SDM 2018 Systems Integrator of the Year: LVC Companies Inc.
An entrepreneurial spirit driven by a desire to service a diverse customer base; a new president/CEO who comes at a time when the company needed to restructure; and a corporate culture that blends personal responsibility with a plan to set employees up to succeed are just a few of the features of this year’s Systems Integrator of the Year.
LVC Companies Inc. (formerly Low Voltage Contractors) began as it would continue — as an entrepreneurial leap of faith brought about by a customer’s need. LVC was created in 1982 as an installation division of the fire suppression company J.N. Johnson Sales & Service, founded by John Goodwyne, after the company sold a fire alarm job in conjunction with a suppression job.
“John needed to either find a subcontractor or start a division to install fire alarms,” says Jeff Nelson, CFO at LVC. “He made the decision to start up a separate company.” That was the beginning of a culture and a philosophy to do what it takes to serve the customer, never stand still, and always look for opportunities to push forward.
LVC quickly established itself as a reputable fire alarm company and became the provider of choice for many significant commercial office buildings in Minneapolis/St. Paul. When, in 1996, one of these customers approached LVC about also doing security, they added that to the roster of offerings. Keith Kranz, sales manager, says, “Very early on in our company’s history we were asking, ‘What can we do next? What more can we offer our customers?’”
For example, in 2009 LVC saw an opportunity to support an existing client in the Arizona market and opened a branch office in Tempe. Shortly after that, the company added a structured cable division. Today, LVC operates six different divisions — fire alarm and life safety; a vast array of security offerings; IT infrastructure and A/V; fire protection, including sprinkler, special hazard and portable extinguishers; design; and service.
As the fire and security industries have changed, LVC has changed as well, like many of their fellow integrators that are morphing into technology companies and becoming more IP and cyber-savvy each year. But unlike many others, LVC’s broad range of skills and divisions gives it an edge with clients, allowing it to be a one-call for a very diverse range of customers.
Having set a course that served them well for years, LVC’s leadership remained unchanged until in 2008 founder John Goodwyne was thinking about retirement. “He had proposals to purchase the company but he didn’t like the structure of the offers because it would be absorbing LVC into a much larger entity and dissolve the culture he had built over the last 20 years,” Nelson recalls. So Goodwyne started researching ESOPs and put one in place for LVC as a buy-out structure to eventually retire.
Additionally, in 2008 LVC entered the next phase of leadership, which included promoting long time employees Bob Hoertsch to president and Dan Westberg to vice president. Under this new leadership the company continued to expand its offerings and locations.
Eventually it was Hoertsch and Westberg’s turn to retire, and Bert Bongard was their choice of successor.
“It was a sunset plan,” Bongard explains. “In late 2016 I met with Bob Hoertsch and talked about what had to be accomplished before he could step away. By September 2017 I was able to do that.” A few months later, Bob Hoertsch officially stepped down and Bongard became CEO in January 2018.
While the leadership change went as planned, it coincided with a growing realization on the part of LVC leadership that there was a need for restructuring due to an extended period of rapid growth. During this same time period LVC also purchased J.N. Johnson, the sister company that John Goodwyne had sold to his son David in 2005, along with another sprinkler company, Champion Fire. That, combined with organic growth, led to strong double-digit growth for three years running. The company that had 90 employees in 2015 now has more than 200, and it is still growing.
“One of the biggest challenges when he took over was to deal with the growth,” Nelson says. “We had gone from a small company to a fairly substantial one for our little niche in the last five years.”
In addition, LVC also decided to rebrand at the same time, officially changing its name to LVC Companies from Low Voltage Contractors to better reflect its new and broader mission statement: To be the industry’s leading fire protection and technology systems integrator, providing solutions for commercial, industrial and institutional facilities.
Judging from what LVC has accomplished so far, they are well on their way to this goal in the markets they serve — and more than deserving of SDM’s 2018 Systems Integrator of the Year award.
Taking the Helm
Bert Bongard joined LVC in 2011, having been a partner/owner of a voice/data company for many years. “I had sold off my interest in that company and was looking to do something different. I had been aware of LVC for many years because I sat on committees with Bob Hoertsch and Dan Westberg (LVC’s president/CEO and vice president). They approached me and asked if I was interested in coming on board here to build business.”
Like much of the way LVC grew over the years, the original intent was to have Bongard build a communication division; but there was also the potential opportunity that he would be groomed to take over LVC when Hoertsch and Westberg retired. “There were no guarantees, but they said, ‘Let’s see how it goes.’” It went very well, and both were able to retire and turn over the reins by January 2018.
It was the first significant changing of the guard since the company’s founding, says Jeff Nelson.
For Bongard it was something he worked toward his whole career, to be the person at the very top, to guide and continue to grow a business and create opportunities for everyone around him. “Even though I was part owner of a company for many years, we had up to six owners positioning to achieve their own agendas.”
When it came time to take over at LVC, Bongard had done a lot of thinking about what he wanted to bring to the company.
“Anybody in this position will look at what the current structure is and what their stamp is going to be,” he says. “I thought about that for an entire year. There was no reason to upset the whole apple cart, but there were subtle things I wanted to change and some policies I wanted to address.”
One of the first goals Bongard accomplished was his plan to create a communications committee. He began by asking everyone on the committee to come up with a list of challenges so the group could brainstorm solutions.
“We have accomplished many things [in less than a year],” Bongard says. “We put together sub-training committees to handle additional training needs; addressed several policies; put together best practices and procedures. It was a big list, to be honest. What we agreed to do was prioritize what we wanted to do in a month, six months, and a year.”
Bongard describes his own leadership style as very transparent and open, as well as methodical, which is reflected in his communications committee approach. Others have noted a positive change as well.
“Since Bert took over, everybody feels we do more; we are expected to do more and we are able to do more,” says Keith Kranz. “The communication throughout the entire company is better. Everybody holds each other accountable, and everybody has each other’s back.”
Brian Gould agrees. “One of the biggest changes is how we approach inter-departmental communication, with bi-weekly communication meetings, creating a culture of collaboration and cohesion rather than operating in our own silos. There is transparency, accountability, and it fosters an attitude of one team, one goal.”
THE RIGHT FIT
One of the most important ways LVC stays on track is to ensure it has the right employees, and that they are in the right roles. It starts with a pre-employment assessment test, which can lead to some surprising results, as was the case with Operations Manager Brian Gould when he was hired in 2006.
“I have a business degree and was working for a landscaping company in the human resources department,” he says. “I was interested in working for a mid-level company and maybe getting my master’s degree; but when I took that test — the same one everyone takes — LVC told me I would hate HR and I was a much better fit for project management. The test didn’t lie. They teased me for years that I was the poster child for that test.”
But before potential employees can even get to the test they have to know about LVC. Many employees arrive at LVC because of word-of-mouth.
“We really promote a referral program and instill the concept that everyone sells all the time regardless of your role and everyone should be recruiting all the time whether you are the CEO or in the field doing deliveries,” Gould says. Gould practices what he preaches. “[Personally] I tell people my story and background. If I can get off a lawnmower and 12 years later be running operations, it tells you the kind of culture we have…. It is a real testimony to the opportunity this company presents. Outside of the people I work with, who are phenomenal, that opportunity is what keeps me engaged and motivated all the time.”
The recruiting philosophy does indeed start at the top with the CEO. While he points to a very lucrative referral program that gives bonuses to employees 30 days after a referral is hired and again at six months, Bongard says there is one particular thing he personally looks for in a potential employee and encourages others to do the same: “It’s work ethic and passion. Look for people that go above and beyond. Look for people that have longevity elsewhere and have a dedication and a passion in their work.”
Bongard tells a story of one of the most rewarding hires he made in recent years, based on these criteria. “It was a Minnesota winter day with several inches of snow on the ground. I was at a local store and I saw a young employee gathering carts to take back into the store. I was having some difficulty pushing my cart towards my car. All of a sudden he stopped what he was doing and ran over to me and asked if he could help. It impressed me so much I asked him how long he had worked there. He told me he had recently graduated high school. I asked him what he was looking to do; he was unsure, but he said he definitely wanted something more. I gave him my business card on the spot and hired him weeks later.
“That employee has now been with LVC for five years and working for me for 10 years,” Bongard says. “I teach everyone to pay attention to how people are talking and acting. I have hired people from all sorts of places. It’s all about work ethic; no matter what work sector you are in if you are working hard and making a difference people will notice.”
Kranz, who himself came to LVC after friends who worked at the company talked it up to him, points to this culture of opportunity as the biggest selling point for him. “I have had six different roles at LVC [in 13 years]. If I saw something where I thought it made sense I filled that role. As people bring ideas for opportunities we take them seriously. There is a culture of not telling people ‘no.’ It’s OK to fail, to make a mistake. We will go on. It gives people the opportunity to not be afraid to try something new.”
LVC also works with JATC (a local union-based training program), job fairs and local colleges and universities to make sure jobs are posted where the most likely people will be looking, Kranz says.
After hiring, the next step for new employees is training and certification — particularly critical for a company that does a significant amount of work in the fire and construction industries. Training and education are so important to LVC employees that they regard it as a reward.
“We view training as an investment in our people,” Gould explains. “We reward people with certain levels of training for those that show a drive and a desire to improve their skillsets. We do the basic onboarding training, in-house training. Then people striving to better themselves and show that progression are rewarded with manufacturing training. We also expect a certain amount of self-study that will benefit the employee and the company now and in the future.”
LVC boasts an impressive list of industry-wide certifications including BICSI, Minnesota Power, NICET levels I through IV, and Journeyman Sprinkler Fitter, in addition to 33 different manufacturer, 12 safety and three IT certifications.
“Certifications are extremely important in all of our disciplines,” Gould says. “That list of certifications really substantiates our company.… It shows we are committed to our craft.”
The ESOP structure helps with this commitment as well, Nelson says. “The ESOP was put in place as a vehicle for John Goodwyne so he could sell the company and maintain the culture, but it just reiterated a culture of ownership and responsibility that was already in place — that everyone has skin in the game. We like to joke that we had an ESOP culture years before we were an ESOP.”
The benefit of an ESOP, he adds, is it gives everyone an incentive to stay focused on the long-term goals, because it is not paid out until an employee leaves or retires. “The focus is on what will the company be like five or 10 years from now? How can I improve the company so that the stock value is as high as it can be?”
This was even the case for the outgoing leadership, he says. “Our retiring president and vice president had a huge incentive to set the company up to be as healthy as possibly while they were getting the ESOP paid out.”
But if the company culture they created and that is maintained today is any indication, they probably didn’t need the financial incentive to do the right thing.
“There is a company philosophy to try to hire the best people possible and from my perspective that is reassuring,” Nelson says. “I don’t want to be surrounded by someone who is just punching a clock. I want someone who is emotionally invested in the company and really cares about the quality of work we put out.”
Gould adds, “I think one of the biggest characteristics that separates us from others is the attitude that we are all owners and difference makers. Even before we were ESOP we had a very entrepreneurial spirit. A lot of other companies get caught up in bureaucracy. Here, it is ‘all hands on deck’ all the time to take care of our customers, be creative, push boundaries and think outside the box.”
In fact, one of the first things Bongard instituted after becoming CEO was a communications committee to be a think-tank of ideas and suggestions, and to disseminate information to their peers. “As we have grown, employees were feeling more disassociated from management, communication and understanding the direction of the company,” Bongard says. “The purpose is to get ideas from as many different people as possible and strategize on actionable items while creating a culture of people having a voice.”
Bongard also encourages an open-door policy. While that was not new, his approach definitely was. “A lot of companies say they have an open-door policy and we did here as well,” he recalls. “But you still have people that are hesitant to use it. I wanted to break down that wall.” At quarterly company-wide breakfast meetings Bongard began offering incentives to anyone that would contact him with an idea or even criticism, as long as it was constructive.
“I ask that you first present it diplomatically and not just as a complaint but most importantly offer a solution or actionable idea. As I started hearing from people I would write it up in the newsletter, with their permission, and say ‘This is what I heard this month and this is what we are going to do about it.’ I also gave them an award, like a $50 gift card, and thanked them for doing it.”
The communications committee as well as the new and improved open-door policy are two examples of what Marketing Manager Robbie Danko refers to as a “paradigm shift that has significantly changed the way life works at LVC” since Bongard took the helm. “Employees are tasked with increasing proactive behavior and identifying long-term solutions to things that had previously occurred situationally.” This added expectation is a bonus, she adds.
“I loved LVC when I first got here, which is why I stayed. And now to see this emerging culture where we are all are working toward actionable goals and doing it together is very rewarding. If someone is falling short there are people there to pick them up. It makes us a better company.”
Cyber Security: An Open Ticket
Like most security integrators, LVC has been on the fast-track in the past few years to understand and mitigate growing cyber security concerns — both internally and for their customers. As a PSA member they have taken advantage of several suggestions and opportunities the organization has offered. The company also has an internal person dedicated to learning all he can about this important topic: David Miller, IT manager.
“We are totally on board with PSA’s approach,” Miller says. “LVC Companies has made cyber security a major focus for the past number of years and we have made great inroads into securing LVC and our client sites. A significant journey remains ahead but we have a strategic game plan to get us there.”
Part of this plan included doing penetration tests and then hiring a consulting firm to make further recommendations and help LVC create written documentation and work towards the NIST cyber security framework. The company also has a client-focused cyber security team focused on what they can do to shore up the client side. It also involves working more closely with vendors than ever before.
“We need to make sure vendors are on board and understanding the criticality of the full cyber initiative,” Miller says. “We make sure unnecessary services are turned off. We used to never do firmware updates, but now we do. That whole mindset needs to go out the door. A camera might work great, but now we have a vulnerability if exploitable services are left on or firmware is not updated.”
LVC also partners with a local provider of cyber security solutions to offer managed IT services to clients when they request it. But all of this is just the start of an ongoing initiative, Miller acknowledges.
“We do know for certain that Microsoft, one of our primary vendors, rates our cyber preparedness well above other similar-sized businesses in our industry,” Miller says. “But cyber security is never something that reaches a ‘finished’ state. It is not a support ticket that we can close, where we hang up our hat and say, ‘We did it!’ LVC is gaining ground and will continue to gain ground in this never-ending battle. Here at LVC this ‘support ticket’ has a priority of critical and will remain forever open.”
Some security integrators find success by specializing in a select few vertical markets or types of technology. LVC takes the opposite approach.
In fact, many of the advancements and additions to LVC’s company and its offerings over the years have been the direct result of following the lead — and the needs — of its customers. As a result LVC has expanded from serving primarily commercial and electrical contractors to end user and general contractors. In 2017, the largest percentage of vertical markets was spread between commercial office space, correctional, government, industrial and healthcare; but the range of vertical sectors served runs the gamut from airports to utilities.
“It is a very diversified market,” Kranz says. “As we grow into other markets it keeps us thinking forward and looking at new options.”
For example, this year a customer who was not using LVC on a particular project asked if they would act as a third-party commissioning service.
“As larger companies are downsized they still have to maintain code, but often they don’t have the resources to do it,” Kranz explains. “A customer came to us and asked if we would be interested in doing it. We looked at what they were asking and realized we have national contractors where we verify things are done to our standards. It was a natural outgrowth to step in and do this for other people.”
The resulting offering is a three-step process, he explains. “We go in after the wiring is done and make sure it meets industry code; we go in after the devicing is done and make sure terminations are correct; and after the final commissioning we meet with the AHJ to make sure it meets their standards and it is reporting correctly. We are the ones vetting these things for the customer, and act as an owner’s rep.”
Another recent offering they are particularly proud of is a new nitrogen inerting service. This one came about as a result of trying to solve a customer’s ongoing problem, Danko says. “One of the things I think makes our company unique is we aren’t tied to conventional wisdom. We look at every situation with unique eyes and don’t make assumptions about one situation because it is similar to a previous one. It helps us to really make sure we are looking at and solving the right problem, providing the right solution.”
In this particular case, a large customer kept chasing leaks in their fire sprinkler piping, which was great revenue for LVC, but not so great for their customer. “We were probably doing $100,000 worth of work a year with them, patching leaks,” Danko recalls. “After a year and a half our industrial division sat down with that customer and said, ‘There has to be a better way.’” Upon investigation, LVC found a solution from the petroleum industry.
“Nitrogen is used in the petroleum industry to remove oxygen,” she says. “Some engineer had applied that same principle to sprinklers about 20 years ago, on the theory that if you introduce nitrogen it stops pipe corrosion, which is caused by oxidation. But it hadn’t been a popular theory. We put two proposals in front of our customer. One was to replace all the pipes; the other was to introduce nitrogen into the system.”
After careful consideration the customer chose the latter, and it was a success. “A year later they haven’t had any issues with pipe leaks,” Danko reports. However, the customer related to LVC that a counterpart in Kentucky had tried the replacement route and was still chasing leaks. “The client realized we were looking out for their best interests and now we have created a customer for life,” Bongard says.
LVC has also added system health monitoring, as system reliability has become a growing concern for customers. LVC first introduced this technology for a large national developer of student-housing facilities. With this software in place LVC personnel are alerted via email whenever a security device has a performance issue or has failed. Once the alert is reviewed a technician will log into a dashboard and troubleshoot the issue, often remotely.
This is one part of an effort to increase hosted and managed services. LVC currently offers hosted access control and video, as well as a range of other managed services, and plans to significantly increase these offerings in the next two years.
The company also offers smart building integration both on the fire and security sides, Bongard says. “We haven’t done a lot of them because it is a long, slow sell cycle. But we have multiple projects in the pipeline for a lot of large buildings in the Minneapolis area.”
For Bongard, the proof of success is in the response from customers and others.
“We do offer a lot of different types of services in both fire and security and communications. There is no one in the marketplace quite like us. But I feel we are already ahead, by the feedback we get from our customers. We have a goal that we always and continually evaluate. The moment you think you have it all done and covered you are in trouble. My philosophy is to never be satisfied, always strive for more and look for ways to challenge yourself. I believe we are doing that,” he says.
Rebranding LVC: A Broader Umbrella
With all of the growth and change LVC has been experiencing in the last five years, why did they decide to rebrand on top of it? Robbie Danko says it was part of an overall effort to move forward as a cohesive and unified brand, as well as to better reflect all that LVC does in its various divisions.
“The story goes back three years to May 2015. We started a fire sprinkler division. A year later we bought a fire protection company, J.N. Johnson, which added a heavy industrial division. For a year as we transitioned through that acquisition and tried to familiarize people with all our capabilities, one thing that kept coming up was, ‘Why, if you are a low-voltage company, are you doing fire systems?’ We made the decision in May of 2017 that we needed to do a rebrand, to have an identity that was stronger and represented everything we did. The other thing was we had started to acquire companies and it was difficult to do that under Low Voltage Contractors. We needed a broad umbrella we could grow under.”
On the security side Low Voltage Contractors had been well known and was often shortened to LVC, so it was a natural decision to formally change the name to that. But there is nothing simple about a rebrand, Danko says. It touches every area of the business, from the business cards to the trucks. In the end, it was a positive change for the whole company.
“It allowed us to streamline a lot of things,” Danko says. “The rebrand helped us get into every area to understand what they needed from a resources standpoint and figure out where to build efficiencies and make sure we were getting competitive pricing and meeting brand standards.”
One of the biggest challenges was coordinating the vehicles and making sure they were relabeled without reducing productivity, Danko says. “Brian Gould and I worked hard to coordinate ride shares. I can’t think of a single instance where a tech was not able to work because they were waiting for a truck to get re-lettered.”
Another area that needed updating was the company website. The rebrand gave LVC the chance to look at it with fresh eyes, Danko says. “Our growth was so rapid it was a challenge to wrap our heads around everything we did and articulate everything we do. We had to figure out how to make our company accessible to our employees and customers without over-complicating it.”The whole process was a valuable exercise, she reports. “I see a ton of opportunity now that we have a really well-defined brand, and a clear and concise messaging around different technologies.”
POSITIONED FOR GROWTH
LVC has gone through a lot of change and transition in the past few years, along with a lot of growth. All of that, in addition to a desire to retain the culture that has been 35 years in the making, led the company to make a decision to deliberately slow growth in 2018 into 2019 to an average of 5 percent. ”Given the last three to five years of exponential growth we needed to focus on efficiencies, assess current processes and strategically plan next steps for our future,” Bongard says.
“We needed procedures and standardization,” Nelson says. “You have to do all that because if you don’t you are not going to be efficient at running a company of this size while maintaining the culture that got you there. It’s easy to have that entrepreneurial spirit when you have 20 to 30 employees. It is a lot harder with 200-plus employees.
“We have had tremendous growth over the years and from a financial perspective you can grow yourself right into financial trouble. We were adding so many people we wanted to take a breath and take a strategic look around, make sure we are running as efficiently as possible. We needed to make sure all these new employees understand what is expected of them being an LVC employee.”
LVC has spent the past year moving to a new ERP platform, which is a back-end software system designed to increase efficiencies, Nelson says. “We had been on the previous ERP since 2000. We hadn’t done a major overhaul in 19 years, so this is a huge project for us right now. Everybody will touch this, from the field guys to sales to accounting.”
Nelson says the new system is all about “getting the right information to the right people at the right time…. The biggest impact will be to get much more live data out to the people who need it on a much more current basis so we are not looking at an installation job two weeks after it is closed out. Rather we will see live numbers and know if we are falling behind a bit in one area but can make it up on another.”
Phase one is scheduled to go live on January 1, with phase two and potentially a phase three to come over then next year or two as people adjust to it. “You don’t go out to a steak dinner and eat your steak in one bite,” Nelson says of this process. “We need to deploy basic functionalities, then get everyone comfortable and familiar, then add some cool bells and whistles down the road.”
With all the positive things that have come their way, LVC is diligent about giving back, not only to their community but to the security industry as well.
“We are a company with a big heart,” Danko says. “It is something I am very proud of because what often goes unnoticed is the employee who will ask if we have a spare camera to donate to their daughter’s horse-riding club for the woman who provides riding lessons to disabled children.”
Other efforts include Ronald McDonald House Charities, Am Vets, Can Do Canines, Boys and Girls Clubs, and many more.
LVC also deliberately makes a big effort to be visible in the industry at trade shows and conferences, and are active members of PSA Security Network, NECA, the National Association of Fire Equipment Distributors, ASIS and ASHE, as well as numerous local organizations. Bongard says, “If you are going to belong to an organization you have to be an active participant or why even belong? Within PSA we have people on several committees. You build your network of people and participants on so many levels by doing that. You are also offering your expertise.”
Bongard says LVC frequently gets calls from others in the industry and organizations to do industry talks. “You are doing something right if people are asking you to participate. You can’t be a taker in any industry; you have to give back in some way.”
As for what’s next, acquisitions are always on the horizon, Nelson says. “If the right one presents itself we could have another big jump in growth; but we look at growth as a trend line — you have areas of big growth, then it is flatter while you are working on efficiencies, then another step up.”
Bongard agrees. “We are always looking at what we can do to better ourselves. We are positioned very well for the near future for additional acquisitions, as well as expanding our geographical footprint. We have a lot of room to grow in all our divisions. We have staffed up very well and positioned ourselves for another run in 2019.”
LVC has received multiple awards for its safety training programs. This year’s awards so far include the Minnesota Governors Safety Award, NECA Safety Excellence Award for both the Minneapolis and Arizona branches, and the NECA Zero Injury Award.
“Our safety training starts as soon as we bring a new employee in,” Brian Gould says. “On the first day they watch a series of safety videos. We also do weekly toolbox talks, and promote OSHA training and certifications. We have a safety committee with representatives from all departments and disciplines who meet quarterly to review processes.”
The toolbox talks go beyond a newsletter, he says. “It is a forum that goes out weekly and is provided by the National Electrical Contractors Association (NECA). Each week is a different safety topic; it could be ladder work, slip and falls, proper lifting, power tools, etc. They have to read through it, answer questions and everyone signs off and turns it back in. We have compliance awards each year — just another way we recognize commitment to our employees.”