NEW SIDNEY HARMAN BOOK PREACHES ‘MAVERICK’ BUSINESS METHODS

There’s “the maverick’s way” of doing business that’s hybrid of new and time-honored business methods and “struggles to determine what is truly effective regardless of traditions or trends.” That’s “the principle that has guided me” for career spanning more than 60 years, writes 84-year-old industry veteran Sidney Harman in coming book, Mind Your Own Business: A Maverick’s Guide to Business, Leadership and Life, due for Nov. 1 release from Random House.

Harman says he didn’t set out to write an autobiography, “but as it has developed, the book has unavoidably taken on some of the character of a memoir.” He says he recognizes “my life would be far less interesting were Harman International a struggling company.” But in fact, he says, “it is very successful, combining sophisticated digital technology and creative marketing with unconventional attitudes and practices.” Nevertheless, he admits book offers “no secret formula for success” for others to follow, but may serve as fodder for readers “to help you generate your own style, your own compass.”

Book marks 50th anniversary of founding of Harman Kardon, which it says was financed in 1953 for $10,000 -- $5,000 each from Sidney Harman and his partner Bernie Kardon. “Although we did not appreciate it then,” Harman writes, “we were part of a handful of small companies that became pioneers in the newly developing field of high fidelity.” Other “upstarts,” he said, included Acoustic Research, Bell, Fisher, Jensen, Marantz, Radio Craftsmen, Rek-o-kut. They competed against “the establishment,” companies “run by traditional business types,” Harman says. They included Magnavox, with “the biggest reputation,” but also Capehart, Columbia and RCA, all of which competed “for the carriage trade,” he says. Establishment was “oblivious to the world changing around them,” Harman says, “confident that size alone would preserve their dominance, they were already the dinosaurs of the industry. They proved soft, easy prey.”

Harman Kardon “was growing at an impressive rate” in its early days because “we tapped into a genuine longing,” Harman says. Breakthroughs in capturing wider audience came when “we lit the place up” at Radio Manufacturers Show in Chicago and signed on Allied Radio (described as “the Best Buy and Circuit City of its day") as first major retail account, he says. In 3 years after its founding, Harman says, Harman Kardon sales grew “into the millions” and company’s net worth burgeoned to $600,000 from $10,000.

Harman says he “succumbed to an interesting temptation” in 1962 when he agreed to proposal by Milton Shapp (later Pa. gov.) to merge Harman Kardon with Jerrold Electronics. He says Jerrold then was “pioneer” in cable business, marketing industry’s first set-top boxes and starting first cable TV service in Williamsport, Pa. “I saw a great opportunity and supported the idea with enthusiasm,” Harman says. Shapp would be chmn. of new Jerrold Corp., Harman its pres.-CEO.

As precaution against “irreconcilable disagreement,” Harman says, he and Shapp negotiated “the business equivalent of a prenuptial agreement.” Each partner would offer price for the other’s interest if relationship soured, he says. Low bidder would be obliged to sell his interest to the other. As it turned out, Harman says, “the honeymoon did not last very long. Milton had a way of swooping in without notice, pronouncing his strong views on many business matters. I found the interventions troublesome and inadequately considered.” Harman says he also objected to Shapp’s use of company facilities to support his campaign for U.S. Senate.

Years later, Harman looks back on Shapp relationship with regret, he says: “I realize that we were both in error -- he for a quixotic, whimsical approach to running the company, I for lack of patience, forbearance and empathy.” Harman says he should have been more “tolerant” of Shapp, “and when I was right, more persuasive. I should have realized that the employees and the customers were more important than our differences, and that I was putting them at serious risk. I should have worked to find a constructive resolution.”

Negotiating well is “a function of experience, preparation and intuition,” Harman says. Notorious for his ego, he describes lessons learned from his deals to sell Harman International to Beatrice Foods in 1976 and buy it back 4 years later. In 1976, he had accepted Commerce Dept. post in new Carter Administration and says he “needed to sell the company quickly -- not generally a recipe for a great deal.” But Harman says he was fortunate to encounter in Beatrice “a mindless determination to diversify and acquire,” and “eagerness blinded them to the fact that they did not belong in our business.” Harman says in retrospect, “I realize I took advantage of their eagerness and gave inadequate attention to what would likely develop afterward… After all, I was committed to government and saving the nation.”

At present-day Harman International, Harman says, “I am the resident visionary, but I also pay attention to the details -- big time.” He says: “Principally, I regard myself as guardian of the company’s soul.” Although relinquishing CEO post to Bernard Girod several years ago, Harman remains extensively involved in company operations day-to-day, he says: “I do all of it because it makes me feel better, but I also do all of it because I am convinced that a company with conscience and soul will prosper over many years.”