The Fire Protection Podcast: Episode #72 – A Conversation with Jensen Hughes CEO Raj Arora

fire protection was a real specialty and that it was a small program. I was in Theta Chi fraternity, which is the same fraternity Drew Slocum is in.

Drew Slocum: Yeah. And actually, Pat Doyle, our CEO.

Raj Arora: Yeah. So, we're all fraternity brothers, which I just remembered live here during the podcast. I heard it was a small niche program, and I was like, "That's good for me because I want to be a specialist who is more valuable." And two, I could use a small program. So, I went through that. I immediately, through internships and whatever, realized that it was in high demand. So, all good. I graduated and went into sales and worked for Tyco, which later became JCI, and I was in the A DT business unit for two years. I sold fire alarm systems, large-scale fire alarm systems. I did some project management. I learned it so deeply, which was the best thing. I was in the field and everything. Then ADT bought a company called Security Link, a residential burglar alarm system company. They put them together. It was a mess. So, I was like, "I got to get out of here." My dad has a company. So, I went there. Ended up leading that company with my older brother. I have a twin brother that I'll talk about in a second, but with my older brother, we aggressively grew that business as MEP, but fire protection was a subset of that. We became real specialists in airports and rail engineering. Then my brother and I, my older brother and I, decided it would be better to be brothers than business partners. Family and business can be tricky sometimes. So, I somehow got in front of George Oliver, the CEO of Johnson Controls right now, through a gentleman named Bob Chauvin. Because I was specifying so many Simplex fire alarm systems at these large airports, I knew people at the top in that organization. I got in front of George. I came into the business. I ended up, one way or the other, leading the fire alarm and detection products business. I moved to Switzerland. I then took on special hazards at the same time. It was like a billion-dollar business. We were doing great, and then Tyco and JCI were going through a merger. They were so good to me. I love that company. To this day, I have no negative feelings, but I got this opportunity to come into private equity. I came in as the number two person at Jensen Hughes. There was more than one number two, and then, five years ago, I became the CEO. So, that's been my career journey.

Drew Slocum: It's interesting you started on the product side.

Raj Arora: I started in system integration, then consulting, then product manufacturing, and then back to consulting.

Drew Slocum: Consulting. Yeah. I feel like with the product side, if you know the product, it's a lot easier to... I don't know. The consulting side is definitely a big piece, but if you know both, if you really know the product, I feel it gives you an advantage.

Raj Arora: Yeah, for sure. I mean, look, all the experiences were great. The A DT experience was being on the front line with customers, deploying solutions, et cetera. The family business was like, "All right, roll up your sleeves and get it done. Assemble furniture the night before people start, get paid, bring in the work, do the work, get paid, whatever." It's kind of like a small Jensen Hughes office today, so I could relate. The Tyco experience was a big company, learning about classical strategy processes, and corporate functions. Jensen Hughes is all those worlds combined, which has been helpful.

Drew Slocum: I remember back when you had the office furniture in Newark, New Jersey, way back, right off the train stop.

Raj Arora: Yeah, exactly.

Drew Slocum: So, obviously, five years in private partnership with Jensen Hughes and then private equity involved there. How is that landscape? I was involved in a lot of the specifications on the product side, talking to fire protection engineers, and MEP engineers. What has changed—and this is more from my thoughts as well, or just I want to know about it—is how has the consulting side changed over the last five to ten years?

Raj Arora: In the industry or at Jensen Hughes?

Drew Slocum: Yeah, I guess the industry and then obviously specific to Jensen Hughes. I see you guys are partnering all over the world. You're traveling everywhere. So, it's kind of fun to see.

Raj Arora: Yeah. The first thing is just new threats and hazards emerging every day, and there are adjacent services that we have that converge onto fire. So, the lines have been blurred a little bit. Wildfires weren't a thing back then. Ten years ago, energy storage and lithium-ion batteries weren't a thing. Small modular nuclear reactors weren't a thing. So, there are all these different threats and hazards that we, as Jensen Hughes, have the privilege of leading the forefront on, whether it's just thought leadership, innovation, codes and standards development. There have been more digital tools along the way, and I think we're going to see a huge acceleration in that. More digital tools that enter into what we call tech-enabled services. Actually, 10% of our revenue has some sort of digital product which is a Jensen Hughes product that we use to either do the work or we sell it to our clients. That has changed quite a bit, and emergency management and forensics and security, testing and inspection—all of them are converging on the consulting space. So, it's not your typical, "Hey, does this meet code, or what's the sprinkler design? Or can you do some modeling?" There are all sorts of threads in the work that we do right now and considerations.  

Drew Slocum: Yeah, your client has bigger needs. They don't just want that design; they want the whole package, and providing them with those solutions only helps them out at the end of the day.  

Raj Arora: Yeah, absolutely. I think the business models have changed as well. I mean, it's not just, "Hey, bill by the hour." There are so many different ways that we price and deliver our work, and we charge subscriptions. Sometimes we do retainers, we do fixed-price projects, we do time and material. That is all evolving over time, and something else that has evolved over time is how we specify. I remember growing up in a household where my father had this business, and he had binders on the shelves, and they would specify very specific products for projects. I would say that's very rare these days unless you're modifying an existing building that has a fire alarm and detection product and you're extending it. Besides that, it's very vanilla, and we allow multiple manufacturers to compete based on performance specs.  

Drew Slocum: Yeah, I think the proprietary nature of the industry... I see it on the test and spec side, and you want to be able to do everything and not get locked into one product. I understand why they did that over time, but the market seems to be moving away from it, even in the fire alarm aspect.  

Raj Arora: And contracting. It would normally be design, bid, build, and then we would represent the owner on the design team or represent the owner on a contracting team. Obviously, with design-build contracting methods or integrated project delivery around the world, we find ourselves teaming more with builders and contractors on our work.  

Drew Slocum: Yep, yep. On the M&A, it's funny, I talked to... Obviously, there's a lot of M&A in the contracting space. There is some in the software space; there's some in your engineering consulting space. Even my buddy who's a dentist, there's a dentist... Private equity firms are buying up dentists. Yeah, it's everywhere, and I don't think it's stopping, either. What's the outlook there? I mean, from the Jensen Hughes side of things, I know you guys are doing pretty well in that aspect.  

Raj Arora: I mean, we're a combination. Jensen Hughes is effectively a combination of three dozen companies over the course of history. We're integrated culturally and process-wise, and that's an easy thing to say but a hard thing to execute. We've been on a special journey to improve our culture, and I sit here today, and our attrition is the lowest it's ever been in the history of the company, and people are aligned to our purpose and our principles, as we call it. So, all good. That being said, we are still highly acquisitive, and there are so many... The special thing is we do very little buy-side origination. People are just coming to us and asking us, "Would we be a good fit for you?" So, our pipeline is huge. We have half a dozen speakers at the annual SFPE conference around the world, and people just come up to us afterward and say, "Hey, how do I become a part of Jensen Hughes?" So that's great. But this question is not solely about Jensen Hughes. I think private equity investment is here to stay. There was a little bit of a slowdown on deal activity because of high interest rates. I think that's going to soften up or loosen up in '25 and '26. I think anytime you have an industry, whether it's a dental office practice or engineering services, or a fire alarm integration firm... I think anytime you have a distributed model and you're able to put pieces together and consolidate the backend and the systems and drive synergies, whether it's on the cost or revenue side for the business, it's compelling, right? It's like, why shouldn't you be able to do that? Private equity firms have done a nice job creating value that way. There are certainly risks and pitfalls to fast-paced private equity ownership, but that depends on the fund and how thoughtful they are, and how much they understand the business, et cetera. But to answer your question, I think it's here to stay. I think for those who are looking for an exit strategy for their business or an ownership transition, it's a cool option. It's not for everybody. There are people who are going to be listening to this who get a negative reaction to this part of the conversation, and that's okay. It is not for everybody.  

Drew Slocum: There are pros and cons, and certain personalities fit it and certain ones don't, and there's opportunity on the other side as well. If you have a strong business and are going to stay in it for the next 20 years, I think there's opportunity, but there's also heartache with that too. Fire protection... I guess that's why private equity has gravitated toward the industry: It's a codified industry. It's tied to life safety. It's not like air conditioning and plumbing and maybe a little electrical, but with electrical, there's a code behind it on the life safety aspect, but also moving through it, the maintenance of the systems, and obviously, we've gravitated toward that.  

Raj Arora: Sorry, I don't mean to interrupt, but go for it. The industry, whether you're a product manufacturer, or system integrator contractor, or a consultant like me, it's a highly regulated industry, which makes it largely recession-resistant because things have to get done. It is, I would say, a small ticket price for a huge cost of failure. So, it's like you want to go with the best people because if you get it wrong, the consequences are so great, and it's defensible growth. You're never going to have a year where you decline materially or decline at all, even in the worst economic conditions. There are new threats and hazards coming in, and there's recurring revenue. So, these are all the boxes that certain private equity funds are looking to check, and they're like, "Sign me up." I think you're going to see a lot of capital being deployed if people want it.  

Drew Slocum: You hit on this earlier: We've got wildfires; we've got lithium-ion batteries. I've talked a lot about those, and the industry does. You mentioned the nuclear side. It seems... I know here in Connecticut they're starting up the old nuclear plant again, Millstone, because of some failures with renewables and a bad deal, whatever. Nuclear is highly, highly regulated. If you think fire protection is regulated, nuclear is even worse. So, is that a real thing, or is that just a flash in the pan for the next few years? Is that going to be a thing moving forward?  

Raj Arora: I personally think it's a real thing. There's no way you can achieve decarbonization goals or meet the power requirements for AI, for example, without nuclear being in the equation. It is safer and cleaner than any other form of energy. The perception of its safety is not matched with reality. It is more expensive, but it's highly reliable. If you ask me five years ago, I felt like that market was challenged because of various things, the cost profile of it, like what happened at Fukushima. But now with the move for sustainability and green technologies and AI, it's here to stay. Three Mile Island is being re-energized for Microsoft, if you read the headlines. That's Constellation. Amazon is partnering with Dominion in Virginia to invest—I think it's 500 million—in new small modular reactors. Google's doing the same, I think. The core fleet that's in existence today has gotten tax credits through the government stimulus, the IIJA, and the IRA, to operate more effectively and to invest more. So, I think it's here to stay. It's a good part of our business, and our team is doing well in that regard.  

Drew Slocum: It's super niche, and obviously, that's great there's growth there because I didn't know those were being spun up, but tech... It makes sense. I know people that were at SpaceX and other firms; they're after this Department of Energy grant that is coming due, and there's a lot of money and eyes on it, so that's great. With that, all right, we've got these three hazards that we're dealing with in the industry, but just overall, with the landscape of fire protection from the manufacturer side, where are the associations—NFPA and UL and everybody's sitting? We have the engineering consulting side, where you sit, and the AHJs. I guess it's a tough question, but what's going to happen over the next 10 years? What does 10 years down the road look like? Are any of these talking more? It seems like they're kind of secular in the space.  

Raj Arora: They've been talking about the convergence of different pieces of the value chain for... We've been talking about that for a long time. I don't think you're going to see manufacturers start acquiring integrators who start acquiring consultants, et cetera. I think the teaming and the project teams will be similar. Look, it all gets down to digitalization and the impact of artificial intelligence, and there are pros and cons to AI, and some people will be early adopters and some people won't. But you cannot deny the fact that that is going to have an impact on everything we do in our life, and our industry is going to be no different. So, I think the way we consume codes is going to be different through these AI tools, and I think the way we share information and analyze a building through digital twins is going to be completely different. So, if you just ask me what's going to happen, it's just digitalization and the impact of artificial intelligence and technology on an industry that is not the most future-focused industry, an industry that is quite risk-averse. It may lag financial services or something like that, but it's going to have an impact over the next five years or so. Jensen Hughes just launched our own internal generative AI tool, which is super cool. We've taken all of our data internally, and you can just ask the tool questions around, "Hey, I'm looking for a fire alarm expert to help me on an airport in Texas," and it'll just pull up through the resumes and the CRM data who can be a good fit. It's just going to change the game and drive massive productivity gains. Massive.  

Drew Slocum: Yeah. No, I see it, especially with all the data being collected right now.  

Raj Arora: It's all about how clean and the quality of your data is. You put garbage into a system like that, that's what you're getting out of it.  

Drew Slocum: I know. NFPA is trying to get their head around—or they have in the past tried to get their head around—standardizing some of the data, and it hasn't gotten there. Again, I don't want to call it a failure, but there's no standardization there. Without that, it's going to be a mess to put that together to make better decisions on code. AI might be able to help that, but without that, standardization is going to be tough.  

Raj Arora: So, Drew, if you look 10 years into the future, I know you'll be on your yacht at that time, but what do you see?  

Drew Slocum: You're not going to be on your yacht? We'll meet on yachts. I don't know. I think the AI side on the code is going to develop. I think on the code side, NFPA and UL and the European standards and all that, that's going to... That's already being done. I think that'll be a big step up. I think getting some of that data into the authorities having jurisdiction, the fire marshals... I think there's a little bit of a gap there in the knowledge base for the code. So, I think that will help accelerate there. There are cool tools on the digitization side of the AHJs. A couple of podcasts ago, I had First Due, which is big software that takes all EMS and fire together and reigns all that in with all these different modules, backed by high growth, putting some great solutions out there and standardizing the data in what they're doing, virtual inspections.

Anyway, I think AHJs and the code coming better together, that will happen, probably not in 10 years, probably five years from now. I think there'll be more IoT stuff out there. Again, that's a slow go. I wish it would be faster, but our industry is slow. I hope in 10 years we're not kicking ourselves that we should have been farther along, but the industry is slow.  

Raj Arora: "We" is a big word. Some of us are going to go fast, and some of us will go slow.  

Drew Slocum: It's true. I'm wondering when the insurers will get into the market a little bit more. There's all this data out there on building health. When does that end up hitting the insurer market? Premiums are probably at an all-time high.  

Raj Arora: I think that's a huge question because that industry is probably equally as slow and process-oriented and risk-averse as our industry. But think about all that data that exists out there to help intelligent underwriting, right?  

Drew Slocum: Yeah. I've always scratched my head ever since starting Inspect Point. I'm like, "Man, the insurers, how are they not involved in some of this data?" But again, I think the insurance industry is ripe for a change with incredible premiums and people not getting covered. So, I don't know where we end up. I hope the insurers are more actively involved in the fire industry. Last question for you: What is it like having an identical twin brother?  

Raj Arora: It's a great question. I love it. It's been an amazing experience. There were a couple of years in high school where I think we were too close for comfort and maybe had a crush on the same girl and got annoyed at each other. But we were always together. We always played together. We made each other better athletes growing up. We shared everything. So, I think naturally, as a person, I share a lot because I was used to sharing things with my twin brother. But really, we talk to each other almost every day. I call him on my way to work around 7:00 a.m., but we mentor each other business-wise, so we share what's going on, the good or the bad, and he does the same. We just give each other perspective and talk for 20, 30 minutes in the morning—my morning; he lives in Switzerland, so his afternoon. It's a super cool experience that I wish everybody had a chance to experience on their own. I know they don't, but I love it.  

Drew Slocum: I don't know if you do this. We have identical six-year-old boys.  

Raj Arora: I forgot that.  

Drew Slocum: Yeah. Hopefully, you're thanking your parents all the time, or have, growing up, because early on, it's a lot, but it is cool to see how they've interacted, and they're best friends.  

Raj Arora: Exactly. Just keep it up with them. Don't dress them in the exact same shirt, but make sure... I always wore red, and he wore blue, and it was the exact same thing. So, don't put them in identical rugby shirts in different colors.  

Drew Slocum: One day in kindergarten, they flipped a shirt, flipped a coat. I forgot. It sent everybody in their classrooms... It was like, "Man, they're starting this in kindergarten." Raj, this has been awesome. I know it's been a long time coming, and I look forward to seeing you in person soon.  

Raj Arora: I'll try to get you some views on this thing, Drew.  

Drew Slocum: Yeah, exactly. We're going to get this out. It's been a lot of fun.  

Raj Arora: We could go on forever, but we don't want to bore the audience with a long video.  

Drew Slocum: Exactly. Where can we find Jensen Hughes? What's the URL?  

Raj Arora: www.jensenhughes.com, or you can type "Jensen Hughes" on LinkedIn. We put a lot of stuff on there. Those are the best two ways.  

Drew Slocum: Cool. Well, I appreciate it again, and thanks a lot.  

Raj Arora: All right. Take care.  

Drew Slocum: All right. See you. This has been episode 72 of the Fire Protection Podcast, powered by Inspect Point. I want to thank Raj Arora again from Jensen Hughes for coming on the podcast and talking about everything fire protection at a high level and getting into the weeds a little bit on some design consulting projects that we were on back in the day. Again, thanks for listening to the podcast, and see you again soon.