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Sidney Harman On Decades Of Industry Changes

4/18/2011 12:01:00 AM Eastern
EDITOR’S NOTE: This interview of of the late Sidney Harman, who died on Tuesday, April 12, with TWICE senior editor Joseph Palenchar appeared in our August 4, 2008 issue. As a tribute to the CE Hall of Famer an excerpt of the original interview appears below.

WASHINGTON — Few people can speak about the consumer electronics industry from the perspective of Sidney Harman, the Consumer Electronics Association Industry Hall of Fame member whose industry career spans almost 70 years.

On the eve of his retirement from active involvement in the consumer electronics industry, Harman spoke with TWICE to discuss the industry’s evolution and potential.

LESSONS LEARNED

TWICE: What lessons has the CE industry learned over the years, and what lessons hasn’t it learned?

Harman: The one thing that clearly has not changed in half a century is a combination of opportunity that is rare, and in some respects unique, to the consumer electronics industry, a combination of opportunity and the reward that comes to genuine innovation. The opportunity arises out of the fact that much of the industry is devoted to the reproduction of either the visual or the audible signal, in voice or picture, and certainly with respect to music.

Music is the equivalent of cultural oxygen. So the opportunity for visual and audio reproduction in an ever-improving fashion is the essence of the industry, and that is a wonderful essence. People in the perfume industry wish they could have it the same way.

The reward for innovation has been demonstrated over and over again going back to my earliest days when we, among other pioneers, determined that the three-tube AC/DC radio was inadequate to the opportunity. And clearly, people were utterly astonished when they listened to the music with which they were familiar — not Strauss and Zarathustra but Frankie [Sinatra] singing. When they listened to that, as they typically did on their little radios or on their large cabinet phonographs — which were really nothing more than disguised three-tube AC/DC devices — then when they listened to it on our elaborate equipment, they were utterly astonished. “Where is he [Sinatra]?” was the not-infrequent question as people would walk into these little rooms of ours [at early electronics shows] and listen to their first Harman Kardon experience.

That’s little different from the response to the iPod. The opportunity is always there. The responsiveness to innovation, which is responsive itself to the way people live their lives, is always there, and there is no doubt in my mind that it will continue to be always there.

Now I made a comment just now that I think is central to the industry, certainly central to my thinking. What you need in marketing is anthropologists, people who interpret the way consumers live, not people who decide how they ought to live, but people who understand the changing habits and lifestyles of consumers and respond with products and services to that changing lifestyle and that changing need. Those are the companies that are invariably successful. The companies that determine unilaterally, the companies that act out of a kind of engineering triumphalism — that we know how to do it and therefore this is what the consumer ought to have — are the companies that turn out monstrous duds.

TWICE: Do you think Apple with its iPod was a company that looked at things in anthropological terms?

Harman: Oh yes. Look at the product. Look at the timing. See the consumer response. And I think it’s pretty evident they know how to do that more than once.

TWICE: You mentioned in your book “Mind Your Own Business” that it is difficult to create and maintain a successful brand. Why is it so difficult?

Harman: That’s an interesting but extraordinarily complicated question. One reason is that success can often breed failure. Success can lead to complacency so easily. And success can persuade you that you’ve got it knocked. You know how to do it. If the world stood still, the probability is that if you were successful in a particular approach, you had it knocked. The world doesn’t change. You keep it knocked.

But if you stay with what you’ve got while the world is changing, and peoples’ lives are changing, and you are unresponsive to those changes, you don’t have it knocked. You’re knocked. It’s not difficult to imagine, it’s not difficult to recognize by now, that companies and people can get comfortable while it’s going nicely. They persuade themselves there is only one answer, and I’ve got it. And that, of course, is the road to ruin.

Then it is fair to say success can breed failure in another way. A company grows. It develops a set of obligations to deliver, to produce, to be effective. If it’s a public company, it’s to perform financially. And those pressures tend to lock in the model. Think about it in terms of technology or engineering. You build a company. It’s doing well. You spend a significant percentage of revenue in engineering, but in a curious way, the better the company is doing, the higher the percentage of the engineering monies you spend in sustaining technology, and in effect, it can detract. In doing well, you’ve got to keep this thing moving, but the stuff that is driving this thing is the current state-of-the-art technology. Where does the new disruptive leapfrog technology come from?

Now it’s not impossible to imagine an existing successful company doing it. Your Apple example is a very good one, but you can see why, in effect, it’s more a challenge to an existing successful company than it may be to a start-up company, one without both positive and negative baggage of history and success.

HOME AUDIO PROSPECTS

TWICE: Will products such as iPod speaker systems and audio networking products help established audio brands survive?

Harman: Yes. And certainly, a matter of consequence is the ability to get seamless connectivity in a system that reflects the way in which we live, and to be able to do it effortlessly is something that people need. It’s an aspiration that makes sense.

TWICE: Do you think the home audio industry has moved too slowly to embrace some of these products and consumers’ lifestyle changes?

Harman: Some companies have a history of responding effectively. Some companies don’t. Back to an earlier comment, the truth is it is often easier for a small new start-up company, unburdened by obligations or responsibilities to sustain existing product lines, to respond effectively to change.

TWICE: Are established audio brands losing awareness of younger consumers who believe the iPod is the be-all and end-all of music reproduction?

Harman: Decades ago, a wonderful writer, H.L. Mencken, said, “For all these serious problems, there is one single, simple solution. And it’s wrong.”

The iPod has some limitations. You know what they are. Digital has some limitations. You know what they are. But there isn’t any doubt at all that the general digital world, and iPod is an expression of it, has multiplied enormously the interest, the appetite, the accessibility of music. Anybody in the industry has to say that whatever does that is a good thing. Right?

I’m saying simply that when you use the iPod less as a specific and more as a general expression of what the technology and marketplace have generated, it is clear that today there are more people listening to more music everywhere on earth. As that happens, it increases the number of opportunities for firms offering specialized equipment to do the job better.

KEEPING IT SIMPLE

TWICE: In your book, your mantra was simplicity in meeting a consumer’s needs, that technology must be subordinated to people it serves. Did that lead you to introduce the first mono receiver and first stereo receiver in the 1950s?

Harman: In its most fundamental terms, that story says the technology is there to serve the customer, not to terrify, not to intimidate the customer. That’s a mindset of colossal importance. If management and engineering believes it’s there to show off how damn smart we are, you get a product with so much complexity that it baffles the consumer. If the mindset of management is that technology in effect needs to be doing its magic without the consumer really being aware of how it does it, and having the process intuitive and transparent, then if that is the mindset, you produce a very different kind of product. I don’t work for technology — technology works for me. I’m the subject, not the object, of technology. That’s the first thing.
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