HOW big is too big? Probably when you can’t see your feet any more — or when you are carrying bits that you no longer recognise as you. For Thomas Berglund, chief executive of Securitas, the world’s biggest security firm, that moment has come.
“When you reach a certain size,” says Berglund, “ you realise you need a certain degree of speciality. By splitting up businesses, they become more transparent and understandable and perhaps easier to drive, especially when there is no strong logic in keeping them together.”
This month London-based Berglund surprised many by announcing that he is splitting up the Swedish giant Securitas, spinning off three of its global divisions — cash handling, security systems and alarms — into new listed companies and retaining only its oldest business, security guarding.
From September, shareholders will find themselves with extra stock, issued on a one-for-one basis, in three new multinationals, and Securitas will lose a third of its £4.8 billion turnover and £460m profit, and its world No1 tag. A sixth of its 200,000 workforce will go too.
Then, promises Berglund, he will begin building the business up again, starting with a drive to buy more security-guarding operations in Britain, Latin America and Asia. In just a few years, he predicts, Securitas’s turnover and profit will be back to 2005 levels.
Bold or barmy? A bit of both, you might think on meeting him. Bulky, blue-eyed and white-haired, 53-year-old Berglund carries himself with a rumpled directness straight from the Boris Johnson school of charm.
But as boss of Securitas for 13 years, he has cannily plotted the group’s growth by acquisition, first across Europe, then through America, doing things his own idiosyncratic way.
Now Securitas keeps its listing in Stockholm and most of its top managers in London (guess where they would rather pay income tax?), while much of its business happens elsewhere.
And Bentley-driving Berglund, one of the longest-serving leaders in European big business, has become a security- industry legend, known for his folksy commitment to staff values, typified by the little wooden toolbox he gives to bosses in every company he buys. The toolbox features carved wooden representations of the disciplines he wishes employees to grasp. He has even brought one to show me.
“Successful management tools cannot be too sophisticated,” he says in his Swedish-inflected English, pulling out the box’s contents, “because successful means it has to be understood by everyone.”
He may need it to convince sceptics about his motives for the Securitas break-up. He argues that the group has done it before — spinning off lock company Assa Abloy in 1994 — and that the divisions will have more value standing alone.
They also, he says, have few synergies now with the main business. They already buy from each other at market rates — and they can continue to do so as separate companies.
But others are not so sure, and raise a host of other questions. Is Berglund, after flat share-price growth, splitting up the group to prevent a bidder doing likewise? Is he facing unrest from the next generation of management, who see the promotion ladder blocked? Or is it a tactical move to put pressure on multi-divisioned Group 4 Securicor, the rival soon to become world No1 by default? Berglund, sitting in shirtsleeves at his London PR firm, smiles when I put this to him. Maybe, he says. Tyco and UTC, the American conglomerates, had run a ruler over Securitas, but it never came to anything. As to whether his senior managers are log-jammed beneath him, “what do I know?” he shrugs.
Well, you’re the boss. “Ja, but the discussion has not been about that, it’s about focus, focus, focus.”
And putting pressure on rivals to break up too? “I don't think so, but in all humbleness I feel we have showed the way for others. You need to build more speciality in each of these divisions. Why keep them together if there are not operational synergies between them?” Because many believe there still are. Group 4 Securicor also operates security systems, cash handling, and manned security divisions — plus prisons, which Berglund has avoided.
Nick Buckles, Group 4 Securicor’s chief executive, says he is surprised at the scale of the Securitas break-up. “There may not be close synergies in developed markets but there are in developing ones,” says Buckles. “And there are also core competencies you share round the group.”
And getting into developing markets, where Securitas has lagged behind Group 4 Securicor, must now be a priority.
Has it been slow? “No,” says Berglund, “we just felt it was more important to be first in Europe, then in America. That’s 75% of the total market in the world. It took a long time to sort out America. Now, we take the next step.”
Or is the break-up about keeping himself motivated? He puffs his cheeks. “In one way you can say many of us have been around for a long time, but as the company has developed, every change is like a new game. At the same time, there is an end to everything.”
That’s a politician’s answer — an echo, perhaps, of when he worked as a youthful adviser to Sweden’s right-of-centre Liberal party. His drive to get into politics died, he explains, when he found that not everyone shared his ideals.
“You have to eat every day,” he says, “and then you realise some are more focused on the eating than changing the world.”
The youngest of four children, Berglund spent his early years being inculcated with his parents’ ambition to get ahead. His father worked selling British cars in Stockholm, but for understandable reasons was not very successful.
Berglund fell into Securitas after politics, offered a finance job by a friend. He joined a company that was loss-making and demoralised — “simple guarding, very little cash handling, very centralised” — and he became part of the cadre of management that turned it round.
Colleagues praise his ability to organise in a tough people business. His approach is the opposite of what he initially found: he keeps a small head office, devolves authority, and encourages promotion from within so staff always feel there is opportunity for advancement.
“He is just very good at painting a picture of where he wants you to go, and making you move towards it,” says Andy Natt, managing director of Securitas Mobile UK.
Others pinpoint Berglund’s dry wit — not the stuffiness of some Swedish bosses — and the values he has instilled. “Thomas brought rigour and discipline to a fragmented sector that was not the most professionally run,” says Roger Carr, former chairman of Chubb.
“He has given his heart and soul to the business.”
That heart and soul will be tested as Berglund watches the reaction to his break-up plan — good, so far — and assesses how quickly he can overtake Group 4 Securicor again.
Its boss, a self-professed admirer of Berglund’s style, is still bemused at getting to No1 so easily. “That’s my three- year objective achieved,” jokes Buckles.
Berglund, on the other hand, will remain patient. He will keep his British base — he came in 1999 “for Heathrow and the investment community”, he says, and those factors won’t change. He has a riverside house in Henley, and a holiday home in Sintra, Portugal. He recently divorced, and now has a 43-year-old girlfriend, a former employee.
His remorseless travelling, however, will continue. That’s one reason why he is little seen on the business circuit here. More noticeable, perhaps, is his red Bentley Continental. “I don’t mind a nice car,” he grins.
We may catch more of that as he scours Britain for acquisitions. He will want to prove that Securitas’s reduced size does not limit its ability to buy here, where it is only No 6 in guarding. But he is waiting to see how new laws on the licensing of guards will affect smaller rivals.
Until then, he has enough on his plate. “It’s better to manage a few things very well, than a lot of things in an average way,” he says. And he hopes performance, and the markets, will prove him right.
Vital statistics
Born: June 18, 1952
Marital status: divorced, with three children
School: Norra Real, Stockholm
University: Stockholm School of Economics
First job: political adviser to the Swedish Liberal party
Salary package: £880,000
Homes: Henley and Portugal
Car: red Bentley Continental GT
Favourite book: All Quiet on the Western Front, by Erich Maria Remarque
Favourite music: Mozart
Favourite film: Limelight, starring Charlie Chaplin
Favourite gadget: iPod
Last holiday: Portugal
Interests: sailing
Thomas Berglung's working day
THE Securitas chief executive wakes at 5am at his home in Henley and heads for Heathrow airport. “I travel most days,” says Thomas Berglund, “so I take breakfast on the plane. Then a taxi to one of our offices the other end.”
He will go straight into meetings, taking reports. “There are always areas I focus on at any one time. When all is fine, I delegate and stay away a lot. Right now I must get the organisational changes in Europe right. Before that, we had problems in America. I’m not much help with customers, as business is done locally.”
Berglund usually returns to Britain after 8pm. “I stop work when the plane lands.” He visits investors in the City every quarter, but rarely wines and dines contacts here. “If I go out, I prefer to go with my girlfriend or children,” he says.
Working space
THOMAS BERGLUND works from a corner office on the top floor of Securitas’s British base, a two-storey block on a Feltham industrial park in west London.
His white-walled room is modest, furnished with an Ikea desk and three chairs, and carpeted in beige. A photo of a Securitas management meeting in Barcelona is the only picture on the walls. Gifts from colleagues in the industry, including a toy security van, are dotted around.
“It’s not a prestige office, but I am not there that often,” says Berglund.
Is it nicer than the modern office near Gatwick of his rival Nick Buckles, boss of Group 4 Securicor? “No,” he laughs, “but you’ll never get me to say anything nasty about Nick. He is a good guy, a hands-on manager, and really knowledgeable.”
