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State of the Industry: Loud and Proud—Mark Graham, President, CEO and Chairman, LOUD Technologies

Part two of a three-part series speaking in-depth with CEOs of noted pro audio manufacturers: Mark Graham has led LOUD Technologies for three years now. Following up on an in-depth conversation with Graham on the road map ahead, conducted in 2011 shortly after he took charge, Pro Sound News sat down with Graham during January’s NAMM show to follow up.

Part two of a three-part series speaking in-depth with CEOs of noted pro audio manufacturers: 

Mark Graham has led LOUD Technologies for three years now. Following up on an in-depth conversation with Graham on the road map ahead, conducted in 2011 shortly after he took charge, Pro Sound News sat down with Graham during January’s NAMM show to follow up.

In 2011, Graham was busy decentralizing the operation and management of LOUD’s various brands, putting the staff in more autonomous work groups, building up the resources for each and making the brands more independent while not isolated. “The transition’s done,” Graham proclaims. “Now we’re ready for the next phase and taking on the next layer of challenges. We have a lot of innovative product. We have teams that are executing well, and it’s now time to shift to a new phase.

“2013 was a big year for LOUD. Our goal is, obviously, to build strong, good brands. We organize ourselves to have brands that are connected to our customers, making decisions at that level and quickly. We’ve done all that, but the other goal is to build strong leaders and leadership teams. To have an effective decentralized organization, you have to do that.”

Graham cites a senior staff member as calling LOUD the “proud parent of high-achieving children,” and as with children, “you live vicariously through them and really start to feel the results and enjoy the chance to celebrate with them on their successes. In 2013 we saw the teams really hit their stride, they executed their plan across a bunch of fronts very well and their businesses ran extremely well because of it.” Operating profits have been improved, as has operational effectiveness, says Graham, in manufacturing, marketing and engineering. While, particularly with international distributors, there is some push to promote LOUD as an umbrella brand, the perception that Graham is more interested in promoting is that “LOUD is a brand enabler and a grower of leaders. I want our partners to feel that we have strong leaders and capable teams, because it’s critical to their success and to that of our brand-focused model.”

He offers the example of EAW, which started 2013 with a thinner top-level leadership team, “but we added in a VP of Operations Manufacturing, a VP of Sales. We transitioned the marketing completely into an outsource model, but a very strong one with a big investment behind it, and we completely retooled the R&D team. Now you have EAW with a hot product [Anya]—actually several of them—and a really strong leadership team, and they’re off and running strong. And in the Martin [Audio] team, they’ve been on a run for a while and we’re just thrilled with them. We added in a really strong veteran player there last year as VP Marketing, James King, and he took them up another notch.”

When Graham began his tenure at LOUD, he says he sat down and talked to the team, saying, “I know this model that you’re in; I’ve been in it, I hate it.” The team agreed, he recalls, and now the value of a decentralized, brand-focused model is being realized. “Innovative product, reliable supply, high quality, service and support as you expect, is all just there and humming.”

When Graham took control, perception of the LOUD brand Mackie had changed from that of a market leader to more of a perennial brand of affordable, commodity level gear. “The quality is outstanding,” asserts Graham. “The [DL1608] digital mixer has been a huge hit and then the series of innovative powered loudspeakers that are coming in have all been extremely successful. We’ve built, I hope, some credibility and [proved] we can consistently deliver innovation and that we can be a reliable good partner. If you’re a dealer or a contractor, you have to have a reliable partner because you make your living by selling the products. We’re actually at the point now where the momentum is naturally picking up.”

Three years ago, Graham says, “We were in the reorg, rebuild, restructure phase and now we’re in the phase where we get to really start pushing on innovation and upping the velocity of new product introductions.” While hesitant to share details of what’s in Mackie’s pipeline, Graham says that in the categories where Mackie previously drove the market, “you can expect more of that and soon…we have to lead and we want to. We like it. We have the technology, the operational excellence to be able to be innovative and leaders [in the market]…I don’t think it’s completely finished work, but we’ve built our credibility back. We can look people in the eye and say now, ‘Here’s the evidence, you can see it.’” He adds that, “We’re just getting started, you know; there’s a lot more coming and I want the world to know that.”

As close as Graham would get to revealing new product initiatives was to suggest that, “You can look down the path where you’ve seen our success. We’re going to go down those paths; it just makes perfect sense. Look at our company and look at where we demonstrated some real innovation. [For example], what we call adaptive loudspeaker systems, we’re leaders in that in the high-end high-fidelity side; you would expect more down that path wouldn’t you? Digital mixing? We’ve really carved out a new niche in that space. We hold it; it’s still very strong. You could expect us to do more down that path.”

In crowded market categories, Graham says “innovation and creativity” will be the basis for Mackie’s initiatives, mentioning adaptive loudspeaker technology, networking, digital mixing and digital processing as elements that “will come together in interesting, awesomely fun products.” He continues, “There’s no amount of whizzy marketing or any type of pricing strategy or whatever you think that’s going to drive us to success. It’s product. And so we need to invest, we need to invest more. In the three years I’ve been here, we have gained momentum and I continue to push. We are laying the bets down.”

Graham says that LOUD came out of 2013 better than 2012 and “with a head of steam that gave me some confidence that we’re getting greater economic stability” in spite of the lack of confident consumers in the retail markets—LOUD brand retail sales were up, but “didn’t set the world on fire.” On the higher end of the food chain, the number of capital expenditure projects “on the books” for LOUD family product purchases gives him “a lot of confidence”

Looking at geographically segmented markets, Grahams says, “China is a big driver.” After a regime change, Graham says you could just tell “it’s not what it used to be” and LOUD’s brands are “adjusting strategy to respond to the changed Chinese economy,” though “every one of our brands was materially up in China last year…It speaks well to the strength of our partners. We have very strong partners in China. So, while the overall activity in the market was down, we are taking share and that feels good. [The US market] feels stronger than it’s felt in a long time. It’s not back but it’s a lot better than it was. Europe is finally feeling more stable…”

Overall, Graham concludes, “I’m more optimistic right now than I have been in a long time. It builds and builds.”