The Business Of Security Has Shifted From Protecting .

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The business ofsecurity has shiftedfrom protectingcompanies fromrisks, to being thenew source ofcompetitiveadvantage .The Business ofResilienceCorporate security for the21st centuryRachel BriggsCharlie Edwards

About DemosWho we areDemos is the think tank for everyday democracy. We believe everyoneshould be able to make personal choices in their daily lives that contribute tothe common good. Our aim is to put this democratic idea into practice byworking with organisations in ways that make them more effective andlegitimate.What we work onWe focus on six areas: public services; science and technology; cities andpublic space; people and communities; arts and culture; and global security.Who we work withOur partners include policy-makers, companies, public service providers andsocial entrepreneurs. Demos is not linked to any party but we work withpoliticians across political divides. Our international network – whichextends across Eastern Europe, Scandinavia, Australia, Brazil, India and China– provides a global perspective and enables us to work across borders.How we workDemos knows the importance of learning from experience. We test andimprove our ideas in practice by working with people who can make changehappen. Our collaborative approach means that our partners share in thecreation and ownership of new ideas.What we offerWe analyse social and political change, which we connect to innovation andlearning in organisations.We help our partners show thought leadership andrespond to emerging policy challenges.How we communicateAs an independent voice, we can create debates that lead to real change. Weuse the media, public events, workshops and publications to communicateour ideas. All our books can be downloaded free from the Demos website.www.demos.co.uk

First published in 2006 DemosSome rights reserved – see copyright licence for detailsISBN 1 84180 163 1Copy-edited by Julie Pickard, LondonTypeset by utimestwo, Collingtree, NorthantsPrinted by Upstream, LondonFor further information andsubscription details please contact:DemosMagdalen House136 Tooley StreetLondon SE1 2TUtelephone: 0845 458 5949email: hello@demos.co.ukweb: www.demos.co.uk

The Business ofResilienceCorporate security forthe 21st centuryRachel BriggsCharlie Edwards

Open access. Some rights reserved.As the publisher of this work,Demos has an open access policy which enables anyone to access ourcontent electronically without charge.We want to encourage the circulation of our work as widely as possible without affecting the ownershipof the copyright,which remains with the copyright holder.Users are welcome to download,save,perform or distribute this work electronically or in any other format,including in foreign language translation,without written permission subject to the conditions set out inthe Demos open access licence which you can read at the back of this publication.Please read and consider the full licence.The following are some of the conditions imposed by the licence: Demos and the author(s) are credited The Demos website address (www.demos.co.uk) is published together with a copy of this policystatement in a prominent position The text is not altered and is used in full (the use of extracts under existing fair usage rights is notaffected by this condition) The work is not resold A copy of the work or link to its use online is sent to the address below for our archive.Copyright DepartmentDemosMagdalen House136 Tooley StreetLondonSE1 2TUUnited Kingdomcopyright@demos.co.ukYou are welcome to ask for permission to use this work for purposes other than those covered by theDemos open access licence.Demos gratefully acknowledges the work of Lawrence Lessig and Creative Commons which inspired ourapproach to copyright.The Demos circulation licence is adapted from the ‘attribution/no derivatives/noncommercial’version of the Creative Commons licence.To find out more about Creative Commons licences go to www.creativecommons.org

ContentsAcknowledgements7About the authors9Notes on the research methodology11Executive summary121.Introduction192.The changing global security context263.Corporate governance: the new organising principlefor corporate security32Good relations: delivering corporate security throughcommunity partnership385.Offshoring: a new role for corporate security476.The art of managing up, down and across547.Managing up588.Managing down659.Managing across7110.Skills for corporate security7811.Conclusion964.Notes101

AcknowledgementsFirst, we would like to thank our partners, without whose supportthis research would not have been possible. They are BP, BritishAirways, Control Risks, E.On, G4S Global Risks Ltd, HSBC, KrollSecurity International, Prudential, QinetiQ and Shell.In particular, we would like to thank Karl Barclay, Alastair Barron,James Cheshire, Graham Clarke, Peter Enzer, William Fell, RichardFenning, Ken Heap, Nigel Jones, Ron Lindsay, Ian McCredie, ChrisSmith, John Smith and John Sullivan.Many thanks to those who agreed to be interviewed, attended orspoke at seminars, or met with us in India, South Africa and the USA.They are too many to name, but special thanks to Frances Allen,Sanjiv Bhalla, Professor Edward Borodzicz, Barnaby Briggs, DavidBurrill, David Crow, Les Dauth, Mike Davis, Philippa Foster Back,Peter French, Chris Gentle, Nikki Heath, Chris Holtom, Dan Hooton,Nimisha Iyer, Hamish Macdonald, John Maltby, Francois Marais,Nick Proctor, Don Randall, Sanjay Razdan, David Reece, Tim Reilly,Mark Sanna and Linda Sharpe.Finally, thanks to the whole Demos team which has offered all sortsof support along the way, but especially to Natasha Barrass, TomBentley, Paddy Dewhurst, Sam Hinton-Smith and Tracy Sartin.Rachel BriggsCharlie EdwardsJune 2006Demos7

About the authorsRachel Briggs is head of international strategy at Demos and runsDemos’s Global Security Programme. Her research focuses on thechanging domestic and global security environments and how theyimpact on personal, organisational and national security. It stressesthe importance of governments, the private sector and citizensworking together to tackle security threats and build resilient organisations and communities. Her current research projects are oncounter-terrorism, counter-radicalisation, corporate security, securitysector reform, security governance and development, and culturaldiplomacy.She is the author of several reports: The Kidnapping Business(2001), Keeping Your People Safe (2002), Travel Advice: Gettinginformation to those who need it (2002), The Unlikely CounterTerrorists (ed) (2002), Doing Business in a Dangerous World: Corporatepersonnel security in emerging markets (2003), Healthy Travel: Effectivecommunication to improve travel health outcomes (2003), 16 Days: Therole of the Olympic Truce in the toolkit for peace (2004) and JoiningForces: From national security to networked security (2005).Charlie Edwards is a researcher on the Global SecurityProgramme. His current work focuses on corporate security, the roleof the private sector and non-state actors in security sector reform,and human security issues. Charlie works directly with senior policeofficers through Centrex, the Central Police Training and DevelopDemos9

The Business of Resiliencement Authority, and has run training courses with the UKDepartment for International Development and the Organisation forEconomic Co-operation and Development (OECD).Previously Charlie worked for a political consultancy and in theUK Parliament where he focused on defence and security policy. Hebegan his career working at NATO. Charlie is a research associate atthe Centre for Defence Studies and has an MA in War Studies fromKing’s College London. He is the co-author of A Force for Change:Policing 2020 (Demos, 2006).10Demos

Notes on the researchmethodologyWe used a number of research methods during the course of thisproject. These included: a literature review and background researchthree research seminars in Londonfieldwork in India, South Africa and the USA, meetingwith heads of corporate security and their teams, peoplewith responsibility for security within business units,other business representatives, security companies,industry bodies and non-governmental organisations(NGOs)in-depth interviews in London with the heads of securityfrom ten major multinational companiesa survey of 50 security managers conducted on the phoneand over the internetinformal discussions and conversations.This report focuses on multinational companies. There arecommonalities between the security challenges facing largecompanies and small and medium-sized enterprises (SMEs), butthere are also many differences. Therefore, while some of our analysisand conclusions may be relevant for SMEs this has not been testedduring the course of our research. This is an area that requires muchmore attention, but is beyond the scope of this project.Demos11

Executive summaryDoing business is getting more and more complex. Globalisationhas changed the structure and pace of corporate life; the saturation oftraditional markets is taking companies to more risky places; the shifttowards a knowledge economy is eroding the importance of ‘place’ inthe business world; new business practices such as offshoringchallenge companies to manage at a distance; and new forms ofaccountability, such as corporate governance and corporate socialresponsibility, put added pressure on companies to match their wordswith deeds, wherever they are operating. One response has been theshift from functional to matrix structures, where companiesorganise themselves into teams with diverse skills and expertise tosolve specific business problems, power is devolved to the local level,and effective management relies on being able to work across theorganisation through trusted networks rather than the officialchannels.At the same time, security risks have become more complex, too.Many of the threats, such as terrorism, organised crime andinformation security, are asymmetric and networked, making themmore difficult to manage. There is also greater appreciation of theinterdependence between a company’s risk portfolio and the way itdoes business: certain types of behaviour can enhance or underminean organisation’s ‘licence to operate’, and in some cases this cangenerate risks that would not otherwise exist. As a result, security has12Demos

Executive summarya higher profile in the corporate world today than it did five years ago.Companies are looking for new ways to manage these risks and theportfolio of the security department has widened to include sharedresponsibility for things such as reputation, corporate governance andregulation, corporate social responsibility and information assurance.As the function comes of age, the corporate security communityhas been trying to understand how to align security with thebusiness, so that doing business and doing security go hand in hand.We have spent 12 months observing multinational companies andhave found a handful that appear to be doing this successfully. Thisreport sets out what we have learned about their strategies to allowothers to replicate their policies and practices.These companies understand that the challenge for corporatesecurity is no different from that for any other function – they mustkeep pace with their company’s changing business environmentand ensure that how they work, what they do and how they behavereflect these realities.They exhibit six important characteristics:12They understand that security is achieved through theeveryday actions of employees right across the company.It is not something that the corporate security departmentcan do to or for the company on its behalf and itsfunctional success is therefore dependent on its ability toconvince others to work differently. This places emphasison communication and requires security departments tovalue the views of non-security professionals just as muchas those of the experts.They recognise the limitations of command and controlapproaches to change management. Behaviour is alteredonly by convincing, persuading, influencing andexplaining why a new way of working is in each person’sinterest. This requires departments to work throughtrusted social networks, which places greater emphasis onpeople, management and social skills than securityDemos13

The Business of Resilience344514experience. The power of the corporate security functionis now directly proportionate to the quality of itsrelationships, not the depth of its content knowledge.They understand that their role is to help the company totake risks rather than eliminate them, and to havecontingencies in place to minimise damage when thingsgo wrong. Risk-taking is essential to successful businessand corporate security departments must not behave assecurity purists whose work detracts from, rather thancontributes towards, the company’s goals.They embrace and contribute towards their company’skey business concerns, and as a result are expanding thesecurity portfolio significantly. Corporate securitydepartments now have responsibilities in areas such ascorporate governance, information assurance, businesscontinuity, reputation management and crisismanagement, which is causing many to question therelevance of the term ‘security’ to describe what they do.The term resilience now more accurately reflects therange of their responsibilities.They draw a clear distinction between the strategic andoperational aspects of security management, and havecreated group corporate security departments to lead onstrategy, leaving operational work to be carried out bybusiness units. They all have a clear philosophy to guidetheir approach to security, which provides direction fornon-security professionals, makes it easier tocommunicate across the company, sell itself to the board,and be credible alongside other functions.Finally, and most important symbolically, the corporatesecurity departments that are leading the way haveabandoned old assumptions about where their powerand legitimacy come from. Their position does not reston that which makes them different – their contentknowledge – but on business acumen, people skills,Demos

Executive summarymanagement ability and communication expertise. Inother words, they have to compete on the same terms asevery other function in the company. This is leading manyorganisations to place greater emphasis on these skillsthan on a security background and some have peopleworking on security who don’t have any securityexperience at all.This report highlights a number of practices – some current, othersaspirational – which constitute a manifesto for twenty-first-centurycorporate security.Philosophy for securityCorporate security departments must: ‘let go’ – they cannot deliver security to the rest of theorganisation and must be committed to the idea ofcommitment-based security; they understand that theirauthority and legitimacy come from openness andtransparency rather than secrecy, and work hard to dispelthe ‘security myth’not practise the ‘dark art of security’ – they should notoverreact to ‘security moments’ or use them cynically asopportunities to fight for more resources or authority, norseek to play others’ lack of knowledge to their ownadvantagebe driven by business priorities – from new organisingprinciples, such as corporate governance, to new businesspractices, such as offshoringnot look for Rolls-Royce solutions – absolute security isnot possible anywhere, and is certainly not desirable in acorporate setting where the economic imperative is keyplace a premium on good relationships both within thecompany and between the company and its stakeholders;fortress security can lose a company friends as well asharm the bottom lineDemos15

The Business of Resilience understand the importance of communication – theymust work hard to sell their services, gain visibility acrossthe company, influence key decision-makers and challengemisperceptions, where necessary.Group security departmentDepartments must: expand their work far beyond the traditional securityportfolio to include issues such as business continuity,reputation, risk management and corporateresponsibility; this creates added pressure to manageacross, emphasising the importance of networks andchange management skillshave as short a reporting line to the board as possibleact as a key point of coordination for corporate security(in the widest sense) across the companyembrace changes to the internal and externalenvironmentsunderstand that there is still more work to be done inaligning security with the business through, for example,strategic plans, metrics that measure the work of thedepartment against the strategic priorities of the business,and more formal links with other parts of the business(for example appraisal processes).Head of securityHeads of security must: 16be effective leaders – they should be credible playersalongside peers at the top of their companies and havedemocratic and open styles of leadership within their ownteamsoccupy senior positions within their companieshave regular contact with their boards and seniorDemos

Executive summary management teams and invest significant time in raisingawareness of security among the board memberswork at a strategic rather than a tactical level; bepresentation-led rather than content-ledview their security experience as being far less importantthan their business, management and communicationsexperience.Security teamSecurity teams must: value diversity – gender, age, ethnicity, leadership stylesand core competenciesplace a premium on business skillsunderstand the importance of investing far more time andresources on the mechanisms for change – personneldevelopment, fast-track schemes for securityprofessionals, rotation and developing qualifications.Organisational structureCorporate security departments must be committed to business integration, and will achieve this through a number of means, such as: sitting on key committees and working groups that linkthem into other areas of the business or give theminfluence at a senior levelbeing committed to alignment with the projectmanagement and coordination processdeveloping a variety of reporting structures, with anunderstanding of the importance of ‘structural layering’delegating as much responsibility as possible for securityfrom group level to the business unitvaluing the regional layer, but acknowledging that it isdifficult to get right; developing innovative responses,such as ‘cluster security’ modelsDemos17

The Business of Resilience having small central budgets, with the bulk of budgetsdecentralised to the business units.Achieving alignment between security and the business requires thefunction not only to widen its remit to cover more risks, butfundamentally to change the way it works and relates to the rest of thebusiness. Those companies that manage this transition successfullywill not just be better equipped to deal with the threats fromterrorism, organised crime or employee theft. The types of changeswe advocate will create significant resilience or adaptive capacity rightat the heart of the business. In an increasingly complex and fastmoving world the successful companies will be those who canmanage change effectively on an ongoing basis. Aligning security withthe business, therefore, does not merely make companies safer – it isone of the most important sources of competitive advantage in thetwenty-first century.18Demos

1. IntroductionUncertainty and doubt push the boundaries of management aswe know it. The raison d’être for organizations and their leadershas long been to increase control and predictability. Dealingwith uncertainty involves growing comfortable with ambiguityand trying to build robustness into choices. Indeed, the flightfrom uncertainty and ambiguity is so motivated, and the desireto reduce what is fundamentally unknowable to probab

the business world; new business practices such as offshoring challenge companies to manage at a distance; and new forms of accountability, such as corporate governance and corporate social responsibility, put added pressure on companies to match their words with deeds, wherever they are operating. One response has been the shift from functional to matrix structures, where companies organise .

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