“Harman Pro Announces Workplace Consolidation (opens in new tab)” was the headline heard ‘round the pro AV world in September 2017. “The changes we announced are the culmination of a transformation that the Professional Solutions Division has been undergoing for the last two years to better serve our customers, increase our competitiveness, and accelerate new product innovations,” David Glaubke, director of public relations, global professional solutions, Harman International said at the time. The restructuring plan included new experience centers around the world and “Centers of Competency” around the U.S. to allow the company’s engineers to focus on critical product differentiations instead of requiring them to develop motors, mechanical structures, and other supporting elements.
“We went through a massive change last year, and I’m really glad,” said Parasher when asked about the state of Harman Pro in 2019. “Because, despite that change, we grew our revenue, we grew our profit, we grew order bookings, and so I think we saw really good growth despite all of the disruption.”
The changes began—at least behind the scenes—when Samsung Electronics acquired Harman International for around $8 billion in November 2016, with the deal closing in mid-2017.
[Read more about the acquisition. (opens in new tab)]
Harman, Parasher said, was creating a lot of pieces of the pro AV puzzle—audio, video, control, and lighting—but was missing the display side of the business, which would bring everything together. The company found that missing piece with Samsung. “As things get connected, there is no better connectivity company than Samsung in the world. [Samsung has] billions of devices out there that are connected either to a network or to something else. That technology and expertise comes in handy for our pro side. The combination of audio, video, lighting, control, and displays is very powerful.”
“We were very clear from day one. Samsung was very clear saying ‘This is a business we’re going to invest in and we’re going to grow.’ True to our word, as part of Samsung, we have invested in the business—time, energy, new hires, investing in experience centers,” added Parasher. “We have a plan and we continue to invest. We’re churning out products. We had a pretty decent year, despite all the change, launching some good products that were extremely well-received by the industry.”
Creating the Right Environment
Parasher acknowledged that change can be hard—and that he knows it was difficult for Harman employees, but hopes that by setting a clear direction and vision for the company, the staff will continue to achieve company goals and enjoy working for the company.
“I believe that a positive morale depends on if you’re doing something big and purposeful.” He said that first and foremost, companies need to have a well-defined purpose, followed by executing against that purpose and clearly identifying milestones. “As you keep delivering [on your purpose and milestone], it creates a positive morale.”
One of the milestones in Harman’s journey was creating its Centers of Competency. Prior to the restructuring, the company’s audio brands were scattered around the country and, according to Parasher, were unable to leverage the full power of the combined brands because the brands were very siloed. “There was a huge potential to combine them all and put them in a platform [the Centers of Competency], where it is engineering—not only hardware, but more importantly, applications and software—sales and marketing, after-sales service, tech support, pre-sales,” he said. “We did that in a very fast-paced way. People call it a restructure; I call it ‘reconstruction.’”
Part of the reconstruction includes ensuring employees have the tools they need to do their jobs. Parasher said they are investing in an “enormous amount” of cross training. “Peer-to-peer learning is much more important—especially on the engineering side—than anyone just sitting and teaching in the classroom. The peer-to-peer learning is the main reason why we consolidated our engineering centers. You’ve got to put the engineers under one roof, on one floor, because what happens when they meet at the proverbial water cooler is very, very important. That’s where the real learning happens, more than some guy teaching a master class on electronics.”
Harman has created a large repository of its engineering knowledge—terabytes and terabytes, according to Parsher—on one platform where any of the company’s engineers can access anything, at any time, and learn from one another. “We created an environment for active learning, rather than just training, because training is one-way. But if you create the right environment, put people under one roof, create the infrastructure for them to easily access the information, we’re creating an environment for learning, which is much more impactful.”
With the new centers and learning environment, Parasher believes the company is on its way to successfully managing change for its employees, for the present and the future. “So far, we have the right purpose, we have started on our journey, and we are right on target to achieve what we committed to as a team,” he said. “We believe we have an opportunity and a responsibility—as a team—to transform the pro AV industry. We have this portfolio of products, this great team, a great business channel, and a great owner—Samsung—who is willing to invest. There’s no excuse. It’s a responsibility to get in there and say ‘Okay, what do you think the industry should look like?’ and then we must drive toward that and take our steps one at a time, have our milestones laid out. We started that journey 12 to 18 months ago and I’m very pleased with where we are.”
Harman has noticed positive results from its reconstruction plan. “We are already seeing the positive impact from the restructuring we completed last year. In fact, 2018 was a record year for orders booked,” Parasher said. “This was driven by our highest-ever year of audio product sales, as well as record growth in sales outside of the U.S. In addition to this record setting revenue, we also drove strong growth in profitability.”
That’s the immediate impact, but what does the future bring for Harman Pro? Parasher plans to continue to break down silos within the company. For example, he pointed out that the pro AV industry would be surprised by the amount of technology Harman’s engineers are able to draw from the connected car. “Nobody in the pro industry can afford the thousands of engineers needed to develop secure Linux products. We have access to that, because that development cost was done for our connected car business. We can borrow 80 percent of the work and bring it into the pro industry. The same thing with the consumer side and the services side and from Samsung, etc. So, bringing all these things together is the opportunity.”