A Sketch of the Visionary Libertarian Security Company

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In Built
to Last
, Jim Collins and Jerry Porras describe the results
of their 6-year research project to identify and understand a slate
of visionary “gold-medal” companies. The criteria were:

  • premier
    institution in its industry

  • widely
    admired by knowledgeable businesspeople

  • made an
    indelible imprint on the world in which we live

  • had multiple
    generations of chief executives

  • been through
    multiple product or service lifecycles

  • founded
    before 1950

Against each
visionary company, they compared a silver- or bronze-medal caliber
company. Some of the visionary-comparison company pairs were:

visionary
company

comparison company

Ford

GM

GE

Westinghouse

Hewlett-Packard

Texas Instruments

Marriott

Howard Johnson

Among other
things, they compared the financial performance of the 18 visionary
companies with the 18 comparison companies and the general market.
For $1 invested 1 Jan 1926, it would have grown to, on 31 Dec
1990, $415 in the general market, $955 in the index of comparison
companies, or $6356 in the index of the visionary companies. This
financial performance is in addition to the criteria listed above.
Clearly, being a visionary company means changing the world while
also creating stellar returns. One of the visionary companies
profiled, Johnson and Johnson, has never had an unprofitable year!

Collins and
Porras and their team of researchers studied the entire history
of each visionary and comparison company. Among their findings,
they claim this:

Our
research showed that a fundamental element in the “ticking clock”
of a visionary company is a core ideology – core values and
sense of purpose beyond just making money – that guides and
inspires people throughout an organization and remains relatively
fixed for long periods of time.

They support
this claim with case study after case study of visionary companies
operating in accordance with an articulated ideology, sometimes
at the expense of short-term profits, as Merck did with Mectizan,
or in the absence of solid marketing data to support a product launch,
as Sony did again and again, with “the first magnetic tape recorder
in Japan (1950), the first all-transistor radio (1955), the first
pocket-sized radio (1957), the first home-use videotape recorder
(1964), and the Sony Walkman (1979).”

When examining
the service-oriented visionary companies, the ideological edge was
most prominent. Each company was rated on ideology on a scale running
from 4 to 12. Marriott bested Howard Johnson by 6 points, Nordstrom
bested Melville by 3 points, Wal-Mart bested Ames by 6 points, and
Disney bested Columbia by 7 points.

If we are
persuaded by the work of Collins and Porras, then we must conclude
that core ideology is an essential part of what it means to be a
visionary company. But must this ideology be something in particular?
Collins and Porras say no:

In a visionary
company, the core values need no rational or external justification.
Nor do they sway with the trends and fads of the day. Nor even
do they shift in response to changing market conditions.

Further, they
caution:

Core
ideology does not come from mimicking the values of other companies
– even highly visionary companies; it does not come from following
the dictates of outsiders; it does not come from reading management
books; and it does not come from a sterile intellectual exercise
of “calculating” what values would be most pragmatic, most popular,
or most profitable. When articulating and codifying core ideology,
the key step is to capture what is authentically believed, not what
other companies set as their values or what the outside world thinks
the ideology should be.
Let’s apply this
now to a libertarian security company.

Libertarian
Security

As I have
argued
before
, trying a security business model as envisioned by libertarians
will likely require starting a new company. And so, while Securitas,
for example, may well be a visionary company in its own right (I
am not persuaded that it is), it likely does not have the entrepreneurial
vision to move in the direction of subscription-based patrol and
restitution for residences. Their work, and that of most security
companies in the US, continues to be focused on business, government,
and other large, institutional clients. I claim that a new security
company that has such libertarian models within its sights must
be independently launched for these security models ever to be tried.

When this
new security company is launched, it has the potential to be a visionary
security company. One essential element of such a company is that
it adopt an ideology. What should be the core ideology of a visionary
libertarian security company? Libertarian ideology, of course! But
what does that mean?

The Values

Nozick (in)famously
argued in Anarchy, State, and Utopia that a likely historical consequent
of free competition in the provision of security would be the establishment
of a geographic monopoly company that forced its “customers” to
pay whatever rate it chose. Murray Rothbard rightly ridiculed this
in the Journal of Libertarian Studies as the “immaculate conception
of the state." I have argued elsewhere
that the main flaw in Nozick’s argument is that he presumes that
the security and adjudication companies would be one and the same,
when it is clearly not in their interest to combine. But, this is
a good value to enshrine: we will not be judges in our own cases,
or in the cases of our clients.

Further, we
might worry that our company might not play well with others. Again,
I have argued here
that it is in the interest of such a company to cooperate with competitors,
including tax-funded patrol, in the capturing of data on crime,
patrol services rendered, share data with insurance companies, and
even establish a patrol-credit clearinghouse to fairly compete with
other companies in the same jurisdiction. So, another value to enshrine:
we will cheerfully cooperate with competing patrol and indemnification
providers.

One of the
dangers of being both a visionary company and a patrol-and-restitution
company is that visionary companies are often secretive about their
internal operations. However, it is in the best interest of a patrol-and-restitution
company to be transparent in its operations, procedures, and cases.
There are some areas (employee privacy, pending cases) that must
be confidential, but the goodwill and trust that transparency create
will be invaluable to the company. I do not mean revealing a little
more than other companies – I mean completely transparent.
As a value: our policies, procedures, operations, and finances will
be open to the public.

There are
many other values a visionary patrol and restitution company might
want to hold. Some of those are typical of a service industry, such
as: continuous improvement, excellence in reputation, hard work
and productivity, service to the customer, and running lean. These
are important considerations, but the most worthwhile value to uphold
in the security industry is one that Securitas works on constantly:
raising the status of security professionals. I have argued here
that the subscription patrol and restitution business model is particularly
well-suited to this worthwhile goal, since patrol work under this
business model is likely to be more demanding than patrol work by,
say, a Sheriff’s Deputy. As a value: our staff will continually
learn and improve, and be of the highest caliber in capability,
productivity, and integrity.

To recapitulate,
the values are:

  1. Justice.
    We are not arbiters in our own cases, or in the cases of our clients.
  2. Cooperation.
    We cheerfully cooperate with all providers of patrol, insurance,
    and adjudication.
  3. Transparency.
    Our policies, procedures, operations, and finances are open to
    the public.
  4. Personal
    Excellence. Our staff continually learn and improve, and are of
    the highest caliber in capability, productivity, and integrity.

Purpose

But an ideology
is more than values. To be compelling, there must be a purpose.
For Merck, it is victory against disease and help to humankind.
For Sony, it is applying advanced technology to the life of the
general public, and the elevation of the nation’s culture. Johnson
and Johnson has its Credo.
It is hard to follow acts such as these, but I offer this:

To improve
our community by reducing fear, reducing crime, reducing recidivism,
and building meaningful connections between neighbors and community
organizations of every type.

Defending
this purpose, I point out that patrol is a good itself, regardless
of its effects, so that reducing fear is an important goal. Reducing
crime is obvious. Reducing recidivism is less obvious. Since our
operating procedure will be to attempt to engage offenders in mediation
or arbitration, more restitutive justice will take place than in
our absence. Some
studies show
that participation in mediation reduces recidivism,
and there are reasons to think that the same reduction would accrue
to arbitration. This reduction in recidivism seems to be partly
due to the creation of positive social bonds between victim and
offender.

But building
meaningful connections between people in a community can be accomplished
in other ways, and has a multitude of positive effects, among which
are the reduction of crime. This is an important element of the
purpose of a visionary patrol and restitution company. Just as in
the age of kings, outstanding men and families rose to the stature
of judge or king in a geographical area; so, the patrol and restitution
company must rise to prominence, but in a modern way that respects
liberty. A possible strategy for doing just that is to be a Gladwellian
connector
for the community, bringing together, for instance, the family that
has just had a reduction in income with the local Christmas charity.
As the eyes and ears of the community, the company would be well-positioned
to fill this essential role, which could benefit its customers and
the community at large.

January
8, 2007

Gil
Guillory [send him mail]
is
an engineer in Houston.

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