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‘People call it a restructure; I call it reconstruction’: Harman Pro president on the acquisition by Samsung

In the first major sit-down with the press since Harman Pro became a radical corporate transformation in September 2017, president Mohit Parasher gives insight into the past two years since its acquisition by Samsung in 2016

Clive Young, editor of PSNEurope’s US sister title Pro Sound News, speaks to Harman Pro president Mohit Parasher for an update on the company’s ongoing restructure since its 2016 acquisition by tech giant Samsung…

We went through a massive change last year,” said Mohit Parasher, president of Harman Professional Solutions & EVP of Harman, speaking in early January 2019. The understatement kicked off his first major sit-down with the press since Harman Pro began a radical corporate transformation in September 2017. With the first results of changes starting to come in, Parasher was ready to provide into the whirlwind that began when consumer electronics giant Samsung acquired all of Harman for $8 billion in November 2016.

“We are already seeing the positive impact from the restructuring we completed last year,” stated Parasher. “In fact, 2018 was a record year for orders booked. This was driven by our highest ever year of audio product sales, as well as record growth in sales outside of the US. In addition to this record setting revenue, we also drove strong growth in profitability.” In summary: “We saw good growth despite all the disruption.”

And there was disruption. Harman Pro’s changes affected all of its brands – AKG, AMX, BSS, Crown, dbx, DigiTech, JBL Professional, IDX, Lexicon, Martin, Soundcraft, Studer and SVSI – with 650 layoffs as it closed numerous offices and facilities worldwide, consolidating into three “Centers of Competency,” with acoustics headquartered in Harman Pro’s existing facilities in Northridge, CA; electronics, DSP, and video and control tackled in AMX’s hometown of Richardson, TX; and lighting centred in Martin Professional’s longtime base, Aarhus, Denmark.

Parasher explained the thought process behind it, and the considerable investment that followed, ranging from IT outlay and reinventing facilities to hiring upward of 350 new employees. “Many people were skeptical, and I understand that, but we were very clear from day one that this is a business that we are going to invest in and grow,” he expressed.

Bringing together the various brands’ teams into physical proximity with the Centers of Competency was key to that strategy. “The idea behind it was that we have a collection of many brands, but we never really got to leverage the power behind them the way we should, because each brand operated in its own silo,” he said. “There was a huge potential to combine them all and put them in a platform [the Centers of Competency] that includes engineering, sales and marketing, after-sales service, tech support, and pre-sales. People call it a restructure; I call it reconstruction.”

The changes continue: new Experience Centers have been built around the globe to demonstrate the company’s solutions for different markets, from recording to live sound to immersive retail environments. Elsewhere, within Harman, a new company-wide IT platform handles sales forecasting. “We created a big repository of all of [our] engineering knowledge – terabytes and terabytes of knowledge – on one platform,” recalled Parasher. “Any engineer on any of our sites can access anything at any time and learn from each other.

Many of the company’s new hires, notably in engineering and software, are from outside the pro audio industry; Parasher himself came to Harman Pro two years ago after a successful run on Harman’s consumer electronics side. While consumer audio tech often adapts advancements from pro audio, Parasher wants to draw from the consumer world, namely its design philosophies. “There is a massive need for making things easy to use and install,” he asserted. “Our industry is a little bit slower to adapt because the installs are bigger [so] the decisions are larger; it’s not like buying a $100 speaker or $200 headphone.”

At the same time, he also wants to rethink products’ industrial design (“just because it’s behind a rack doesn’t mean it has to be ugly; you can make it good-looking at the same price”) and their ability to integrate with not only other Harman products, but the industry in general. “In the old AMX world, we had our own programming language, our own way of doing things, so we were closed off to the world,” he lamented. “Make it open, discoverable, connectable. It’s ok – customers will choose some competitors’ products to connect with yours? It’s fine, it puts reverse pressure on us to be best in everything we do. The customer should get the best product, the best choice.

“We believe we have an opportunity, and a responsibility, to transform the pro industry,” said Parasher, “because we have this portfolio of products, this great team, this great business channel, and a great owner like Samsung that is willing to invest, so there’s no excuse.”

To that end, there’s both short- and long-term goals in play. This year, the company will be placing emphasis on specific segments, notably video and control, with a number of products hitting in mid-2019.

For the long-term, widescreen view, Parasher plans to draw from the R&D elsewhere in Harman and Samsung, and bring it to bear on Harman Pro’s world. “You’d be surprised at the amount of technology that we can draw from the connected car business,” he shared. “Nobody in the pro industry can afford the thousands of engineers needed to develop products in secure Linux. Almost 80 per cent of the work on Linux that would be required is already done, so we can bring it into the pro industry. It’s the same thing with industrial design, except that’s from the consumer side, the services side and the Samsung side. Bringing all these things together is the opportunity for us to unlock value.”

For now, however, buoyed by Harman Pro’s record sales in 2018, Parasher is looking for the company to continue hitting milestones in the months and years ahead. “We are right on target to achieve what we committed to as a team,” he said. “It’s our responsibility to say, ‘what do you think the industry should look like?’ And we should drive towards that. We started that journey 20 months back, and I’m very pleased with where we are.”