For this year’s SDM Systems Integrator of the Year, family is everything. Not only was it founded as a family-owned business back in 2005, but each and every employee — 155 of them and growing fast — is treated as a member of the family as well. Which is a good thing, because company president, Shaun Castillo, has the lofty goal of building a multi-generational company that someday his grandchildren, or the children or grandchildren of his employees will still own many years from now.

Preferred Technologies LLC, or Pref-Tech, started shortly after Castillo finished his U.S. Army service and was searching for the next step. His parents, who had owned and operated a structured cabling company, were looking to start a new venture after a merger with another company didn’t go as they had hoped. Shaun Castillo had planned to go back to school, and at first wasn’t interested in joining them. “Then a mentor of mine said he thought it was a rare opportunity to own a small business,” he recalls. “He said, ‘Give it a shot and if you don’t like it, school will still be there waiting for you.’”

So along with his father Charlie and mother Trisha Castillo, Shaun founded Pref-Tech, based in Houston. Trisha left the business in 2008 and Charlie retired in 2022, leaving Shaun as the sole owner. The original mission of Pref-Tech was to be a minority-owned security integration business, based around five key business principles: private ownership, self-performance, competence, project management and trust. That purpose has evolved over the years, but the founding principles still hold. Today, Pref-Tech’s purpose statement specifically calls out its family approach: “Within a family culture, nurture and inspire our employees to creatively resolve customer pain using the highest level of craftmanship and service.”

AT A GLANCE

2023 Systems Integrator of the Year

Preferred Technologies LLC

Employees: 155

2023 SDM Top Systems Integrator Report Ranking: No. 21

Shortly after its founding, Castillo also recruited two of his former Army buddies to join him in the business.

Jeff Ferguson, vice president of operations, was in the same unit as Castillo and joined Pref-Tech immediately after leaving the Army. Grady Jett, vice president of sales and marketing, joined Pref-Tech after first working for a large manufacturing company for a few months. “I realized I was just a cog in the wheel — maybe a bolt that held the cog in,” Jett recalls of that experience. “I realized quickly I was not going to be able to make a difference and that was not going to be the future for me. I joined Pref-Tech about four months after its inception.”

The military background for all three men would help inform the direction of Pref-Tech, particularly when it came to the concepts of leadership and responsibility.

“I would say on the surface, Pref-Tech and our time in the military are completely different, but we were all Army officers; and in order to be commissioned as an officer you have to go through some leadership training,” Ferguson explains. “Our background in the military with that emphasis on leadership — and there is a difference between leadership and management — gives us an advantage. An executive team comprised of three former service guys kind of differentiates us.”

Jett adds, “While it is a little different in the corporate world than in the military, what motivates people doesn’t change. I don’t think it matters what industry or role you are in, people want to know that other people care about them. In the military you have a bond of people that likely hold each other’s lives in their hands. … At Pref-Tech, it is about individuals’ futures. We have to work together as a team and depend on one another. That mindset comes into play when we begin to look at team goals. We succeed together and we fail together. That is a true military basic. One individual doesn’t win the war. Teamwork and camaraderie are a big piece of what we bring from the military.”

Another thing the military loves is an acronym. So when the Pref-Tech leaders implemented the Entrepreneurial Operating Systems (EOS) in 2016 to clarify, simplify and achieve their vision for the company, they came up with the perfect acronym to go along with it: PGRIT, which stands for the company's core values of Professionalism, Grit, Right, Intelligent thought and Trusted advisors.

“For each candidate we might have on average 15 hours of time invested. We put a lot into it, and that is what candidates love. By the time we get to onboarding, they know we are as invested as they are.”
— Vicky Dinger

With a firm goal of remaining privately owned; a commitment to do all work themselves rather than subcontract; a reluctance to seek out RMR except where the customer would benefit; and a pattern of hiring not acquiring, Pref-Tech definitely goes against the grain compared to many other security integrators. The tactic appears to be paying off. In the past year, Pref-Tech has grown its headcount by 35 percent, including opening a brand new office in Dallas/Fort Worth in September — a venture that required some employees to agree to relocate along with a massive hiring push led by a newly built out HR department. In spite of those investments, Pref-Tech managed to grow its total annual revenue by 50 percent and net profit by 62 percent in 2022 and is on track for 16 percent growth this year.

But perhaps its most significant accomplishment is the decision in 2022 to focus heavily on its people at a time when the entire security industry is experiencing a hiring crisis and shortage of technical talent. While not unaffected by those same forces, Pref-Tech set out to do everything possible to attract — and keep — its workforce, and has been largely successful. For all these reasons, Pref-Tech has been named SDM’s 2023 Systems Integrator of the Year.

Investing in People

Pref-Tech’s biggest investment is in its people — both current and future employees. In order to work at Pref-Tech a prospective employee will go through a six-step hiring process that begins with a culture-fit assessment test.

“We acquire talent through multiple avenues, including firms, social media and the internet,” Ferguson says. “We have a culture-fit questionnaire we give everyone who applies, which is a series of questions that aligns with PGRIT. We review the answers and if we like those, the candidate goes through a written skills test.” Only after passing the first two hurdles does a prospective employee interface with anyone at the company. The first interview is actually with peers who would be coworkers doing the same or similar job they are applying for. “They spend an hour talking and getting to know each other, and they get a chance to ask questions,” Ferguson explains. The peer panel then meets to review. “If the peer panel thinks the candidate is a fit, they then go to a leadership interview. If they pass that, then we send an offer letter.”

Pref-Tech, now with the help of its HR department, has the process down two about a week and a half per candidate. “It’s pretty intense on the employees that work here but we place such an emphasis on hiring and recruiting good candidates that everyone understands it will take more effort but will pay off in the long run,” Ferguson says. “It has proven 100 percent effective so far. There is always a little attrition in hiring but it is way lower than we have ever realized before.”

What’s more, Ferguson says employees who have gone through the process have had overwhelmingly positive things to say. “Almost to a person they are very impressed with our hiring process.”

Vicky Dinger, director of HR, went through the process herself just nine months ago when Pref-Tech decided to build out a dedicated HR department. “I do believe our interview setup and process makes a tremendous difference with candidates,” she says. “For each candidate we might have on average 15 hours of time invested. We put a lot into it, and that is what candidates love. By the time we get to onboarding, they know we are as invested as they are.”

Recipe for Success: 1 on 1 With Shaun Castillo

SDM spoke with Shaun Castillo about what it means to be a leader and how that informs his plans for the company in the near and far term.

SDM: What is a leader and how would you describe your own leadership style?

CASTILLO:We make a distinction between the terms leader and manager. We articulate those words by saying, “You manage tasks and lead people.” I am very much focused on the latter. My job is coaching and monitoring and building teamwork.

I would describe my leadership style as one of serving and sacrifice. I hope all my employees and customers would say, “Shaun will serve you well, and give you the best of himself.” The keys to leadership are know your job and love those that you lead. If you do those two things you will be successful. I don’t think it is a crazy recipe.

SDM: What does it mean to have a multi-generational company and why is it so important to you?

CASTILLO: Multi-generational means through generations. What I mean is hopefully my great-grandchildren will be part of Pref-Tech one day.

For me personally my exit strategy will be retirement and transitioning to either my children or employees. We are building and structuring the company to hope it makes three or four generations, or a 150-year-old company. I like to do hard things most people don’t do. A lot of entrepreneurs are good at developing an idea and selling it in three to seven years. I want to do something very few do and that is to build something that lasts through multiple generations.

SDM: You have a goal of being the most well-respected security company in the world. How do you intend to get there?

CASTILLO: It is a long-term goal but we were very intentional when we said that. That is the path we are on. It’s one of those goals that you may never reach. But we were specific on well respected. We won’t have necessarily the largest office count or revenue dollars. All those things may be a component of it but it is more about do people look at us — whether that is other integrators, manufacturers or customers — and say, “Those folks at Pref-Tech are the best. They know what they are doing and they do what they say they are going to do. You can rely on them and trust them.” These are the things that lead to people respecting us.

It’s not a metric to easily measure. I keep my ear to the ground and I ask questions of customers and peers and ask vendor partners, “Do you respect us? Can you trust us? Do you feel we are good at our jobs? Do you feel we serve customers well?” We are in the people business and ultimately it is about serving people well. That looks different day to day depending on the job, but at the end of day it is doing what you say you are going to, and having hard conversations that need to be had in a professional way. We believe those things will lead us to being the most respected security company in the world.

SDM: Where would you personally like to see the security integration community be in five years?

CASTILLO: Unfortunately, money drives behavior and with all of the investment money in our industry, and all the mergers and acquisitions, the tide is moving towards satisfying investors and not investing in employees. The employment market is still tough. In order to deliver complex integration projects we have to invest a lot in employees. I would like to see the security integration market fight against the tide of greed and money and focus more on delivering safety and security to the communities we live in and invest more into the people we lead.

Onboarding starts with training, as well as a new-hire breakfast with Shaun Castillo. These breakfasts happen approximately every other week with the number of new hires recently, Dinger says. The company has been averaging 10 new employees per month and Castillo is there to welcome every one of them. “It is important for him. Shaun wants them to know he is invested in their success.”

It also functions as a welcome to the family event and an introduction to the “Pref-Tech Way.” Castillo says it is important for them to understand the company priorities, including the dedication to employees and customers and a firm commitment to stay privately owned and pass down to future generations. “They aren’t serving the interest of some investor they don’t know and will never meet. We had a recent new hire breakfast where one of the new employees told me they left their previous company because every time they did a job and got paid the owner would show up with a new toy. It matters how we invest the money we make. We want our employees to know the money they helped make will profit them directly.”

Training consists of many of the typical manufacturer and other onboarding certifications and training, but Pref-Tech also goes above and beyond to ensure its training is top-notch. “We are committed to training like nobody’s business,” says Douglas Patete, vice president of finance and accounting. “We hired or promoted two full time trainers where that is their whole job.”

Each Pref-Tech location also has a dedicated “training wall” full of technology that employees can come practice on whenever they need or want to, in addition to the scheduled trainings. “I actually scheduled a day for my entire team to be hands-on and see what we do,” Patete says. “This showed them what all those words on the invoice are, because a lot of accountants have no idea.”

For the higher level certifications such as PSP or CPP, Pref-Tech also offers its employees a bonus of $10,000, plus an additional $10,000 annual salary increase upon completion of one of the professional certifications.

For many companies training ends with a test, but Pref-Tech takes it one step further — teaching others what they have learned, Castillo explains.

Pref-Tech recently started an apprenticeship program for at-risk youth that will hopefully eventually lead to a steady pipeline of employees. “The apprenticeship program is a long-term solution to sustain us and others in the future,” Castillo says. “We want to attack it as a societal problem.” So when a friend told Castillo about a program called Craftsmen with Character, he jumped at the chance. “Apprenticeship programs have a 50 percent failure rate because people don’t know what they are getting into. The intent of this program is to introduce high school age students to opportunities in trades, as well as give them some education around what kind of character will lead them to success within the trades. We did our first cohort at the end of last semester here in Houston and it went very well. We had three students come join us as summer interns and hopefully once they complete their high school they will join us permanently.”

A side benefit of this program, he notes, has been watching the joy and interaction of the Pref-Tech employees becoming teachers. “Our staff is very engaged in the teaching of that program and it is very rewarding for our employees who conduct the training,” Castillo says. “For sure it has modified our training program to where the culmination of the training we do isn’t taking a test; it is teaching. We take it beyond the test and say, ‘Now go teach it.’ The Craftsmen program has helped us take that next step.”

Another form of training Pref-Tech recently engaged in is the Become Unmistakable Leadership training.

Based on this program, every employee at Pref-Tech is asked to build a “uMap,” which outlines key personality traits and professional and personal goals. “A uMap looks at both the right brain and left brain, your goals and plans, favorite quotes and key performance indicators for your role in the company,” Castillo explains. “Everyone in the company completes one and it allows us to connect at a deep level pretty quickly. If I am going to join a new team I can pull up their uMaps and feel like I know them before I actually meet them.”

All of these efforts help Pref-Tech feel like one big — if fast growing — family, Dinger says. “What’s amazing to me is we practice what we preach. The core values, our purpose statement, being family oriented, we walk that walk. Often on the HR side, you see beautiful core values and they are never really adhered to or brought out or referenced. For us, it is a daily occurrence to use those. It translates to a really warm, open culture where you truly gain a work family almost from the get-go. I would not have believed it if I hadn’t experienced it myself.”

Katherine Reeves, marketing manager, who joined Pref-Tech last year, agrees. “I have never felt so connected to a workplace before Pref-Tech. I have worked in a variety of other industries, and I have felt the most supported at Pref-Tech. … Pref-Tech is a unique environment where the leadership is transparent and voices are really heard. This provides a safe environment for sharing thoughts and ideas. I truly enjoy being a part of Pref-Tech and make it my daily mission to do my part in helping this company flourish.”

The Leadership Team

Shaun Castillo President
Grady Jett Vice President of Sales & Marketing
Jeff Ferguson Vice President of Operations
Douglas Patete Vice President of Finance & Accounting
Mark Roland Director of IT
Vicky Dinger Director of Human Resources
Delilah Palacios Service Manager
Pamela Santandrea Operations Administrator Manager
Scott O’Brien IT Services Manager (Austin)
Aaron Jamieson Sales Manager (Austin)
Brandon Platt Sales Manager (Houston)
Nathan Israel Senior Project Manager
Nancy Bryant Senior Project Manager
Patrick Spera Warehouse Manager
Katherine Reeves Marketing Manager
Shannon Richardson Design Estimator Manager
Griselda Zendejas Controller
Keshia Hall AR Manager

For any family, the real test is how you handle adversity, and Pref-Tech had a couple of situations recently that truly tested that bond.

“We had some disasters like Hurricane Harvey and the freeze,” recalls Mark Roland, director of IT. “The first thing the company did is send a company-wide email asking if you are OK? They said don’t worry about your paycheck; we have you covered. People responded with their problems and others said, ‘I got you.’ We had people running all over Houston helping each other out including by installing new drywall, pipes, patching, etc. That isn’t something you see in a lot of organizations.”

Patete agrees. “Go talk to any new employee and they will all say, ‘We have heard this family stuff before,’ Every employee by a year in says ‘Now I get it. This is different.’ It is not anything you can put your finger on, but the coming together supporting everybody in need is something special. We have been through a lot in the five years I have been here, including a couple of hurricanes, the freeze and a pandemic. During the freeze Shaun and our vice president of operations went over to an employee’s house and replumbed her house. Those kinds of things happen because of the relationships. … In my own department, I meet with everyone on my staff at least monthly one on one. For the first 15 minutes I tell them they are not allowed to talk about work because ‘you matter. The 40 hours or whatever you give our company is great and we appreciate it; but you are so much more than your job.’”

At the company quarterly meetings there is time set aside to talk about the culture as well, he says. “Pref-Tech knows you are more than the hours you spend with us. That care, that relationship — we make decisions based on the long term and with the mindset that ‘I am going to see you at the family reunion.’”

Customers & Technology

That same care and attention carries over to Pref-Tech’s relationships with its customers. As Castillo says, “One thing that pervades the company is the customer focus. … At the end of the day, if we have the best processes and people but don’t listen to our customers and solve their problems, we won’t be viable and certainly won’t be the most respected. We do everything according to how it helps our customers.”

For that reason, the company isn’t pursing RMR-based services with the same intent many security integrators are. “We see a focus on that [with others] primarily because it allows owners of security integration companies to earn a greater multiple when they sell their company,” Castillo explains. “We are not looking to sell, so gaining more of a multiple for RMR is not a big issue.”

That said, for customers that can truly benefit from a subscription-type service, Pref-Tech is more than willing to deliver. “If you do it correctly and the customer experience is the primary driver, subscription-type services can be very powerful,” Castillo adds.

“The company is in it for the long term. Shaun wants his kids to run it one day. So we try to grow internally and give people opportunities so they can succeed and feel valued. It goes back to that family culture.”
— Mark Roland

Jett explains, “We won’t turn down an opportunity to provide RMR services if our customers need it, but if that is not a part of their pain … if it is not helping them, it is not a benefit to us. It is just not a focus for us right now. Other integrators think we are crazy, but we believe in what has made us successful. Right now our generational focus doesn’t lend us to needing RMR.”

The focus on private ownership extends in other ways to customer relationships as well, Castillo says. “Private ownership is key in our time of rapid acquisition activity. We have a different focus for this company. We are looking at much longer relationships with customers than many are. We don’t have to satisfy an investor. We can choose to do the right thing for the customer over the long haul, even if that means not making as much money in certain quarters.”

Roland predicts the company will see an uptick at some point in RMR-based projects, but it will be customer-driven when it does happen, and many of their enterprise level customers aren’t demanding it quite yet.

To better serve customers, Pref-Tech also structures its teams a little differently. “We are somewhat unique from other integrators in that our folks have an IT background but are also doing system setup and programming,” Roland says. “We are enrolling cameras, setting up access rules and so forth. Others might have a team of programmers and a separate team for IT. We structured things differently and chose not to go that route. I am in charge of that, making sure the customers and team have what they need.”

To further help with that, Pref-Tech spun up an innovation team this year to look at new products and help solve specific customer pain points. “We have sales folks, technicians, service people — we try to get a good segment of the entire company so we can do a fair assessment of technologies and products and get an overall picture of what is going on,” Roland says. “My team doesn’t necessarily see everything so we wanted to get everyone’s input.”

Pref-Tech also has an internal software development team that is responsible for implementing custom software solutions.

On the cybersecurity front, Pref-Tech is working its way through NIST, with a goal of eventually completing SOC2 compliance, Roland says.

All of these efforts help the company fulfill its mission to be the “special ops force of security.” A reference to the leaders’ time in the military, this mission aligns with the company’s PGRIT values, Ferguson explains. “In the military spec ops units are the best trained, most well equipped and most capable of performing highly complex missions. They are known for professionalism, grit and are highly competent. When they are given a mission you know it is going to get done. That is how we strive to conduct our missions here. It is very close to our PGRIT values. If you have a tough mission we have the resources and expertise and experience so that we can get it done. We pride ourselves on the ability to do so.”

This approach was put to the test recently when Pref-Tech was asked by a customer to go to Belize for a project. While Pref-Tech is a regional integrator operating mostly in and around Texas, often customers will take them elsewhere in the country for a project. This was the first time a customer asked them to go outside the country, however. “We are not an international company,” Jett says. “It is our customers that take us outside our geographic area. Belize was a challenge for us. We had never worked internationally … but we were one of only two integrators that had the capabilities and skillset to implement a first-of-its kind Genetec access control solution. We met with the Central Bank of Belize and ended up being selected.”

Pref-Tech doesn’t subcontract, so that meant sending their own people to Belize for a month or two at a time until the project was finished. “We send our own people because we are fanatics when it comes to the professionalism and the craft of our installation,” Jett says. “[This project] speaks to the willingness of our customers to want us as part of their team. That is worth the value to them, even though it may cost more.”

That was always the goal, Castillo says. While Pref-Tech was founded as a minority-owned business and does enjoy the benefits of that status when working for city, state and local government and large customers with diversity programs, Castillo stresses that the idea has always been to have that be the bonus, not the reason for hiring Pref-Tech. “As we started working and building a reputation, the goal became, ‘Don’t hire us because we are minority; hire us because we bring value.’ Now it is a nice-to-have for customers, but they are choosing us because of the work we do, not because of our company status.”

Jett adds, “Our goal is to build a relationship with our customers to feel like with us they can be successful. At the end of the day, they are individuals holding down a job as well. They have to be successful, so we are a guide to help them get there. If they win, we win, and I mean the whole company. We are not just selling widgets or a product to them. It is a long-term relationship.”

Future Plans

What does the future hold for Pref-Tech? The company’s core target is both ambitious and specific: “On or before Dec. 31, 2032, Pref-Tech will be the most well-respected security company in the world. We will generate $88.5 million in revenue, earn 5 percent net profit, employ 354 people, have mature offices in Houston, Austin, Dallas and be established in at least one other geographic market.”

“If you have a tough mission we have the resources and expertise and experience so that we can get it done. We pride ourselves on the ability do to so.”
— Jeff Ferguson

In pursuit of this goal, on Sept. 12, 2023 Pref-Tech opened a new office location in Dallas, a project that had been in the works for a few years but had to be postponed initially. “We actually looked at opening that office a few years ago,” Castillo recalls. Like most of what they do, from their hiring push to going to Belize, this, too, was at the request of a customer. “They asked if we would consider doing work there. We had another large opportunity at the same time and thought we could deliver.” But in November 2021 at a strategic planning meeting Pref-Tech leadership realized they weren’t quite ready to move in 2022. “We spent all of 2022 getting ready to move to Dallas,” Castillo says. “It has been a long time coming, but we put the breaks on when we needed to and did the necessary prep work to move into that market.”

That prep work included moving several employees to the DFW area to ensure the company culture will continue, Castillo adds.

Everything Pref-Tech does is intentional, and with customers and employees in mind. Now that they are growing into a new market, that means continuing their pace of hiring, for one thing.

The HR department has a strategic goal of adding about 50 more employees by the end of the year, Dinger says. And the pace of hiring is expected to continue into 2024 and beyond.

The marketing department is also gearing up for new efforts, Reeves says. “Since its inception, the role of marketing at Pref-Tech has had a focus on cultivating long-lasting relationships with our customers; and that commitment remains true,” she says. “We take pride in serving as trusted advisors to our customers. Traditionally, much of our business arose from a more word-of-mouth style of marketing. However, with growth comes change. Expansion into new geographical areas across Texas has necessitated adding new marketing strategies to our arsenal, but we will always stay true to our … customers and to our core values.”

While the long-range goal is the absolute target, as was the case with the Dallas office plans, Castillo realizes things do sometimes change. Thus, while he plans to do all this growth organically, he doesn’t completely close the door on some capitalization down the road. “More than likely we will stay private. But if there was some kind of large opportunity and we needed a large cash infusion, we might entertain it; but it would be very calculated and the amount of equity minimal,” he says.

Privately-owned is a core tenant of the company, and one Castillo and his fellow leaders are strongly committed to.

“The company is in it for the long term,” Roland says. “Shaun wants his kids to run it one day. So we try to grow internally and give people opportunities so they can succeed and feel valued. It goes back to that family culture.”

While all of their kids are still young, Jett says he and the others are not going anywhere any time soon. “It may not be our kids taking over. Maybe it is other employees. I don’t know what that looks like, but I hope I have another 25 years in this thing. … I know we want to continue marching forward.”