He has helped power Grass Valley Group into a leadership position
By Ken Kerschbaumer -- Broadcasting & Cable, 4/9/2002 8:00:00 PM
So how does a psychology major become a technology leader? Tim Thorsteinson, CEO of the Grass Valley Group business unit of Thomson Broadcast Solutions, credits both family and co-workers.
"It's through osmosis and being around smart people," he says. "I've learned a lot about technology, and it's a little like art. I have a house full of beautiful art, but I can't paint; I know good technologists and technology when I see them. And that's been to my advantage."
Even on the home front, Thorsteinson's technical skills are in the passenger seat.
"My wife is an electrical engineer, so she's the technical one in the family," he explains. "But I've always worked in highly technical environments since my first job, which was running a simulated lab for National Semiconductor. So I've been right in the middle of technology-based businesses for 22 years."
Today, Thorsteinson is right in the middle of something else: one of the larger industry acquisitions. His company, Grass Valley Group, was recently acquired by French equipment firm, Thomson Multimedia for $172 million; together, the two companies expect to do $500 million in business every year. He will play a major part in Thomson Multimedia's future here in the U.S. Thomson looks to take advantage of GVG's solid reputation here in the States.
"Our goal is to take the things we've been successful at and carry them forward," Thorsteinson says. "And the upside of this whole acquisition is that we're now part of a company that is focused on the total media space and we're part of a large company that has a capital base. The challenge of what we've been doing the last couple of years is that we've been very thinly capitalized. So keeping the engineering spending where we kept it—15-20% per year—when we're in an industry recession and we're capitalized by basically one person was difficult."
Thorsteinson's career trajectory pretty much took off after college graduation. His first job was working at National Semiconductor, where he used his psychology background to bring in new hires and form teams to create semiconductor fabricators. He then moved into the position of director of productivity and quality improvement.
"I spent most of my time at National Semiconductor running staff organizations that were all aimed at improving the performance of the operation with either quality or productivity improvements," he says. "It started out in manufacturing, but, near the backend of that, it was re-engineering the businesses, and a lot of work was done with the design and development areas."
It was during that five-year period from 1980 to 1985 that he learned to place an emphasis on product development. After squeezing efficiencies out of the manufacturing side, he moved to the next goal, making the product-development process a lot more efficient and productive.
"If you don't move your development process very quickly, you can't take advantage of the most current component technology, and, as a result, your price points and feature sets will be non-competitive," he says. "That's seminal to my whole view of the business."
Since joining Grass Valley Group as president in 1997, Thorsteinson helped the brand regain much of its former glory. In the '80s, Grass Valley Group had been synonymous with production switchers, its 300 line a de facto standard among many broadcast professionals.
In 1992, Thorsteinson, who was vice president, human resources and total quality, for Tektronix, which had owned by Grass Valley Group since 1975, made his first trip to see the company's operations in Nevada City, Calif.
"Back then, Grass Valley Group was spending quite a bit on research and development, but it really wasn't delivering anything to the marketplace," he says. "When I got the business in '97, only 10% of the revenue was coming from products that had been introduced in the previous two years."
He quickly saw the challenge facing Grass Valley Group: how to again become a product company whose brand equity was technology leadership and what he calls customer intimacy.
"If you went to our NAB booth in 1997, you saw basically one new product; everything else was six or seven years old," he says. "You did not see technology leadership. What you saw was a company that looked like it was on its last legs."
That emphasis on new products also left many old products behind. Thorsteinson eliminated 60% of legacy analog products in the switcher/ router/modular-components segment and increased R&D investment to $100 million during the next three years to capitalize on the pace of technological change.
He points to last year's NAB booth as an example of how that pace changed Grass Valley. "If you went to our NAB booth last year, you would have seen Vibrint editing systems, the MAN server, Kalypso switcher—all products that had been introduced in the past 12 months. They're also all products that have feature sets that give customers tremendous advantages."
It also gets back revenue. In 1999, GVG had double-digit revenue growth over 1998, with revenues peaking at around $200 million annually. Since the dotcom bust, GVG revenues have held steady at $180 million.
Working in the semiconductor industry gave Thorsteinson some advantages he has been able to capitalize on. He understands the building blocks that lead to the larger technology developments. As he puts it, it's the inevitable march of Moore's Law.
"We can't fight those development curves," he says. "We have to ride them."
In his new role under the Thomson Multimedia umbrella, Thorsteinson will have a simple goal: to help keep Thomson Multimedia in a leadership position.
"If you're not a leader, and that means number one or two, you don't have the scale to afford the investment to stay as a leader," he says. "When I inherited the Grass Valley Group business, we had some markets, like nonlinear editing, where we were fourth- or fifth-ranked supplier. In that case, you're just swimming upstream. The amount of money you need to spend to become one or two steals money from the other places where you're doing okay."
His mantra towards development is simply four words long: "Be quick, be fast."
And with the Thomson Multimedia behind Grass Valley Group, there might be an addendum: Be big.
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