Capturing value by asking a simple question

Ninety-nine percent of alarms received by Stanley Black & Decker's electronic security operations center are 'false alarms', not a threat to their customers' life or property. Rhamey Elhosseiny, EMBA ’22, wanted to know why. As a divisional CFO and an MIT Executive MBA student, he planned to use his Organizations Lab (O-Lab) course to help him find out, and understand this industry-wide challenge.

O-Lab is an immersive experience that empowers students to research and recommend solutions to real-life challenges in their organizations—making a significant impact. As Rhamey dug into his project at Stanley, he uncovered information that dramatically changed the scope—and impact.

In the end, Rhamey’s project was not only voted best in its cohort by his peers, it eventually led to Stanley capturing tens of millions in value. This increase in value became even more significant when Securitas made a bid to acquire the security unit, which they did in 2021 for $3.2 billion.

What was the initial scope of your O-Lab project? How and why did it change?

The initial scope centered on incident reduction in our security operations center. The initial problem statement was related to certain customers having a disproportionate number of false incidents (no threat to life or property), leading to inconvenience for customers and inefficiencies and costs to our operations.

As I went through the O-Lab process of “go-see-and-assess,” we discovered a group of customers who hadn’t received a contractual price increase over a multi-year period. I pivoted the scope of the project, and as a team, we focused on escalating prices. The project led to millions in price realization and tens of millions in total value capture.

Could you talk about the courses useful to you during your project, and why?

The O-Lab course challenges executives to view work design, particularly knowledge work, through a different lens, and equips us with tools and skills to simplify the world around us. Professor Nelson Repenning grounds his dynamic work design framework with cognitive psychology, which ultimately increases the practicality and effectiveness of the tools.

Our call center at Stanley was experiencing high call-drop rates, and I recognized it as a queuing problem from the Operations Management class. We were able to hire the right support for the team and our drop rate fell by over 80 percent. Ultimately, it was about our team knowing the right triggers to intervene and help improve the experience.

System Dynamics helped me understand the complexity of the business and where to find the highest leverage points to improve the outcome. For example, we modeled out capacity to convert our growing backlog and deliver organic growth expansion.

Nelson Repenning is known for advising executive degree students to ask their employees: "What's the one thing getting in the way of you doing your job?" This became an important lesson for you. Can you talk more about it?

I love asking the question throughout my organization with our sales team, technicians, field operations teams, billers, collectors and order entry specialists. It’s a simple and disarming phrase and ultimately signals to the organization your role is to help solve problems where the work is being done. Practically, it yields enormous insight into how work is being done and what I can do to help. Whether its issues in hiring and ramping up team members, challenges sharing branch office space, or a burdensome customer billing process, I’m equipped with finding ways to solve problems with our team.

What transformed at Stanley by applying what you learned in the MIT EMBA to your work? What was the impact on the global business?

I had significant support from the executive leadership to experiment and apply tools and mental models to Stanley Security. In addition to the courses I mentioned above, here are some other examples:

• Applied Economics and Scenario Planning: We developed an imagined future of the security industry to understand the consolidation and enormous investment from PE/VC moving into the space. We built partnerships with technology companies. This ultimately formed a key piece to our strategic plan we presented to the board of directors.
• Competitive Strategy and Organizational Processes: As we embarked on our security as a service strategy, understanding and addressing the strategic, cultural and political lens became critical to sustaining the change.
• Data, Models, and Decisions Using decision trees and calculating the value of an option became a key part of decision-making when we made pricing and real estate decisions.
• Marketing Management: Understanding the true total cost of customer acquisition and calculating lifetime value of customer is challenging in a service environment. We’re building new capabilities to analyze and improve customer retention.

What was your goal when you enrolled in the MIT Executive MBA?

The first phase of my career was spent in operating finance roles and my goal was to expand beyond the financial skillset. Working as the CFO of our European business sparked a curiosity to learn operations and to commercialize new technology solutions.

As the security industry (like many others) undergoes digital transformation, I wanted to challenge myself to bring tools and frameworks from the classroom and apply them within Stanley Security. I had the platform and the leadership support to make change and bring the best of MIT to bear.

Why did you choose MIT Sloan versus another business school?

I chose MIT Sloan for the academic rigor, uniqueness of the curriculum, and the quality of the cohort. The seniority and experience of the MIT EMBA cohort stood out relative to its peers. The emphasis on technology, sustainability, and most importantly on Action Learning stood out from a curriculum standpoint.

Beyond the academic knowledge, the practical skills, and the alumni network, what have you gained from your MIT Executive MBA experience?

MIT can be an intimidating place at first, and I’ve had my fair share of imposter syndrome. The Executive MBA experience helped me gain confidence in myself, have a clear understanding of the impact I can deliver and how to take control of my own career.

Rhamey Elhosseiny, EMBA '22, is the Chief Financial Officer, Security North America at Stanley Black & Decker in Indianapolis, IN.

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