Inter-Con Security sheds its anonymity by delivering to big clients

Here are some things about Inter-Con Security that most people in security might not know.

The Pasadena, California-based company was recently recognized as one of North America's top security service providers by Security ProAdvisors’ annual Security Letter. The listing confirms Inter-Con’s position as one of the largest and fastest-growing companies in the industry. It is now the fourth-largest security services provider in the industry, with more than $1 billion in revenue. Inter-Con boasts a stable business foundation that has flourished organically and carries an unusually low debt load.

As the country’s largest wholly minority-owned security provider and a certified Minority Business Enterprise (MBE), Inter-Con espouses the values of diversity, equity and inclusion from the top down. Inter-Con is 100% Hispanic-owned, all four board members are Hispanic and/or female, and minority employees represent 81% of Inter-Con’s workforce. Management has taken that ethos beyond evaluating its own workforce. Inter-Con regularly audits the diversity of its supply chain, measuring against its company’s ambition of a 100% diverse supplier base.

With all these accomplishments and superior business benchmarks, President and CEO Henry Hernandez, the third generation of the Hernandez family to guide the company’s fortunes, still finds that many of his potential clients have no idea of his team's expansive capabilities. In contrast, others have little or no knowledge of the company.

“I walk into too many presentations where people say, holy smokes; you're that big? And you do all that work, and I've never heard of you, which is not a good position to start from,” said Hernandez in a recent conversation with SecurityInfoWatch.com Editorial Director Steve Lasky before this week’s GSX event in Orlando about the 50-year old company. “I don’t know how many people have told me that we're the industry’s best-kept secret, which is not a good thing from my perspective. What I want to happen is for us no longer to be the best-kept secret; maybe we can become the second-best-kept secret over the next year or two.”

Inter-Con Security was founded in 1973 by U.S. Army Veteran and retired LAPD Detective Lt. Enrique “Hank” and, his wife, Bertha Hernandez. From their kitchen table, the two invested their life savings into Inter-Con, aiming to build a new security company. Inter-Con would distinguish itself by providing security services to clients whose threat profiles exceeded the capabilities of traditional “guarding” companies.

Now in its third generation of Hernandez-family leadership, Inter-Con employs over 35,000 employees across North and South America, Africa, and Europe. Inter-Con provides tailored security services to Fortune 500 companies, public utilities, ultra-high net worth individuals, non-profit organizations, and federal, state, and local governments worldwide.

Steve Lasky caught up with Henry Hernandez during the pre-show to discuss who Inter-Con Security is and what it brings to the table in an extremely competitive market. Prior to his current role, Henry was responsible for Inter-Con’s International Operations. Before joining Inter-Con, Mr. Hernandez worked as an associate in the New York office of the law firm Sullivan & Cromwell LLP, where he advised on private equity and commercial real estate transactions.

Note: The interview was edited for length and clarity

SIW: Many of your competitors have merged or become guard service slash techno-companies and you guys are a sort of a throwback. But you’re also a very innovative and forward-thinking company. Let's talk briefly about Inter-con because you're no longer a small player in the industry.

Hernandez: We're still 100% family-owned. It has the same name and the same exact ownership structure. It's just the kids and grandkids of my grandfather now in control. We are focused on doing one thing very well: quality manned security, and risk management. While I'm highly skeptical of a lot of that techno stuff, not in the sense that it can't be done well. There are amazing innovative companies out there, and rather than compete with those companies, I'd rather be focused on getting the right guard to the right spot at the right time. But in terms of how we got here, you may know some of the story and kind of the high level; my grandparents' family, immigrants from Mexico, my grandpa dropped out of high school, joined the army, fought in Korea, came back, joined the LAPD, got his pension, and then put his life savings into the security company.

His big initiative was to turn us into a relatively significant player in the federal contracting space. A lot of embassies, the U.S. Department of State -- stuff like that. We were still primarily a federal player when I joined nine years ago. I thought there was an opening on the commercial side, the high-quality commercial space. I thought we could be more competitive in that space than Allied, Securitas, and Gardas meeting the large-scale program needs. You actually have to staff the post. You can't share resources.

You need to have enough quality to justify the spend. We said let's take this embedded service model that works well on the federal side and see if we can't convince Google, Nike, Amazon, and clients like that to come over. And it's been extremely successful. When I came in, we were doing around $300 million. We're a billion-dollar company today, which is rewarding. We are staffing posts. Last week we staffed 99.8% of billable posts. in addition to the staffing quality, we actually have a pretty darn good tech solution. But our tech solution is, again, not the cameras and security tech; it's the staffing tech.

SIW: So, you're into the guard software and deployment side of the business?

Hernandez: That's it. Our stuff's cool. It's kind of uber-esque, where everything's handheld devices, mobile, fully mobile, GPS, facial recognition, and personal code. It allows you to see where everyone is in real-time. But I really like that we can automate much of the scheduling now.

Open post: the thing goes out to every officer who might be interested in working the post; it matches them based on availability and skill sets. Instead of running a call center for scheduling, we can run it all through the {app} first and then allow human beings to double-check it afterward. But we did {approximately} 15,000 shifts by machine last week, which is extremely intuitive and cost-effective. We own it {the software} completely. We built it from scratch.

SIW: You've created and sustained a stable business, and it's all been organic. You've got a low debt load; now you've become a major player and haven't done it through acquisition. What's the secret?

Hernandez: It's long-term partnerships. We're at 98% client retention year over year, going back six or seven years. We have a bunch of clients that go back 30 or 40 years. What we're doing is we get in with the client, we evolve with their needs over time. We're not the company that ever points at the contract and says, hey, you only get three cars or something like that, or you must buy three cars. We work with the clients over time and don't upsell. You'd much rather decrease hours when the client has a lower budget, adjust pay rates as needed, and work with the client to come to a solution than take a hard line and get fired. We have good word of mouth. In today’s industry, if you staff posts with quality people and you react to your client’s needs, the world is your oyster.

SIW: Your uniform security services are for critical infrastructure and high-traffic locations globally, and you've talked about what sets you apart on that end. Is there anything you want to add on the man side of it?

Hernandez: Most of our revenue is just straight man security work. If you were to look at a prototypical type of client, think of the JFK airport or something similar, we're operating effectively on any human aspect of their program. Whether or not that's SOC or counter detection or EP, we go all the way down the line. No one program will have everything, but you can kind of see an Inter-con individual doing basically all aspects of physical security somewhere around the world at any given time. I'm just saying, hey client, do you need anything? Is there a human being required to be part of that need? And if you do, I'd be happy to staff and train those individuals for you. We don't even draw some of the distinctions internally when we're counting revenue. We're just saying, here's a client.