A Legacy of Helping Dealers Be Successful
SDM: How did you get your start with the security industry and with Honeywell?
Rothman: I think, like a lot of people in this industry, I must have been destined to be in it because I certainly didn’t find it; it found me. I was a 22-year-old unemployed copier salesman who had just gotten married and quite frankly needed to eat. So I was answering ads in the newspaper — it was that simple — and it was for inside sales. It was actually ADEMCO in those days. They were interviewing for two different positions — one was inside sales and the other was assistant manager. I didn’t feel I was qualified for the assistant manager’s job, so I applied for the inside sales job and I was thrilled that they asked me to join the team in 1983, answering the phone, working with customers at the counter, picking orders in the stock room.
I had a blast doing that. I really enjoyed working with the customers. But I really did stumble into the industry and I never would have dreamed that 32 years later I would have had the opportunity to run the business.
I always loved working with our customers and helping them be successful, and [thinking about] how our products and innovations and services could help them become more successful. That’s really the basis of the 32 years that I’ve spent here.
This was a tough time in the history of ADEMCO. In the early ‘80s we were making the jump from electro-mechnical to electronics. We were the market leader and quite frankly we didn’t do it particularly well in the early ‘80s. I remember going through that experience and then watching the business just flourish and become very innovative after that.
There were about 10 locations in those days, and I was in one in North Miami. They were really more like warehouses with a little counter in the front. It was before the ADI model had started; that didn’t start until 1985.
As the story goes, there was a parade of sales people who were running the state of Florida outside and it hadn’t gone all that well, so they gave a shot to me. I was 24 — most of the other salespeople were in their 30s — and the state of Florida is a big place. They handed me a catalogue and a gas card and off I went.
I fortunately did well. I was actually a salesman of the year, which I was quite proud of. I was the top salesman in 1986 and from there my career kind of took off. I ended up managing larger and larger customers, getting involved in product development, moving to Syosset, N.Y., which was the Mecca of the business in those days. I got a chance to be mentored by Roger Fradin, Leo Guthart, and be exposed to these industry icons. I was able to test myself in product development, in general management and the things it took to run a business. It was a great experience.
SDM: How long have you been in the role that you’re currently in today?
Rothman: Five years — since 2010.
SDM: So you’ve seen a lot of change. What has been Honeywell’s role in technological innovation in this industry over the years, in helping the market to grow?
Rothman: We at Honeywell are quite proud of that legacy. I think our customers are outstanding at embracing new technology and finding ways to drive the business models. From the ADEMCO/Honeywell perspective (because it was Honeywell for half my career and ADEMCO prior to that for about half) I really believe that we helped the industry transform itself from one that was fairly sleepy in those early days — and the recurring revenue model hadn’t fully developed yet. We really, I think, were the first manufacturer that established an end-to-end solution with a hybrid product via wired and wireless.
We had three generations of wireless, the 5600, 5700, and 5800 in those days to get to where we were, and we really set the de facto standard with our VISTA systems and our 5800 series, to this day the largest selling and largest installed base of that type of product. It created the market, I believe, for the hybrid product as it’s known today, and that led to self-contained systems and more wireless.
I think that our focus on understanding the business model of the customer is what led to our success. We always defined our success by their success. That’s one of the lines I still quote Roger Fradin on daily. It’s not about us; it’s about them. If we make our customer successful, the rest of it will take care of itself. We focused on their labor costs, their serviceability, how many systems they could install in a day, how they could lower their labor rate. How could they put more systems in per day? How could they get more recurring and keep it stickier and manage their attrition? We know the two big numbers they look at are creation costs and attrition, and we were always focused on the drivers that our customers were faced with. If we could improve those — quite selfishly — we knew it would be good for them and be good for us.
We had a cloud in the early ‘80s; we just didn’t call it that. Alarm Net: It’s got a million-and-a-half subscribers; it’s the largest of its kind. It was a cloud before Microsoft called it that, and that was another huge innovation.
The next leg of that were more sensors and user interfaces. We were really a pioneer of graphic interfaces. Heck, we were making systems that talked to the Internet before there was broadband. We actually had to sell a dialer to connect to the Internet because not enough of the end users had broadband in their homes.
I really believe that our innovations around wireless and communications — both short and long range — and the user interface, improve the security business. I really believe that we’ve been innovators. Now you take it to the modern age of Total Connect with remote services, and video — all leading to the same opportunities for our customers to be successful.
SDM: Honeywell talks about innovating around specific benefits to the dealer, such as helping them reduce attrition, helping them be more efficient on the job, helping them make more recurring revenue. Could you address?
Rothman: We have the pleasure of having our customers visit us here quite often, and we’re often reminded that we do have a unique approach and it does make a huge difference. We’re trying to help their business model be better so we have had a big investment in our First Alert program, our Connect program, and what will be the future of the Lyric authorized program. We recognize that it wasn’t just enough to have great technology and great support and great products; we also wanted to help them learn how to be better business people.
The First Alert program was about helping them develop better business acumen, which is really impressive when you look at what the skill level of the industry is now versus what it was in those early days.
We took it upon ourselves to come up with resources that were at the disposal of our customers, for their use to help them train their salespeople, set up telemarketing and then, of course, that became Web and is now social media. Dave Gottlieb, our director of marketing communications, is deeply engaged in that.
SDM: How do you see the dealer market faring in light of all these changes that are coming at them right now?
Rothman: As I’ve said many times on the stage at the First Alert Convention, there has never been a better time to be in this industry, and I feel that way right now. I think opportunity knocks everywhere and as I’ve also told that audience, the reason everyone else is entering this space is because it’s such a darn good space, and we were here first. We already knew that as an industry.
That said, we can look at all the demographics and the penetration rates, and we all know the numbers of how many systems there are roughly installed in the market — there’s just a ton of upside. There’s more than enough opportunity for the professional installer channel; in fact, I think they’re better positioned than anyone in this space because they understand what it means to install things in the home and to work with consumers. They’re great integrators of technology. They’re not intimidated by it; they live for that, and I think that they’re going to continue to do well.
I believe, as I always have, that the Honeywell customers will be more successful because they chose to partner with us. That is the promise we make to them. While we know there are multi-billion-dollar companies looking at the space or entering the space, we also know that there are well-funded startups — it runs the entire spectrum. That said, the opportunity and the position that our professional dealers are in, I believe, is outstanding.
SDM: Tell us about your retirement. What do you have planned?
Rothman:I am going to be here until June full-time, helping David Paja, who’s taking my place, get acclimated to the role. He has deep global experience in sales, marketing and operations and I believe he will be an outstanding leader for Honeywell Security. I’m retiring from Honeywell for personal reasons. My wife has some health issues and it’s really important that I spend more time with her, my family, my friends. My job is global and it requires a tremendous amount of travel and energy and I look at it like being an athlete. If I’m not able to play 100 percent, I will take myself out of the game. I felt it was the right thing to do for the business and for my family to get someone in that could play full-time, because I really need to spend time with my family and that’s what this decision was all about.
It’s heartbreaking for me to leave, particularly because we’re right on the verge of getting Lyric launched. But like I said, I’ll get to watch from the sidelines. We’ll be having some events at the ISC show around it and into the fall, and I’ll be leaving on June 30th.
SDM: What do you think has been the biggest challenge in your career?
Rothman: It was halfway through my 30 years here — we got acquired. Pittway was a wonderful experience, very entrepreneurial, a small company in the scheme of things, relative to Honeywell. It was the market leader, and we got acquired.
And around that same time, I became president of what was now ADEMCO. It was interesting because people were really nervous about what was going to happen and also we were watching a whole bunch of other companies get acquired — global companies.
I think what we were able to do was take that entrepreneurial DNA from the Pittway days and blend it with real business acumen. It was like we all got an MBA when Honeywell bought us and we really learned how to run a business. I hadn’t run a business before, even though I was now the president. I hadn’t run it at the level of skill that I was going to. I didn’t know what I didn’t know, and really Honeywell was like getting a business school degree on top of whatever we may have already had on our own.
And quite frankly, while other companies didn’t make this transition, we flourished. And we’re still here.
SDM: What are you going to miss the most?
Rothman: I don’t know how to put them in order, but clearly our customers, the friendships that I’ve developed, and our employees. We’ve got a great team here. I’ve been so blessed to have had, I think, a very unique career and particularly in these times when you look back, where people change jobs and aren’t really working with the same people. I’ve actually been working with the same customers, some of them, and many of the same employees for all 32 years.
To be 32 years in the same industry and having watched so many alarm dealers start out with a screwdriver and a dream and end up being just wildly successful and do such good work for an industry that saves lives and property is really gratifying. It’s the relationships that I’ve come to enjoy, both internally with my employee friends and my customer friends. It’s going to be tough to leave them and it hasn’t really hit me yet.
SDM: What legacy do you feel that you’re leaving both within Honeywell internally as well as among your customers?
Ron: Oh gosh, I hadn’t thought about my own legacy, quite frankly. I’d like to think the themes we’ve been talking about — the passion for doing the right thing for our customers and for our employees; being focused on things that, even if they weren’t easy and they took a lot of work and you may not get them right the first time, and again, it goes back to the mentoring I got from Roger Fradin. He would tell us it’s okay to fail; just don’t bet the ranch. So we’ve always had a philosophy here of being innovative, staying very close to our customers, and I think I’d like to be remembered as a person that would do whatever it took to help our customers be successful, and I think that’s probably what people would say.