#229 Sidney Harman Founder of Harman Kardon



In his book "Mind Your Own Business: A Maverick's Guide to Business, Leadership, and Life," Sidney Harman shares the wisdom garnered from six decades in business, emphasizing the importance of rejecting orthodoxies and crafting one's unique approach to leadership and management. Harman, founder of Harman International, reflects on his journey from starting Harmon Kardon with just $10,000 to building a company renowned for high-fidelity audio systems and innovative digital technologies for automobiles, achieving consistent growth and solid profits. Investor Ho Nam lauds Harman's ability to 'double dip' by buying back his company at a lower price after selling it, highlighting his maverick spirit. Harman's philosophy centers on serving as a catalyst and inspirer, embracing technology in service of the customer, and fostering critical thinking. He champions the value of hard work, the power of writing as a tool for discovery, and the significance of maintaining an ethical compass in business.

Summary Notes

Sidney Harmon's Perspective on Writing His Book

  • Sidney Harmon, at 84 years old, writes a book that started as a non-autobiography but developed into a memoir.
  • He shares lessons from 60 years in business, debunking business orthodoxy and dogma.
  • Harmon International, the company he discusses, is successful and combines technology with creative marketing and unconventional attitudes.
  • The book aims to help readers develop their own business philosophy and style, not provide a secret formula for success.
  • Writing the book was a process of discovery for Harmon, echoing Dylan Thomas's sentiment about reading one's mind on a blank page.

"I am 84 years old. As I write this book, I do it because I believe, finally, that the time is right."

This quote expresses Harmon's belief in the timing of his book's release and sets the stage for the wisdom he intends to share.

"In this book, you'll find no secret formula for success. You may, however, find it useful as you think critically about what works for you and what does not, what matters to you and what does not."

Harmon clarifies that his book is not a step-by-step guide to success but a tool for critical thinking and personal growth in business management.

Discovery of Sidney Harmon's Book

  • Ho Nam, a venture capitalist, introduced the host to Sidney Harmon's book.
  • Nam's concept of "double dipping" and "triple dipping" in business is exemplified by Harmon's career with Harmon International.
  • The book, "Mind Your Own Business: A Maverick's Guide to Business, Leadership, and Life," is seen as a hidden gem with numerous insights.
  • The host has made extensive notes and highlights from the book, indicating its depth and usefulness.

"I've known multiple founders who buy back their companies at a fraction of the price and make it successful again after it was ruined. I call that double dipping. I've once heard of a triple dip... that's exactly what Sidney Harmon experienced in his career."

Ho Nam's quote introduces the concept of buying back one's company to turn it around, a key point in Harmon's career and book.

"This book is like 193 pages, something like that. I bought the Kindle version. So I'm working off this notebook right now. It says I have 202 highlights and 101 notes."

The host's quote indicates the richness of content in Harmon's book, as evidenced by the extensive notes and highlights made.

The Fox and Hedgehog Framework

  • The concept of foxes and hedgehogs in business, discussed by Jim Collins in "Good to Great," is used to describe different entrepreneurial styles.
  • Foxes are characterized by their cunning, versatility, and social connections, while hedgehogs are single-minded, deeply knowledgeable, and dedicated.
  • Hedgehogs are seen as the builders of great, lasting companies due to their commitment and focus.
  • The host recognizes Sidney Harmon as a hedgehog, indicating a deep, focused, and dedicated approach to business.
  • The framework helps to understand different business leaders' approaches, including famous entrepreneurs like Sam Walton and Warren Buffett.

"Foxes tend to be serial entrepreneurs. Hedgehogs tend to stay at one company forever."

This quote summarizes the distinction between foxes and hedgehogs, with hedgehogs being more likely to build long-term value at a single company.

"In the end, hedgehogs are the ones who build great, lasting companies. As entrepreneurs, they are the rarest of breeds."

The quote emphasizes the value of the hedgehog's approach to entrepreneurship, highlighting their rarity and impact on building enduring companies.

Sidney Harmon's Business Philosophy

  • Harmon's "Maverick Way" combines the best of traditional business practices with new economy innovation.
  • He emphasizes leadership as a catalyst and inspirer rather than a top-down commander.
  • Technology is embraced as a tool for customer service, not as an end in itself.
  • Harmon criticizes narrow specialization and promotes critical thinking and a broad philosophical base for sound judgment.
  • He admires Warren Buffett and Charlie Munger and shares a love affair with company building, viewing himself as the guardian of his company's soul.

"I've been in business for over 60 years, and through those 60 years, I have done it differently. Hence the subtitle to this book."

Harmon introduces his unique approach to business, setting the stage for his "Maverick Way."

"The maverick's way of conducting business foreswears the leader as a commanding general. It rejects the practice of top-down, authoritative command."

This quote outlines Harmon's leadership philosophy, which focuses on inspiring and catalyzing rather than commanding.

Harmon's Approach to Business and Leadership

  • Harmon's first act of daring was creating Harmon Carden, which went against conventional wisdom.
  • He encourages daring in business, defining it as a calculated risk after careful consideration.
  • Harmon respects Bill Gates for his nimbleness and willingness to challenge orthodoxy.
  • He compares Gates's and Buffett's different responses to the Internet, both seen as daring.
  • Harmon's leadership style is likened to a jazz quartet, where each executive contributes to the whole.

"My first act of daring, I would say, was joining Bernard Cardin in 1953 to create Harmon Carden. I quit a well-paying job to start a business in a very new field."

Harmon describes his bold move to start a business, which laid the foundation for his future success.

"A good leader encourages daring action and does not penalize it when it fails."

This quote highlights Harmon's belief in fostering a culture that supports risk-taking and learning from failures.

Final Thoughts on Sidney Harmon's Book and Philosophy

  • Harmon stresses the importance of technology as a servant to the business, not a tyrant.
  • He criticizes the overemphasis on specialization in business education, advocating for a broader understanding of the entire enterprise.
  • Harmon sees poets as the original system thinkers, essential for business leadership.
  • Leading as a "first among equals" is a key concept in his leadership style, emphasizing collaboration and contribution from all team members.

"Technology must never be permitted to tyrannize. It must be the servant."

Harmon's quote underscores the need for technology to enhance business, not dominate it.

"I am proud of the fact that although the four top executives at Harmon could hardly be more different, they have melded into a virtuoso jazz quartet."

This quote illustrates Harmon's pride in his executive team's ability to work harmoniously despite differences, reflecting his leadership philosophy.

Value of Hard Work

  • Sidney Harmon emphasizes the importance of hard work and leading by example.
  • He maintains a rigorous schedule, arriving at the office after morning exercise and working late.
  • Sidney's commitment to hard work is intertwined with his personal life, leading to a divorce.
  • Hard work is presented as a foundational element of success throughout Sidney's career.

"I typically get to my office late in the morning about nine or 930, because I exercise in the morning. But I work uninterrupted throughout the day and I am nearly always there well after our staff has left and everybody knows it."

This quote demonstrates Sidney's personal routine that prioritizes exercise before a full day of work, highlighting his dedication to both physical and professional well-being.

Mental and Physical Engagement

  • Sidney believes in staying mentally and physically engaged to prevent decline.
  • He works out daily, even at 84, and has a disciplined diet.
  • The connection between mental engagement and physical health is a recurring theme for Sidney.

"It's really important to never not be fully engaged in your work because he feels that the mind goes once the mind goes first, the mind goes first, then the body goes."

The quote reflects Sidney's philosophy that a sharp mind leads to a healthy body, and staying engaged in work is crucial for overall well-being.

Challenging Business Orthodoxy

  • Sidney advocates for questioning business norms to discover opportunities.
  • His critical approach was shaped by diverse experiences, including teaching and managing both an experimental college and a traditional business.
  • Sidney's schedule reflects his dedication to multiple roles and the sacrifices made for success.

"I believe that refusing to accept business orthodoxy uncritically can open your eyes to opportunity."

This quote encapsulates Sidney's belief in the value of challenging standard business practices to find new opportunities for innovation and success.

Customer-Centric Product Development

  • Sidney places high value on customer interaction for generating product ideas.
  • He contrasts his approach with Henry Ford's and Steve Jobs's views on customer input.
  • Sidney's success in product development is attributed to his understanding of customer needs.

"To this day, over half a century later, I can say that no valuable, enduring product of mine ever arose from contemplation in my office."

The quote underlines Sidney's conviction that direct customer engagement, rather than isolated contemplation, is essential for creating valuable products.

Mentorship and Early Career Influence

  • Sidney emphasizes the importance of mentorship and learning from others in the field.
  • His early career at Bogan Company and his relationship with Mr. Bogan were formative.
  • Sidney's determination and courage were recognized and rewarded by Mr. Bogan.

"It was my view then, and it is my view now, that Mr. Bogan honored determination and respected courage."

The quote reflects on the mentor-mentee relationship between Sidney and Mr. Bogan, highlighting the impact of determination and courage on Sidney's career trajectory.

Founding Harman Kardon

  • Sidney started Harman Kardon with Bernie Cardin, focusing on high-quality audio products.
  • The company was a pioneer in the high fidelity field, and their products were driven by personal passion.
  • The decision to leave Bogan and start Harman Kardon was a pivotal moment in Sidney's entrepreneurial journey.

"In 1953, Harman Cardin was formed. Bernie and I capitalized it with a total of $10,000, $5,000 from each of us."

This quote marks the beginning of Sidney's venture into entrepreneurship and the establishment of Harman Kardon with a modest initial investment.

Marketing and Product Differentiation

  • Sidney's unique approach to product presentation at trade shows set Harman Kardon apart.
  • He created an inviting environment that mimicked a home setting, playing popular music to showcase the product's quality.
  • Sidney's marketing strategy was instrumental in establishing Harman Kardon as a cult brand on college campuses.

"We played Frank Sinatra in our quiet, comfortable room. This was at the height of Frank Sinatra's popularity."

The quote illustrates Sidney's strategic choice to use familiar music in a comfortable setting to effectively demonstrate the superior quality of Harman Kardon's products.

Persistence and Determination

  • Sidney advocates for persistence and determination as key factors in business success.
  • He draws inspiration from Abraham Lincoln's repeated failures and eventual success.
  • Sidney's philosophy is to improve the odds of success through hard work and determination.

"The trick, I decided, was to use all my resources to improve the odds. Improving the odds, I came to realize, was the essence of most business activity and most decisions."

This quote reveals Sidney's mindset of leveraging all available resources to enhance the likelihood of business success, taking inspiration from historical figures like Lincoln.

Growth and Expansion of Harman International

  • Sidney repurchased Harman Kardon and acquired JBL, expanding into the automotive OEM market.
  • Harman International grew rapidly, reclaiming leadership in the audio business.
  • Sidney's approach to acquisitions was cautious, focusing on strategic growth rather than large takeovers.

"A few years later, we repurchased Harmon Carden from Jared. With that repurchase began the transformation of the company and my return to the audio business."

The quote signifies a major turning point in Sidney's career, where he regained control of Harman Kardon and set the stage for the company's future success.

Sidney Harmon's Career and Memo Writing

  • Sidney Harmon was appointed as deputy secretary of commerce by President-elect Jimmy Carter in late 1976.
  • Harmon is proficient in writing terse memos, influenced by David Olgivy's boss, who was a partial influence for James Bond.
  • Harmon had to sell his company due to potential conflicts of interest with his government position.
  • He sold his company to Beatrice Foods for $100 million in 1976, which is roughly equivalent to half a billion dollars today.
  • Harmon's approach to communication is inspired by figures like Churchill, who emphasized the importance of compressing thoughts.

"The note I left myself here is funny. I said, this guy has mastered the terse memo like Olgivy's boss." "So the president's council notified me that if I were to place my harmon stock, even if I was going to place it in a blind trust, my ownership of a majority of the company's equity would place me in an awkward position."

The quotes highlight Harmon's skill in concise communication and the circumstances that led to the sale of his company. His ability to summarize complex situations succinctly is likened to the brevity of Olgivy's boss and is seen as a valuable skill.

Business Acumen and Company Management

  • Harmon exhibits a deep understanding of business and the pitfalls of conglomerates that acquire companies without understanding the business.
  • He repurchased his company for $50 million from Beatrice Foods, which had failed to manage it successfully.
  • Harmon's management style is compared to a jazz quartet, emphasizing individual expertise and collaboration.
  • He went through several partners before finding the right team members, demonstrating his commitment to effective team assembly.

"He buys the company back for $50 million, and he's making fun of these large conglomerates." "I promoted Don to run the company. Don and I try to make it work, but we are increasingly incompatible."

These quotes illustrate Harmon's strategic business decisions and his iterative process in finding the right management team. His experience with multiple partners until the right fit is found underscores the importance of team dynamics in successful company leadership.

Technological Innovation and Industry Adaptation

  • Harmon's acquisition of Becker, a company that was struggling at the time, led to significant growth due to a strategic pivot towards premium music reproducing systems for automakers.
  • He recognized the shift from analog to digital and invested in digital engineering, which became central to the company's success.
  • Harmon's leadership in technological innovation positioned the company as a key player in the automotive industry.

"Buying Becker made him go down this route that winds up growing." "It did not require a genius to recognize that I was looking at the future."

The quotes emphasize Harmon's foresight in recognizing the potential of digital technology and its application in the automotive industry. His decision to acquire Becker and invest in digital engineering reflects his ability to adapt and innovate within his industry.

Ethics in Business

  • Harmon stresses the importance of ethics in business, especially in the wake of scandals like Enron.
  • He believes in the long-term success of companies guided by honest leadership and the value investors place on integrity in management.
  • Harmon's approach to business is characterized by a focus on reducing matters to their essence and the importance of creativity and romanticism in leadership.

"It does no good to make money at the sacrifice of one's soul." "A honest, healthy company guided by honest leadership is much more likely to succeed in the long term than one that allows and encourages dishonesty in any form."

These quotes convey Harmon's conviction that ethical conduct is paramount in business. He views integrity as a key factor in a company's long-term success and the preference of employees and investors for honest leadership.

Leadership Philosophy

  • Harmon shares his accumulated wisdom on leadership, emphasizing the leader's role in setting direction, inspiring others, and promoting a coherent vision of the company.
  • He believes in the importance of disciplined hard work, decision-making, and the development of others.
  • Harmon's leadership style is influenced by his experiences and the teachings of figures like Mr. Bogan, who exemplified diligence and attention to detail.

"The leader leads. He or she is not a caretaker." "The leader inspires. People want to be more than people want. People want work to be more than drudgery."

These quotes distill Harmon's leadership principles, highlighting the active role of a leader in guiding and inspiring a company. He sees leadership as a multifaceted responsibility that goes beyond mere management to include inspiration, coherence, and the promotion of hard work.

Education and Lifelong Learning

  • Harmon's involvement with Friends World College influenced his business philosophy, advocating for student responsibility in their own education.
  • He contrasts traditional educational models with his approach, which views teachers as resources rather than sole providers of knowledge.
  • Harmon's educational philosophy mirrors his business practices, emphasizing the importance of self-directed learning and the dynamic relationship between teacher and student.

"Our college viewed that the teacher as a resource rather than as the unchallenged fountainhead." "The college looked to the student to design and execute his or her own study program."

These quotes reflect Harmon's belief in the power of self-directed learning and the role of educators as facilitators rather than dictators of knowledge. His educational philosophy is consistent with his business approach, valuing autonomy, responsibility, and mutual learning.

Engagement in Work

  • Sidney Harmon emphasizes the value of being fully engaged in one's work.
  • He contrasts a life of engagement with a life looking forward to nothing but leisure.
  • Sidney reflects on his own life, indicating his active involvement in his work even at an older age.

"When you're younger, it's extremely easy. He's like, don't give this up. I'm 84 years old. I'm on the ball. I'm in this every day. I'm paying attention to what's going on."

The quote highlights the importance of maintaining engagement and passion for work throughout one's life, as exemplified by Sidney's own experience.

Entrepreneurial Instinct and Negotiation

  • Sidney recounts his early recognition of having entrepreneurial instincts during his first year in business.
  • He discusses a challenging situation with inventory management and a negotiation that taught him valuable lessons.
  • Sidney's interaction with an older, more experienced entrepreneur, Mr. Schooper, provides insights into the art of negotiation and the value of learning from seasoned businesspeople.

"I was first persuaded I had the instincts of an entrepreneur at the end of our first year in business... Authorized our sales representative to offer the entire quantity to this company called Radio Television Supply Corporation... I authorized the salesman to telephone me collect from Sol's office... And he says, I was first persuaded I had the instincts of an entrepreneur at the end of our first year in business."

This quote describes the moment Sidney realized his entrepreneurial potential and sets the stage for a story about overcoming a business challenge.

Lessons in High Finance and Simplicity

  • Sidney shares a story from 1986 about taking Harmon International public with Goldman Sachs, highlighting the simplicity in high-stakes financial decisions.
  • He emphasizes the importance of not being intimidated by the complexity of finance and the power of simple communication.
  • Sidney advocates for a common-sense approach and the necessity of understanding the intricacies of financial dealings.

"High finance, as it is practiced in the real world, is frequently a great deal simpler, less complicated, less sophisticated, and less mysterious than it is usually presented... It is a good thing to recognize that nearly all of it reduces to pretty straightforward common sense."

This quote conveys Sidney's view that the seemingly complex world of high finance is often much simpler than it appears and that straightforward common sense is key.

Investment Philosophy and Acquisitions

  • Sidney discusses his investment philosophy, particularly regarding stock buybacks and acquisitions.
  • He stresses the importance of understanding the company and making informed investment decisions.
  • Sidney aligns with Warren Buffett's approach to value-driven acquisitions and rejects the idea of financial engineering for short-term gains.

"The best reason to employ the company's cash to buy its own stock is the judgment that the purchase represents the best investment that the company can make."

The quote encapsulates Sidney's belief in investing in one's own company as a CEO, given the intimate knowledge of its value and potential.

Marketing and Brand Identity

  • Sidney delves into the significance of marketing and the need to understand the true business one is in.
  • He cites Apple and JetBlue as examples of companies that go beyond their products to define their brand identity.
  • The focus on marketing is essential, and Sidney shares how Steve Jobs prioritized marketing at Apple.

"Marketing demands attention. Like life, it is always one thing after another... But its fundamental is this: know what business you are really in."

This quote underscores the dynamic nature of marketing and the importance of clarity in understanding the essence of one's business.

Reflections on Life and Work

  • Sidney shares his personal reflections on life, emphasizing the importance of self-awareness and the development of an inner compass.
  • He regrets not keeping a more comprehensive record of his work and advises others to document their journey.
  • Sidney stresses the value of preparation, continuous learning, and being fully engaged in life and work.

"I have lived a long life. I continue fully engaged, fully responsible, and fully committed."

The quote encapsulates Sidney's philosophy of staying actively involved and committed to work and life, regardless of age.

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