this and this” and somebody else will say, “Wouldn’t it be better if it did this?” “Oh, yeah, let’s do it that way.” When you get that consensus among them it helps make our product really targeted toward that industry.
Looking at the larger industry picture, what about all the manufacturer consolidation we’ve seen? Being independent I am sure makes DMP more nimble. What’s your perspective?
Britton: DMP’s faces are consistent. Customers see myself, Marc Mills, David Peebles, Joe Hurst and others that have represented DMP for decades and decades. Even though some of the other manufactuer names stay the same, the people change. So that underlying change in leadership and sometimes strategy is upsetting. We stay the course of being very consistent.
Some of those larger players must have shown interest in acquiring DMP through the years?
Britton: You get people calling all the time wanting to buy, but now with the next generation of Jeff [Britton] and Brad [Tucker] in here and each in very key roles, we really don’t even talk to anybody. We’re just not interested. We like building and designing alarm panels.
How about DMP consolidating other suppliers, what is your acquisitive stance?
Britton: We have considered how we’re going to get into videos. We could go buy a video company or a couple of small ones. We just never have tried that. We’ve used outside engineering to get us into a market knowing we’re going to let them come and train us. So we’ll do that and then as we gain that experience we’ll develop people that now we can do all the work on our own. Then we’ll try to do the same thing with some other technology we don’t know, and then we’ll go out and seek outside help to do our first product with us, and then train us and learn and hire those types of people, get better and better on that.
You’ve worked with so many dealers and also come from that world. Could you offer three pieces of advice for if you were a dealer today, what you would focus on most?
Britton: The first thing is determine what business you’re in, that you can sell big systems with not a lot of recurring revenue and make good money, if you want to be in that business. You can sell the least expensive system in the world and have a good business, if you want to be in that. Don’t try to mix them. One of them is a whole lot of capital and machines that churn through. One of them takes highly skilled people. Maybe a line of credit or something, but you can’t mix all that. You can’t be everything to every part of the security industry. Pick your part of the industry that you can really excel in.
Second would be getting a good financial advice, whether it’s a full-time CFO or a good outside advisor that can advise on your daily operations. OK, this is costing you, this is losing, how to direct all your daily stuff. And then your long term, if you’re going to make money here then you’re going to have to either have good financing or you’re going to have to have a good marketing program.
Then on the technical side you’ve got to have good technical advice. You have to have somebody that knows we can do this or we can’t. That is too difficult of an installation that you’re getting in over your head, or we’re really good at this. We can get these kinds of people that can install this every single day.
It’s also about having the insight to know what the culture or climate is right now in the alarm industry. What will work really well right now, that you have to know whether commercial is on decline or is the housing marketing falling to zero. If so, then don’t do a residential plan right now. Having those kinds of advisors around you that can really look at the climate of the industry would be really important.
It’s shifted a lot over the last few years.
Britton: It has; hasn’t it? Vivint came in with a door-to-door plan that happened to be right in the climate they knew they could probably knock on any door and show them I’ve got something better than what you’ve got. Today, I don’t know that you can. If you decide you’re going to go after residential, whatever product you have, it may or may not be better than what those people have inside. Now, there’s a pretty good chance they’ve got a nice graphics display and some lights, locks, thermostats. But when Vivint started you probably had a plastic key thing that you punched in the code and made noise at night for a reason or for no reason. That was a unique time.
Is there anything else you would like to add?
Britton: It’s a fun industry. It’s an exciting time in it. I appreciate you coming in and talking with us.