April 14, 2006

Malcolm Forbes, Sr, was asked "How can you truly know whether a company is going to be successful?" Forbes answered, "You bet on the jockey, not the horse."

We would suggest that the word "jockey" be made plural, because the whole team, not merely the CEO, wins the race. Products don't sustain themselves. It is the leadership in place that creates and sustains successful companies.

One of literally millions of examples of companies overcoming the odds is Steinway & Sons. The company has a well-known brand, but a little known history. It survived the Civil War, two World Wars, the Great Depression, materials scarcity, and a labor market lacking in the necessary technical skills. Yet almost since its inception in 1853, Steinway continues to set standards in the piano industry, earning phenomenal acclaim from both musicians and audiences.

The Steinway story offers five important lessons in leadership, most important among them being a commitment to possibilities.

To your continued success!

Susan and Lisa

A Leadership of Possibilities

Three wars, near bankruptcy, attempts to burn down their factories, and aerial bombings aren't usually the T on the SWOT list of most companies. (Strengths, Weaknesses, Opportunities and Threats) Steinway & Sons survived these and many other challenges.

Leaders rarely have ideal conditions to grow their organizations. Instead, they succeed by seeing rich opportunities and staying persistently committed to a future bigger than their past. Some, like Steinway, definitely had more obstacles to overcome than others. Steinway provides five hard-earned lessons that apply to leaders everywhere. Here is a little history from a 153 year old company that can inform our present and future decisions.

1. A Commitment to Improve: Great leaders, at all levels, have a willingness to constantly improve, consistently getting new ideas and fresh input. For decades, the Steinway factory in New York has invited musicians to come in to work with their technicians on improvements to the instrument. It was one of the first companies to actively solicit customer feedback.
   
   Steinway found that adequate products create satisfied customers, while innovative, best-in-class products create loyal customers.


2. A Commitment to Fighting the Unscrupulous: Every industry has its share of thieves, con artists, and liars. By 1892 Steinway had established its reputation as a premier manufacturer of pianos. During that time, unscrupulous competitors and dealers placed an intentionally badly tuned, purposely distorted Steinway in the showroom for the purposes of unfairly contrasting it with their well tuned, but inferior piano. In response as the industry leader, Steinway initiated the unique "Group of Six Agreements" which was the first code of ethics among piano manufacturers.


3. A Commitment to Innovate: Matching the competition doesn't create any advantage. Bringing synergy, freshness, and something that no one else is doing is what elevates and differentiates. Steinway created "Steinway artists" in the 1880's. Great pianists like Anton Rubinstein, Agnace Paderewski, Sergei Rachmaninoff, Artur Rubinstein, and Vladimir Horowitz played Steinways in music halls all over the world.
   
   Composers like Wagner, Saint-Saens, and Liszt wrote letters of endorsement promoting Steinway pianos, which Steinway then published in its advertising. Steinway was one of the first companies to market superb "athletes." The inspirational, personality based advertising promoted their pianos as "The Instrument of the Immortals."


4. A Commitment to Quality: In every industry, there are standards that all companies meet. Leaders consistently look to exceed and outperform whatever standards are in place. The Steinway factory takes a full year to build one piano and over 200 technicians and craftsmen work on each piano.
   
   Even Thomas Edison was impressed.
   From the Laboratory of Thomas E. Edison, To Steinway & Sons,
   Gents, I have decided to keep your grand piano. For some reason unknown to me it gives better results than any so far tried. Please send bill with lowest price.
   Yours, Thomas A. Edison


5. A Commitment to Possibilities: The two wars between America and Germany separated the Steinway factories located in New York and Hamburg. Both governments demanded that these two factories produce not pianos, but war articles. "Our hearts bled when we had to use our valuable supply of seasoned Red Beechwood to build stocks for rifles," lamented Gretel Bruhn, director of the German factory during WW II.

The best leaders can transform even the most debilitating events into breakthroughs in thinking and action. Full commitment to possibilities mean facing the truth and asking, "now what?" Like many companies today, Steinway assessed the situation, did what they could, and looked to the possibilities after the war. Through its commitment to possibilities, Steinway remains the industry leader, and today is stronger than ever.

Benjamin Zander, the conductor of the Boston Philharmonic, tells the story of his father in 1945. He arrived in England from Germany after the war and was put in an internment camp. With little food, and terrible living conditions, he looked around at the depressed, but well educated group of refugees and said "now what?" With no paper, desks, computers, or books, he started a university at the camp and eventually offered a total of 40 classes.

Ben Zander and his wife Rosamund wrote an inspiring book called "The Art of Possibility." Their premise is that many of the circumstances that seem to block leaders may only appear to do so based on the framework of assumptions they carry. Draw a different frame around the same set of circumstances and new pathways come into view, as illustrated by the following example.

A shoe factory sends two marketing scouts to a region of Africa to study the prospects for expanding business. One sends back a telegram saying,
SITUATION HOPELESS. NO ONE WEARS SHOES.

The other writes back triumphantly,
GLORIOUS BUSINESS OPPORTUNITY. THEY HAVE NO SHOES.