Ask the legends: Stephan Cretier

President & CEO, Garda World Security Corp., Montreal.

Career Highlights

• Starts his career as a professional baseball umpire in the U.S.; earns an MBA on the side.
• Returns to Canada in 1989 and, after a brief stint in property management, takes a job with a security firm. In five years, he increases sales from $4.8 million to $32 million. Bolstered by his success and full of ideas, he decides to venture out on his own.
• Founds Trans-Quebec Group in 1995 with an initial investment of $25,000, which he raised by placing a second mortgage on his home. The company starts as a provider of electronic security systems, expanding into an array of services, including store detectives and cash logistics.
• In 1999, the company goes public on the Alberta Stock Exchange through a reverse takeover.
• Early on, Trans-Quebec Group takes an aggressive approach to acquisition. In late 1999, the firm acquires Groupe de Sécurité Garda Inc. and renames itself.
• Over the next decade, Garda expands into the the U.S., Europe, Latin America, the Middle East, Asia and North Africa.
Today, Garda has 45,000 employees; in the 12 months ended Oct. 31, 2010, its revenue exceeded $1.1 billion.

What did you learn from professional umpiring that has helped you in business?
In umpiring, you need to know how to manage people, events, your own stress and other people’s stress. You also have to look like you’re in control. Doing it well comes down to communication. I was a shy kid, and I think baseball gave me a lot of confidence in what I could do and how I could influence people.

What gave you the idea to start a security business?
When I entered the field as director of operations at a security firm, I discovered an incredible market. Unfortunately, everything negative I’d heard about the security industry was true; the companies were all mom-and-pop shops, run by ex-cops or wannabe cops who didn’t always have a business mentality. After five years, I went to the owner and told him we should try to replicate the model of big, multi-faceted security companies—which were common in Europe—in Canada. He said, “It’s too complicated.” So, my wife and I took out a second mortgage and I started from scratch.

Did you always intend for Garda to be a multi-faceted business?
Yes, although it took a bit of time to do it. The concept of one firm offering multiple services was new in Canada. We saw the opportunity in the market and said, “Let’s go.” Our whole premise was to be businesspeople in security instead of security people in business. We started by offering electronic security systems. After that, we moved into investigation, consulting and store detectives. Cash handling came a bit later.

What is the hallmark of a good acquisition target?
With the exception of maybe three companies, we’ve always bought companies that weren’t for sale. Kolossal Security [acquired in February 2011] is a good example. It wasn’t for sale, technically, but we had solicited them for five or six years. One day, the owner called us and said he was ready. So, it takes a lot of patience. We’ve never acquired a company that we didn’t know really well.

Many acquisitions run into trouble during the integration process. How have you avoided such difficulty?
We’ve always looked at companies that would integrate extremely rapidly and give us a return over a quarter or two. We start by going in and evaluating the talent. We don’t keep people around who won’t fit our goals for the company. We work in an urgent way; we don’t spend six months massaging the culture. We give directions, and we cut out the people that don’t follow them. That’s it. Of course, if we removed everyone, we’d have a problem. But if you need to fight to get everyone going in the same direction, I think you’re wasting your time.

Given the size of your company, does Garda have an identifiable culture?
If you ask me if there’s a Garda culture for all 45,000 employees, I would say no; a lot of our front-line workers are managed by our clients. But there’s a clear Garda culture among our management. Evolving from a startup into a $1.2-billion operation today, we needed an entrepreneurial culture, which we have. Every one of my senior executives feel that they are entrepreneurs. It’s like they’re operating their own business.

Why did you take Garda public?
After 9/11, security became very sexy. But in 1998, it was seen as a commodity: it was low margin, low pay. I honestly couldn’t get any financing. Quite candidly, if I had been able to raise the money privately, I would have done it privately. Still, you need to go public for the right reasons: it’s both a financing tool and a branding tool. If you do it to watch your stock price and count your shares, those are the wrong reasons.

Garda’s share price dropped from $17 to 57¢ through the height of the financial crisis. How did you manage through it?
Our two main clients at that time were Washington Mutual Bank and Wachovia Bank, which don’t exist today. [Wachovia is now a subsidiary of Wells-Fargo.] We were leveraged to the maximum, and we didn’t even know if our bank clients were going to survive. So, many people questioned whether we would survive.

I remember sitting with my management team. I said, “Let’s stop focusing on what’s impossible, and start thinking about what’s possible.” So, we started thinking about ways to get through the crisis, whether it lasted 12, 18 or 24 months. And we said, “Let’s make sure we’re the best security company in the world when this crisis is over.” So, we really started focusing on our systems, on benchmarking the company, on choosing the key markets, on cleaning up the parts of the business we wanted to be in and getting rid of the rest.

How have you evolved as a business leader to be able to lead such a large, complex and global company?
It’s definitely tough. I’ve done a lot of reading, and I’ve had good mentors and coaching. In essence, I’m not trying to manage a $1.2-billion company; I’m trying to manage and focus on a few elements that I think are essential to this business. A lot of it is about being able to evaluate my strengths and weaknesses, and to build the right team around me. I think my best quality is identifying and managing talent.

Do you still consider yourself to be an entrepreneur?
Oh, more than ever. These days, I’m spending three to four months a year in Dubai. What am I doing? I’m building the business there. I’m still driven. I wear three hats. I wear an investor hat—I still own 25% of the business, so it needs to be great investment for me to continue. I wear an operator hat, because I still operate the business. But I define myself as a true entrepreneur. Every morning, I get up and get to work at building a great company.