How Crestron is Like the Yankees
7/15/2009 8:24 AM
Sometimes you think that you know a person (or a company, in this case), but only after you visit their home (or headquarters, in this case) do you truly realize what they’re all about. Such was the case, last week, when I attended “NewBay Media Day” at Crestron Electronics headquarters in Rockleigh, New Jersey. For a slideshow of our visit, click here.
My big revelation as I toured the Crestron campus with my colleagues from Systems Contractor News, AV Technology, and our custom publishing division was that Crestron is the custom installation industry equivalent to Major League Baseball’s New York Yankees (full disclosure, I’m not a Red Sox fan). Crestron’s like the Yankees? Yes, both organizations have legions of fans around the world, yet they also get plenty of outspoken criticism from rivals, because they are pretty successful at what they do, and because they’re a leader everyone secretly wants to be just like them.
Before you assume that this story is just a puff piece for Crestron, let me assure that it won’t be, because they really don’t need one. Instead, I would like to share my observations from a day and half in Rockleigh, especially the surprises that I encountered.
Like almost everyone in this industry, I came into my visit with Crestron with a pretty strong preconception about the company. I, of course, recognized them as “one of the leaders” in the control market. Our Crestron tour guides acknowledged its competitors in our meeting, so I will too. There are veteran companies, like AMX in the residential and commercial markets, and Extron mostly on the commercial side. Then there are hard-charging newer players like Savant and Control4. I would also include companies like RTI, Niles, and Russound (to name but a few) that compete with them, as well. Out of all of these companies, I would contend that Crestron has the biggest target on its back. Does this make them THE leader? I’m not going to go there, but I will acknowledge that I’ve always felt that the Crestron name was synonymous with the CI channel and control products.
What I did not realize, until my meeting last week, was just how big Crestron has become and how much the company reinvests in research and development, year after year. In my meetings and tours with national product sales specialist David Silberstein and marketing director Jeff Singer, I learned that the privately owned company, which until recently has kept its financial information very close to the vest, annually reinvests 40 percent of its profits back into R&D. This number clearly wasn’t marketing hype, because I saw direct evidence of this spending when I toured the company’s six buildings, including a beautiful new Research Center building next door to its headquarters.
As amazing as it sounds, Crestron’s entire headquarters filled only one small building just 12 short years ago. Now that building houses its printed circuit board assembly operation. Our tour also included a separate off-site finished-goods warehouse and shipping building (the only facility in the six that is rented, not owned outright by the company), a main headquarters building (housing a training center, marketing, tech support, and new Experience Center), and a product assembly facility.
Perhaps the most surprising realization about Crestron for me, however, was that the company’s entire manufacturing operation is contained within the State of New Jersey. In other words, none of Crestron’s manufacturing is outsourced to Asia or Mexico. When was the last time you heard that? Not to mention, Crestron owner and founder George Feldstein had made the conscious decision to purchase land and support a sizable workforce in New Jersey’s very expensive Bergen County, primarily because that’s the area where he grew up and has lived his entire life.
Obviously, it’s the hard work and dedication of Feldstein’s team and a loyal group of residential and commercial dealers around the world that has helped fund 20 years of double-digit growth. But because Crestron’s owner seems to truly love his work, he’d rather reinvest in expensive test gear or product modeling machines, rather than, say, a giant yacht for him and his wife. The company’s focus on R&D and tech support includes an investment in 400 True Blue team members offering 24/7 service in 40 dedicated training centers among Crestron’s 59 offices in 90 countries.
I guess I knew Crestron was big, but not THAT big. Like I said, sometimes you think you know somebody. Again, just like the New York Yankees, Feldstein spends a lot of money to be successful. Instead of simply pocketing all of his profits, he puts money back into his products. The Yankees pay mega-millions for the contract of one of the best pitchers in baseball, and Mr. Feldstein buys a new machine that simulates lightning strikes, so his products won’t be destroyed during storms in Florida. Is that a fair comparison?