“We've seen a lot of changes in the last six months on leadership and the show global integration, but today I think we’re in a good place,” says incoming CEDIA chairman David Humphries. 

His assessment might be the understatement of the year. The association has restructured to be globally integrated, sold its tradeshow, and is in the midst of constructing a new headquarters.

All of these bold moves by CEDIA make strong, valid sense for its members that will “leave a lasting impression for the organization move forward,” says Humphries, who has been involved in the custom electronics industry for 27 years, first with Lutron Electronics for 15 years and as a manufacturers’ rep for the past 13 years running Atlantic Integrated in the Metro New York area. 

Humphries sat down with CE Pro to discuss his vision (and that of the entire Board of Directors) for the association and the industry in 2018 and beyond. He touches upon CEDIA’s new educational initiatives planned, the need for integrators to embrace Do-It-For-Me business models without alienating the high-end luxury market, and offers an update on the search for a new CEO.

CE Pro: What are your goals?

David Humphries: My short-term goal will be to complete the three-year strategic plan we have been working on with Dr. Rebecca Homkes, the CEDIA professional staff, and the current CEDIA Board. She is a strategic planning expert and a teaching fellow at the London School of Economics who works with top global companies on a growth strategy and execution.   

Long term, we will begin the process of implementing the plan and turning the corner from being a trade show-driven organization to an organization focused on facilitating our members success. In tandem with that decentralization of our training, we are going to make education more convenient for members.

For example, we’re going to be doing network training in New York in September, and we’ve just completed an agreement with the Independent Professional Rep Organization (IPRO) to do trainings and certifications at 20 major IPRO locations all around the United States. That starts in the fourth quarter of 2017. The association is growing and evolving to meet the needs of the changing industry and that is our long-term commitment.

How would you characterize the current state of the industry?

Humphries: The custom installation industry is very strong. There has been quite a large jump in business that started in 2014. We’ve seen nearly a doubling of growth revenue and a quadrupling of net profit since the Great Recession. Another good indicator is we’re seeing more new construction work for our members, which correlates with the increase in new housing starts. The Census Bureau says there was double the number of new housing starts from 2010 to 2016. It’s a great time to be a home technology professional.

What is the state of the association?

Humphries: We’ve seen a lot of changes in the past six months on leadership and the show, but today I think we’re in a good place. The global integration has gone exceedingly well from the Board and staff perspective. We’re currently accepting Board ominations and we have more interest than we’ve had in years, which I think is great.

The show is coming together really well, registrations are higher than they were last year. The staff has been working diligently on the transition of operations with Emer-ald Expositions as we move into 2018. So we’ll continue to be deeply involved with Emerald on the strategy and direction of the show. That’s not going to change.

Can you explain why selling the show made sense for CEDIA and its members?

Humphries: None of these decisions was made lightly. From a historical perspective it’s very important to remember that from the founding of CEDIA until 2008, the CEO of the organization came from, and the show was managed by, a third party. In fact, a third party also manages Integrated Systems Europe, which is co-owned by CEDIA and InfoComm.

When CEDIA pulled the show internally in 2008, it evolved over the last several years so that 50 percent of the annual CEDIA staff time was going to just organizing and running CEDIA Expo. It was consuming an awful lot of time and basically it just diverted us away from delivering other member benefits that we wanted in the field.

So now, Emerald is managing attendee acquisition and the logistics of the tradeshow floor — that is what they do, and they do a good job of that. They have the economies of scale that CEDIA doesn’t have for things like hotel rates. CEDIA continues to own all of the content at the show; we also have control over the educational conference, keynote, panels and branding. So really the Emerald acquisition is an operational acquisition. We’re still in control of all of the other areas. Selling the show was an opportunity to transition to a year-round focus on areas that are most important to our members.

Can you elaborate on the financial arrangement between CEDIA and Emerald? How much did CEDIA receive for the event and is there an ongoing revenue share?

Humphries: Under the legal agreement we have with Emerald I can’t discuss any of the financial aspects of the transaction.

How does the new global structure of CEDIA benefit the members of the association?

Humphries: To give a little bit of historical context … a lot of people don’t know CEDIA was founded as “CEDIA North America.” CEDIA had all the branding rights and all the licenses, etc. for that. As different areas of the globe started to evolve, they became what were known as CEDIA licensees, i.e., CEDIA Australia and CEDIA EMEA in Europe and Africa. So it wasn’t a contiguous organization.

So we decided to unify all these chapters into one unified membership. Essentially it strengthens the influence of the association and its members both globally and locally. We have one global branding message, for example. The manufacturers used to pay multiple dues by country, now it’s one membership for all, one set of dues. We increased our operational efficiencies while decreasing our expenses and tax burdens. Becoming one global organization ensures that our direction is consistent around the world.

The members won’t really feel anything in the way of an operational change. Our ability to address regional issues, legislative issues, market and provide local connections will continue. We’ve streamlined the CEDIA organization by doing this.

Let’s talk about the new headquarters. Why does that make sense for the organization?

Humphries: The decision to build the new headquarters was vetted from every single angle. To give you some perspective, CEDIA has a very disadvantageous lease in the current building it has been in for several years. We’re not only responsible for an aging building, but we are responsible for all the maintenance of that building. When an HVAC unit goes down we have to buy and replace it. So we looked at rehabbing the space and it didn’t make any sense.

So we started looking around Indianapolis to see what else was available to lease. We had some very specific needs, such as a warehouse, and areas for hands-on boot camps and classroom training. We were unable to find anything that would fit our needs, either as a lease or rental basis. So after exploring all the alternatives, we did a thorough financial analysis and the Board determined that the constructing a new building was the best solution for the current member needs.

I will add that by constructing the building, CEDIA now has a long-term real estate asset that belongs to the association. We’re not just simply sending money out the door. The building is going to be completed in August or September of 2018.

Where do you see CEDIA heading from a market perspective? Is the association going to be inclusive of all IoT businesses and products or will it migrate back to a membership that serves affluent customers?

Humphries: Luxury is still incredibly important to our industry and that’s not going to change. But the mid-tier market represents a huge opportunity of growth for members. Fifteen years ago you were able to sell a plasma television for $15,000. Times have changed … technology is now everywhere and everybody wants it. We have members who have built incredibly successful businesses focusing on this large mid-market opportunity. 

CEDIA is an inclusive organization and our mission is to be a central touchpoint for all home technologies. We want every experience a consumer has with technology to be exceptional — whether they have a $5,000 job or a $5 million job. And CEDIA is providing the training and resources to ensure integrators whichever client they serve, that integrator provides them with an exceptional experience.

How is CEDIA helping its members adapt their business models to fit the growing awareness among consumers of smart-home technology?

Humphries: We view this as a new opportunity to custom integrators as growth of the channel in general opens up more awareness from a consumer perspective. It especially expands what I would define as the “mid-tier market.” It’s a very large market segment and we believe these new technologies are expanding that at a rapid rate. A good example is integrating voice into existing control systems using things such as [Amazon] Alexa or Josh.ai.

I hear not only from the integrators but from the manufacturers as well that they view these technologies as an expansion effort that floods our industry. Clearly our members have many different business models. Some are interested in only a few jobs a year for multimillion-dollar installs, while some have set up incredibly profitable businesses for the mid-market. Either way, this awareness is incredibly beneficial to our industry.

What is CEDIA doing to help integrators with the lack of manpower in the industry?

Humphries: We agree the lack of labor and manpower is the No. 1 challenge right now. CEDIA is continuing its work with the U.S. Department of Labor to develop a nationwide updated apprenticeship program with the electronic systems technicians.

This is a long-term plan. Working with the government on the program of this nature is not a quick process but we are very dedicated to it. We are devoting and adding additional resources from a senior perspective to focus on what we know is our No. 1 members’ priority and pain point, which is labor and manpower.

How long does it take to get something like that done?

Humphries: We’ve been working on this now for almost a year with the U.S. Department of Labor. So, like any government program, it’s a long-haul program. We hope it will be in place and running in 2018.

What can CEDIA do to increase consumer awareness of the custom installation channel? You could pour money down the drain trying to build consumer awareness.

Humphries: Consumers are becoming more aware of the solutions that are available in the CEDIA channel. But you are right — the reality is we are a very small trade association. We don’t have a lot of resources to put into a mass consumer ad campaign — no Super Bowl ads and no New York Times campaigns. What we can do is continue our outreach on behalf of the industry and make sure our members have tools they need from the grassroots level. It’s going to require all of us working together to make a difference. We will continue to allocate more resources to this area but we are fairly limited on the amount of resources we have right now.

Can you pinpoint any specific initiatives that the former CEO Vin Bruno implemented that you plan to continue?

Humphries: Vin put on an incredible amount of energy and passion to the organization. He was a great example of how to be an ambassador of the association. Global integration, the sale of the show and the new headquarters are all big projects in the Vin Bruno leadership that we were able to tackle together. Vin leaves a lasting impression for the organization moving forward.

How is the search for the new CEO going?

Humphries: Our priority right now is to finish the organization’s strategic plan. That will be completed in early November. The new Board will be seated in January 2018 and they’re going to reopen the discussion on the leadership needs of the association, and then decide on a plan of action. So we want to conclude our strategic three-year plan and then enable the new CEO in January to decide the direction he or she wants from a leadership perspective.

What are the dates and locations for the upcoming CEDIA shows?

Humphries: The 2018 show will continue to be in San Diego, from September 5-8. In 2019 we’ll be in Denver from September 11-14, and in 2020 Denver again from September 9-12.

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