Pelco CEO Is Out

By: John Honovich, Published on Sep 05, 2017

Less than 2 years after taking the job, Pelco's CEO is out.

Pelco's rollercoaster continues.

In this note, we examine the move, share feedback from Pelco's outgoing CEO, look at his replacement and the future for Pelco.

**** **** * ********** ****** *** ***, *****'* *** ** out.

*****'* ************* *********.

** **** ****, ** examine *** ****, ***** feedback **** *****'* ******** CEO, **** ** *** replacement *** *** ****** for *****.

[***************]

CEO ***

*** ******* **** ** ***** is ****** *******, ********* ***** ** ****, ********** ** ******* ****** *** *** **** ** years, **** ******** ******* the $1.7B ******* ************** ********.

Pelco CEO *********

*****'* ******** *** ******* described ** **** ** detail *****'* ******** ****** his ****** *** ******:

***** *** ************ * *** in *** **** * years ** **** ***** be ********** ** ***** 1 ** *****'* **************. ** have ******* *** ********* of *** ******* ** terms ** *** ****** focus, *** ******* *********, its ********* ********* *** its *********** *********. **** massive ************** *** **** a **** ******* ** "team ****" *** ** have *** * ***** management **** ** ***** that **** ******** ** this ********* ********* *** plan. These ******* **** ***** ***** ******* to * *** ****** phase ** *** ****** years. 

***** *** **** ***** about ***** * *** what ** *** **** based **:

(*) ******** *** ****** focus ** ******* ******** and *********** ****** * key ********* **** ****** end **** ***** ************. And ********** *** ***** teams ** ** ********* countries. 

(*) ********* *** ******* lines ** ************ ******* development. ********, ***** *** ******** ****** cameras, *** ***** *** and ******** ******, ** Enterprise *** ** ***. With *** ******** ****** of *** *** ******* and ********* ***** ******* in *** **** ****** of ******, ***** **** **** * very *********** ******* ***** with ** ***** *** market ******* ******* ** each ********/*******. ** **** also ********* * **** ** established ******** ** ** move *** ** *** factory ** ******. ***** forward, with * **** **** product *******, *** ***** on "********** **********" **** not **** ****.

(*) ****** *** ********* Machinery, ****** **** ** in-house ***** ** * partnership ***** ************ **** major ************ ** *** aspects ** *** ********. For *******, ****, ***, IP *********, *******, **&* just ** **** * few ** **** ***** include ************ ** *******, technology, ****** ***** *** service. 

**** *** ******* *****, ***** ** more *********** **** ****, is ******** ** *** accelerating ******** ******** *** a ******* *** ****** towards *** **** ********* that ** **** ********* for *** ******.

*** **** ***** ** transformation **** ******** **** work ** ***** * and ***** * ***** path ** ******. ****-**** Theolier ** *** ***** person ** **** ***** ******* this ***** ***** **** have **** ***** ** Sales, ********* *** ******* Management ***** *** ****-****'* strength. 

Replacement ***

*** *** ***** *** is****-**** ********, * ********* ******* of nearly ** ***** *** most ******** * ******** Unit ******** *********, * ******* **** manufactures ******* ********** *** ****, heating *** *** ************ systems. ********'* ****** **** not ******** *********** ********** in *** ***** ************ nor ******** ******** ********.

Improvements ** *****

*** **** ******* ******** change ** ***** *** been******** **** ***** ****** factory. ** *** **** side, **** **** ********* help ****** *****. *** it ** ********* ******** to ****** *** ******* products ******* ************* ** house (**** ******* **** who ****** **** *********** manufacturing). *** *** ***** is ***** ** ******* / ****** ******* ** be **** *** *** risk ** ** ***** chooses **** ****** / OEMing **** ***** ****** their *********** ***********.

**** *******, ** **** certainly **** *********** ******* and *********** **** ********* of ****** *****. ****, Pelco *** **** ******* hard development ***** *** *** to ******* ***** ************* ******** VMSes.

Sales *** ********* ************ ************

** ** ***** **** Pelco's ******** *** **** sales *** ********* ************ are ****** *** ** question ******* ***** *** deliver ****. * *** points:

  • *** **** ******* **** transition ** * ******** case ** *** *** to ** ****** **** a ****** ********* ***********. Good ********* ************* **** the ********* *** ***** campaign **** *** ** advance, ******** ***** *** non-friendly ************ ******** ****.
  • ***** *** ** ** Sales ***** ******* **** last ****, ******** ******** **** ******** (**** **** **** ******* like *** *** ***), has **** ****** ********* from ** ******** ***********, with ** ********* ** ** about *** ****** ******** people ** ************.
  • *** **** **** ******* CEO **** ******* *** industry *** ***** ******* challenges.

***** *** ********* ** tough ******* ******* *** interacting **** ****** ** the ********. *******'* **** ************ ******* ****, ***** ******* **** a decade ** ********* ******** management *** **** **** to ******* ***** *** trust **** *** ********.

Vote / ****

Comments (28)

Quite sad.  This is like being around to see the dinosaurs die off.

"Jean-Marc Theolier is the right person to lead Pelco through this phase which will have more focus on Sales, Marketing and Product Management which are Jean-Marc's strength." - Sharad Shekhar

Ok, so who knows the real story? :)

Ok, so who knows the real story? :)

Lol. I am curious if the new CEO is really that good at sales and marketing or that is a cover for SE making a change. So far, it seems like a cover because someone really good at sales and marketing would be easily able to handle the selling and marketing of their own appointment.

Dahua NA's CEO is out too last week

[IPVM Note: We are looking into this and will update when we have full details.]

Frank Zhang?

" more focus on Sales, Marketing and Product Management"

I have to think this is why Pelco is failing. Why aren't they focused on Quality and Customer Service FIRST, then on Sales and Marketing. They're focused on dollars, not their customer.

Why aren't they focused on Quality and Customer Service FIRST, then on Sales and Marketing.

That's a good question. Our integrator stats on Pelco and the stats above (i.e., 68% negative on Pelco's future) show they have a broader industry problem, people are generally no longer even considering them, i.e., they are not customers so Pelco cannot even try to 'service' them or show quality.

I do think they need to get back out there and show 'quality' through public engagement (i.e. sales and marketing) and interacting with dealers that gave up on Pelco 3 years or 5 years or 7 years ago, etc. and then keep them with quality and customer service.

Yes, I think that's correct. They need customers in order to have happy customers. Wouldn't you agree also, though, that when potential customers do consider Pelco, they'd better be ready with quality products? They can possibly regain lost market share through Marketing and Sales, but if they lose customers a second time through poor quality, they'll never get them back.

 2 years is not enough time to significantly impact a company the size of Pelco IMO.  I suppose the cost-cutting and consolidation steps they list are the main accomplishments of the past couple of years, which have little to do with re-shaping the sales and marketing efforts of the company.  So, nothing but the black and white facts I guess, but nothing to instill passion in the outlook for the success of Pelco.

The new products they offer are not so much different from anything else to warrant significant cause for celebration, but the Optera camera is a nice 180/270/360 degree offering and fits a lot of applications where a PTZ 

Old CEO to the new CEO:  "I did what I am good at, now you do what you are good at"

In large conglomerate companies like Schneider, in all in the numbers and the days are gone where people "in the industry" run companies "in the industry".  The current management model appears to be to get someone who has a slightly different flavor kool-aid in their cup to run the business.  WHat's so odd to me is the fact that companies that once held so much potential and/or market respect can't seem to prosper even with the huge benefit of the backing, resources, and deep pockets of a company like Schneider.

In some ways, Pelco never wanted to be known an "Schneider", so the fault may be just as much the old Pelco guard as anyones else's .... 

 

 

 

 

Unfortunately Pelco who was one of the kings of CCTV of their time. Got too busy beating their chests saying we are the top dog to see the industry flew past them without them noticing. They didn't make the changes needed in time to stay competitive. Two years seems like a short time to turn a company that big in a new direction. I Wish them the best as I know several people who work there.

Pelco was a product of Dave McDonald. His "fanatical customer service" set the tone for the company and the industry. His departure started the decline of the company. The corporate mentality of Schneider sped up the downward spiral, as big corporations tend to do. 

I agree with the fanatical customer service that Dave drove but most people don't realize the decline started Waaaaaay before he left. I was a rep for 6 years and had to live thru it. Pelco could not make the fundamental shift into the IP space. It's a completely different mindset than analogue. 

This combined with the Fresno facility being in...Fresno. How many hot IT folk do you think you can attract to move to Fresno and work for you? 

Dave got while the getting was good and orchestrated a beautiful exit for himself. He propped Pelco up to Schneider in a flurry of shell gaming, glossing over all the issues they were having at the time. 

Philosophical question but do we think Pelco would still be in a troubled position if it hadn't been sold?

My belief is yes it would be. 

Pelco would still be in a troubled position if it hadn't been sold?

That's a great question.

I am pretty confident that it would be in less trouble if Pelco had stayed independent because Schneider actively made bad mistakes that an independent Pelco would not have (e.g., the customer service cuts, the meddling of unknowledgeable outsiders, the weird branding issues they went through, etc.).

To put it in perspective, in 2006, Pelco's revenue was $506 million. Assuming a modest 7% CAGR, their 2016 revenue would have been $1 billion. Actual 2016 Pelco revenue was $250 - $300 million, according to sources. 

So could an independent Pelco have done better than revenue declining by 40% in a market that was easily up 100% in the past decade? I think so.

As a former employee, this change appears to simply be a continuation of the Schneider EcoBuildings business unit leader, Laurent Bataille,  populating Pelco with yet another lieutenant from his past.  Laurent came up through the ranks of Schneider solar and sensor companies and the majority of his other appointments have also been from those businesses. Whether or not this is simply cronyism or a means for populating the company with "yes" men he can control, is anyone's guess. Sharad coming from a non-Schneider company, was quite frankly, a shock to the management team at Pelco, as it was a departure from his standard  m.o.  

In my opinion, if Dean Meyer had stayed on leading the EcoBuildings division for another year or two, things would have continued to stabilize at Pelco and the company would have built on its momentum and "Back to Blue" mission to return to the original company culture and values. The product roadmap would have been difficult to catch up to the competition, but I think there would have been more achieved in this arena as well, even while completing some needed cost restructuring. Growth would be flat or small, but there would have still been growth.  Dean's sabbatical for family reasons was the right thing to do and one can not fault him for it.

Schneider has a habit of replacing leaders after 2.5-5 years in a leadership role, so it is also entirely possible Laurent's tenure, slightly over 3 years at this point, will end in the next 12-24 months as another role in the organization opens up for him at a higher level and his successor will then put their own mark on Pelco. Perhaps this is just the nature of big companies. 

Whether or not this is simply cronyism or a means for populating the company with "yes" men he can control, is anyone's guess.

So it's either cronyism as a pay back or cronyism with a pay forward?  

habit of replacing leaders after 2.5-5 years in a leadership role

This is like how a losing football team changes GMs or coaches every couple years.

It's a corporate thing. Plain and simple. If you have ever worked for a successful private company that was taken over by a large corporation, you fully understand.

There is a corporate mentality that they are smarter than everyone in the room. That is why people with zero experience in the security industry always think they can run things better than current administration.

Bottom line is that large corporations only have a "quarterly" vision. They only care about short term profits that will make the stock price look good, since that is how they are compensated. They will never care about the employees or the customer.

Just a fact of life in the large corporation world.

There is a corporate mentality that they are smarter than everyone in the room

This is true at smaller companies as well.  I believe it's an American business culture typical at all levels of company size.

Best Democracy Wall Street can buy...

Another industry outsider that will take 2 years to understand this industry and thus be unable to affect positive change at Pelco. It is unfortunate that big companies don't understand our business and continue to throw unqualified management in to these high level management roles. Good news for Pelco competitors!

Pelco is owned by an international behemoth with a large number of separate and (in most cases) unrelated business units spanning the globe.  Taking a company which, at one time, was an industry Global leader in product and innovation and basically making it "just another business unit investment" never really works out.  Schneider Electric will never let Pelco be Pelco in the truest sense, and as a result, it is unlikely that Pelco will ever reach the same pinnacles of the past again.  There's just too many layers and too many competing interests in the various other global business units for Pelco to be able to invest in product development and innovation - and to take all of the risks inherent in that process - when decisions are being made in Paris France that are centered solely on or around stock share price and value.  Schneider bought Pelco as an accoutrement, not as a core business item worthy of their ongoing financial speculation.  Thats going to make a difference when competing with other Global Brands whose sole focus is on what WE do.

 

.......(Has it really come to this? Ive had to use the word "accoutrement" in a sentence?)

I don't necessarily agree with the majority that Pelco's future is going to be negative. In speaking with their Reps on the west coast they have been given the tools necessary to work with integrator's and end-users alike to make them competitive.  If the people at the top are willing to step out into the industry and get around to meeting with the industry professionals they should do well. I think what has not been mentioned here is the fact that most industry professionals are tired.  Tired of dealing with Hikvision, Arecont and a few other who fail to deliver on their lofty promises. I think Axis and Hanwha should take note as I think that Pelco's product offerings will soon rival their own.  

They use to have the best tech support group years ago.  Their focus on marketing would seem to push a spike in sales but without good product support I would suspect it is only temporary at best.  Just my opinion, after 35 yrs in the security business.  Doug

I agree Doug, which is why companies like Arecont are no longer well received in the industry. It's common sense, why would we as integrator's or other industry professionals mess around with products that are not well supported. After-all, by and large, the majority of professionals are trying to establish long lasting repeat business with our clients.  

This industry is not like any other. Can u name an outsider from a big company that ever came in and make the company the entrepreneur/founders left better? Big players buying into this industry have left a trail of dead bodies along the way many many times.

 

 

 

Update: Pelco finally issues their own official announcement, via Pelco Press:

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