The Diamond's Best Friend

Sep 1, 2006 12:00 PM, By Michael Fickes

On his first day at Tiffany, McGowan met with the vice presidents of human resources and operations. They talked about the company's heritage; its image in the market today; their plans for future growth; and their dissatisfaction with the direction of security. “Stay out of day-to-day operations for three or four months,” they said. “Just talk to people, find out what is needed and make recommendations on how to get there.”

Over the next few months, McGowan conducted an organization-wide security audit, interviewing approximately 600 Tiffany employees in locations around the globe. He then wrote a 10-year strategic plan for modernizing the firm's security capabilities to meet current and emerging threats. Underpinning the plan was a realistic assessment of Tiffany's security challenges. “We sell gold and silver and other valuable raw materials,” McGowan says. “Countries fight wars over these materials.

“Today, Tiffany & Co. has stores around the world. We also have manufacturing facilities that hold tens of millions of dollars in loose stones. Criminal groups want to get their hands on these materials. Sometimes they come to rob us, fully armed, in broad daylight.”

McGowan also found that Tiffany had built a sound, though conventional, jewelry store security system that recruited hard targets by hiring large, tough-looking guards and installing after-hours alarm systems. The department had an experienced investigative wing. When something turned up missing, it was usually found. Characteristic jewelry store design contributed to Tiffany security with metal mesh built into the walls of the stores to prevent burglars from cutting through the walls of the soft target next door.

McGowan's audit identified problems, however. For example, 18 vendors supplied 18 different brands of alarm systems to the various stores, making it difficult to manage alarm maintenance, upgrades, replacements and new stores. The chain used no camera or access control systems. International stores tended to set up and manage their own security, independent of corporate policy. Training programs were okay, but not suited to the challenges confronting a growing international company. McGowan also wondered if the department's top down management style could keep up with the many issues that would confront an international jewelry store chain. He drew up a strategy to address these issues.

First, he wanted to maintain and enhance the hard target concept featuring guards and technology. “Being a hard target is the first principal of jewelry store security,” McGowan says. “You have to prove to anyone with bad intentions that if you are going to attack us, you are going to run up against the best perimeter security you have ever seen.” “If I don't catch you at the perimeter with an alarm, I'll catch you some other way. If you try to compromise our communication system, it won't matter, because we have other means of communication: Internet, radio cellular, many back-ups.”

McGowan has kept pace with evolving security technologies. Today, to secure store perimeters as well as interiors, he has added a number of security technologies, including ProWatch, an access control software platform from Honeywell, in Morristown, N.J.; digital cameras and digital recorders from Pelco, in Clovis, Calif., and an intelligent video management system from Verint Systems Inc., Melville, N.Y.

Video systems are wired locally, and video is stored locally. But the cameras and storage devices also connect to the Tiffany network so that video from any site in the world will flow back to corporate headquarters in New York City, as necessary.

“Intelligent video focuses on doors and sales floors,” McGowan says. “We can go down to the product level by setting a sensing window and asking to be told when the product moves. During investigations, we can also ask for historical information such as when the product was moved.”

“Video intelligence is growing, too. Verint has introduced an improvement that will enable us to construct different kinds of intelligent video models. Merchandisers will also use the system to learn what customers do when they are in the stores and to keep better track of shelf stock.”

McGowan is experimenting with various technological configurations when conditions warrant. For example, Tiffany operates three stores in Japan, a market with a dramatically different profile than other international markets. The risk of a jewelry store crime is significantly less in Japan because jewelry has a different cultural meaning and the value of the merchandise is much less.

“A Japanese woman isn't looking for a large diamond ring,” McGowan says. “So I don't need the same level of technological investment in Japan as in the U.S. We are testing virtual security in these stores by replacing security officers with cameras (managed by an intelligent video system) that tour the stores constantly.”

If there are no guards to be seen, is a store more susceptible to crime? McGowan believes the level of protection is the same, thanks to the intelligent video, signage and the ability to communicate with store employees. He calls the test successful so far.

By coordinating technological innovations with Tiffany's information technology department, McGowan has created what he calls a “one-world” security technology platform, in which every Tiffany location uses the same technology. The data is automatically sent across the corporate network.

“This enables us to bring in new security professionals and to train them and put them in any store in the world,” McGowan says. “This was a huge challenge because the international locations were so accustomed to running their own businesses. It was especially difficult in countries where respected domestic technologies are available.”

Traditionally, Tiffany security employed a top down management style characterized by silos. Employees interacted with the mentality of “you do your job and I'll do my job.”

McGowan has shifted to a collegial system he calls “one-team management.” “It's a management style based on conflict — meaning that when friends argue, the truth comes out,” McGowan says. “When there is an issue, we argue until we figure it out. It helps us get the most out of our management team. I could never have achieved the degree of success here without the team.”

“In fact, I want to mention their names: Hank Siemers, group director, security services, retail branches worldwide; Drew Brennan, director, security services, New York City and manufacturing operations; Mike Castronova, director, security services, New Jersey operations and strategic planning; Keith Meyerson, regional director, security services, U.S. retail east; and Charles Olschanski, regional director, security services, U.S. retail west.”

In a one-world system, policies, procedures and technology are the same everywhere in the world. That has enabled McGowan to standardize and centralize training for Tiffany's 300-person security staff. “Three years ago, we set up a security training school in Parsippany, N.J.,” McGowan says. “No security officer can start with us until he or she goes through the school's week-long program. New officers learn our approach to surveillance, deterrence and customer service. We teach them to greet customers and never to profile customers. We work hard on sensitivity training and technological systems training.”

At the end of the week, officers take a test and receive their assignments. In most cases, McGowan says, test scores aren't used to weed out officers. Instead, they are used to identify strengths and weaknesses that managers can build into their programs.” If someone does poorly on the test, the manager knows what kind of continuing training to focus on,” he says. He or she will work to toughen up weaknesses uncovered by the test while sanding off the rough edges and explaining that the boss wants tough officers that do not lack civility.”

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© 2012 Penton Media Inc.

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