Furuno USA might appear to be in a time of transition with longtime president Jim Atteridge’s retirement and a score of new management appointments. But Dean Kurutz, the company’s new vice president of sales, marketing and product planning, says that’s not actually the case.
Several people in the company took on expanded roles after the retirement of Atteridge, who served for 22 years and was only the second president in the company’s 36-year history. But incoming president Brad Reents has been with Furuno for 15 years, and Kurutz has been on board for 21 years in various roles.
“When you look around, either inside or outside our industry, that type of top management longevity is quite rare,” Kurutz says. “Having that consistency of management and longtime employees provides a somewhat intangible benefit for us, as we all know each other extremely well and we can speak frankly with each other, much like a family whose goals are shared and in sync.”
Kurutz spoke with Soundings Trade Only from the company’s U.S. headquarters in Camas, Wash. (The office on the Eastern Shore of Maryland is a full-service facility and does technical warehousing and order processing.)
Q: I think this is the first time we have spoken. Can you give us some background on your past and history with the company?
A: The quick history is, I’m originally from New Jersey. When I started with Furuno way back in 1993, I worked out of my home, doing commercial sales for the company. The headquarters at the time were actually in south San Francisco, five minutes away from the airport. The company building was getting quite old, we were outgrowing it, and given the cost of living for employees in the San Francisco Bay area in the ’90s during the tech boom, it was determined that it would be best for the company to relocate. Some people here had some foresight to find this location here, which is just across the bridge from Portland, Ore. — we’re about 15 minutes away from Portland Airport — and they acquired this property in the early to mid-’90s. We built the facility and moved in at the end of 1997. I moved here in December 1997, around 17 years ago.
Q: Furuno USA president Jim Atteridge recently retired to assume a new role as director and corporate adviser, at which time a lot of other changes in management were announced. How is that playing out?
A: I’d say the change is not so significant. What’s really happened with Jim retiring is, it’s brought several of the core management team here. On March 21, I’ll be 22 years with Furuno. That’s [true of] most of our core management team. I think the least-tenured person is almost 14 years here. So while there are changes within the company, it’s all the same people and the same core team.
Several of us have taken on expanded roles. In my case, I’m … getting more involved in product planning and future product development in association with our parent company in Japan.
Nobody new has been brought in. One of the things we’re kind of proud of is that our employee retention rate is phenomenal. It’s not just the management team; we have people working in the order service department, phone techs and warehouse personnel that have been here 20-plus years.
The other thing is, we feel those employees have been loyal to us, so we try to maintain our loyalty to them. Even through the recession we never downsized at all. That’s something we’re proud of.
Q: How many employees does Furuno USA have?
A: Between this office, Maryland and our field, tech and sales staff, we maintain around 100. We have brought on a few people because some parts of our business have had a pretty good expansion — particularly in the deep sea, commercial and workboat market. So we’ve added to the tech side of that market.
Q: You said you’d be doing more product development. That sounds like fun.
A: Yes, it’s something I’ve been involved with for a number of years and something I’m proud of. My job has grown organically over the years. I started out in a sales role, and just from the exposure I had here and from the mentoring I had from my managers over the years, I evolved into the marketing side. I worked with communications manager Jeff Kauzlaric on the advertising side. Through that process I started getting involved in the product planning and development. There’s a core group of us that go over to our parent company in Japan a few times a year and work with them on the upcoming product plan.
One of the things that have changed here over the years is back in the mid-’90s, there weren’t a tremendous number of players, especially in the recreational market. It was a pretty finite group of companies working in the recreational market, and product development was a lot slower, and products stayed around for 10 or 15 years. The products coming from Japan [at that time] would be kind of adaptations of products that were developed for their domestic market in Japan. They worked and were bulletproof in performance and quality, but sometimes they were a little difficult to operate because the software and user interface concept was a little different. Not that it was wrong: It was just different from what it is here.
What changed is we started developing, over time, good relationships and trust with our developers and product engineers in Japan, to the point that we were brought in much earlier in the design process to give our feedback. The product is still their core design, and engineering and production and development are done in Japan. But when we start talking about user interface, operational logistics and what features and technologies are being asked for by our customers here, a lot of that input was much more accepted.
Then we started having some successes with the products we had input on, so as each product was developed we were brought in even earlier in the process. That also translates into our markets in Europe and other parts of the world. That’s something I’ve been involved with to some degree, but probably in the last year or so it’s become a lot more formalized and I’ve been heading up a small team here that works directly with our guys in Japan.
And also technology has helped us. A little over a year and a half ago, we invested a tremendous amount of money into a high-end video conferencing system so we can sit down with our guys in Japan on a weekly basis like we’re in the same room. So we not only go over there a couple of times a year, but my team is videoconferencing with them on a weekly basis as products develop.
What it ends up giving us at the end is not just a better product, but a more applicable product for our market.
Q: How hard is it to stay fresh and innovative and compete, and how do you distinguish yourselves from the pack?
A: The competitive landscape is so different than what it was when I first joined the company and probably through the turn of the new millennium. There are so many more companies in this space. But like you said, the technology that’s developed over the last 10 to 15 years has helped product capabilities really explode. It might sound like a cliche, but the competitive landscape is more challenging than ever because there are more players and more types of products.
How do we distinguish ourselves? There are a couple things we’ve continued to focus on. People ask who’s our biggest competitor, and I say, in which market segment? Most are focused on a certain space. Not only is Furuno a full marine-line manufacturer, but we’re really the only ones providing products and solutions for anyone who has a trailer boat to a supertanker, and anything in between.
People recognize that Furuno is on the commercial fishing boats and it’s a high-end product for expensive yachts — it was [once] considered to be out of people’s price ranges and we’ve adjusted that over time — but why we gain that reputation is we construct a [quality] product. Everyone wants to say their product performs extremely well and is reliable. I’m going to say that, too, but we have ways to back that up.
We have our dealers that have voted for these products for many years for the NMEA awards we’ve won. That’s not just because it’s a good product that’s easy to sell, but mostly because it’s a product that, quite frankly, is extremely reliable and didn’t bite them in the butt from a service perspective and helped them keep customers happy.
Additionally, because we come from this commercial mentality, this company does not really know how to make a cheap product. We really focus on quality, and sometimes that comes at a cost. So sometimes it comes at a premium. But I think the reliability factor is huge. That’s from a support standpoint, as well. Because we have this commercial mentality, it benefits our recreational customers, not only in product and design and quality, but also our mindset from a service and customer service support perspective.
There’s a tremendous loyalty to the Furuno brand. At the Fort Lauderdale show, we have customers coming in that are still running radars and other products of ours that are 20-plus years old. [We can’t] guarantee it, but in many cases we can still support those products. Can you think of many electronics that have been there for 20-plus years and are still viable and working?
Some people say that’s a little to our detriment because maybe we missed an opportunity to sell two more newer systems to them over the years. But because we’re a company that has more of a long-term perspective, our hope is that the customer will share his or her experience with others and say, “You’re getting a radar? I’ve had my Furuno for 20 years and it still works.”
We ran an ad called The One. This is the one company in the marine electronics business that has not been sold or acquired or merged over the years that actually has a primary focus over the years. Not just in the marine electronics business, but all over we’ve seen a lot of companies acquired over the years, and merging to expand product lines. All that has its merits. What separates us is, Furuno has not been acquired by anybody. We have not merged with anyone. We made some acquisitions along the line to enhance our service offerings, but the primary focus of this company is marine electronics.
Q: Can you tell me a little bit about the awards you mentioned earlier?
A: Furuno has been awarded a total of 212 NMEA Awards over the years, which is more than any other manufacturer — in fact, more than any two other manufacturers. We’ve won the best radar award for 39 consecutive years, as well as earning the best fishfinder award 43 times in 44 years.
This past year, in addition to securing the radar and fishfinder honors, our NavNet TZtouch system also won the award for best Multi-function Display. Since these awards are voted on by the dealers who install and service these products, as well as distributors, industry experts and NMEA-certified technicians, I believe our long-standing track record with these awards makes a statement about the consistent quality, reliability and performance of our products.
While we are very proud of those many product awards, the NMEA Award that Furuno most truly cherishes is being named manufacturer of the year [for] support. This is an award that was first introduced nine years ago. Furuno has won it every year since.
Q: Technology continues to change and evolve at whirlwind speed. The pressure to keep up must be incredible.
A: Watching how technology has exploded over the years, we’ve also looked at partnerships that help us continue to excel in those areas. We’ve partnered with and essentially acquired under the same corporate umbrella the company MaxSea, a French software company that started working with us in developing some more advanced software and capabilities in some of our own multifunction products, like NavNet deep touch and NavNet 3D.
Working with a company that had specific and focused software and user interface experience was key. Our developers in Japan are really great engineers and developers, as well, but they recognized that as the technology is rapidly expanding, it’s beneficial to develop strategic partnerships to keep up.
Q: You mentioned dealers. How does Furuno’s distribution work?
A: We’re probably very similar to our competitors in some ways, but very different in a few. We maintain a dealer network of a few hundred around the country. I’d say the majority of those are smaller, independently owned dealerships, ranging from a three-person operation to 20-something people. We label those our elite dealers. Those dealers are not only selling, but also installing and servicing the product.
We want to make sure that when a customer purchases a product they’re not just left to their own devices, We want to make sure they’re dealing with a trained dealer network — not just for installation, but also for follow-up service, regardless of where they are in the country or world. They can be confident when they go on our website and contact an authorized Furuno dealer that they will get training, service and support.
In addition to that core dealer network, we do also maintain key distribution type accounts selling our products through distribution channels to smaller entities. We limit the product line that we make available to those distribution accounts. For example, a sonar that goes onto a commercial fishing boat is a very highly technical installation, so we don’t sell them through our distribution network. We don’t want it to go through a channel and end up on somebody’s dock and either not know how to install it, or worse, install it improperly.
Where we differ from probably most of our full-line competitors is we do not currently have an OEM boat manufacturing channel, with the exception of a few manufacturers who are specific to government — we do a lot with the Navy and Coast Guard — but we don’t sell directly to recreational boat manufacturers. We have opted over the years to work through the technical dealer channel.
Those dealers in many cases do work directly with boat manufacturers or key boat dealers. It’s not that our product doesn’t go on boats; we just don’t maintain direct OEM accounts. I think you’ll find most of the major full-line manufacturers maintain some type of OEM relationships, and some have leveraged them quite substantially.
Q: Any reason Furuno chooses not to go that route?
A: I think there have been a number of reasons. It’s a topic that comes up all the time over the years. Some of the reasoning changes over time. In the past, we felt that in order to go to that level we had to have the exact right product and exact right scope of product. One thing we’ve been working on over the years is what we call the complete helm solution — everything that a guy’s going to need on his boat, from instruments to radars to whatever. We were also realistic and understood where we didn’t have all the pieces to the puzzle … so we focused our efforts where we felt we could be most successful.
What’s happened over the last 10 years is we have added what we felt like were missing pieces back in the day and we think we have a more complete solution, but as you know, the market landscape in boating has changed, as well. Did we maybe lose some opportunities some time ago by not having those direct manufacturer relationships? Yes. But we also, hindsight being 20/20, we see we may have saved ourselves some downturns as a result of that because we have seen some manufacturers that were heavily leveraged into those businesses.
What we saw during the downturn, when boat manufacturing was reduced, the sale and purchase and installation of those electronics came to an abrupt halt in many cases. We experienced the general recession, but we didn’t experience it directly because we didn’t have those relationships set up. Don’t get me wrong. I’m not going to say we were geniuses and chose to avoid it. I’m just saying that in retrospect, maybe it wasn’t such a bad thing we weren’t in that space.
Q: Training must be quite an endeavor, given the pace that all these products come to market.
A: It’s an ongoing challenge. We’re very focused on training and making sure that not only our own people, but our dealer base is very dialed in to what’s going on. We maintain a training committee here in the company that involves people on both the technical side and sales side. On an annual basis, we try to put together a training agenda that deals with our new products and also revisits current products that have been around for a while, but may be a little bit more technically challenging.
The way software is now, a product that came out six or seven years ago has changed a tremendous amount. A dealer might say he got training on NavNet 3D four years ago, but we tell him you didn’t get trained on this part of NavNet 3D because this part just came out this past year because we’ve updated the software. That also allows some longevity of products.
We try to take those trainings regionally. We might do a couple of days in South Florida, and on the West Coast — we take a traveling road show, if you will. Because a lot of dealers, as I mentioned before, are very small independent organizations, they’re watching their expenses.
If we have very focused training, like a brand-new product line, we’ll go to an area and do single-day training for several days so we can get as many people in as possible.
When it comes to our larger deep-sea and commercial fishing products, we’ll also do a few trainings a year in our Washington and East Coast offices.
For customer-based training, we have regional managers that manage regional dealer relationships. A lot of times they’ll work with dealers on a local level and put together a training open house or something like that to get hands-on training with equipment. They will also participate in rendezvous events that manufacturers put on.
We’re not trying to sell equipment at those. We’re just going on boats and trying to show customers who have invested in our products how to tweak a unit and get the most out of it. A lot of these guys love the product, but never knew it could do half the stuff. We feel we make that investment in customer loyalty so when these guys are going for their next boat or their friends are buying a boat, they’re saying, ‘Hey man, Furuno has been phenomenal for us, not just giving us a quality product, but showing us how to use it.’ Training is key.
The last thing we’ve really jumped on, and a lot of others have, too, is video production. We’re doing a lot more video content where we’re trying to provide training content for both our dealers and our end users.
Our NavNet TZ Touch Series is our most technologically advanced product, so I do a video overview presentation that is about 16 minutes. But we also came up with the concept of TZ Touch Quick Takes. We’re in a relatively short-attention-span society these days, and we take different features of the product and make 3- to, max, 7-minute videos on various features, like putting routes and waypoints into your system or bringing TZ Touch Screen onto your iPad. We’ve gotten a lot of really good feedback from our customers, because how often do you read a whole manual cover to cover? Each of these quick takes is sort of like a chapter or section.
Q: How did the electronics segment fare during the recession? There were a lot of changes in that time period that in some cases essentially changed the way people boat and fish.
A: During the whole recession, new boats on the recreational side, from the smallest point to megayachts, everybody felt it. On the electronics side it more directly affected manufacturers with OEM partnerships because business literally shut down in some cases. What those companies did, and what we already were focused on, was continuing in the retrofit market.
There was a tremendous amount of people with that itch cycle, wanting to upgrade, and that wasn’t happening now because of what was going on economically. Then the decision came: Do I keep boating, or do I leave? A good portion stayed and decided they would stick with their current boat.They wanted to upgrade what they had.
One of the ways people can do that without a tremendous amount of financial hardship is on the electronic and technology side. They might not have had the ability to change boats, but they could go from a standalone radar to a multifunction display.
When we talk about technology, one benefit is not only that there is more innovation out there and that it’s become more reasonably priced, but also the consolidation of product is a real benefit to the average boater. Some time ago, if you wanted to do some cruising but also some fishing and occasionally liked to venture out in bad weather, you were going to buy a standalone radar, a standalone fishfinder, and then you were going to buy a chart plotter, or at least a GPS.
You had these three pieces, and on a smaller boat you had to figure out where to put them, and you had to buy each one individually, which meant buying three different displays, which is kind of expensive. Then you probably had to have help setting up the interface because you want your GPS and fishfinder to talk to each other, for example.
The real movement now is toward what we call an MFD, a multifunctional display. That guy probably has those three units and one small screen because he had to deal with the real estate available on his dash. He can now buy from us one 14-inch-wide aspect ratio display and replace all three of those units that display a radar, a fishfinder and a chart plotter all on that one unit.
It’s a reasonable price because he’s buying one display instead of three.
In addition, new capabilities have made this technology much more understandable for the customer and made boating much more accessible.
You used to have to overlay this abstract radar image on a chart or map and see, ‘OK, that’s the coastline, that’s a buoy, that’s me.’ Now they totally get what it’s saying. It’s not about training. It’s just showing it to them with this additional layer of information. It makes the understanding and situational awareness much easier.
This article originally appeared in the February 2015 issue.