A Man the Guard Firms Love to Hate

Chances are, you won't see these guards being led away in handcuffs on the evening news. In contrast to some of its larger competitors, sixth-ranked Guardsmark has nurtured a culture geared toward doing things right. Managers who neglect even the smallest screening procedure have their bonuses docked. While executives routinely job-jump among the biggest guard outfits, Memphis- based Guardsmark refuses to hire anyone who has ever worked for a rival. "I don't want their bad habits," says Ira Lipman, the firm's president and owner.

Applicants for jobs as "security officers" (a.k.a. guards) must first deal with an intimidating 24-page application form that, for example, demands 10 years of residential history. Neighbors and former employers are interviewed. Any 30-day gaps in work backgrounds require a notarized explanation. Many applicants are polygraphed; all are drug-screened. Even one-time cocaine- snorters need not apply. Guardsmark claims that only 2 out of every 100 applicants survive, making the process more rigorous than many police departments'. Once hired, employees take the 567-question Minnesota Multiphasic Personality Inventory, an expensive psychological test. If the results disclose emotional problems that make the company's psychologist leery, the guard is dismissed -- even at the risk of a civil-liberties lawsuit.

The tough standards pay off. While some Guardsmark guards run afoul of the law, the firm's record in 1991 was more than twice as clean as that of the New York City police department. And cleaner records translate into lower insurance premiums and happier clients. Rhode Island Hospital, the state's largest, switched two years ago, after using Wells Fargo. "We weren't satisfied with the quality of the ((Fargo)) guards or the image they portrayed," says Tony Kubica, a vice president at the hospital. "The Guardsmark guards were an amazing contrast."

Lipman says that by showering his guards with benefits that are rare in the trade -- life and health insurance, college-tuition aid and at least two weeks of paid vacation -- he has kept annual turnover to around 57%, vs. 200% to 300% for the industry. Not surprisingly, Guardsmark guards don't come cheap: typically $16 per billable man-hour, more than twice the industry average. "My impression is that Guardsmark's screening and supervisory standards are better than the competition's," says Robert McCrie, the security business's leading newsletter publisher. "That also prevents it from becoming the largest company."

It may not be the largest, but it does stand out. Lipman not only sets a higher standard; he also runs a campaign to upgrade the entire industry -- placing ads, writing editorials, lobbying for bills. That prompts some of his rivals to accuse him of self-promotion. "Sure the industry is furious with me," concedes Lipman. "I'm a thorn in their side."