Fire-Fighting for Profit; N. Poole

Statisticsback the mayor's enthusiasm. A recent poll by Arizona Opinion and Political Research found that by a margin of six-to-one, Scottsdale voters prefer Rural/Metro to the option of a municipally owned fire department. Moreover, the price is right. Drinkwater says that because of Rural/Metro, Scottsdale citizens benefit from a superior level of fire service at a considerably lower cost than if the city had a municipal fire department. Drinkwater, however, doesn't want to focus exclusively on economics. "Even more impor tant," he stresses, "the kind of service Rural! Metro provides is based on incentive and innova tion. So our citizens aren't subject to the con straints experienced with traditional municipal fire departments." For example? "The traditional emphasis is on fire response," Drinkwater answers. "We think Rural/Metro's emphasis on prevention is a more effective way to deal with fire protection service.

Nancy W Poole is a/reelance writer based in Scottsdale, Arizona. The company's core philosophy is prevention. As a result, Scottsdale citizensare offered a much bet ter balance between response and prevention than is available in most communities." Rural/Metro's unique mix of part-time fire fighters working alongside career professionals makes Scottsdale's fire protection service one of the most economical in the nation, and one of the most effective. There are literally hundreds of small private fire companies along with seven industry leaders in 14 states, according to Private Sector Fire Associa tion statistics. RurallMetro is not only the largest such company in the country,it is an industry mod el for customer service, excellence, cost contain ment' and innovation. For example, an increasing number of estab lished departments are emulating Rural/Metro's subscription servicesin remote areas. RurallMetro created the concept of providing fire protection to areas that might otherwise have difficulty obtain ing any fire or emergency medical service at all-communities without the tax base to subsidize fire departments. Rural/Metro currently services communities in Arizona, Tennessee, and Oregon on a subscription basis.

The subscription process is voluntary. Rural/ Metro contracts with home and property owners in subscription areas, who pay annual fees for fire protection and emergency medical service. Level of service is based on population density and geography. Rural!Metro is the first-responder agency in these locales. A non-subscriber must pay a fairly high hourly rate per firefighting unit if it is neces sary for RurallMetro to respond to a fire at that 310 THE FREEMAN • AUGUST 1991 Robert Manschot and crew. person's residence or property. (The adequate pro tection of members' properties requires response to all fires and medical emergencies in a subscrip tion area.) ServiceTailoredto Needs Another company tenet is the tailoring of ser vices to each area's needs. For instance, poisonous desert reptiles are removed from members' homes or properties, at no extra charge. Or how about bursting water pipes? Rural!Metro subscription customers know the company will shut off utilities and remove excess water from their homes as a matter of routine, at no additional cost. The list goes on and on.

Typically, the difference between public and private firefighting services isn't a matter of avail able resources, but in the management of those resources. The private sector depends on manage ment skills for its results. In the case of Rural! Metro, the average per capita cost to subscription customers in Arizona is 25 to 50 percent lower than for similar services nationally. "We are forcedto be more economical but at the same time provide excellent service, since the pri vate citizen has other options," says Robert Man schot, Rural/Metro's president and CEO. "Other wise, we will not survive. Communities can and do have specific cost and performance requirements; if we don't produce, our customers can release us. This is a task not easily accomplished when a com munity has a municipal department! Because we pioneered the concept of matching manpower and equipment to each service area's needs, we can do a better job for less money."

RuraVMetro's vice president of fire operations Robert T. Edwards puts it another way, half-jok ingly: "Our firefighters must bleed green." His statement refers to a company slogan about loyal ty. Rural/Metro began painting its fire apparatus lime green in 1972 for safety purposes, after a national study showed this to be the most visible color in evening and all weather conditions. Edwards continues more seriously. "Can you imagine what our liability risk would be if our fire fighters weren't extremely well trained and state of-the-art in performance?" With a sharp rap of knuckles on the wood conference table, he points out that, so far, no Rural/Metro firefighters have lost their lives on the job. "Naturally, this shows we're doing something right; but what it really shows is that the guyswe train are trained to think. They see a hazard and don't wait to be told what to do." The Growthof RurallMetro When newspaperman Louis Witzeman founded Rural/Metro Corporation in 1948,it was probably the last thing in the world he'd planned on doing.

There was no fire protection for his home, and he simplywanted to get it. Neighbors promised to pay him $10 a year for fire protection, and the 21-year old Witzeman invested his last $900in a fire truck. So much for promises. Stuck with the truck when his neighbors didn't follow through, Witzeman had to go into business. So it was that one truck, four men, and a modest budget started a fire protection subscription-based business that grossed $30,000 in its first year. What is now the city of Scottsdale was incorpo rated in 1951, and Rural/Metro has continued to provide fire and medical emergency services. Since that time, the community has grown from a town of 2,000 people to a thriving metropolitan area of 126,000. Today, more than 50 communities in five states take advantage of Rural/Metro's innovative privatesector approach to emergency services. Over 1,800 highly trained specialists provide fire, ambulance, and other services to five million peo ple, responding to over 300,000calls for assistance each year. Rural/Metro operates the equivalent of over 20 fire departments nationwide.

In addition, Rural/Metro has a wild-land fire division, and offers fire and safety services to the Potlatch Paper Company and other private com panies-plus providing training programs in han dling hazardous materials and manning industrial fire brigades. When Witzeman left the company in 1978, he sold it to his employees, making Rural/Metro unique in this respect among private sector emer gencyservices. "We believe that employee-owners make better employees," Edwards stresses. "For example, a firefighter who finds a bulb out on his truck could open a package with two bulbs in it, use the one he needs, and throw the other one away. An employee-owner will put the extra bulb back on the shelf. He is cost-conscious." FIREFIGHTING FOR PROFIT 311 "Furthermore," says Manschot, "since the ownersof Rural/Metro respond to our customers' emergencies, they respond faster, better, and with genuine caring."

Accordingly, a recent study by The University City Science Center of Herndon, Virginia, praises Rural/Metro as "one of the best departments we have had an opportunity to review." The report cites the company's "model prevention and inspec tion program ... [which] provides citizens with a higher degree of safety than available in most com munities." Beyond that, because of Rural/Metro's strong prevention ethic, Scottsdale enjoys one of the lowest fire incident and loss records in the nation, for a city its size. This helps keep the costs of Rural/Metro's serviceslow compared with other communities. NewManagementSparks Innovations Robert Manschot became Rural/Metro Presi dent/CEO ih 1988.After 14 years of running hotels internationally for Sheraton and Intercontinental, he had joined The Hay Group, a human resources oriented consulting firm-the largest of its kind in the world-becoming a worldwide partner. Rural!

Metro hired Manschot as a consultant in 1987,and then offered him the position of chief operating officer,which he accepted. Why Rural/Metro? Manschot answers quickl~ "After working with hundreds of companies, I had the urge to practice what I preached. RurallMetro is one of the most unique companies I'd ever worked with, and it attracted me because of char acteristics I felt were related to my strengths. Expertise in fire, ambulance, and various other lines of business were already in place, but Rural/Metro had expanded so rapidly it lacked established infrastructures." "No other privatized emergency services com pany can boast our kind of diversity," Manschot points out, referring to Rural/Metro's multi-state and international operations. "Falck, located in Denmark, is the largest privatized emergency ser vices company in the world. However, last year we entered the international arena in a joint venture with the Holland-based Smit Fire & Loss Preven tion Company to provide off-shore and petro chemical firefighting expertise internationally."

As a result of this agreement, Rural/Metro fire312 THE FREEMAN • AUGUST 1991 Rural/Metro firefighters were three ofsix specialists called to battle a fire on the Norwegian tanker Mega Borg. fighters were three of six specialists called from around the world last summer to successfullybat tle afire on the Norwegian tanker Mega Borg in the Gulf of Mexico. Since joining the company, Manschot has streamlined operations to bring about maximum communication, efficiency,and cost-effectiveness. The energetic Dutchman leans forward for emphasis. "I believe that your strongest asset is your people-not your capital, not your equip ment, but your people-the empowerment of the employees, which has nothing to do with unions." "What we like to do," he continues, "is push the entrepreneur role down to our general managers; then these managers push it down ever further to our employees, stretching them to be innovative."

Every month, Rural/Metro's "Idea Program" offers innovative employees who contribute ideas that are implemented a percentage of whatever dollar amount the company makes or saves as a result. RurallMetro also rewards "Conscientious and Responsible Effort" (CARE) on a regular basis.Don Niesen, an employee in Yuma, Arizona, received a CARE award last October, in recogni tion of the many extra hours of time he had donat ed for equipment repairs and maintenance. The CARE award is a $50 gift certificate for dinner at a restaurant of choice. Manschot and other Rural/Metro managers spend one-third of their time visiting employees on-site. "We want our employees' ideas," Man schot stresses. "However, I also believe that employees must be taughthow to be more auto nomous and participate in decision-making. Em powerment goes hand-in-hand with accountabili ty," he continues. "Managers and employees must be accountable for their own success.The strategy must be pervasive and ongoing. That is why we have task forces and 'shadow' boards to deal with strategic issues. Since we almost are the industry, we must train our own managers."

Paramedic Bob Videan gives an example. His immediate supervisor, Clint Vardeman, returned to home base recently from the Florida operation. "Clint has put together two weekend-long 'camps' held at his home," explains Videan. "I saw enough value in the first one that I volunteered to be fac ulty for the latest session. The presentations are well organized, and we have time at the end for open discussion-which is veryactive." "For one thing," he continues, "these 'camps' have helped us know Clint, and certainly have created an esprit de corps. Employees from all over the country were at both 'camps.'" According to Vardeman, employees receive special invitations to these weekend sessions, which are structured and informational with ample time for brainstorming during the day. After dinner, all present break for games and socializing.Eventually, every ambulance company employee will be invited to a "camp."

"At the end, we summarize our ideas, and all employees receive a copy of the summary," Varde man comments. "We follow up by letting them know when ideas from these sessions are being implemented. " Manschot indicates that a Rural/Metro fire fighter or paramedic can be a senior manager with in eight or nine years. "If we want to continue at our present rate of expansion," he emphasizes, "we will need 50 new managers five years from now.This is the reason we have a very strong train ing and development program." In 1987,Rural/Metro acquired Arizona Medical Transport (AMT), a private ambulance company, and AMT paramedic Videan became a Rural/Metro employee. "Within three months," he says, "we were better equipped than we'd been at any time during the previous 10 years since I started with AMT. Mr. Manschot has brought about extensive communication between top-level management and field crews.The difference is like night and day."

FightingFire withPrevention Rural/Metro has a strong prevention ethic. "The best way to fight fires is to prevent them," com ments Edwards. "For example, we have a much higher number of inspectors per capita than is the norm." Rural/Metro fire inspectors are also asked to serve as firefighters, so that their awareness of hazards in buildings throughout the community often aids in the suppression of fires. "For us," Edwards explains, "it's not prevention and sup pression; instead, it's prevention/suppression-the two components interact." As a national leader in the development of fire prevention programs, Rural/Metro abundantly communicates prevention to its customers FIREFIGHTING FOR PROFIT 313 through many training and education programs. These include home fire-safety inspections, CPR classes, emergency first aid, water and mountain rescue courses, and hazardous materials services, as well as fire safety education classes in the schools.

With top performance records and dramatically lower costs than publicly owned counterparts, RurallMetro is a hard-to-beat sell. Nevertheless, since public sector turf is often just across the street, the company's nonunion, privatized opera tion is frequently a target for intracity politics and media misconceptions. (Rural/Metro's employees recently voted down union membership.) Fire fighter Wes Kemp elaborates. "Our position as a privatized emergency services company is a chal lenge because we are continually up against the municipalities to prove ourselves." Historically, a rivalry has existed between Rural/Metro and unionized municipal depart ments. "We position the company not in a directly competitive mode with these departments, but as a fire service alternative," says Suzanne Brossart, Rural/Metro's corporate communications manag er. Brossart adds that Rural/Metro does not ap proach communities that have established munic ipal fire departments. "Instead," she explains, "we prefer to target small but growing communities that don't have fire departments or that want to expand volunteer departments into full-time ser vices. With this approach, we can build our strong fire prevention and operational philosophies directly into a community'Sdevelopment."

President/CEO Manschot adds, "We must con tinue building relations with other agencies, and reinforcing an atmosphere of mutual cooperation and respect." Rural/Metro's philosophy translates into finan cial success. Corporate revenues have grown over the past 10years from $6 million to almost $65 mil lion annually, increasing in the past three years alone by over $24 million. Revenues for the cur rent fiscal year are estimated at nearly $68 million. , Rural/Metro Corporation has shown that fire fighting and other emergency services can be pri vatized, with outstanding results. As municipal budget crisesplague many communities, privatiza tion is an option that merits careful study. 0 314 Public Interest Is Usually Special Interest by Dwight R. Lee and Robert L. Sexton S pedal interest groups have been quick to tap . the public till. Of course, they usually aren't so blunt as to demand tax money for their personal benefit. They have found a more effective strategy: obtain government subsidies for their pet project by arguing that it will benefit everyone in the community. Their project, in fact, is something we all "need." It's amazing what a person will "need" when someone else is picking up the tab.