Security concerns in the U.S. have become a hot topic in recent years, with terrorism dominating the headlines, workplace violence on the rise and kidnappings for ransom an international phenomenon. In response, many large corporations have hired chief security officers who oversee comprehensive security operations targeting every facet of the business, including personnel, IT systems, intellectual property and facilities.
Smaller family businesses face essentially the same issues as larger corporations do, but security needs will vary depending on the type, size and location of the family business as well as other factors. The challenge is to create a security infrastructure that meets the needs of the business—and the family—without going overboard, which can drain resources and foster an inhospitable climate in the workplace and the home.
I have seen small and mid-sized businesses both underestimate and overestimate their security needs, with results that range from inconvenient to disastrous. I could spend days recounting horror stories of companies and investors victimized by scam artists, of high-net-worth family members targeted for extortion, of travel security nightmares, internal theft and espionage. These stories have one key element in common: They were preventable.
• Karen Maffucci, wife of the owner of a large New Jersey landscape business, was kidnapped from their stately home in November 2005 by a laborer who had been terminated. He demanded a $1 million ransom before she was able to escape.
• Erene Rapoza, wife of Rhode Island real estate investor and radio station owner Craig Rapoza, was kidnapped in February 2006 for $150,000 ransom by two young men posing as potential property buyers.
• In May 2006, a driver transporting private artwork to New York City for David Jones Fine Arts of Boca Raton, Fla., disappeared with a truckload of pieces valued at several million dollars. The truck was eventually recovered, and police revealed that the driver had a criminal record dating back to 1989. Not exactly the kind of person you would entrust with the family heirlooms.
As logic suggests, prevention and planning provide the foundation for any successful security program. The stories that are not told because precautions were taken vastly outnumber my cautionary tales.
A strategic plan for security
Most small and mid-sized family businesses I’ve encountered handle security in a piecemeal fashion. Some have IT experts, some employ building security guards and others hire a security director. An integrated security plan that covers all the bases is essential to guarantee family safety, protect business and personal interests, and ensure peace of mind.
First, it is absolutely critical to drill down into the family’s attitudes and perceptions. Ultimately, someone’s security profile depends on his or her personal assessment of the risk of harm vs. the cost and inconvenience of taking preventative action. The steps taken to protect a family must be consistent with each family member’s level of comfort and risk tolerance.
Additionally, an assessment should be made of security technology at the workplace and home, including a determination of which tools are appropriate to meet the needs of both the family and the business. Crisis management plans should be tested. Policies and procedures should be evaluated to determine their consistency and effectiveness. Vulnerabilities should be identified: Are family members exposing themselves to unnecessary risks, for example, and how might they be compromised?
Once the assessment is complete, recommendations can be developed for managing identified risk. At this stage, you will have some essential decisions to make. How are the vulnerabilities identified during the assessment best addressed? Do you need to upgrade your home security systems or provide family members with basic security awareness and training? Are there cost-effective alternatives for various strategies? Should you hire security personnel or contract out these services?
The answers to these and other questions will vary, but a few constants are worth noting:
Due diligence: It is important to conduct background checks on all prospective employees, business partners, family hires and anyone else who might have access to sensitive business or personal information. Proper due diligence goes well beyond standard reference or résumé checks; it includes an examination of civil and criminal litigation histories, media and other database reports, and financial records.
My company was recently engaged to help extricate a group of investors from a problem that due diligence would have thwarted: An individual with apparently flawless credentials and a well-appointed suite in a modern office tower had pitched an elaborate and seemingly brilliant investment idea that was rewarded with $5 million from the group. It turned out that the individual was a con artist with a string of bankruptcies and a history of stiffing creditors, including his fellow church members. By the time the investors learned the results of our investigation, the money was gone.
Education and training: Security training for family members should include prevention of violence in the workplace, crisis management and fundamental security guidelines for business or personal travel. I was recently appalled to learn that a client had flown to Mexico City on business and grabbed a cab at the airport, an absolute violation of basic security precautions given the volatile situation there and complicity of taxi drivers in the kidnappings of wealthy foreigners. The individual was robbed at gunpoint. Luckily, he just lost his Rolex and not his life.
On the home front, family members should be trained in basic security practices that minimize risk. These might include evasive driver training, home security and a general understanding of how and when problems arise. Parents of young children also must monitor their children’s activity on the Internet.
Your security assessment should identify training needs that will go hand-in-hand with information technology recommendations.
Communication: Effective communication among those responsible for business and family security is essential. I’ve often seen security compromised by internal turf battles and a lack of access to decision-makers at crucial times. A security director, whether full-time or on contract, should be considered an executive-level position, at least in terms of access, so that security is integrated into all phases of the business.
If the family has a security director separate from the company’s, the two must be in constant communication about travel plans, ad hoc circumstances (such as family problems that may pose new risks) and whatever else could affect the business and family.
Another proactive way successful families can evaluate and manage personal exposures is to keep track of publicly available information about them that could motivate or support the malicious efforts of criminals or disturbed individuals. For example, they can have someone monitor—and attempt to delete from the public record—information that leads to or includes home addresses.
Costs and benefits
One size does not fit all when it comes to security, and the number of variables is large. The owner of a low-profile business who lives in a suburban, low-crime neighborhood may not need electronic gates and surveillance cameras, whereas a high-profile retailer in a major metropolitan area whose image appears on billboards and in television ads would likely opt for more stringent home security measures.
Though it’s impossible to estimate the exact cost of formulating such a plan without knowing the particulars, security should be considered a need, not an option, for even the smallest family enterprise. And effective security will require an ongoing expenditure of resources to implement and maintain. But the cost does not have to be—indeed, should not be—disproportionate to the benefits.
Overreaction is not the answer. Too much security is not merely burdensome; it can even draw unwanted attention to yourself, your family and your business. Creating a balance between effective security and freedom from excessive constraints is a worthy objective. Most often, the best security is the kind you never see at all.
David W. Nicastro is the founder of Secure Source, a part of GlobalOptions Group Inc., which provides security consulting services on a global basis (www.globaloptionsgroup.com).