The story of Harman Kardon is largely the story of Sidney Harman.
Harman, born in Montreal in 1918, grew up in New York City. From an early age, he showed a flair for business. As a teenager, he collected recently published magazines, talked local retailers into selling the used but still interesting publications for a nickel apiece and split the resulting revenues with them. “That nice little business helped finance my years in high school and paid for my books in college,” Harman says in his memoir, Mind Your Own Business.
But Harman had another talent: science. At New York’s City College, he majored in physics. In 1939, after he completed his education, he found a job in the engineering department of the David Bogen Company, a firm that made public-address sound systems. He and his boss, chief engineer Bernard Kardon, quickly became friends.
Soon, Harman moved from engineering into sales and found that he liked it. In sales, he discovered the importance of paying attention to customers. “To this day, over half a century later, I can say that no valuable, enduring product ever arose from contemplation in my office – or in the engineering department,” says Mind Your Own Business. “I know of no substitute for the firing line, for listening to the customer, for identifying and responding to real need.”
He responded to the customers’ needs by innovating. In the early 1950s, Harman and Kardon wanted Bogen to let them simplify the controls on the company’s public-address systems. Also, after customizing Bogen loudspeakers to play records in their own homes and noticing how much their guests loved the machines’ sound, Harman and Kardon wanted Bogen to manufacture similar devices for the public. Bogen agreed to Harman and Kardon’s proposals – but he agreed very reluctantly.
Though Harman rose to the rank of Bogen’s general manager, he wasn’t content. Not only did he chafe against Bogen’s conservative ways, but the aging Bogen planned to leave the company to his son and son-in-law. Harman realized that he would never be able to run the company as he liked.
In 1953, Harman resigned and took Kardon with him.
Each man put up $5,000 and formed a new company, Harman Kardon, to manufacture high-fidelity machines for playing music at home.
“At the time,” New York Times reporter William Holstein wrote fifty years later in an article about Harman, “the conventional wisdom was that to listen to music from the radio, you needed a tuner to capture radio signals, a preamplifier, a power amplifier and speakers.” Instead, Harman and Kardon combined multiple components into one easy-to-use unit that they called a receiver.
Built into an attractive housing that looked more like stylish furniture than complex electronics, the receiver – model name Festival D1000 – was a huge success. It was especially popular with young listeners. “The college campuses were the breeding grounds for a generation who loved the music and felt that the best way to listen to it was in the dorm with our equipment,” Harman recalls in his autobiography.
In 1956, Harman and Kardon’s initial $10,000 investment was worth $600,000, and Kardon wanted to retire. Harman bought out Kardon’s share of the company and kept on working.
Two years later, Harman Kardon produced the Festival TA230, the world’s first stereo receiver. High-quality sound that seemed to come from around the listener, not just in front of him, was at last available to a wide audience. And the wide audience loved it.
Harman Kardon continued to create popular products. Starting in the late 1950s, for instance, Harman Kardon’s Citation series of amplifiers and other components included some of the most technologically advanced equipment in consumer audio. (Today, those Citation machines are collector’s items among audiophiles.)
By the early 1960s, Harman was a happy man. In 1962, he confidently merged Harman Kardon with a cable-television company, Jerrold Corporation. Soon, he was no longer so happy.
Harman felt that Jerrold’s chief, Milton Shapp, interfered too much in Harman’s own work. After a series of arguments, Shapp bought out Harman’s share of the company. Harman now had a pile of cash, but he was cut off from the company that he had built.What’s more, this constantly productive man suddenly found himself with nothing to do.
Harman might have been down, but he wasn’t out. He took some of the money from the buyout and invested in a small conglomerate, the Jervis Corporation. He took over the company and used its financial clout to buy Harman Kardon back. He also acquired other audio houses, such as the prestigious JBL, and eventually renamed the entire group of companies Harman International Industries, Incorporated.
Meanwhile, Harman Kardon continued to seek out new technologies. In the late 1960s, the company began working with a young, high-tech firm with fresh ideas about reducing audio noise. Its name was Dolby Laboratories. Harman Kardon products continue to feature Dolby equipment.
As the 1960s became the ‘70s, Harman Kardon grew larger and more profitable. Harman attributed the success of Harman Kardon and his other companies to a new style of management. Instead of simply issuing orders, as executives at other companies did, Harman encouraged his managers (as he told Music Trades magazine in 1988) “to respect people who do the work, to see them as a great untapped resource.” He felt, for instance, that the workers building amplifiers and speakers could contribute smart, practical ideas about ways to improve the manufacturing process.
Harman’s approach apparently worked. By the mid-‘70s, Harman Kardon was a leader in American consumer audio.
In 1976, Jimmy Carter – a candidate that Sidney Harman had supported – became President of the United States. What’s more, he asked Harman to join his administration as Undersecretary of Commerce.
In order to enter the government, Harman had to give up any jobs and holdings that might become a conflict of interest. For the second time, he sold his company. The buyer was Beatrice Foods, a large conglomerate that included many products in addition to food, and the price was about $100 million.
Beatrice’s executives didn’t seem to know how to run an audio business. Sidney Harman saw his child go into decline, and he didn’t like what he saw. By 1980, Harman International had lost about 40 percent of its assets.
By the time the Carter Administration came to a close, Sidney Harman had left the government and was determined to get his old company back. He bought Harman International back from Beatrice for $55 million.
He didn’t get Harman Kardon, though. During the late 1970s, Beatrice had sold the company to a Japanese firm.
Five years would pass before Harman could return Harman Kardon to Harman International. Finally, in 1985, he was able to buy Harman Kardon back. His flagship company was in his hands once again.
Returning to Harman’s hands didn’t suddenly make Harman Kardon a flowering success. In the 1990s, Harman Kardon was running into trouble. The company still made excellent products, but it wasn’t leading the industry in new technologies anymore. The world of audio no longer spoke about hi-fi and stereo but about CDs, MP3, DAT, and other bits of techno-slang.
Harman, his executives and his engineers took action. In 1999, for instance, Harman Kardon presented the CDR 2, the world’s first CD audio recorder with 4x dub speed, allowing music fans to accumulate more sounds and songs quickly with no loss of audio quality. Also that year, the company produced SoundSticks® computer speakers, a combination of science and sculpture so beautiful that New York’s Museum of Modern Art has added them to its design collection. In 2000, Harman Kardon teamed with Microsoft to develop a high-tech remote control for computers. Another advanced remote control came along the next year, as Harman Kardon’s patented EzSet™ remote allowed owners of multichannel audio systems to calibrate their speakers automatically for superb surround sound.
Additional inventions followed. By 2003, the company’s 50th anniversary, Harman Kardon was going strong again.
Sidney Harman continued to run Harman Kardon and his other companies. Still, he realized that he couldn’t keep going forever. In May of 2007, as he approached his 88th birthday, Harman recruited Dinesh Paliwal as Harman International’s chief executive officer.
Paliwal, an engineer with degrees from the Indian Institute of Technology and Miami University of Ohio, came to Harman International from the presidency of the global power and automation technology leader ABB Ltd. About a year later, he succeeded Harman as the company’s chairman.
The engineers, executives, and other employees of Harman Kardon watched these changes with considerable interest, but none of the changes swayed them from their usual concern: making great audio products. In 2007, for instance, the Chicago Athenaeum: Museum of Architecture and Design gave its Good Design™ award to Harman Kardon’s DMC 100 digital media centre. And in 2008, the prestigious Electronic House magazine bestowed Product of the Year honours on Harman Kardon’s AVR 354 audio/video receiver.
What’s ahead for Harman Kardon? More of the same – and if that sounds boring, consider that at Harman Kardon, “more of the same” means more innovation, more attention to its customers’ needs and more great sound. Those are the principles on which Sidney Harman started the company. And they’re the principles that guide it today.