David Lenz, Hills.

Hills has divested its AV and Antenna Divisions and is refocusing on areas of growth, including integrated security solutions, technical services and health technologies. Hills CEO and MD David Lenz speaks with John Adams about the company’s plans for the electronic security business.

JA: You’re the biggest locally owned electronic security distributor in Australia now – what’s your message to the market?

DL: Yes, we are the largest locally owned distributor in the electronic security industry by a significant margin. Our message to the market is look out, we’re coming. The recent announcements that we are exiting the Antenna and AV businesses show our intentions. Hills is a security, IT and technical services distributor now – there’s no mucking around – there’s a clear focus on what we are doing. There is a new clarity around that is good for us and good for the market.

JA: The Hills of the future is going to be a more focused business?

DL: Absolutely – more focused and more streamlined. There are many efficiencies that come with being more focused than we have been. We are putting more customer-facing people out in the market with a focus on supporting our key vendors; Carrier (UTC), Axis, IDIS and Genetec. We’re going to be pushing hard and telling the market about our new products and solutions – things like ChallengerPlus and TecomC4, Reliance XRpro – it’s a good, solid range that solves people’s problems in the real world.

JA: Back to the future for Hills?

DL: You could argue that in a good way. We have been on an interesting journey, but I think the future is about having more clarity around the business and that is the clear message – we are in the health technology and electronic security markets, this is what we are doing – nothing else.

It’s probably been easy to take pot-shots at Hills over the last couple of years but where we are at now we are still the largest player in town and we need to act and operate like it – to improve our customer service, to improve every part of the business, including our supply chain.

JA: Does local ownership give you fingertip control over the business?

DL: Yes, and we want to give that fingertip control back to our team. We have people who are very passionate about what they do, and we want that passion to reach the market. From our point of view, the new structure means we have a very clear way to talk about the company to the market. We are in health, including patient engagement and nurse call, and with distribution it’s security, IT and technical services – that’s all we do.

JA: Looking at the numbers from Hills’ financials the profitable niches are clear. This obviously informed decision making at board level when it came to focusing the business?

DL: Yes, definitely – we can see our future lies in the health, security and technical services sectors. But alongside those numbers there’s the exclusivity of the products we have, the branch network we have, the quality of the people we have – they are all huge assets and we need to leverage them in a more effective and more focused way.

JA: The importance of relationships between people in the security industry can’t be underestimated, can it?

DL: People are the key and we have a great team across Australia and New Zealand. Victoria for example is a revitalised team with a balance of talent, drive and experience and we will continue to attract key talent. What’s been positive for us in our divestments has been the transition of staff – the AV and comms businesses have been incorporated into strong businesses in which there’s a real future for the expertise of our people. Our goal in these divestments has been to ensure the business continues and former staff careers continue, and that everyone is a winner.

JA: Where are you growing right now?

DL: We’ve just opened a new branch in Nerang on the Gold Coast – plenty of people are coming through. We are seeing more activity around all the branches – this comes back to the leadership of the team. Our growth is linked to the new products and solutions coming through. There are some good things happening that will really shake up the market.

JA: In what ways are you empowering the team in terms of day to day operations?

DL: We just changed our phone system over the past couple of months – it used to be that our phones overflowed to a central location but now if you call a branch, you get that branch – customers are happier with that. Tech support has a state-of-the-art call centre grade phone system that has delivered a huge improvement in efficiency and customer service. The tech support team has been expanded to 10 people.

We are attacking the areas we think are important and that local connection is what’s important for customers – they love local support. And when you talk about national technical support teams, they need to be trained by a rigorous training process to understand the new products coming out. There are other aspects that are important – our recreation of distribution to make it more efficient for customers plays into improving our service, too.

JA: Is the electronic security business harder than it was in the past?

DL: The challenge in modern distribution is dealing with change. Nothing stops in business – you must keep moving forward. We are meeting change by putting new technology through the business – new stock management and BI tools – that inform the team what new stock is coming and when it will arrive. We are feeding that information back out to the team so they can offer better service to our customers. The website – you take off comms and AV we have a security and IT website that’s easier to navigate. These changes will help drive our focus on customer service. I’m excited about where we sit now – we’ve cleared the air.

JA: You’ve been in distribution a long time, David. Has the process you’ve been through over the last couple of years been the most engaging?

DL: It’s been the most engaging process of my career and the most challenging, there’s no doubt about that. We’ve gone through a lot of change. It’s important during such a process that the team stays focused on the end goal, asking ourselves what we are trying to achieve as a publicly listed company and as a service provider.

Obviously, part of achieving our goals is about delivering profitability for shareholders but from the point of view of customers it’s about the service levels we provide and how we go about providing those service levels. And for our vendors it’s about executing in the market for them and for our customers, so we are all successful. You can’t lose sight of that because it’s the core of the business. So, yes, it’s been a journey, but we are getting there.

JA: Do you have a message for the Hills team?

DL: I think the message for the team is that we are without a doubt one of the major players in the local market, we have a selection of great brands and we are going to establish a winning culture for our staff and customers. I am excited about where we are today. I think the changes we have made, and the renewed focus will drive accountability back to the team – there will be more ownership of the business from our people and we will be a more agile business as a result. The next 12 months is going to be exciting times for all of us.

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