Feature: Does AV need to go to biz school?

• Features

• 24/01/2025

When it comes to systems integration in AV, technical prowess often takes the centre stage. From designing intricate systems to troubleshooting complex installations, technical knowhow for an integrator is crucial. But at its core, AV integration is undeniably a business. It is essential to recognise that, like any business, the ultimate measure of success lies in profit maximisation.

Despite this truth, the dominance of technicians within the field of integration often sidelines discussions around business strategies. Are integrators missing out on lucrative business opportunities by neglecting a business oriented mindset? Perhaps, the lack of formal business education in the form of an MBA might be hindering the industry’s potential for growth and innovation.

Bill Fons, president at PTG — a global AV integrator based in Michigan, United States — sheds light on the nature of AV integration as a business: “I believe that a lot of AV integration businesses started in basements or small garages. Eventually, the businesses outgrow the ownership’s ability to run the company, which means that more talent would eventually be joining the company. Right now, for example, I have 52 employees, and three of them have an MBA — I’m not one of them. I only have real-world experience, and I have been in AV long enough to know what I am doing right or wrong. With AV integration, it is just about learning how to do things right after a while.”

Echoing these sentiments, Keith Donahue, senior vice president of sales and marketing at Avidex, a global AV integrator headquartered in North Carolina, United States, adds: “I agree that AV, particularly in North America, has historically operated more like a cottage industry. Or perhaps, most companies follow the trajectory of a founder-led organisation. Many companies, especially those founded by individuals, have followed a trajectory of bootstrapping their businesses. While some still rely on this approach to a certain extent, it has become noticeable that the top players, ranking within the top five or top ten based on revenue, have started attracting private equity investments over the past five to eight years. These companies are growing larger through consolidation and acquisitions.”

As companies scale and expand their offerings, the importance of skills gained from an MBA become more apparent. From general management to finance, marketing, HR, and strategic planning, these specific skill sets aim to empower leaders with the tools and framework needed to navigate business challenges. The breadth and depth of knowledge gained from an MBA have their merits. Girish Narayanan, managing director of Granteq, comments: “Having an MBA can be advantageous because you are better equipped to deal with contracts, understand and manage people effectively, and have solid accounting practices. An MBA curriculum also allows you to gain a mastery of finance to interpret financial statements, manage budgets effectively, and make informed investment decisions. These are definitely necessary analytical skills to steer any company towards financial success.”

Soft skills and experience While having an MBA can potentially bring about organisation benefits, it is not the be-all and end-all for AV integration businesses. Instead, soft skills are being increasingly prioritised and sought after to build better businesses. Donahue says: “In my observations regarding the North American AV industry, having an MBA has traditionally been considered less important than the ability to build a good team, recruit and retain skilled individuals, and foster a good workplace culture.”

Beyond soft skills, there is also a growing consensus that having practical experience trumps formal education when it comes to AV integration, especially since technical expertise is core to enacting an integrator’s role. Donahue shares: “There are numerous technical prerequisites that I believe are more important than a formal business education, with CTS certification being one of them. Different levels of CTS are essential because it determines how good one can be at executing complex systems and projects. For many of our large clients, a project management professional (PMP) certification is mandatory for anyone managing a significant AV system deployment on-site. It’s interesting that while MBAs aren’t typically specified in RFP requirements, there are other mandatory credentials that are asked for.”

The paradigm shift towards acquiring soft skills and practical experience reinforces that individuals need to learn how to apply their knowledge and business acumen effectively in the real world. And doing so does not necessarily come with a big price tag. Is the MBA becoming obsolete, then?

Fons weighs in: “Interestingly, the employees with MBAs in my company are not necessarily using their MBAs in the way you might expect them to. People who go to school do not go in thinking that they are eventually going to be an AV specialist — most of them simply end up on this trajectory one way or the other. In my organisation, those with MBAs often find that they need additional training for their roles, such as project management certifications, engineering accreditations, and other specialised skills. These aren’t things they could simply figure out on their own or skills that are not necessarily innate; they require formal training. It’s shocking to me how much people spend on their formal education versus how much more they use the training bespoke to the task at hand.”

Narayanan shares his perspective: “While I don’t hold an MBA in the traditional sense, I like to think of myself as having an MBA in passion. In the AV industry, passion is pervasive. People are driven by a genuine desire to see positive outcomes. I’m fortunate to have talented individuals with MBAs on my team. Their expertise complements my passion-driven approach. Ultimately, what fuels the AV industry, at least from my perspective, is passion.”

Hiring talent in AV For newcomers looking to make their mark in the world of AV integration business, an MBA may serve as a powerful differentiator. When presented with two CVs, one featuring an MBA and the other without, which candidate would hiring managers gravitate towards?

Narayanan gives his take: “I would definitely prioritise someone with AV experience, especially if it is coupled with an MBA. That combination would be ideal. However, if it’s just an MBA versus someone else with significant AV experience, I’d lean towards the latter. Of course, this can vary depending on the department head’s preferences. Personally, I value continuous learning so any form of education is commendable and the greatest asset that a person can have. But from an industry standpoint, I’d place more emphasis on practical experience over an MBA qualification.”

Moreover, role-specific requirements are essential when it comes to hiring talent. Donahue says: “Recently, a technology vendor we work with introduced a new team member to me. He was relatively young and previously had a stint in investment banking in New York City. So, what did they bring him in for? Well, the company lacked a strategic plan despite going through acquisitions. The CEO — who doesn’t hold an MBA — saw the need for someone who could devise a long-term strategy to capitalise on recent acquisitions. This brings me back to my point that while an MBA is valuable, it’s not always the decisive factor. It depends on the specific requirements of the role, especially in leadership positions. It’s possible to hire individuals with MBAs without necessarily needing the leader of the organisation to possess one. I speak from personal experience as someone holding an MBA who isn’t the leader of my own organisation.”

It seems the ‘why’ often takes precedence over the ‘how’ when it comes to AV integration businesses. Online courses, tutorials, and self-study materials offer avenues for individuals who are looking to acquire certain skills beyond the classroom. But beyond theoretical learning, not everyone knows why certain practical business decisions have to be made. Fons observes: “Knowing how to analyse financial statements or interpret data is now easily accessible. So, while an MBA is beneficial, true value lies in a deep understanding of the fundamental principles of business and being passionate about it. An MBA might enhance your skill set, but it’s not indispensable. You need to be able to have the foresight to make good business decisions.”

Private equity and AV As more private equity firms acquire stakes within AV companies, integrators need to find ways to better engage with them. With private equity firms stepping into the picture, will the consensus that an MBA is not necessary still hold true? After all, private equity firms know how to talk business, and a level playing field is important if integrators want to come to the negotiating table on an even footing.

Narayanan sheds light on the matter: “Indeed, having someone on the team who can speak the language of finance, especially when exploring growth opportunities, can be advantageous. Is an MBA necessary in my business today? No. But has it helped? Yes. Some of my team members are qualified with MBAs so they make some very good decisions when it comes to looking at contracts, managing stakeholder relationships and dealing with finances. However, I still believe it’s not mandatory in our line of work.”

Likewise, Fons shares similar sentiments: “On one hand, many individuals in private equity have MBAs, so it might lend some credibility when dealing with them, particularly on the buy side. However, any reputable private equity firm familiar with the AV systems integration industry would understand that an MBA isn’t necessarily a prerequisite. Historically, successful individuals at successful companies in our sector didn’t necessarily have MBAs at the helm during their growth phases. Any private equity firm who really understands the AV integration business knows that it’s not a place to go looking for MBAs. That’s not the nature of who we are as individuals or as an industry. So, while it might carry some weight in negotiations, it’s not a defining factor in our industry.”

Fons identifies a spirit of entrepreneurship as being a critical aspect of AV integration businesses and a founding factor of many successful integrators operating in the North American market. Furthermore, he believes that this founding spirit of entrepreneurship is still relevant today even as the AV industry becomes more business savvy. He elaborates: “I think of the trajectory of companies that started small and grew to become significant players. Names like Karabiner, Midwest, Visual NCSI, and many more come to mind. I often wonder how many MBAs were involved in those endeavours. It seems likely that they were predominantly on the investment side rather than the dealer side of the equation. Today, when I think about the diligence required in buying or selling a company, I recall being frequently pitched ideas, thinking I should follow suit because others were doing so. In hindsight, many of these pursuits seem absurd. It makes me wonder what kind of predatory growth tactics were prevalent at that time. Interestingly, none of the aforementioned companies seem to ring a bell today; they’ve all vanished despite once standing as the Goliath entities of the day. This leads me to believe that, in such scenarios, an MBA might not hold much value on the sell side of the equation, but ensuring fairness in transactions becomes even more important.”

So, how does an integrator determine fair value when dealing with private equity firms? Donahue concludes: “An MBA won’t necessarily make you work with private equity better. It’ll definitely provide some insights, but having practical experience and a deep understanding of the industry are equally, if not more, crucial. Negotiating with private equity firms requires a blend of knowledge, experience, and strategic thinking. An MBA might help, but it’s not the sole determinant of success in such dealings. You have to simply be savvy enough to understand that to run a business well, other forms of specialised education and training would be needed to succeed.”