-- Los Angeles, CA- We went through a massive change last year, said Mohit Parasher, president of Harman Professional Solutions and executive vice president of Harman, speaking in early January inside the company's new Experience Center in Los Angeles. The understatement kicked off his first major sit-down with the press since Harman Pro began a radical corporate transformation in September 2017. During the months that followed, the company was largely mum as the process played out, but with changes now in place and the first results starting to come in, Parasher was ready to provide some insight into events of the past two years-a 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, said 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 U.S. In addition to this record-setting revenue, we also drove strong growth in profitability. Put another way, he summarized, We saw good growth despite all the disruption.
And there was plenty of disruption. Harman Pro's changes affected all its brands-AKG, AMX, BSS, Crown, dbx, DigiTech, JBL Professional, IDX, Lexicon, Martin, Soundcraft, Studer and SVSI-with layoffs in the hundreds 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 home town of Richardson, TX; and lighting centered in Martin Professional's longtime base in Aarhus, Denmark.
While the effort may have appeared on the outside to be all about paring back, Parasher explained his thought process-and the considerable investment that followed, which ranged from IT outlay to reinventing facilities to hiring upwards of 350 new employees. Many people were skeptical, and I understand that, but we were very clear from day one-Samsung was very clear, we were very clear-that this is a business that we are going to invest in and that we are going to grow, he told Pro Sound News. We continue to invest. We have a plan and we are executing against it.
Bringing the various brands' teams together in 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], where it is engineering-not only hardware but, more importantly, applications and software-sales and marketing, after-sales service, tech support, pre-sales. We did that in a very fast-paced way. 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 in Harman, a new company-wide IT platform handles sales forecasting up to raw materials procurement and supply chain, but also aims to break down silos between engineering teams. We created a big repository I'm proud of, with all [of our] engineering knowledge-terabytes and terabytes of knowledge-on one platform, said Parasher. Any engineer on any of our sites can access anything at any time and learn from each other.
Parasher likewise sees placing engineering teams under one roof as a learning opportunity, aiding cross-pollination between brands' technologies. Building on that, the various centers have standardized labs so that hardware and software engineering teams can collaborate with the same resources and equipment-a move he expects will provide fast ideation, with talent pools handing off work across time zones as the day progresses around the world.
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 a bit-namely its design philosophies. There is a massive need out there for making things easy to use, easier to install, he said. 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 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 said. Make it open, discoverable, connectable. It's okay-customers will choose some competitors' products to connect with yours? It's fine. The customer should get the best product, the best choice, and that puts reverse pressure on us to be best-in-class in everything we do.
It may be a tall order, but that's nothing. We believe we have an opportunity as a team to transform the pro industry, said Parasher. We have an opportunity-and a responsibility, in a sense-because we have this portfolio of products, this great team, this great business channel, fantastic brands and a great owner like Samsung that is willing to invest, so there's no
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-- Los Angeles, CA- We went through a massive change last year, said Mohit Parasher, president of Harman Professional Solutions and executive vice president of Harman, speaking in early January inside the company's new Experience Center in Los Angeles. The understatement kicked off his first major sit-down with the press since Harman Pro began a radical corporate transformation in September 2017. During the months that followed, the company was largely mum as the process played out, but with changes now in place and the first results starting to come in, Parasher was ready to provide some insight into events of the past two years-a whirlwind that began when consumer electronics giant Samsung acquired all of Harman for $8 billion in November 2016.
