Beyond Shredding

Mike Tingle and Tri-R Shredding survey the landscape beyond document destruction.

Best-selling business management authors often urge us to meet change head-on, but the theory is often easier to digest than the practice.

Meeting change head-on, though, has become standard procedure on the Front Range of Colorado at Tri-R Shredding, based in Denver.

Tri-R Shredding President Mike Tingle, CEO David Powelson and Tri-R Recycling President Brad Heinrich don’t just try to cope with change—they seem to be the ones encouraging it on several fronts.

Tri-R Shredding has roots that spread in two different directions. Sibling company Tri-R Recycling, founded by Powelson in Denver in 1977 began offering in-plant document destruction within a few years of starting up as a business. Powelson says the company may well have been the first in Colorado offering the service.

In 1994, Mike Tingle and business partner Steve Crockett started a mobile shredding service in Denver. "We were the first mobile shredding company in Colorado," says Tingle of the firm, which deployed Shred-Tech and ShredFast mobile shredding trucks.

As case studies often show, being a pioneer in an industry segment can pose the unique challenge of convincing customers they need your service or product. "When Steve and I started, medical offices, legal practices and even some banks didn’t understand why they should shred," recalls Tingle. "We found very little interest in shredding, and it was often up to us to inform people why they should shred."

But communicating the message turned out to be a strong point for the duo, plus they found their share of customers in the Denver area who understood the security and liability reasons for shredding. "The whole business community wasn’t in the dark—we found those accounts who were aware," says Tingle.

Key customer contacts and media coverage of the practice of "Dumpster diving" for sensitive information also helped boost their mobile shredding business.

One of the mobile shredding company’s first major Denver accounts was Federal Express. Convincing FedEx security manager Gary Peterson of the need for shredding was like "preaching to the choir," says Tingle.

Peterson helped convince Tingle and Crockett that promoting the service of security was a key to their business. "Gary said the shredding firm must become an extension of the company’s security department. This helped [other companies] become more receptive," recalls Tingle. Peterson continues to provide counsel to Tingle and others at Tri-R, but now does so internally as director of security for Tri-R Systems Corp., the holding company for Tri-R Shredding, Tri-R Recycling and DataGuard USA.

National and local media coverage was a key external factor in the growth of the shredding industry in the Denver area. Tingle recalls that one financial institution they had been calling on as a potential account finally signed up for a service contract—after a local television news investigative reporter "Dumpster dived" one of their trash containers and found a bounty of documents, deposit slips and credit reports with names, home addresses and account numbers clearly available. "They wanted service right away for 65 branches—two bins at each branch," says Tingle.

Although they had built a solid business throughout the 1990s, Tingle and Crockett also knew a good opportunity when they saw a chance to work more closely with the Tri-R organization.

"It may have been the smoothest merger in history," says Tingle. The wheels were set in motion when scrap paper broker Giles King was hired by Tri-R late in the 1990s. Tingle and Crockett had been comfortable dealing with King at his former place of employment. "We followed him to Tri-R and soon became comfortable with the entire organization," says Tingle, even though Tri-R was a competitor in some respects because of its plant-based shredding service.

"One day, David Powelson, Steve and I met and decided we could all work together," Tingle remarks. "Tri-R had the shredding plant, and we were all mobile, so it was a good fit. We have nearly doubled the size of the business in three years—growing about 22 percent each year—so I think our judgment was good."

Crockett subsequently stepped away from the information destruction business, while Tingle has assumed a role as a strategic planner and developer of additional business opportunities, many of them Web-based and grouped into the DataGuard USA subsidiary of Tri-R Systems.

Powelson and Heinrich are the key decision-makers for Tri-R Systems, Tri-R Recycling and the operations of Tri-R Shredding, while general operations manager Robert Espinosa keeps the shredding and recycling plants humming.

The officers all agree that document and information destruction is a key part of the overall Tri-R Services picture. "We saw it as necessary to have a profitable business model," says Heinrich. "A recycler who is not in the shredding business is making a strategic mistake. Other shredders are taking the material you used to get."

While the origins of Tri-R Shredding trace back to paper documents, the company’s current destruction services go well beyond the shredding of paper files.

The company’s latest major purchase—a large rotary RG78 Vecoplan shredder driven by a 250 hp motor—can not only churn paper into un-restorable quarter, nickel and dime-size pieces, but can handle a wide stream of unwanted products and obsolete electronics.

"We really didn’t have a good product destruction machine until we installed the Vecoplan in August of 2003. It’s a grinder with a single shaft and offers some of the advantages of both a hammermill and a slow-speed shear shredder," says Tingle.

For a recent visit by a local television news crew, Tri-R chewed up a foosball table and an air hockey table in its Vecoplan shredder. "You can put pretty much any obsolete items that might come from a factory or distribution center through the shredder: bowling balls, luggage, the foosball tables—we have shredded some weird stuff," Tingle comments.

The large shredder is sometimes involved in the electronic information destruction side of the business as well, although many other methods come into play. "Dealing with electronics, the guidelines are massive and the penalties are huge, but we went out and made ourselves experts," Tingle remarks. One of their conclusions, though, was to forge a series of partnership arrangements.

"We do the marketing for rebuilders/refurbishers," says Tingle. "Since we’re already calling on customers as recyclers, they want us to take the equipment on our trucks, and we can provide the documentation and certification the customer needs."

When customers request it, Tri-R employees will witness the destruction of hard drives or the degaussing (demagnetization) of electronic storage media. Of the product destruction and electronics recycling segments, Tingle says, "It’s a fairly lucrative and growing market."

Even though Tri-R’s roots are in recycling, the Tri-R Shredding business unit thinks security and destruction first and recycled fiber market grading second.

"Office pack is our largest grade, with some filestock and mixed paper grades also produced," says Tingle. "We don’t sell much shredded white ledger—you have to do a lot of sorting to reach that level. We do a two-inch sort—that much is grabbed to determine how much color paper is in a load."

The volume is significant, though. King, president of Tri-R Services paper brokerage business unit Secondary Fibers, handles 1,500 tons per month of shredded paper. While some of that is brokered on behalf of other shredding service providers, most of it is produced by Tri-R Shredding’s Denver plant.

Growth that can stretch out beyond the Denver area may come from the Web-based DataGuard USA initiatives that Tingle and DataGuard USA vice president Steve Hastert devise and manage.

DataGuard is an always-growing assemblage of Web-based ideas that, in some cases, bring material into Tri-R’s Denver facility or, in others, attempt to set up networks and alliances that can benefit not only Tri-R but also cooperating secure destruction companies in other parts of the country.

Ship’n’ Shred (www.shipnshred. com) is an attempt to provide a secure destruction solution for home-based and small businesses. Through the Web site, users can make shipping arrangements to send confidential documents, storage media or other items (such as pill bottles with prescription labels) to the nearest participating secure destruction facility.

"Ship ‘n’ Shred helps prevent identity theft by giving its users peace of mind when disposing of their private information," says Hastert.

The service is just one of several set up by DataGuard, with others including:

• ShredNations, a proposal gathering Web site that generates leads for shredding companies

• ShredMall, envisioned as a "town center" for the secure destruction industry, offering a central spot to purchase equipment or services

• LockNations, an online security bin service that offers shred bins equipped with patented combination locks and accessed with "passwords" rather than keys that can be lost or misplaced.

• ShredTrades, a trade site for those in the shredding industry, finding homes for pre-owned bins or bales of mixed paper grades.

The Web-based businesses emanate from a corporate culture that encourages new ideas, says Tingle. "I love solving problems," he declares.

When Mike Tingle entered the mobile shredding business or when David Powelson’s Tri-R Recycling started offering a document destruction service, neither one could envision precisely how their businesses might evolve.

Tri-R Shredding and DataGuard USA both remain in a state of evolution, as the business units and their Tri-R Systems holding company continue to react to changes in the marketplace or, preferably, anticipate them.

Tingle notes that legislators continue to address the security issues relevant to identity theft and corporate espionage. "I think there will be a plethora of legislation, and it’s going to get very industry-specific," says Tingle. "We’ve seen it happening in states such as Georgia and California and we have seen the federal government address industries such as health care and banking." (Tingle refers to such legislation as "Shredder Relief Acts," as they provide ongoing employment for shredder operators.)

Tri-R, with its hiring of Gary Peterson as director of security, is taking steps to position itself as a supplier of security services well beyond document shredding. "One of the first women who earned a PhD from Harvard wrote that if the railroads had defined themselves as transportation companies instead of just railroads, they would have owned the airlines," Tingle comments.

Tri-R’s ability to offer wider security services is an attempt to remain a vital security service to its clients. "The shredding and security industry is 10 years behind the bad guys," says Tingle. "We’re talking about Dumpster diving when much of the crime has moved on to hacking or using cell phone cameras to capture information."

With the opportunities come challenges. Electronic transactions between consumers and their banks may yield fewer checks and deposit slips to be shredded at central points like bank branches. (The opportunity is reaching the consumer printing out records at home.)

Unfortunately, the bad guys engaged in identity theft see plenty of opportunity as well. "The market [for identity theft and security against it] is growing faster than the overall economy," declares Tingle. "In one recent year, the GDP grew 4.1 percent, our industry grew 20 percent, and identity crime expanded 40 percent. There are a growing number of identity theft victims, so, regrettably, the anti-identity theft industry must grow too." n

The author is editor of Secure Destruction Business and can be reached via e-mail at btaylor@SDBmagazine.com.