The Obama Administration : Debates and Trends in US Foreign Policy

An Indian View by R.Swaminathan

“The power of accurate observation is commonly called cynicism by those who have not got it.” – George Bernard Shaw
I have been studying the developments in the USA and India-US relations for nearly fifty years and have developed no phobia. The apprehension about stronger and strategic ties between India and USA making India a client or vassal state of USA is not shared by me. I try to be realistic and, in the process, may appear as being cynical on occasions. My apparent cynicism stems from genuine concerns, which are naturally based on my perception of India’s national interests.

There is a sense of déjà vu when viewing the Obama Presidency, because of the many parallels with the Camelot days of the (tragically shortened) Kennedy Presidency in the early 1960s. Both young presidents were elected, in major departures from history and tradition, on the basis of hopes and high expectations raised by visionary rhetoric and promises of change or transformation. JFK was the first non-WASP (White Anglo Saxon Protestant) to be elected President and Barack Obama is the first non-white President.

First, the Positives
President Obama has brought about a change in the US official mindset, trying to replace war as a means of settling issues with international diplomacy and dialogue. The changes in the deployment of the anti-missile shield and in the approach to Iran are positive steps that should help in reducing tensions around the world. The President has been showing that the US is “out of the bullying business” and prefers cooperation to “going it alone”. His foreign policy philosophy and style have unfolded in his foreign trips and major speeches. It can be said with some certainty that governments and peoples around the world have now started feeling slightly better about USA and its president.

The hard reality, however, is that USA is continuing to fight two wars far from its shores, seemingly without any clear idea of how to win or to disengage. I find it difficult to agree with the unstated logic of the Norwegian Parliamentary Committee (Jury for the Nobel Peace Prize) that visionary rhetoric, raising hopes and expectations, as well as a few symbolic actions, could be substitutes for real actions and “deliveries”. As the President has himself said, the award of the Peace Prize “is a call for action”. Hence it is time to start “transforming” rhetoric to actions and, as Nike says, “Just do it”.

Then, Some Indian Concerns
The US-India Civil Nuclear Cooperation Agreement (2007) was signed by the Executive and ratified by the Congress. However, the sponsorship of the UNSC resolution which, in effect, seeks to dilute / change the terms of the bilateral agreement, raises doubts about the sanctity and credibility of bilateral agreements signed by the USA. The real values of the President’s assurance to the Indian PM that the UNSC resolution is not directed at India and the statement that the US commitment to carry out its obligations under the Agreement remains undiluted have to be seen in the coming months. There is an old aphorism that one cannot get at the peace talks what one could not get in the battlefield. In the current situation, it can be adapted to say that what has been agreed to in bilateral negotiations should not be sought to be diluted through a subsequent international instrument. [It is worth noting here that the US Senate’s refusal to ratify the CTBT is still current.] Tens of billions of dollars worth of commercial deals between India and USA, relating to nuclear reactors and power generation, would depend very much on how well the Obama Administration accepts the President’s admonition (though delivered in a different context) that rights come with responsibilities.

Recent debates in the US are displaying extreme concern for Pakistan’s uneasiness about India’s role in Afghanistan. General Stanley A. McChrystal had said that it is “likely to exacerbate regional tensions”. Later, on 2 October 2009, Milt Bearden (ex-CIA Station Chief in Pakistan) said that “India is becoming involved in Afghanistan to an extent that Pakistan considers Afghanistan as developing into an Indian garrison.” [Of course, India has no troops in Afghanistan.] Chairman John Kerry of the Senate Foreign Relations Committee characterized Bearden’s presentation as a “very cogent and thoughtful oversight”. In a thinly-veiled effort to justify Pakistan’s sponsorship of terrorist actions against India, Steve Coll (President of the New America Foundation) said that “Pakistan believes that it requires unconventional forces, in addition to nuclear deterrent, to offset India’s conventional military and industrial superiority – and hence the tolerance to Taliban”. In effect, the earlier hyphenated US-India-Pakistan relationship that the Bush Administration was moving away from seems to have been reinstated and renamed the Af-Pak policy. On the other side of the coin, the Pakistani military establishment has vigorously disagreed with the political leadership and has termed the anti-terrorist conditions in the Kerry-Lugar Act on US assistance to Pakistan as violating Pakistani sovereignty. In relation to China also, the Obama Administration seems to show more concern for the sensitivities of China than for those of India. There is apparently a steady “transformative” reversal of the “pro-India” posture of President Bush. I would prefer to see USA-China, USA-India, India-China and India-Pakistan relations as inter-related issues – with none of them holding any other hostage. A rising India should be unwilling to be considered and used only as a counter-weight to a rising China.

Military relations between India and USA are growing rapidly. Many joint armed forces exercises are carried out, even without sharing any stated or presumed joint strategy in South Asia – though there is “a shared strategic interest” on some issues including combating terrorism. Many analysts feel that the ongoing military cooperation between India and the United States is bound to grow (at least at the commercial level) as India plans to spend billions of dollars for modernizing it defense capabilities. India, they say, is preparing for short term threats from Pakistan and long-term deterrence against China.

A former Indian Foreign Secretary (Kris Srinivasan) has written that “Big countries usually differ on big issues, like security and arms control, the environment or access to trade. But between India and the US, the small matters are blown out of all proportion and it seems, at times, as if India is searching for matters on which to take offence”. He says that, despite emotional reactions against any outsiders who dare to interpose themselves in Indo-Pakistan bilateral relations, there is nothing that the Government of India would like more than Washington’s benevolent attention and sympathetic understanding. Is the US devoting thought and time to Pakistan at the expense of India - a Pakistan (which is a client state in nearly every respect) where anti-Americanism is stronger than it is in India? An important question is whether President Obama and Secretary of State Hillary Clinton can initiate and sustain measures to reduce the feeling of muted hostility that many Indian opinion-makers nurture?

Conclusion
The old saying about knowing one’s enemy applies equally to knowing one’s friend. President Obama and his advisers need to realize that USA and India have all the requisites and needs to be friendly to each other, even without any requirements imposed by their relations with China and Pakistan. The political leadership and the peoples of the two countries have clearly to understand the strengths and weaknesses, as well as concerns and sensitivities of each other and not take good relations for granted. An ambience of free consultations and explanations (of the evolution of policies affecting the other) would be very helpful. The promised and expected Obama-led transition from confrontation to consultation to cooperation should help both countries in the long run.

[The Center for Security Analysis and the US Consulate General in Chennai jointly organized a public lecture in Chennai on “The Obama Administration: New Faces, Debates and Trends in US Foreign Policy” on 15 October 2009. This brief note was prepared by R.Swaminathan, President & DG, International Institute of Security and Safety Management, and former Special Secretary, DG (Security), Government of India, to form the basis of his talk on this occasion. He can be contacted at rsnathan@gmail.com]

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The Indian Security Czars; Indian Security Companies thinking Big

- Mr. G.B. Singh, Editor, Security Today Magazine.

THE last two years have been signifi cant in many ways for the global business community. While the year 2008 will mostly be remembered for the sub prime crisis - collapse of Lehman Brothers and the global fi nancial crisis that followed, the India Private Security industry would remember it as a period when our small, close knit protection industry came of age.

Over the last few quarters, our private security industry and its constituents have seen it all – almost! First the cutbacks on security budgets as a result of cost saving initiatives by major security buyers, then the sudden spurt in demand post 26/11 attacks, pressures on business as a result of regulatory action in different states, rise of unionisation amongst industry workforce, emergence of private security as a recognised industry sector by government and media… there is clearly a lot that has happened in the last twelve months. However, there is one other development that may go un-noticed in the already crowded list, a relatively quiet move by few of our peers has changed the image of the Indian Private Security Industry forever - a step that marked the arrival of Indian owned security businesses on the world security industry map.

This story is an effort by the S SECURITY ECURITY TODAY ODAY editorial team to bring to the fore the rationale, excitement, struggle, entrepreneurship and sheer boldness that resulted in the creation of Indian Multinationals in the private security business – in times that are widely acknowledged as the greatest fi nancial downturn since the 1920s. It is also an effort to gather and share the experience that Indian owned security companies have gained from their overseas operations.

As a part of our research we followed the story of SIS, TOPSGRUP, ZICOM and Firepro - all well recognised, leading security industry players in India and tried to understand how and why they decided to take the plunge to expand their businesses outside of India in the midst of global business turmoil.

The cross border M&A bug seems to have bitten most of these Indian Security companies sometime in the year 2007. This was a time when the Indian security industry was on a dream run. On the back of strong demand for security products and services as well as increasing awareness about security, most leading security companies recorded phenomenal growth and bottomline expansion. This was also the period when Private Security Industry emerged prominently on the Private Equity radar as the next - Sunrise sector! Companies like TOPSGRUP, FirePro and SIS India Limited concluded private placements with the big boys of the fi nancial world. While Rakesh Jhunjhunwala (also known as the Warren Buffet of India) acquired 16% percent stake in TOPS, DE Shaw & Co. which ranks amongst the world’s largest hedge funds invested in SIS. Firepro also received US $ 12M investment from AIG. It was clearly a time when the fi nancial wizards were waking up to the tremendous wealth creation opportunity in the private security sector. With valuations at all time highs and availability of debt and equity funding, it was clearly a time when the Indian security majors were spurred to think big and push the envelope.

In March 2007, ZICOM perhaps became the fi rst Indian security company to make a major investment overseas with the acquisition of 49% shareholding at an investment of US$ 5 million, in Unisafe Fire Protection Specialist LLC, Dubai. Sharing insights into their international foray, Mr. Pramoud Rao, Managing Director of ZICOM explains “In 2006-07 there was a major construction boom in the Middle East, especially Dubai. Huge infrastructure projects coupled with large commercial projects were driving the Emirates Economy. Over 70% of the world’s construction cranes were engaged in Dubai and we decided this was the best opportunity for the company to ride on the curve of the boom”.

Firepro also setup its international operations during the same period in Australia. The reasons for Firepro seem to be quite similar. Mr. NS Narendra, Managing Director of Firepro adds “The expertise that Firepro has built over almost two decades is applicable globally. This helped broaden our vision in terms of expanding national leadership into a more global position. Our reputation locally has helped us connect with emerging opportunities in the Middle East, Singapore, Malaysia, Australia – and now Europe. We have been associated with ‘lighthouse’ international projects like the F1 Grandstand and Ferrari Experience Mall at Abu Dhabi. Our idea of the Firepro Centre of Excellence has found immediate acceptance in developed markets like Germany and Australia.”

While the electronic security companies initiated the overseas expansion binge in 2007, the big ticket M&A transactions were still sometime away. It was only in May 2008 that announcements were made for TOPSGRUP’s acquisition of 51% in Shield Guarding Company, UK and then the mega deal of SIS – 100% acquisition of Australia’s largest security business, Chubb Security, from United Technology Corporation, USA.

Dr. Diwan Rahul Nanda, Global Chairman of TOPSGRUP while sharing the rationale for his INR 125 Crore acquisition of Shield Guarding Company, the 10th largest private security operator in the UK, explains, “The year 2007-08 was a landmark year when we committed to making a paradigm shift from just being an Indian company to becoming a transnational company. While our Indian revenues grew to more than INR 3 billion we embarked on an aggressive global journey to acquire strategically placed security companies in high growth & strategic global markets. The globalization plan was also designed to counter competition from global players in the home market and to enable economies of scale by taking advantage of consolidated opportunities across geographies. It was also felt that cross pollination of ideas, processes, best practices & strong client relationships were needed to consolidate our leadership position in India while equipping TOPS to be a preferred global brand.”

Mr. R. K. Sinha, Chairman, SIS Group explains the acquisition of Chubb Security, a $375 million market leader in Australia, and says “principal drivers for our international foray were the need to scale up and the opportunity to leverage customer relationships and best practices from more evolved markets… with the acquisition of Chubb Security, we have managed to achieve those objectives to a large extent.” Elaborating further on their experience in UAE Mr. Pramoud Rao of Zicom adds “Unlike India, one of the best things we experienced in the Middle East is the quality of workmanship with the clients demanding the best from us. There the safety standards are taken very seriously and nothing is compromised in order to deliver a robust safety solution. Price is not the only criterion for deciding on the contract being awarded, rather it’s the technical capability which is given preference. The handing over process is also very stringent and the checks and balances are very well defi ned. Overall, I would say, it’s a great experience of working there.”

Like they say, it isn’t a bed of roses. The great opportunity in overseas markets and the fantastic knowledge transfer comes with its own challenges - the biggest one being, getting stakeholders in the business to recognise and respect Indian ownership. It is not very often that one hears of an Indian Security multinational and that is exactly what appears to be the problem. Mr. R.K Sinha, Chairman & MD, SIS India Limited admits some diffi culties but clarifi es “Its unfair to say that Indian owned security companies fi nd it diffi cult to operate in international markets, it’s just that the concept of Indian ownership is a little new in the developed world – especially in the security space. One is more used to hearing of a US, British or Swedish multinational. This does create some issues initially for employees and customers but one has to learn to deal with that”.

Talking about the challenges for Indian companies operating overseas, Diwan Rahul Nanda of TOPS says “There was absolutely no change in the management structure of the company, thereby ensuring customer’s perception that ‘it was business as usual’ & nothing has changed. I have led from the front the integration process of Shield Guarding. I have personally met most of the customers of The Shield Guarding Company and ensured that Shield did not lose a single customer or employee, post the acquisition. Plus I have been actively steering a ‘Best Business Practices’ study that was initiated to understand and leverage the synergies. We have established systems and processes to systematically align employees of diverse backgrounds and cultures with short-term synergy goals and long-term performance objectives to create accountability at various levels keeping the entrepreneurial culture of TOPS in sight”. Sharing his experience of operating with partners in overseas markets.

Mr Pramoud Rao of ZICOM adds “All acquisitions come with some expected and unexpected challenges. Out of the many challenges we faced, the biggest was on the fi nancial front. A huge amount of uncollected debts were lying in the market and the company needed urgent injection of working capital. We decided that the working capital would be supported only through collections from debtors. Meeting customers and convincing them to pay was one of the biggest challenges we faced. Also in a few of the projects, the workers had not been paid their salaries and had stopped working. We had to convince the workers of the credibility of the new management and motivate them to start working for the new entity.”

It is indeed fascinating to learn from industry leaders of the vast global experience that they have gained over the last year or so of operating internationally. One thing that emerges quite clearly is that this global push by Indian security companies is certainly not a one off exercise. A majority of the companies we spoke to are in the process of looking at other M&A opportunities across different parts of the world. The global fi nancial crisis may have managed to slow them down a little but it certainly has not deterred them from pursuing their global ambitions.

SECURITY ECURITY TODAY ODAY caught up with Chairman, SIS Group, Mr. R.K Sinha to understand how his mega acquisition in Australia was faring and the international experience for SIS group over the last 12 months.

ST: Mr. Sinha, 1st August, 2009 was the fi rst anniversary of your acquisition of Chubb Security in Australia. Looking back, how has the experience been for you and the SIS Group in general?

RKS: As an entrepreneur, the transaction has been a matter of great satisfaction and pride. For the company, it has been a tremendous learning experience. Being our fi rst international operation, there was certainly a lot of knowledge and experience to be gained. One year down the line, I’d say that we are quite satisfi ed with the way things have progressed. The rationale for the transaction is playing out quite nicely. We hope to make the acquisition a success story.

ST: We have been wanting to ask you this for a long time - why Australia? Most other companies seem to be going into UK, US and the Middle East.

RKS: When we were developing SIS’s Vision document, we thought hard about where we would want to see the company in 2015 – what could possibly be SIS’s unique position in the global security space. From our research, we realised that the long term opportunity in the contracted security space was actually in APAC region. The security business in APAC was witnessing a growth in excess of 15% YoY as compared to 5% in the mature markets like the U.S and U.K. It also emerged that barring G4S, there was no player with a pan APAC footprint – it was quite clear from this analysis that the value proposition for us was to position SIS as a leading player in the fastest growing security markets in the world. As a fi rst step in this journey, we didn’t want to start with multiple small acquisitions in small countries with limited growth prospects – this would obviously be too complicated to handle. Alternatively, we decided to focus on one major market, gain experience and then plan strategic ‘bolt on’ acquisitions across the region. Within the APAC region, Australia is not only the single largest market but also the most developed one in terms of operating practices. It so happened that Chubb’s AUD 375 M Australian business was put on the block around the same time. The rest is history.

ST: A lot of Indian companies that acquired entities in the last 24 months seem to acknowledge that they over valued the target. How do you see the acquisition of Chubb Security (now MSS) from a valuation and return on investment standpoint? The Economic Times reported it to be a USD 235 Million deal.

RKS: I don’t think that there are things such as right or wrong, high or low as far as valuations are concerned. It depends on how you assess the opportunity – estimate the intrinsic value of the business, investment risk, strategic upsides etc. There was a lot of speculation around the price we paid for Chubb Security. Different media reports quoted different estimates. As far as we are concerned, we believe that we paid a fair price for the business and based on that we will create a handsome return on capital for our investors and shareholders.

ST: Considering that this deal was concluded in May – August, 2008, it certainly wasn’t a case of good timing – fi nancial markets wise. What challenges did you face as a result of the global fi nancial crisis?

RKS: You are right. It wasn’t great timing to try and close a multi million dollar deal in the fi rst half of 2008. Also given the fact that this was the fi rst time an Indian security company was pursuing a transaction of this size – things did get very diffi cult at one point in time. Had it not been for our faith in the fundamentals of the transaction and the backing of our fi nancial partners, especially the State Bank of India, anyone could have succumbed to the pressure. Credit goes to our deal team that worked painstakingly addressing each challenge one by one to close the deal. It took us almost eight months, but the efforts paid off.

ST: How did the customers adjust to Indian owners after UTC, the American giant? How diffi cult was it to gain the confi dence of customers in Australia?

RKS: Well, I’d be wrong if I said that there were no issues. UTC being a Fortune 100 company is a big name in International business. SIS was comparatively an unknown entity in Australia. In the run up to closure and even for a brief period afterwards, there were serious apprehensions about Indian ownership……………., but I guess the dust settled once everyone realised that even though we weren’t exactly UTC, unlike them, Manned Guarding was core business for us and we were committed to it. Customers and other stakeholders realised that we not only understood and appreciated the nuts and bolts of the guarding business; we were also keen to deeply participate with the local management in terms of improving the business and the service quality for customers. Since then there has been no looking back.

ST: We understand that you have not deployed managers from SIS’s Indian operations to run the Australian business. Any reasons in particular?

RKS: We strongly believe that security is a local business. To offer a good service, one needs to have a good understanding of local environment, customer interests, threat perception, manpower issues and behaviour, work culture etc. Therefore, a competent business manager who is also a local is probably the best person to operate the security business in that part of the world. Moreover, in Australia there is no dearth of professional business managers with experience in the security business and a deep sense of commitment. Keeping these facts in view, we never felt the need to export managers from India. In any case, our managers in India have their hands full maintaining SIS’s 45% CAGR.

ST: Why did you choose to re-brand Chubb as MSS Security and not v?

RKS: Again, it was a decision based on local sentiments. When we fi rst got into the Australian market, there were a lot of apprehensions about what the “Indians” were going to do. From the beginning, we maintained that we wanted to retain the Australian identity of the acquired entity. Despite the fact that the Chubb business had changed hands many times in terms of ownership and logos….. its history could be traced back to the 1940s……we decided not to disturb the Australian identity and pride that was associated with it. Therefore, when it was time to replace the Chubb brand, we agreed on MSS as the name…….a name that the business had a decade back when it was owned by an Australian group and gave the logo a makeover in SIS colours. The business transitioned into the new brand - MSS Security – An SIS Group Enterprise in June, 2009.

ST: How is the MSS (formerly Chubb) business performing generally?

RKS: The last year has been all about stabilising and improving the business. We focussed on issues like labour effi ciency, cost management, service improvements and retention of contracts. Re-branding and re-positioning the business has also been a major area of achievement. Through the efforts of the country management and our governing board, the business has shown strong correction in profi tability. Going forward, thrust is on customer satisfaction and growing the business.

ST: What are the major lessons that you (SIS Group) have learnt from this fi rst international experience over the last 12 months?

RKS: The list is quite extensive but at the heart of the learning is - the importance of building trust. In international business, it is eventually the trust and quality of relationship that one builds with employees, customers and other stakeholders that matters most.

ST: Are you looking at more acquisitions in the near term or are your hands full for now?

RKS: One is always seeking good opportunities.

ST: In the recent past there has been a lot of reporting in the media about racism in Australia and the challenges faced by Indian students, professionals and businesses there. What are your perceptions?

RKS: I have just returned from Australia. Personally, I don’t buy the racism story. There is crime in every part of the world including India. I see the attacks on Indian community members in Australia more as acts of crime than anything else. I am sure that the state governments in Australia will act to contain such incidents and protect the interests of the growing Indian community in the country. In my personal experience, I have found the Australian people to be warm, high spirited and business like.

ST: Any advice for other Indian security companies seeking to setup international operations? Do you think Indian companies have what it takes to succeed internationally?

RKS: Well…..I am no authority to really comment on this but I strongly believe that the Indian Security Industry will become a dominant player in the global security space simply because of the size of our home market and the growth opportunities it offers. There are some brilliant entrepreneurs and professionals in our Indian security sector and it is only a question of time before Indian security companies start making their presence felt on the global security scene.

ST: Thank you for your time Mr. Sinha. We wish you and SIS the very best.

RKS: Thanks! It’s always a pleasure to chat with ST.

SECURITY TODAY also chatted with Dr. Diwan Rahul Nanda, the young and dynamic Global Chairman of TOPS, in London to understand how his foray in a mature manned guarding market of the United Kingdom was coming along.

ST: Dr. Nanda, thank you for taking out time to speak with SECURITY TODAY.

DRN: SECURITY TODAY is the #1 professional magazine in the Indian security space and it’s always a joy to talk to SECURITY TODAY .

ST: Please describe your acquisition / investment in the overseas business, giving details – when did this happen, which company did you acquire, describe the product/ service portfolio, nature and level of investment etc and any other additional information that you may like to give.

DRN: In May 2008, TOPS created history in the Indian security space by acquiring a majority stake in the UK’s leading security company, The Shield Guarding Company Limited, in an all cash deal worth INR 1250 million. This was a historic fi rst ever overseas acquisition by an Indian Security Company, and that too in one of the world’s mature security markets.

Established in 1987, The Shield Guarding Company Limited is United Kingdom’s premier security organisation, setting and achieving standards of performance unrivalled by its competitors, thereby creating a niche market segment for itself. The company provides high-end services in Manned Guarding, Remote Monitoring, Reception Security, Shopping Centers, Event Security Management, Concierge Services etc.

The Shield Guarding Company is one of the largest players in the manned guarding space in the UK & amongst the top fi ve players in London. Shield has a diversifi ed client base and caters to clients from diverse sectors like Healthcare, Hi-tech Industries, Legal & Professional, Logistics, Fine Arts and Utilities. The Shield Guarding Company partners with more than 250 clients.

The Shield Guarding Company in the UK was a right fi t for TOPS because it demonstrated consistent strong contract performance, enjoyed immense respect within the industry, had a better growth rate as compared to other large players and most importantly, Shield’s core belief of ‘Customer First’ matched with our root principles too. Besides the above, a strong and committed management team associated for over a decade with Shield was the icing on the cake.

For TOPS, UK was a natural jumping board for its global ambitions because of the familiarity with the language, business processes, stability of the market and the cordial Indo-British relationships. Also, the UK is an attractive market with high security industry growth rate, as compared to other mature markets in Europe & the rest of the world. Introduction of a compulsory licensing regime leading to consolidation in the UK market makes it a good acquisition from a timing perspective.

We have recently relocated our Global Headquarters to London, the fi nancial capital of the world, to leverage its geographical proximity to the North American, African and EU markets. As we consolidate our position in the UK with tuck-in acquisitions, our Global headquarters in London will oversee our global reach into the Americas, Africa, South & Far East Asia and the Middle East in the coming years. We see UK as our springboard to global growth.

ST: What made you do it – the rationale behind this?

DRN: In TOPS, growth has been the only constant powered by its vision of achieving revenues of USD 10 Billion by 2020 and be amongst the top 3 global security players.

The year 2007-08 was a landmark year when we committed to making a paradigm shift from just being an Indian company to becoming a transnational company. While our Indian revenues grew in excess of INR 3 billion we embarked on an aggressive global journey to acquire strategically placed security companies in high growth & strategic global markets . The globalization plan was also designed to counter competition from global players in the home market and to enable economies of scale by taking advantage of consolidated opportunities across geographies. It was also felt that cross pollination of ideas, processes, best practices & client relationship was needed to consolidate our leadership position in India while equipping TOPS to be a preferred global brand.

This acquisition was “a small step by TOPS & a big leap for the Indian security industry.”

ST: What were the operational challenges that you faced after the acquisition?

DRN: TOPS’s ‘philosophy of growth’ stems from its intrinsic capabilities to seamlessly manage change, to meet the growing expectations of its customers, employees, stake holders and business partners and to stay ahead of the rest by being the best in whatever it does. This has led to the shaping of an aggressive road map for Shield to increase productivity and create more verticals/business lines for growth and horizontals of support functions with well defi ned SLA’s for enhanced customer and business support.

The Shield Guarding Company was a right cultural fi t for TOPS whose nucleus of corporate culture is built around shared values of responsibility, ownership and entrepreneurship. TOPS brings its marketing expertise to leverage on the operational excellence of Shield thereby redefi ning ‘Customer Centricity’ at Shield.

There was absolutely no change in the management structure of the company, thereby ensuring customers’ perception that ‘it was business as usual’ & nothing has changed. I have led the integration process of Shield Guarding from the front. I have personally met most of the customers of The Shield Guarding Company and ensured that Shield did not lose a single customer or employee, post the acquisition. Plus, I have been actively steering a ‘Best Business Practices’ study that was initiated to understand and leverage the synergies.

ST: Has the foray started yielding the kind of returns that you expected? Or are you still in the consolidation phase.

DRN: We have proven our mettle as the fi rst Indian MNC in the security industry. Quick and seamless integration of all three of our acquisitions into the TOPS fold establishes the basic tenets of a sustainable global corporate culture. We have successfully set systems and processes to systematically align employees of diverse backgrounds and cultures with short-term synergy goals and long-term performance objectives to create accountability at various levels keeping the entrepreneurial culture of TOPS in sight.

Post acquisition, The Shield Guarding Company has already gone into a sales overdrive. In 2008-09, we acquired 65 new units valued at Rs 590 million. In the Q1 of 2009- 10 Shield acquired new contracts worth Rs 286 million which includes key clients like Field Fisher Waterhouse, Hammersons, Bank of China and Alcatel. Shield recorded a turnover of Rs 4835 million in 2008-09 (unaudited) despite the economic downturn as compared to Rs 4509 million in 2007-08. Shield is now poised to achieve revenues of Rs 8043 million by 2011-12.

The various outsourcing and rationalization initiatives have brought about a savings of Rs 57.6 million.

A further substantial investment has already been made in our Sales Teams to enable an industry specifi c segmented sales approach. The sales teams are already meeting clients to initiate the cross selling process and getting business for India from the United Kingdom. Shield Guarding has already started to rapidly expand into new business verticals like Event Security Management, Close Protection and Vacant Property Security Management.

Substantial marketing investments are also planned for the brand ‘Shield’ which will be used as the parent brand for the other upcoming UK and EU acquisitions.

ST: Do you foresee a signifi cant number of jobs being created for Indians in the security industry overseas?

DRN: Yes, I defi nitely see a growing cadre of expat senior security managers from India but the most exciting possibility is that of Indian private security offi cers being drafted in large numbers to manage large scale sporting events like the Olympics and large scale Trade Fairs and exhibitions.

ST: What have been your key take-aways from this experience in terms of signifi cant technological upgrades and/or industry best practices?

DRN: When we acquired The Shield Guarding Company, we realized that there were certain areas of strength and certain improvement opportunities for both. We cross inherited the strengths which helped us improve effi ciency levels and growth across India and the UK. While the Indian operations of TOPS has given Shield a perspective of accelerated business growth leading to higher valuation and creation of wealth, Shield has made signifi cant contributions to the operational and technology domains of the Indian operations and in particular, effective management of critical processes such as receivables, operations, pricing etc. We also have cross functional teams from the UK and India working together to raise the operational effi ciency at the Group level.

MNC brands that we work with in India have offi ces in the UK and we are already leveraging that relationship to expand the business in the UK. Similarly, Shield clients in the UK are being approached for business in India.

ST: How do you see the future? Any more acquisitions planned?

DRN: Yes, we have a clear roadmap of having our footprint across all the continents within the next 2-3 years. TOPS is positioned at the top of the growth and industry curve; all TOPS has to do is to stay ahead of the game, keep on providing innovative and customer friendly services and soon, it will achieve its vision of becoming a US$ 10 billion conglomerate and one of the top three global security giants in the world. In the coming years, TOPS is poised to strategically enter other parts of the world including the Americas, Australasia, South East Asia and Middle East. The global pie at US$ 140 billion is big enough to make our dream of $10bn by 2020 & we have all it takes to make it happen.

To aggressively move towards our vision of becoming a global brand, a strategic reorganization is already in motion with me moving away from managing the day to day running of the business and focusing solely on taking TOPS to the next level of global leadership.

ST: What’s your message to other Indian companies?

DRN: “If you can dream it, you MUST do it.” Our global foray is part of the great M&A surge made possible with the conducive environment for overseas acquisitions powered by a combination of economic, political and institutional factors.

With the carefully-constructed acquisitions around the world already creating real value for Indian companies, Indian business people today are thriving in an encouraging environment where their entrepreneurial zeal and enthusiasm is being recognized globally.

This is the right time for Indian fi rms of all sizes to reach outside their traditional borders to fi nd new markets to sustain top-line growth, expand their capabilities and assets and maybe even to ward off the pressures of domestic competition.

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